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Cloud Computing

Half of All Startups Fail: Three Tips for Ensuring Yours Survives

Startup founders who participated in Oracle’s Startup Cloud Accelerator outline three key resources for startup success.

By Sarah Perry

August 2018

In the fast-growing world of tech startups, failure is a common occurrence: consider that nearly half go out of business within four years, according to the Bureau of Labor Statistics. From finding the early-stage capital to get started, to hiring talent, to building a product and getting traction in the market, the challenges facing startups abound.

Yet, founders aren’t focused on simply not failing. Instead, they want their fledgling companies to survive—and more importantly, to thrive. Having access to some critical resources can make startup survival much more likely, according to startup founders who participated in the Oracle Startup Cloud Accelerator.

These founders, who helm technology startups around the globe, note that the ability to connect with business and technology expertise, access business networks, and tap into the right technology can accelerate growth and set startups up for long-term success.

Expertise That Pays

Stefan Rehm was the director of operations for two ecommerce companies—in Germany and Brazil—before he founded Intelipost in 2014. “Operations and logistics in Brazil are totally different than in the Western World,” he says. “There’s an additional complexity here.” For instance, there are at least 70,000 logistics companies, and few provide cross-country service.

Ecommerce companies find themselves managing numerous carriers, each with their own fees and tools for tracking shipments. It’s difficult—and it’s also an opportunity, Rehm says. His startup, Sao Paulo-based Intelipost, provides a freight management platform that gives shippers, primarily ecommerce companies, insight and control over the entire shipping process.

While Rehm knows much about logistics and operations, the fact that Intelipost is in the startup ecosystem means the company lacks deep expertise in many areas. “We’re relatively new, and for most of our employees this is their first or second job,” he says. “We don’t have a lot of experience in how to run a software company.”

As part of the first cohort of the Oracle Startup Cloud Accelerator, Rehm was able to tap into Oracle’s expertise and specialists regarding everything from how to set up their sales team to what it takes to create a partner network for reselling and implementing software. Oracle mentors helped the company devise a strategy for approaching larger contracts—and even assisted in closing a large deal.

“As a startup, we don’t have two or three attempts to try things at our disposal; we get one,” Rehm says. “For us, access to this expertise has been a game changer.”

Networks That Open Doors

In addition to expertise, tapping into the right business networks at the right time can open whole new opportunities for startups and speed growth. Gal Oron, CEO of Zoomin, a software startup based in Tel Aviv, has witnessed this firsthand.

Founded three years ago, Zoomin helps companies leverage and personalize their technical product content. Oron says that “until Zoomin came into the world, product content was basically a cost center.” The startup’s software makes this content personal, searchable, and actionable. Zoomin has dozens of customers, including tech giants such as Dell EMC, MasterCard, ServiceNow, Cisco, and McAfee. As part of the accelerator program, Oron and Hannan Saltzman, the company’s vice president of product management, say they’ve been introduced to potential clients in other industries as well, including clients in financial services and oil and gas.

The ability to connect with business and technology expertise, access business networks, and tap into the right technology can accelerate growth and set startups up for long-term success.”

“As a startup company selling into some of the biggest enterprises in the world, it’s not easy to succeed,” Saltzman says. “You have to have a good understanding of the enterprise ecosystem; otherwise, you spend a lot of time not talking to the right people and not understanding how to approach the enterprise sale.”

Oron adds that Oracle mentors helped the startup executives understand that their product needed to complement what these large companies already had—instead of being something brand new. Thanks to connections from the program, the startup was also introduced to prominent venture capitalists and venture capital firms.

Technology That Spurs Growth

In 2009, Charlie Davies called Peter Lilley with a question: “Why can’t you search the Internet by time?” By that, Davies meant that nearly every application that provided directions or showed people locations denoted them by distance. But that’s pointless, Lilley recalls Davies saying, because knowing how long it takes to get somewhere is more important than actual miles, especially in urban areas.

The inquiry spurred the pair to found iGeolise, a London-based travel-time platform, which participated in the Oracle Startup Accelerator program as well. The iGeolise platform enables users to search for locations based on the time it takes to get there. But building the software that can provide this information has been a complicated task for the cofounders—and one that has been streamlined with the help of Oracle’s technology.

“Every week, we have to update the underlying data in the platform for roads, railways, maps, and other transportation information. It’s a lot when you’re doing it for one country, and now we’re live in 25 countries,” Lilley says. That updating had been taking a week to complete—and the startup needed to do it weekly.

The founders outlined the problem to their contacts at Oracle, who gave them access to “two bits of technology”—Kubernetes and Docker—to speed the process. Today, the same updating takes one day. The tech giant also provided Oracle VM and Oracle Bare Metal to help further speed their connections and computing.

Lilley says that while iGeolise doesn’t appear to have a current competitor, he knows one will appear someday. “That means we need to accelerate what we do,” he says. “Having the right technology removed some of the roadblocks so that we can do things faster and scale more easily.”

Starting a company will always require sacrifice, stamina, and a lot of hard work, as these founders can attest. The road to success will never be easy. But with the right expertise, networks, and technology, your startup can avoid needless pitfalls and focus on what’s needed next to grow.

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