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5 Ways to Increase Startup Success Rates

Andrius Ziuznys

Updated on Jul 25, 2022
Published on Jul 25, 2022
big company building

A brief introduction to startups

Risk and reward

Startup companies are generally risky. Venture capital investors fund a startup without any guaranteed assurances that the investment would pay off. It has been calculated that approximately 90% of all startups fail.

However, there is an upside to it. Even though 9/10 of your opportunities will most likely go to waste, that 1/10 chance will come around eventually and compensate for all your losses. That one successful startup can generate enough profit to forget about the previous failed ventures.

Venture capital funding

Venture capital funding is one of the essential parts of startup success. It might be possible for a startup to achieve unicorn status on its own, but it's usually a significantly more challenging path. It is estimated that 1/3 of all small businesses start their venture with less than $5,000 in their pocket.

With that in mind, attracting investors as soon as possible is crucial to sustaining the business and not running out of capital.

The thing is, funding a startup is beneficial to both sides, even if the startup fails along the way. The VC fund distributes its investments into several companies knowing that most of them, or all of them, won't pay off.

It's a risk that venture capitalists take for a chance of generous returns from at least one startup along the way. And funded startups are able to scale their business faster and with more confidence, knowing that they will receive not only financial support but also guidance.

5 things that make most successful startups

There is a wide variety of aspects that could make or break a startup company. Some of them are bigger than others, however, in this section, we will discuss the most important business tips for startups: idea, team, business model, funding, and timing.


Idea, being the starting ground for developing a new business, is important, but keep in mind that it's extremely hard, if not impossible, to come up with a unique idea that has not crossed some other entrepreneur’s mind at some point over the years.

The more important step is to execute the idea in a way that contributes to your clients' needs and benefits your company at the same time. Execution, in turn, requires a dedicated team.


A team of employees is what brings the idea(s) to life. Finding a great team of best talent could be hard work, and that's where Coresignal steps in to help you out.

Coresignal provides you with high-quality employee data from multiple sources for unprecedented accuracy. With this data, you no longer need to source talent on your own and waste precious time and resources that could be spent on actively building and improving your company and profits.

Automatization of such process allows you to build a dream team in no time and fuel your startup's success.

Business model

Establishing a great business model right at the start is imperative to sustain long-term startup success. It's possible to change the business model along the way if it's not working out so well, but doing that will have certain consequences.

For example, it might put your business to a stop for some time, or at least limit the operations until the model is back on track. After all, cash flow and revenue stream both rely on a defined business model.

Therefore, the business model should be well-adjusted to benefit your company instead of potentially damaging it.


Funding is one of the main contributors that have defined success for some startups, however, not all startups that receive generous funding tend to succeed.

Therefore, you should focus more on your business model and execution and think of funding not as the ultimate goal, but as means to an end. In other words, it should fuel your already existing business growth.


Last, but definitely not least, is timing. You may have a great idea and execution, but if the market is not ready for your product yet, the efforts are bound to fail.

One significant example of poor timing is Bill Gates' release of tablets. In 2001, he revealed the first prototype for the tablet and failed because the market wasn't ready for it. However, years later, Apple came out with its tablets and made a fortune.

Therefore, it's crucial to establish product-market fit and evaluate the situation before releasing new products.


Keys to a successful startup

There isn't a single formula for making a successful startup. However, there are some key points and tips to establish a working business model.

Mainly, there are 4 stages to ensure a startup's success: vision, assessment, planning, and execution.


Vision is the primary ground upon which a successful company can be built. It requires creativity and imagination and could be harder for some than others.


The second step - assessment - relies less on imagination and more on critical thinking. Now it's time to scan your business landscape and see what's happening around you.

Here is a short list of how to proceed with the second step - assessment:

  • Gather as many ideas as you can and single out a few best ones;
  • Think about your potential audience and different segments of it;
  • Establish who might be your direct competitors and learn what you can about them;
  • Figure out the competitive advantages of your product or service;
  • Identify the potential obstacles you're likely to face along the way;
  • Estimate the funding that you need to get to market.

These steps will help you find your product-market fit and establish the path you need to take.


