Most successful start-ups have a few key elements in common. Without them a start up will not likely be anything more than a lifestyle business - one that provides the owner a decent lifestyle. By definition a lifestyle business is not a start-up.
What do we mean by ‘start-up’? It is a business built to grow exponentially. Many business ideas require capital to grow, but some will scale, growing quickly with small changes to the process, via the internet. For our purposes this is what we define as a start-up.
It is important to note that a start-up can be built from anywhere. With today’s tools of distribution being in a large market like LA, NY or SF is not necessary. With a clear focus on GROWTH, start-ups can come from anywhere like Ottawa, Waterloo, Halifax, Vancouver, Toronto or Montreal. So we asked John Ruffolo, CEO of OMERS Ventures, what drives GROWTH?
The first element without question is PASSION.
Ruffolo puts it this way, " In the very first meeting I am listening for what drives this person. Make no mistake, the success of any business comes down to a single person and their leadership. Even if there are co-founders, there is always that single driving force, that passion that never backs down. Apple’s Steve Jobs and Facebook’s Mark Zuckerberg each had a great team of extremely talented people around them, but they were the source of the constant flame that always burned bright. They had a passion that called them. In Steve's case it was 'make a dent in the universe' and in Mark's it was 'connect everyone' “.
Ruffolo says “Every start-up encounters many obstacles and pitfalls. Passion is what carries an entrepreneur through to fulfill the vision, no matter what. Passion, or 'what drives this person' to solve this issue must be deep enough to carry the day – or weeks, months, even years. Making money is a natural result and should always be distinguished from starting a business. I have seen too many so-called entrepreneurs who were passionate about making money cause their start up to fail because they had their eye on the wrong ball. Being passionate about making money is not the same as being passionate about solving a problem that a lot people will value."
The second ingredient is CREATING VALUE. Remember that small group of snowboarders who wanted to sell stuff to other snowboarders online? Sounds easy enough, until they dug into it and found out that consultants and programmers wanted their first born to help them set up a functioning e-Commerce website. One of the co-founders learned something about programming with Ruby On Rails. The next thing you know their friends were asking if they could help them. Those were the early days of Shopify, driven by a simple passion: to sell snowboarding stuff online. As the business grew so did the vision. Now for as little as $19.95 month with Shopify anyone can sell anything anywhere in the world online. That opens up a lot of possibilities! Steve Jobs would say that made a dent in the universe.
The idea itself is clearly a key ingredient. Often the best ideas are born out of a mutual personal need. One person sees a need and realizes if they need it others probably do too. A Santa Monica couple hated leaving their dog in a "pee-filled kennel" when they travelled. They discovered a lot of other people shared their view. So many in fact they built an on-line service to connect people to in-home dog sitters - and it has scaled. It is now global. The owner's vision of pets staying in loving homes rather than cold, impersonal kennels is being fulfilled. As long as they stay true to that vision, that passion, and practice sound business management, the money will follow.
The third ingredient is EXPANDING YOUR VISION IN KEEPING WITH YOUR PASSION. John Ruffolo believes good business management advice is plentiful. “There is no shortage of books and business gurus who will dole out advice on request (and often without request). Understanding the passion that creates new business and causes real change in the world, well, that's a completely different story. Aaron Hirschhorn's love for dogs and his desire to have them lovingly cared for when he travelled lead to a business beyond most people's belief. Definitely, he made a lot of 'right' business moves but it was that passion - that vision that had him continue through thick and thin - through the many obstacles being a start up throws at you.”
The fourth element is SURROUND YOURSELF WITH GOOD PEOPLE AND IMPLEMENT SOUND BUSINESS PRACTICES. Unfortunately the fact is many co-founding situations are a group of good friends who happen to be together when the idea was conceived. There are many roles that must be filled with committed, talented people, yet not all roles warrant a “co-founder” status. You must decide which roles are mission critical to your idea and if you feel you need a co-founder, partner with the absolute best person you know.
The fifth element is HANG ON. It is quite a ride, which explains why many come back for more.
1. Find something you are passionate about. (Other than making money)
2. Create a solution that others will value.
3. Keep expanding your vision, in keeping with your passion.
4. Surround yourself with good people and implement sound business practices.
5. Hang on!