Alain Closier
Aug 26, 2024
Q: What makes innovative and tech startups successful? Why do many fail?
Monthly Commentary
Q&A with Alain Closier
Alain Closier,
Senior Advisor
Paris, France, Europe
Question:
What makes innovative and tech startups successful? Why do many fail?
Answer:
The lifecycle of a startup encompasses four primary stages: conception, survival, takeoff, and maturity. Each of these stages presents distinct success factors critical to a startup's effectiveness and growth. While fundraising is often regarded as a pivotal element of success, it is not the ultimate measure of a startup's triumph, despite its undeniable importance. Additionally, it is essential to recognize that building a successful startup generally requires more time than anticipated, with notable exceptions such as Facebook and Google.
Each stage of a startup's lifecycle demands different key success factors:
After achieving initial business success, typically several years post-conception, the focus shifts to efficiency. This involves the simultaneous and harmonious improvement of the product or service and the customer acquisition process, a challenging endeavor.
During the takeoff stage, the primary success factor is the ability to scale the business and drive growth aggressively to reach a critical size.
Once a startup attains maturity, sustainability becomes paramount. This stage requires the firm to maintain its market position by adapting its business model to evolving market forces.
These success factors help explain why most startups fail, with only one in ten achieving long-term success. The journey to maturity is often lengthy and demanding.
A crucial takeaway is that a startup's success hinges on its ability to scale effectively. The true challenge lies not in fundraising but in balancing the growth of all key dimensions: the business model, product, human capital, and customer base.
Finally, even if all success criteria are met, success is not guaranteed. Factors such as market timing, the maturity or cost of technology (e.g., electric batteries), can still impede a startup's progress. However, when timing aligns and all success factors are met, the potential for success is limitless. It is important to remember that while the most successful startups are celebrated, they are often the exception amidst a backdrop of numerous failures.
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Alain Closier, Senior Advisor
Paris, France, Europe
Alain Closier is a former member of the General Management Committee of the Société Générale group. With more than 35 years of experience in international banking and finance, he is, and has always been, passionate about creating innovative activities.
Alain Closier is a graduate of the National School of Statistics and Economic Administration (ENSAE) and holds a post-graduate degree in Economics from Panthéon-Sorbonne University, in Paris. He began his career as an economist, before joining the International Treasury department of Société Générale.
In the 90s, Alain was responsible for the international development of FIMAT. Originally only a French brokerage company, FIMAT has become in just a few years an international leader specializing in brokerage on derivative stock markets with a presence in more than 25 countries.
Alain Closier was also the creator of FIMATEX, a precursor of online brokers. In 2000, FIMATEX was one of the largest IPOs in Paris in the internet sector. After several mergers and acquisitions, FIMATEX became Boursorama, today one of the French leaders in online banking.
Alain Closier's work has been rewarded on several occasions by international financial institutions. As Director of Société Générale Securities Services (SGSS), he was elected “European Personality of the Year in Asset Servicing” in 2010 by Funds Europe magazine. Its teams were recognized both for their expertise in emerging markets and for their presence on a European scale.
Overseeing the development of the bank's venture capital activities in Silicon Valley during the 2000s, Alain Closier acquired in-depth knowledge of the problems encountered by start-ups, both in the United States and in Europe.
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