From Silicon Valley to Africa, entrepreneurs and small businesses are driving innovation worldwide. These small companies are responsible for 70 percent of job creation globally. (Source: International Finance Corporation) However, according to even the most optimistic studies, three out of every four startups fail. To combat these odds, entrepreneurs must search for new ways to gain a competitive edge, network with the right people (foster make-or-break relationships with them) and, most importantly, raise funds.
Through my work with IBM, I’ve had the privilege of interacting with some of the best and brightest startups. I’ve noticed there are four distinctive and common characteristics that are driving their success:
Implement cost-effective technology like cloud computing.
Cloud computing offers start-ups the security, pooled manpower and established infrastructure of an expensive data center and experienced IT team, but without the actual expense and with more convenience and ease of accessibility. The cloud levels the playing field between small, growing businesses and well-established companies. It allows them to spend less time and money managing IT and more time focused on their real priority – growth. For example, survey and monitoring solution startup, TMC, runs their automated real-time monitoring and early warning system on a cloud platform, which grants them the flexibility and stability needed to nurture and grow their business without worrying about expensive and complicated IT infrastructure.
Leverage a partner ecosystem.
Successful startups depend on ecosystems of partners, academics, venture capitalists, developers and established corporations to drive their success. Young companies aren’t the only ones relying on partner networks – according to insights from a recent IBM study, 61 percent of C-suite executives expect to partner to increase value over efficiency. A robust ecosystem can offer the breadth and depth to identify new funding sources, capture new markets and deliver the right skills and advanced technologies to help bring innovative solutions to solve some of business and society’s greatest challenges.
Eager to adopt emerging technology trends.
Startups that identify and quickly adopt emerging technology trends, such as cognitive computing, often have an advantage over competitors who are slower to jump into new or uncharted territory. Coriell Life Sciences, which helps medical professionals use DNA and gene sequencing in real-world situations to better treat patients, is making plans to upgrade their system by embedding IBM Watson technology to read and “understand” medical literature. Coriell expects the Watson platform’s ability to ingest and understand huge amounts of disparate information will simplify their labor-intensive process of gathering and evaluating medical information. Thus far, Coriell has raised $2.2 million in venture funding and is working towards reaching its goal of $4 million.
Address a business or consumer need.
To attract potential investors and clients or end users, startups must offer an innovation that can be put to use. Right now, successful startups are bringing innovative solutions to market that address challenges, simplify business process or ease a business pain point. For example, nearly 80 percent of mobile phone users in growth markets do not have access to traditional banking loans and credit. Nairobi-based startup MoDe’s innovative payment services ensure that users have access to mobile airtime when needed, all while helping telecommunications companies increase efficiency and build brand loyalty. Launched in Kenya in 2010, MoDe’s instant nano-credit for pre-paid mobile phone users has already expanded to 13 countries in Africa.
The technology industry may be changing every day, but the methods for success are the same. These tactics are not new or revolutionary – entrepreneurs have been using them for years. Successful startups are always pivoting to quickly adapt and capitalize on industry shifts, new partner opportunities, or evolving and cost effective technologies such as cloud, cognitive computing or big data analytics.
The entrepreneurs who actively engage and collaborate with an ecosystem of partners, academics, venture capitalists, developers and established corporations are able to tap into expertise and mentorship to help identify the right industry shifts, the right partnerships and the right technologies to successfully accelerate and set themselves apart from competitors.
Sandy Carter is General Manager, Ecosystem Development, as well as a Social Business Evangelist at IBM, an American multinational technology and consulting corporation, with headquarters in Armonk, New York, United States. IBM manufactures and markets computer hardware and software, and offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology. Connect with @sandy_carter on Twitter.
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