A Startup’s Path to Profitability

A Startup’s Path to Profitability


The path to profitability varies from startup to startup. I believe there are basic Organisational structures that form the foundation of every successful and profitable startup. Once an entrepreneur gets the foundation wrong it may be take longer than necessary to find the success path again. Entrepreneurs who start a company and understand buyer problems soon become occupied with the details of running the organization.
In the evolution of a technology company, greater percentage of products fail because entrepreneurs no longer focus on buyer problems and building products the market wants to buy, but rather they obsess about the details of managing an ongoing business like hiring and firing, finance, office space, investors, and the like. Outside pressure forces the company to become the opposite of what it set out to accomplish- Building a profitable business.

There is a difference between building the first product and building subsequent products. Depending on the industry, the market and the opportunity identified, a startups may find itself on one of the following paths, and depending on how you handle it, you could be probably be among the few percentage that succeeds or among the larger percentage that fail. Your strategy could be:

Competitor Driven -creating similar products and services and entering the same vertical markets as competitors. This happens a lot in the telecommunication industry. A startup that depends on this strategy must be very good at what they to survive the treat from competitors with huge resources and giant companies behind.

Customer Driven -Letting existing customers define extensions and new features to your products, sometimes creating a market of one to be copied by others. If master this strategy, your customers will be satisfied and you could be on your way to huge profits sooner than you have planned.

Sales Driven -Defining direction by the current needs of prospects .You may be unconsciously pursuing this strategy, but you also have to consider combining the needs of would-be clients who are not yet in the sales funnel yet.

Market Driven – Focusing on the needs of the market you serve to innovate products has worked for huge technology companies. The market determines how products are shaped and designed.

Whatever strategy you adopt, the ultimate goal is to be profitable, maintain or grow your profits. Find what works for you and your investors will be proud of you BUT the most important -you will be proud as an entrepreneur.