For anyone who has followed high-tech for the last few decades, building a lasting company in this industry is not easy or common. As a longtime entrepreneur, I’ve seen many promising companies stumble and fall in my tenure. So few are built to stand the test of time. In fact, the failure rate is upwards of 70% for the average tech startup during the first part of this decade, which is a stark reminder that success is the exception, not the rule.
For a new company to work, and work well, there are many things that have to go right (and, quite often, some good fortune doesn’t hurt, either!). In my view, there are three keys to building a lasting high-tech company, one that can ride out the waves of highs and lows that are hallmarks of not just the world of startups but the world of high-tech, in particular.
Get The Team Right
Your people are your most important assets. This is especially true of your leadership team. These are the faces who will greet you every morning in the office, back you up in the boardroom and keep your business moving forward. Getting the team dynamic right is probably the most critical thing to nail and the thing that most quickly cripples a young company when it’s not done well. A great team must provide an almost perfect balance between skills and experience — from functional competency to diversity to complementary skill sets and adaptability.
There are many questions to ask yourself about potential hires as you build your team: Do their functional skills complement one another? Do their gifts and aptitudes provide a diverse pool of talent? Do they bring the right type of experience that will get the company moving and then propel it in the direction you want to take it? Do you have a good balance between introverts, extroverts and those somewhere in between? Are there natural-born leaders who openly voice their ideas to the team? You will need those leader types. They stretch the rest of the members of your team beyond their comfort zones, helping them think outside of the box. But you also need the pragmatists who are scrappy and loyal, those ones who are great at getting their hands dirty and finding ways to make your vision a reality.
Define, And Embody, The Culture
The most important aspect of culture is that it underscores what you, as the leader of your organization, embody as you run the business. In my case, I place a tremendous amount of value on our people and helping them succeed. This means setting them up for success from the start — making sure they have the tools they need to do their jobs — but also ensuring that they feel empowered to enact real change in their area of influence, ultimately making an impact on the company. It also means supporting them on both a professional and personal level — achieving a work/life balance is a theme that runs through our culture in a big way at SailPoint. A lot of that has to do with valuing the person behind the employee badge as just that: a person.
Listen To The Market
Building a product that the market is lacking seems like a pretty straightforward problem to address. However, a lot of companies fall short of achieving that goal because they get caught in an inside-out view of the world. They dream up a product that sounds compelling, has lots of bells and whistles, and, before they know it, they’ve fallen in love with the product. But they’ve forgotten several key questions: What does the market need? Where is there a missing hole to be filled? What are customers clamoring for? And, most importantly, can you execute on building and delivering the product or service once you’ve addressed these crucial questions?
For example, you could have the right idea but execute it poorly or show up late (or uncomfortably early) to the proverbial party. This is true of HP’s attempt to enter the tablet market with its own version: the HP Touchpad. This foray into tablets didn’t last very long. The company was simply too late to market. The opposite is true of Google Glass — a cool idea, but it just didn’t have enough applicability to make it a hit with consumers. The tech giant may make another run at it, but that first attempt was a costly learning experience.
As you build your company and product roadmap, turn to the market first, turn to it again as you build your product to elicit feedback and, yes, turn to it again when you’re ready to launch that product publicly. By listening to the market and your potential customers, you’ll be set up for success because your product meets a clear market need versus being that product (and company) that crashed and burned well before its time.
The tech industry continues to adapt and evolve, and there appears to be no end in sight. It’s easy to get caught up thinking that you’re on to the next big idea, but before you mortgage your house or spend hours developing that VC pitch, think through how you would find your people, what you would build into your culture and how to verify that you’re meeting a real market need. Building from a strong foundation based on these three key tenets is critical to not only getting your company off the ground but also to ensure its long-term success.
This post was previously published on Forbes.com.