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Two Common Startup Pitfalls
If this is your first start-up, you’re probably getting a lot of advice, including from well-meaning friends who never have and never started a company.
Which advice should you heed? What are the most common pitfalls in year one?
After being involved in at least five now, from successful, to not so much, there are two enduring lessons that stick in my mind. I say that because some of the most exciting and meaningful adventures and friendships in my life have come from these fledging companies, and I want you to enjoy those kinds of experiences too.
I’ve filled the shoes of founder, advisor, consultant or employee. The one that taught me the most was an art “micro-multinational,” a business I co-founded in 2002, and helped run for ten years. Others include a creative agency (branding, strategy, design), an app linking TVs to phones, and a financial services play between China and the U.S..
Stated simply, two year one lessons are:
1. Pure Reactivity:
The leadership or founders lose all perspective on their options, because they are so immersed in the business’ operations. They become almost purely reactive, rather than pro-active or strategic. They don’t know when to say no and when to say f*ck yes. This reactivity then spreads to every aspect of the business’ operations, chasing ghost opportunities way outside the sweet spot. This feels like treading water wearing concrete slippers. I’ve been guilty of this myself.
2. Overcomplicate Everything:
The leadership was so focused on complicating every initiative that nothing happened. Lots of spinning wheels and no finish lines, putting a campaign or product to rest. Relentless simplifying becomes literally unthinkable. To remedy this, I fall back to my dad’s “forgiveness rather than permission” ethos. Learn by doing, however imperfect, bias towards action. When you’re small, just try stuff. In a start-up, there’s no legal team yet to make you aware of the thousand things that could go wrong. The greatest creative asset of a small company is the nimble ability to try out an idea without wrecking a revenue generating behemoth. A “little bets” approach (thank you Peter Sims) will find you your market traction and probably result in some recoverable losses. This love for experimentation can even work at a mid-size to large company.
The larger remedy to both these scenarios starts with K.I.S.S.. Keep It Simple Stupid. Get those creative constraints neither too risk averse nor too novelty seeking. But first, some questions you might want to answer for yourselves.
Where are your revenues? What do you love most about your job? What are you best at? Do you get to do these things every day? What do you suck at? What do you hate doing? Why? How much of that can you cut away from your operations or outsource to vendors? Where can you cut costs?
You’d be shocked how much grief you’ll save by succinctly answering these questions. Often when I’m brought in to get the team to specificity, to clarity, the folks who have brought me in find their own answers to be a revelation. A learning by discussion can yield potent focus.
Here’s another very simple way to get at your core value proposition and the heart of your brand. Without clarity on this, you’re probably setting yourself up for failure, for an exhaustive meandering sprint without any understanding of finish lines. Give yourself some time, but answer these questions:
1. Who are we?
2. What do we do?
3. Why do we do this?
4. Who do we do this for?
5. Why should they give a shit?
6. How do we reach them?
You might be surprised at 1) how hard it can be to answer these 2) how powerful it can be once you’ve refined and simplified your answers.
Strategy, brand and marketing language, all your campaigns and much of the language your sales force will use can all be born out of this core exercise.
Why? Because you’re now addressing the “why” and the “who” more than the “what,” which is your good or service. More and more, people are loyal to companies and organizations when they feel values alignment with that brand’s reasons for being. Get clear on your “why” and work feels more like flow and less like a death march in circles.