The Definition of a Successful Startup Is Surprisingly Complex

The words “successful startup” seem pretty straightforward at first glance. But, what do you picture when you hear them? A unicorn? A world-famous company, like Twitter or Facebook? A small company bootstrapping and grinding through the night, with steady growth? A lifestyle business? A thriving brick-and-mortar shop? A string of failures, followed by the perfect product/market fit?

Like so many things in the startup world, the definition of what a successful startup truly is can be elusive — and frustratingly subjective. While some founders might strive for that billion dollar valuation, others measure their success by how happy their customers are or the biggest impact they’ve made on the world. When we dig past the visions of unicorns dancing in founders heads, the elements of success become much more nuanced.

And, frankly, more interesting.

We talk a lot about success in the startup world. We strive for it. We rely on it to help push us forward. So it’s worth asking: What are the characteristics of the most successful startups?

We took a deep dive into the Startups.co community to answer exactly that question. Here’s what we learned.

A successful startup is… being able to spend time with family.

That hustle and grind is real, whether you’re working a corporate 9 to 5 or you’re trying to get a new business off the ground. While the stereotype of startup life — especially of the early stages — is one of no life and no time spent outside of work, being your own boss does mean being in charge of your own schedule in a way that simply isn’t possible for an employee.

So, for some founders, the ability to spend time with family is the definition of a successful startup. Jim Jacobs, President of FocusInsite, sold his previous company for to General Electric for nine figures. These days, he has a new focus.

“Success is all relative and I used to think it was one thing: Money,” Jacobs says. “I was dead wrong. I’ve watched founders lose their health, get divorced, or alienated from their kids. We have an ambitious 10x plan to grow this business exponentially, not incrementally, and we’ve tripled in the past 18 months.

Not getting a whole lot of sleep, but I still coach my kids youth hockey teams. Is it the ‘highest and best use’ of my time? Yes! Family priorities teach me to hire better, faster and delegate quicker. Making your kids a priority makes running your business without you a priority. Block out your calendar and keep your personal relationships strong, and the rest will take care of itself!”

A successful startup is… making a positive impact on the world.

We tend to default to money when we’re talking about success, but for some founders the ability to make a difference — to truly make a positive impact on the world — is the definition of a successful startup. That’s the case for nurse practitioner Rick McCartney, who considers his first three businesses practice for his current startup, iRewardHealth.

“I make 1/3 of what I made a year ago,” McCartney tells Startups.co. “This is because I decided to leave my clinic job and sell my private practice in pursuit of scaling a technology startup with early traction and an opportunity at exponential growth. I consider myself successful, and define success by being able to be content in my daily work, and knowing that each day’s tasks have brought me closer to having a positive impact on the world.”

Another former nurse and health practitioner, Anna Morrison, MSN, ARNP, FNP-BC, looked at her experience in the healthcare industry and decided she wanted to have an even bigger impact — so she founded The No BS Supplements Company. She was “sick of all the false information and inflated claims about supplements and wellness products in the fitness and health industry.”

“I saw how this had a negative effect on my patients — especially women,” Morrison says. “As we age, women are increasingly more susceptible to these falsities, simply because of the society we live in. We don’t allow women to gracefully age and learn about their new bodies, and instead encourage them to look younger, be younger. My passion is helping women over 40 live full, engaging, pro-aging lives in an anti-aging world. I believe this alone makes me a success.”

A successful startup is… doing what you love and helping others do so as well.

The startup life isn’t easy, but truly loving what you do makes those long hours and financial struggles much, much more tolerable. Those of us who have the guts to strike out on our own know that without the passion, no one lasts very long in the startup world. And for some founders, doing what you love — and helping other people do what they love as well — is the definition of a successful startup.

Geoff Roberts has been working in startup SaaS companies for eight years. His current company, Outseta, is a software platform designed to help startups launch more efficiently.

“I have had some success in my career, sure, but I’m sure you will talk to plenty of founders of who have had financial successes that are wildly above and beyond my own,” Roberts says. “I consider myself successful today because I am working with people I genuinely like, trust, and enjoy spending time with. In building a self-managed organization, we are taking the road less traveled and trying to lead by example in building a company that represents a better, more fulfilling future of work. Way too many people hate their job,s and we want to show that there’s a better way of doing things. To me, that’s exciting and that’s success.

Success means enabling myself to live the happiest life possible. It also means trying to provide that same opportunity to others. If I can do those two things, everything else is just gravy.”

Photographer Mitch Russo of MitchRussoTravels has a similar view of success.

“Probably my drive to succeed based on the effecting I can have on people, markets, and team members,” Russo says. “I love to see others benefit from my work, so I create very powerful win-win situations to help my teams grow and prosper. I love feeling like I am wanted for help and guidance by others, I love to contribute to their success.”

