A great product or service idea does not necessarily result in a great product or service. A great product does not necessarily result in a great company.

To succeed, a company needs more than a good idea. Its success is largely due to how the idea is executed and whether it addresses a real market need. A stellar management team will ensure the correct decisions are made along the way. Capital is also essential to make everything come together and push the venture ahead. In order for a business to succeed in the long term, it should be able to scale up. One way to scale is to design not one but a pipeline of products. Below, some of the essential criteria that lead to a successful business are listed.

INNOVATION. Startups should be based on innovative services or products that bring unique value to the customer. There needs to be real value created for the customer in the marketplace and this is sometimes difficult to determine. Until that value is determined, it is often necessary to protect the invention. Intellectual property becomes essential for commercialization as a way to guarantee the monopoly needed to justify the cost of development.

INTELLECTUAL PROPERTY. There is no need to have rights to intellectual property (IP) to start up a company. However, if the executive team is seeking significant external financing, it should be aware that many investors require that the anticipated technology be backed by IP. IP serves as a barrier to entry against competing companies that might want to replicate the product. The management team will have to decide whether the market for their product requires this kind of protection.

PRODUCT PIPELINE. Discoveries that could lead to multiple products or product lines, are what many investors look for when funding a startup. Is it a product or a company? A single product alone may not be enough for it to be a viable company and outside financing opportunities may be limited. One can certainly start a new business around a single product, but it is unlikely that the company will be attractive to institutional investors unless the product represents a very large market opportunity. For these cases, the inventor might want to consider licensing the product for further development to one or more established companies, rather than creating a startup.

MARKET NEED. Deciding on the company’s first product is often very difficult. Startups must provide compelling answers to questions such as: What market does this product serve? What products are already in this market? How is this product different from those that already exist? Who are the competitors, and how are their products better or worse than yours?

SPECIALIZED PERSONNEL. Perhaps the most common reason for a startup to fail is lack of adequate management. Early stage technologies will invariably encounter many hurdles before they reach commercialization. Being able to manage the hurdles, raise capital while building a motivated team requires experience, a sophisticated network and unique business talents.

CAPITAL. A startup’s demand for cash depends on the costs to take the product to market. Starting a single product business out of the garage that can be initially funded through personal savings, may not require any outside initial investment capital. In contrast, starting a new pharmaceutical company is going require substantial outside investment from angels or venture capital firms.

The decision on whether to form a modest-investment company or an equity-investment company is largely dependent on the timeline to launch and the nature of the product, which remains to be completed in its development and manufacturing. While the desire to preserve ownership and control of the venture through a modest-investment company is understandable, many commercial opportunities require extensive partnering, both in investment and strategy, if they are to be successful.

A continual flow of innovative ideas is absolutely essential for staying ahead of the pack.