What startups think will fly may not be the best predictors of their success. Innotribe, which runs an annual startup challenge, has a pretty good idea of what works. Fabian Vandenreydt, Head of Markets Management, Innotribe and the SWIFT Institute, listed a number of reasons why some startups do better than others:
All the time, energy and money spent developing the most amazing product is wasted without starting with a problem to solve, explained Vandenreydt. "Without a clear problem to solve, you may get lucky, but 99 out of 100 times you won’t. Innotribe will help companies by identifying the problems the industry is facing," he said.
2) A clear and detailed way to explain and implement the chosen solution, and a clear understanding of the market for this solution
"Without understanding who you are trying to sell to, you often over-complicate your product. The key to understanding your market is to test early, and test often. When the people behind Dropbox had their original idea, their initial product was a video of how they envisioned the service. They distributed this product to see if there was a market. By creating enough validation of their idea, they then went on and invested the time, energy and money to develop Dropbox," Vandenreydt said.
3) A strong team of quality individuals who can collaborate and work well together, and
4) A deep understanding of the expectations of venture capitalists and bankers
A significant key to success however, is the willingness to change if needed.
"Agility, the ability of a small startup to succeed, is often measured not in how great their initial idea is, but by the agility and ability to respond to better understanding of the problem and the market," Vandenreydt explained.
"This pivoting of ideas is what separates success from failure. One famous example is Flickr, which started as a game but later found that photo sharing ability of the platform was what people used more than anything else. They responded by pivoting, and moving from a game platform to a photo sharing one."
Creating visibility is also essential, Vandenreydt added. "You may have the best product in the world that solves a number of issues, but how does one person or a small company grab the attention of a multinational?
"This is one area where Innotribe excels. Our mission is to bridge the gap between the fintech innovation ecosystem, and SWIFT and its members, by exposing what these companies are doing, and how they are doing it."