In addition to using cutting-edge innovation expertise and know-how, some startups certainly all have the same goal: to become unicorns themselves. But for these 320,000 new entrepreneurs who take on the challenge of setting up their own business, many obstacles loom … Focus on the pitfalls encountered by these entrepreneurs in the process of creating their business and the levers to support these young people shoots.
Birth of a startup: from the creation stage to development
The lifecycle of a startup can be summarized in two main phases. The creation, which is estimated to take approximately 1 to 2 years, will concentrate efforts on product development and the choice of the market in which to position itself. The development phase will analyze the product-market fit. It is here that the company will have to prove itself, by generating growth, a fundamental factor for the success of a possible new fundraising in order to develop on a larger scale. Hypergrowth(scalability so sought after), in other words, the purpose of these stages will determine the growth potential of these companies in the process of creation.
Passing the course of 2 to 5 years: the test of strength
Despite a complex economic situation, it is ideal for starting a business. Combining both a strong entrepreneurial spirit (76% of people believe that starting a business is more rewarding than a salaried workforce) and levers facilitating financing, private (a venture capital funds are the 2nd in Europe in terms of number supported companies) and public (tax measures for SMEs or the action of Bpifrance), it is the ideal cradle to create a business. As a reminder, according to INSEE, the percentage of companies formed by VSEs / SMEs is 99.9%.
However, market analysis proves that it remains complicated to ensure a certain sustainability for one’s business since it seems that a large part of young companies unfortunately do not pass the 2-5 year old mark. The numbers speak for themselves. If the average life expectancy of start-ups has increased in recent years, it remains very low: four years. Unfortunately, this is the lifespan of 60% of start-ups!
It emerges that the main difficulties in the development phase are linked to the economic situation, administrative and fiscal constraints, without forgetting the financing. Among the operational problems, the issue of human resources comes first, highlighting the difficulty talents and retain them.
Tips to make a difference
There are avenues and tools to improve the life expectancy of young shoots. In general, beyond the skills of the management team, the company’s ecosystem plays a fundamental role in its survival. By capitalizing on public bodies, particularly in terms of financing, companies in the creation phase seem to significantly improve their life expectancy.
Large companies themselves also have every interest in getting out of the game. In addition to this hat of incubator, large companies like startups must be able to take advantage of their respective internal skills. Why not work in particular in project mode, thus making it possible to pool knowledge? In essence, open innovation is based on the sharing of resources between companies and employees. An operation that has already proven itself, particularly at Lego, Toshiba and Orange.
Most countries have many assets to set up its own business. You still have to know how to surround yourself, by setting up skills-based sponsorship and finding the right investors … A project alone is not enough, the maturation phase is fundamental and the construction of a solid ecosystem seems be the key to success!