The difference between startup success and failure comes down to this one thing

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In every company, employees are an invaluable resource. Not only are they the ones who help startups hit the ground running, working fast and furious to achieve outrageous goals, but they also bring an incredible background of education, experience, skills, creativity, and more.

These are the intangible factors that make human capital a fundamental piece in the puzzle of a startup.

As a former entrepreneur and now investor who helps startups realize their dreams, I know how a talented and motivated workforce can make the difference between a successful business venture and one that fails.

Let’s talk about how human capital can be the secret weapon for a thriving startup.

Related: Beyond the Basics: 5 Surprising Qualities Investors Look for in a Winning Team

Investing in people and their skills

While entrepreneurs have great ideas, they need a team with the right skills to transform their vision from a concept to a viable product or service. This means finding the right people with particular skills and experience to drive innovation and solve problems that others can’t solve.

Personality, attitude and work ethic are crucial. This is an element of human capital that cannot be ignored. You can hire someone who is the best in their field, but if it creates division and conflict in your team, it won’t work.

Instead, the success of your startup depends on people who know what they’re doing and do it well. It’s difficult to build a strong company with good people who don’t contribute to the technical needs of the organization on a daily basis.

It’s a balancing act that you need to get right the first time, as hiring the wrong person can set your company back. And in the fast-paced startup environment, that doesn’t bode well for future investments.

Attract and retain the best talent

Anyone familiar with startup culture knows that things can get pretty dangerous when trying to hire top talent. It is highly competitive, with many fledgling companies vying for valuable capital.

That’s why it’s essential to create a culture that attracts the right candidates. With so much transition over the past decade, there aren’t many ways startups can differentiate themselves in a tangible sense, like working virtually, ping pong tables, free food, etc. Since most companies already offer these things, it becomes more about selling your vision and what the future might hold with the right people on board. Appealing to a candidate’s sense of self-worth and intrinsic value can go a long way in attracting them.

However, once you’ve entered them, the game isn’t over yet. According to Founders Circle, the average employee tenure at high-growth startups is two years. If getting them in wasn’t hard enough, keeping them there is even more challenging.

This churn rate makes sense. Startup life is exhausting and can quickly take a toll on everyone in the organization. This is why employee engagement initiatives are so important. As a business owner, you need to remember that you have real people working for you, and that even the most dedicated among them have needs.

Talk to your team members individually and have honest conversations about how they’re doing, how the company is doing, and how your team can help each other through tough times. Ask them what they need or if there is further education or learning that could help them in their roles. You have no idea how the simple act of taking time to care for your employees, treating them like people and not resources, can motivate them to keep their eyes on the prize.

Related: Here’s what’s brewing in the minds of startup investors

A culture of continuous learning

While the planning and budgetary constraints of running a startup can sometimes be brutal, it’s still important to carve out opportunities for staff to focus on better learning and skill development. Giving employees the opportunity to pursue their passions and improve their craft is an integral part of the human capital process.

When you think about the technology and software industry, change and evolution are constant. It makes sense that you want your team to stay up to date on the latest trends and developments, bringing this new information into your organization. You want your team to evolve with the technology they work with, so give them time to focus on the latest updates and integrate these ideas into their daily work.

Not only is this an essential investment for your company, but you are also sending the message to your employees that you value them and their careers. You want them to be the best version of themselves and give them opportunities to develop their knowledge and experience.

This can be scary, as there is always the possibility that all this new knowledge will be transferred to another organization. But that’s a risk you should be willing to take if it means improving your product and service while strengthening your company culture.

Building a winning team

As mentioned above, I’ve been on both sides of the startup life as an entrepreneur and investor. In my experience, I have found and firmly believe that no single individual can get all the work done, nor does he have the talent to do so.

As a leader within an organization, it is your responsibility to recognize that you can’t do everything and you shouldn’t. Finding the right people makes an incredible difference in the work you do. This includes building a diverse and inclusive team. A strong and diverse team is a good signal to investors of a healthy organization and also pushes your team to think in new and innovative ways that are crucial for development.

Every person in your organization should be viewed as a strategic ally and resource for the ongoing growth, development and success of your company.

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