A successful startup is… impacT

But “do what you love” and “help others” can feel a little woo woo to some people. For the more practical minded, a successful startup might be measured by how much of an impact it’s had.

That’s how Nathan Lustig, Managing Partner at Magma Partners — a venture capital fund that invests in the best companies from Latin America and helps them target the U.S. market — views his success.

“Since 2014, my partners Francisco, Diego, and I have invested in 30+ companies with founders from 9 countries including Chile, Colombia, Argentina, Costa Rica, Guatemala, U.S., UK, South Korea, and Venezuela,” Lustig says.

“We invest $25 to $75K at the seed stage and then follow on with up to $250K more to help companies scale. We’ve now had more than $7M in follow on funding into our companies from outside investors. Most importantly, our companies now employ more than 300 people and generate more than $10M in revenue per year. This was all possible for less than a typical Silicon Valley seed round.”

A successful startup is… freedom.

Some people value stability. Others value freedom. Startup founders tend to generally fall into the latter camp. That’s definitely the case for Diane Elizabeth, a TechStars Chicago alumna and freelance marketing consultant for more than 10 years.

After two failed ed-tech startups, she pivoted to a lifestyle business: Skin Care Ox, “a high-quality skin care blog focusing on publishing accurate, beautiful, and informative skin care content.”

“When I was young, I set a goal for myself to achieve three freedoms in life: freedom of my time, freedom of my location, and creative freedom,” Elizabeth says. “Basically, I wanted a life where I could do what I want, when I want, where I want. After all, who doesn’t?

I consider myself successful today because I’ve achieved just that: my business covers all of my living expenses, doesn’t require me to be in any given location, I earn passive income so I’m not required to work each day, and I’m 100% my own boss. I spent a lot of years chasing unicorn startup dreams while forgetting that my primary goal was financial freedom — which does not require a unicorn-style outcome.”

Kean Graham, CEO of leading ad tech firm MonetizeMore, can point to a specific moment when he realized that a successful startup, for him, had a lot to do with freedom. Four months into a South American backpacking trip after getting laid off from his marketing job, he found himself looking over Machu Picchu after a four day hike on the Inca Trail. That’s when he realized that the thing he wanted most was a company that allowed him to work and travel anywhere he wanted.

“Seven months later, I started the digital business which now offers this autonomous lifestyle to each of the 90+ members of our team,” Graham says. “I do consider myself successful because I have not only been able to build a bootstrap business that is competitive against companies that are heavily invested, I have have been able to travel the world at the same time. I am successful because my unique lifestyle provides clarity, inspiration and it grounds me.”

And, finally, financial freedom is a huge factor for a successful startup. Bret Bonnet, founder of Quality Logo Products, knows all too well the struggle of making ends meet.

“Success means financial freedom to me. When the company first started in 2003, I had literally no money to fund the venture,” Bonnet says. “All I had to work with was an old hand-me-down laptop with missing keyboard keys (who would have thought you could miss the letters ‘a’ and ’s’ so much?!), a ‘borrowed’ internet connection from my neighbor, and my personal cellphone. I put all of the company’s expenses on a personal credit card and wound up being nearly six figures in debt! There were only two employees at the time and we worked out of my basement. Fourteen years later, Quality Logo Products makes nearly $50M in revenue, employs 110+ people, is housed in two buildings in the Chicago suburbs, and I’m not in debt anymore.”

A successful startup is… work not feeling like work.

You know the cliché “Do what you love and you’ll never work a day in your life”? Well, like most clichés, it’s grounded in truth. When you truly love what you do, even the longest work days feel good. And for some founders, that feeling is the ultimate definition of a successful startup.

Chris Prendergast discovered that feeling when he invented the Jamstack, a modular amp that hooks into his electric guitar, is totally portable, and uses smartphone apps for custom sounds, backtracks, and online sharing. He was sick of how long it took him to set up all his gear whenever he wanted to play guitar, so he solved his own problem.

“I think if you’ve got a great idea you can really defend, and that fire of reflective confidence in your eye, people believe in you,” Prendergast says. “Anyway, it worked for me and even though I work like a dog, it doesn’t really feel like work.”

Another word for “not feeling like work?” Passion. Ben Cope, founder of the website auditing company The Content Works, sold his last company to one of the biggest publishing companies in the UK.

“I put my success down to the business being my passion,” Cope says. “I didn’t think about profits and focused on building the best business I could. My passion was clear to my clients and helped me stand out from the crowd. Turning a passion into a business just meant that I got to spend more time involved in my passion, so putting in the hours was a win-win and not a chore. If you focus purely on profit, you’ll lose focus on your business.”

A successful startup is… being your own boss.

Say it with me, founders: “I’m not bossy. I am the boss.”

