How Do Start-Ups Succeed?

NEW YORK – The most popular stories often seem to end at the beginning. “…and so Juan and Alice got married.” Did they actually live happily ever after? “He was elected President.” But how did the country do under his rule? “The entrepreneur got her startup funding.” But did the company succeed?

Let’s consider that last one. Specifically, what happens to entrepreneurs once they get their money? Everywhere I go – and I have been in Moscow, Libreville (Gabon), and Dublin in the last few weeks – smart people ask how to get companies through the next phase of growth. How can we scale entrepreneurship to the point that it has a measurable and meaningful impact on the economy?

The real impact of both Microsoft and Google is not on their shareholders, or even on the people that they employ directly, but on the millions of people whom they have made more productive. That argues for companies that solve real problems, rather than for yet another photo-sharing app for rich, appealing (to advertisers) people with time on their hands.

It turns out that money is rarely enough – not just that there is not enough of it, but that entrepreneurs need something else. They need advice, contacts, customers, and employees immersed in a culture of effectiveness to succeed. But they also have to create something of real value to have meaningful economic impact in the long term.