What are the critical factors that determine the success or failure of a start-up company?
Analyze why the two companies in this module, Seibel Systems and eBay, differ so much in their outlook.
Identify some of the important lessons you derive from comparing companies that continue to do well and others that flounder, after being successful start-ups. Do any stand out as being most important in their two cases? Why or why not?
Assess the key start-up factors that determine long-term sustainability of a company such as eBay or Siebel.
Critical factors that determine the success or failure of a start up:
Statistics show that normally for any start ups, only one out ten succeed with six out of ten shutting within the first year and three yielding two to four times in four to seven years (Dellmour, 2006). Normally the success or failures of start up businesses are often determined by various critical factors. These factors are previous work experience in the start up business operations; a strong management team and employees which is critical in enabling the performance of critical tasks that will see the start up kick off operate strategically; and personal networks which is very critical in enabling the business start getting its first clients or referral clients (Boyer, Creech, & Paas, 2008). This helps in getting the business off the ground and running.
Other success factors include learning from past failures which would help an entrepreneur learn how to avoid failures and the various pitfalls that a start up may face; developing a clear vision and mission for the company which determines what the business intends to achieve in the long run and how it will achieve it; the uniqueness of the product being offered in the market and the need that it will satisfy determined by the demand. This would greatly impact the performance of a start up and may influence whether it succeeds or fails since it is the product portfolios that attract buyers to it; capital requirements of a business also determines whether or not it will be successful. This is because a business that requires more capital than is available or can be obtained would rarely even take off (Boyer, Creech, & Paas, 2008; Devang, Wilkinson, and Yallup, 2009). In addition, the ability to understand what risks to take and how to evaluate the feasibility and impact of a risk on the business is a critical facto in determining the success or failure of the business. Those who take uncalculated risks haphazardly would ...
The critical factors that determine the success or failure are determined.