Business success relies heavily on the planning aspect. It takes a considerable amount of time to plan funding, recruiting, sales & marketing, company growth, customer acquisition, and more.

It's important to prepare a business plan for difficulties and obstacles along the way instead of expecting smooth sailing. The more prepared you are for the adversities, the higher your chance of building a successful startup.


Once you have established your vision, assessed the situation, and planned accordingly, you can proceed to execution.

Execution is the final step where your ideas are finally brought to life and materialized.

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Successful startup stories

Here you will find a few short stories about well-known startups and successful business owners.

You may also find some business advice or get inspiration and entrepreneurial passion to start your own business.


When Reid Hoffman founded LinkedIn, it wasn't the only platform for a job board. It wasn't a unique idea.

In 1993, he decided to start a software company alongside his studies. When he first approached VCs for funding, he got rejected. After that, he decided to get some other jobs along the way in Apple and Fujitsu, but eventually left to start a business.

In 2003, R.Hoffman launched LinkedIn and attracted an investment from Sequoia. After a while, in 2015, LinkedIn became one of the top 10 websites around the world. The rest is history.


A social media website, founded by Harvard University students in 2003, one of whom is Mark Zuckerberg, has become one of the most successful internet businesses.

In the early stages, Facebook was not similar to what we have today at all. It was highly controversial because M. Zuckerberg used to steal images from the University's records. The "hot or not" feature was the thing that made the platform grow exponentially. Essentially, they uploaded images of other students and allowed users to decide whether that person was "hot or not". During the first hours of releasing it, the website gained over 20,000 views.

After seeing such numbers, M. Zuckerberg and co-founders realized that they could turn it into a social network and expand it even further and looked at funding opportunities that would help them expand the project for national, or even international, success. After they got the first investment of $500,000, Facebook continued to grow consistently, attracting more and more users.

In 2012, Facebook reached a milestone of over 1 billion users and made history.


Amazon was founded by Jeff Bezos in 1994, starting out as an out-of-garage small business. Initially, Amazon was supposed to source and distribute books. In 1995, website made its debut. By December 1996, it attracted over 180,000 customers. Fast-forward one year, Amazon gathered around 1 million customers.

Moving on, Amazon expanded its inventory to include consumer electronics, software products, home items, toys, and more.

The thing that made Amazon stand out at the time was the concept of shopping online from home and picking up the delivery at your doorstep. It showed people a novel way of shopping that eliminated the obstacles of commuting to a store, carrying potentially heavy items, and other bothersome tasks.

Amazon's success factors included innovation and unprecedented customer service. It was the first platform to adopt technological advancements to increase performance. It was also experimenting with AI, which was a pretty risky business at the time.

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In general, what we can learn from these short success stories is that an idea is only as good as its execution, since it's nearly impossible to come up with a unique idea. 

Also, when you have established where you want your business to go, attracting interested investors is essential for consistent improvement of the product.

Lastly, not being afraid to innovate and finding better ways of doing something (i.e. shopping) may yield significant results, as we can see from the Amazon example.


All in all, startup success depends on many factors. However, using the tips discussed in this article is a good practice to pave the way for new entrepreneurs. A small group of trusted business advisors or a co-founder could also help you manage the business better and stay ahead of the competition.

Keeping an eye on the latest trends could also diminish the chances of failure and create a business that will lead the way to success.

Frequently Asked Questions

What makes a startup successful?

There are several key things that help make a successful startup: idea, team, execution, business model, funding, and timing.

How to measure startup success?

Measuring startup success mostly correlates with measuring business performance, which can be done by analyzing quantitative and qualitative metrics, such as revenue, profits, quality of service, product satisfaction, and more.

How to predict startup success?

Predicting startup success is not an easy thing to do. Conducting a certain trend analysis, or predictive analysis, might help, but the future is not set in stone and circumstances may change. In general, it's logical to follow best practices that are mentioned in the article: defining a vision, assessing the competitive landscape, planning, and executing.

How many startups are successful?

So far, the highest five-year success rate for new businesses stands at around 50%. However, around 90% of all startups eventually fail.

What types of startups are most successful?

E-commerce, mobile apps, and SaaS startups are among the ones that often reach profitability.