Feels good, doesn’t it?

The ability to control your own destiny — to be not only your own boss but the boss — can be intoxicating. For some founders, then, success is found with that title that starts with a “b.” For Yosef Solomon, founder of uber-luxury boutique Fizzm, getting to be the man on top is his definition of a successful startup.

“I believe success can be measured by happiness and progress in fulfilling what you want out of life and, in my situation, starting my own business allowed me to control the things that made me happy and allowed me to progress,” Solomon says. “Essentially, I feel like I can make and break my own destiny as a business owner and not have to rely on a boss, superior or anyone else to decide whether I succeed or fail.”

A successful startup is… happy customers.

Woe to the startup that provides poor customer service — she won’t be with us long. Keeping customers happy is always important, but for struggling startups it can be the determining factor for whether or not they end up in the failed startup scrap heap. However, some companies take that customer happiness to a whole new level, citing it as their number one marker for whether or not they’re a successful startup.

Max Godin spent years in ecommerce before launching his current startup, CrazyLister, which helps people create professional eBay listings.

“We speak to our customers on a daily basis and gather tons of feedback that guides us to building the next features that will add value to our customers,” Godin says. “This approach drives our growth. We are laser focused on making our customers successful, this is all that matters. To me success is receiving a great feedback from a customer who was able to grow his sales by using CrazyLister.”

A successful startup is… constant growth and evolution.

Like success, growth can mean a lot of things. Growing revenue. Personal growth. Growing number of active users. Growing amount of money being invested. And one marker of a successful startup is constant growth — of any kind. Katelyn McCullough, co-founder of beauty matching business Elwynn + Cass, says that’s what makes her qualified to say she has a successful startup.

“Success to me means constant growth and the pursuit of goal,” McCullough says. “If your business is constantly growing and going in a forward direction, then you are successful, as you are making a difference and working towards the achievement of your goal.”

One aspect of growth is evolution — when the climate changes, a plant will die if doesn’t evolve. The same goes for startups — a successful startup is one that is able to evolve and change with the times. Brittany Finkle, CEO and founder of the online bridal rental boutique Happily Ever Borrowed, explains

“I think what defines us as successful is our ability to not only keep growing every year, but to continue to evolve the way that the wedding industry operates,” Finkle says. “After being in business for over six years, the stigma of renting has transformed into the standard of operation.  Whereas designers used to be afraid to have any of their prices online, they are now asking to be included in our assortment so that they can give access to brides who would otherwise not be able to afford to wear their pieces. While we could of course make more profit by selling products at a high-margin, we define our success through our ability to disrupt the industry and change the status quo.”

A successful startup is… disrupting the market.

“Disruption” has become such a cliché — scripted into every pitch deck presented at every VC meeting and every tech conference for the past decade — that it almost doesn’t mean anything anymore.

Key word: almost. Because, sometimes, startups really do disrupt an industry in a new and exciting way. For Raj Singh, founder and CEO of DroneCast, LLC, disrupting the ad industry is what makes his company a successful startup.

“After exploring the world of entrepreneurship, I founded DroneCast in 2014 as a drone-based advertising company, which is basically what it sounds like; we flew drones around at events with advertisements/banners on them,” Singh says. “But of course it became much more than just that. Ford Motors and other Fortune 500 companies partnered with us to present interactive advertisements at their events. For example, at Ford’s international auto show, drones would have a phone number on the banners so attendees could text in to receive a prize. Our largest presentation of drones was at the Super Bowl halftime show featuring Lady Gaga.”

A successful startup is… overcoming fear.

Fear protects us from danger — but it also keeps us from taking the kinds of risks that can result in major success. Overcoming that fear is the milestone that tells some founders that they’ve created a successful startup. That’s the case for Hernan Giraldo, founder and CEO of iTOi.

“I measure success by the number of personal limitations and fears that I have overcome,” Giraldo says. “At a personal level, I have detached my self worth from my bank account balance. The fear of failing and starting over in my career is gone, the transmutation of that fear — amidst high family and social expectations — is my number one victory in life.  No one will ever take that away from me.”

So what is a successful startup To You?

It’s easy to assume that all successful startups look alike: Millions raised in funding. Exponential user growth. A big exit. But, as we found speaking with these founders, th success is not usually  measured by those outside factors. Instead, true success is determined by each individual.

And yeah, sometimes that means a billion dollar valuation. But, not as often as you’d think.

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Also worth a read:

1. Team Goals Are Your Company’s Recipe for Success
2. The Secret to a Successful Product Launch Strategy
3. My Startup Failed – But I Was Still Successful. Here’s Why
4. How to Scale Growth for Business Success
5. 3 Tips to Ensure Your Growth Metrics Represent Your Startup’s Success