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In the business world, it often looks like startups go from idea to billion-dollar valuations in the blink of an eye. But while these overnight success stories are inspiring, they often mask a key truth: building a great, sustainable business takes time, often much more time than most founders, investors and observers expect.
Nothing sells higher than the idea of achieving quick, lightning-fast success, and we have all heard the legend stories – Instagram went from launch to Facebook acquisition for a billion dollars In just 18 months, Uber achieved a valuation of $70 billion less than a decadeand the idea for Airbnb evolved from air mattresses on the front room floor in global hotel giant in a few short years. However, these are the exception moderately than the rule and paint a distorted picture of how long success really takes.
As a founder-turned-investor, I have built and financed highly successful startups. But it took them a long time, in some cases over a decade, to get there. And there’s nothing unsuitable with that. The real secret to building and growing startups lies in the art of patience.
Reality Check: The Real Timeline for Startup Growth
The reality for the most successful startups is much less glamorous than the headline-making firms, and much more time-consuming. When you’re starting a recent business, the following things take the most time, but you need to prioritize to have a likelihood at success:
- Product-market fit: Finding the right product that solves a real problem for a specific market can take years of iteration and change. Take Slack for example – it began as a gaming company and then grew into the workplace communication tool it is today.
- Revenue generation: Developing a sustainable revenue model often requires many trials and adjustments. Pinterest spent years refining its monetization strategy before it achieved profitability.
- Scaling: Growing a small team into a larger organization while maintaining culture and efficiency is a slow and demanding process. Dropbox spent over a decade perfecting its product and scaling operations before its successful IPO.
- Market education: For truly modern products, educating the market and changing consumer behavior takes time. Tesla spent years convincing the market of the viability of electrical vehicles before achieving mainstream success.
I spent eight years at Density, which I co-founded, and we were very focused on getting these areas of the business right. We first tested our idea by manually counting people in a café and publishing the results online. We initially sold Wi-Fi-based billing solutions to retail businesses, but after receiving feedback and interest from larger organizations, we decided to pivot and focus exclusively on business real estate (CRE).
Along the way, we realized that our product wasn’t accurate enough, so we built it from scratch. We’ve expanded into mid-market firms and even found an unexpected use case with airport lounges – if you fly on Delta, you’ll likely see one of our sensors above the lounge doors. Ultimately, we returned to a CRE focus and modified our business model from a per-sensor fee to a square footage-based software fee because it made the most sense for revenue generation.
Since I left the company, this journey continues. This timeline is much more representative of the typical startup experience.
Maintaining momentum in the long run
Long timelines without significant milestones can definitely be demotivating for employees and management. However, there are ways to maintain motivation and momentum in the long run.
Set intermediate goals by breaking down your long-term vision into short-term, achievable goals. This will help your team understand that they are making progress, even if it is gradual. I also consider in celebrating small victories. Recognize and rejoice the small achievements along the way, regardless of how insignificant they could appear.
This can be difficult when you’re working hard to make your idea a reality, but hear me out – it’s incredibly necessary to maintain some semblance of labor-life balance. If everyone works until 9pm and on weekends, they may burn out and be even less likely to stick around in the long run. Encourage your team to take day without work.
Finally, stay connected to the mission. Regularly review and reinforce the company’s core mission and values because it reminds people why they do the work and why they need to proceed to do it, even if progress is slow.
How investors and founders can realize long-term visions
Building a great startup takes time, and it is not just you who needs to be patient – your investors need to be on board too. From the very starting, make sure you have an honest conversation with them about what the trip will be like. Talk about the timeline, key milestones, and what success really means for your startup.
It is crucial to find investors who won’t only conquer your industry, but also share your long-term vision. It’s necessary to raise capital from investors who share your ideology and have a vision for your fund that may outlive your business – an investor can only stay in it for the long term if their fund model supports them.
In general, try to find investors with a good track record and some semblance of operational experience. They often have more empathy for the ups and downs of finding market fit or unlocking revenue. Once you have these people in your corner, keep them in the loop with regular, open communication. And don’t just focus on today’s revenue and growth numbers; concentrate to leading indicators comparable to customer acquisition cost, monthly recurring revenue, and user engagement rates. These are signs that show you are on the right track to future success.
Don’t hesitate to ask investors for help. They bring experience and contacts that may be a game-changer when the going gets tough or you want to scale faster. As a former founder, I try to be a mentor to the firms I invest in. I’m at all times glad to go into detail with founders and help them with operations, brand work, product development and company culture. The more involved your investors are, the higher for you.
Embracing the long game
Building a truly great, sustainable business is more of a marathon than a sprint. This requires not only ambition and labor, but also patience, resilience and a willingness to learn and adapt over time.
For founders, this implies setting realistic expectations from the starting, each for themselves and their teams. This means being prepared for the long haul, celebrating the small wins along the way, and staying focused on the ultimate vision.
For investors, this implies going beyond the lure of quick profits and the willingness to support promising firms on the turbulent path to start-up.
We also need a change in mindset across the industry. We must enjoy not only rapid growth, but also regular, persistent builders who create value over time. With patience, we will create a more sustainable startup ecosystem – one where sustainable firms create real value for society. The most influential firms of our time weren’t created overnight. It was built day by day through patience, perseverance and an unwavering commitment to their vision.