How To Drive Long-Term Startup Success In Turbulent Times
Studies show that opportunity recognition and innovation in tough economic periods are stronger determinants of startup success than in periods of economic prosperity. Here are three key imperatives that startups should follow to drive long-term success in turbulent times. GETTY
How To Drive Long-Term Startup Success In Turbulent Times
“There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune,” William Shakespeare. Business is all about seizing opportunities. Understandably, many entrepreneurs see turbulent times as periods of deceleration in venture initiation, innovation and growth. When the going gets tough, most entrepreneurs will pass on incredible opportunities leaving all the rewards to the few who seize and persist.
In fact, studies show that opportunity recognition and innovation in tough economic periods are stronger determinants of startup success than in periods of economic prosperity. Research further shows that the novelty of the product and service opportunities captured and introduced by startups launched during weak economic periods is significantly higher than solutions introduced in a thriving economy.
The results can be explained by entrepreneurs’ willingness to make bolder decisions focused on long-term returns. Since economic activity generally declines in slow economic periods and because most entrepreneurs will prioritize survival and short-term profits over innovation, leaving opportunities on the table, those who invest to create, reap the benefits. Here are three key imperatives that startups should follow to drive long-term success in turbulent times.
1. Differentiate Between Business Opportunity And Necessity
Necessity-driven new ventures are when entrepreneurs choose entrepreneurship to substitute, complement or replace another business or a job during weak market conditions.
Unlike necessity startups, research shows that opportunity-driven ventures are more likely to innovate and thrive in turbulent times. It is when entrepreneurs recognize an opportunity, understand that weak economic conditions will eventually reverse, and prioritize long-term over short-term returns.
