Over many decades playing in the digital space, I’ve had the pleasure of working with some brilliant folks launching my own companies and subsequently as an investor, advisor, or team member when others were starting theirs.
From those highly entrepreneurial experiences, which include “firsts” in the areas of commercial social media, interactive digital signage, SMS mobile marketing, and distributed distance learning, to name just a few, I learned there are three things that can kill a startup (and the passion of the people who make it go) faster than you can say, “Wow…that’s never happened to me before, baby. Really.”
46 years after I launched my first business (a neighborhood lawn cutting venture), just reading the words “No Plan” seems antithetical to the success…of anything. Listen, I’m definitely not one of those people who plans and plans until there’s nothing left to chance and all risk has been mitigated. Not at all. In fact, I can’t see any business succeeding without exposing itself (and it’s people) to some healthy risk at one time or another.
People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year. – Peter F. Drucker
But I’ve seen one too many poorly planned venture launch behind what someone thought was a kick-ass, one-of-a-kind idea that would seriously pay off, including a few of my own. It’s always resulted in personal, professional, and financial heartbreak – and that’s not likely to change unless you avoid the three startup killers I’m discussing here.
Have you seen mixed martial arts (MMA) fighters do their thing? Sure, the activity comes with a bit of risk built-in, but those fighters do some serious planning and training before they ever step into the ring. The fighters with the best strategy, the best training, and the best execution tend to win – and win often. Do they get hurt? Sure, but because of the prep work, the chances of being totally out of the game and not being able to come back are slim.
You need to plan and prepare like you’re going into a steel cage MMA match. The goal is to win and protect yourself from being beaten down so badly that you can’t ever come back for another match.
If you’re over 18, you’ve likely been associated with a failed business led by some incompetent jabronie (or group of jabronies) with no clue how to plan, staff, or run a business. They were probably the people with the capital or, worse yet, put in place by the people with the money but for all the wrong reasons.
The most successful leaders I’ve worked with and for surround themselves with people who are smarter than they are. As Phil Libin, the co-founder and Executive Chairman of Evernote says, “Everyone who reports to me has to be much better at doing his or her job than I could ever be.” Hire people who compliment your skills and are way smarter than you, then get the hell out of their way.
Those great leaders take all of the credit when things go wrong and little or no credit when things go right. They empower their people to make decisions and execute and firmly believe that mistakes are opportunities to learn. Great leaders breed kick-ass staff who become great leaders themselves.
When it comes down to it, startups already have the odds stacked against them. Why push the odds further in the house’s favor with poor leadership?
Have you been a small cog in the wheel of a startup? Did you find yourself looking around at some of your colleagues only to hear that little voice in your head saying, “If assholes could fly, this place would be an airport?” I know, it’s not that you’re a nasty person. It’s just the overwhelming feeling that, if the success of the company (and your upside) is dependent on these jabronies, you might as well get your Linkedin on and find something else to do with those 100 hours a week you’ve been spending in that place.
As Jim Collins, the author of “Good to Great” says, first you need to get the right people on the bus (and make sure they’re in the right seats) and the wrong people off the bus. The inability to get the right people on the bus and in the right seats while continually hiring the wrong people is a business killer. Period. How does this happen over and over again when simple logic screams that (the right) people are the most important asset a company has?
Simple. Please see “Poor Leadership, above. The same incompetent, Peter Principle execs running these companies tend to hire people just like them. Once the cycle starts, it’s tough to stop and before you know it, you’re rolling one of those really cool, ergonomic, $1,000 chairs out of the airport – I mean, the building – while your co-workers sit around blubbering about how shocked they are that the business tanked.
I Was a Jabronie, Too
Truth be told, I’m guilty of all three of these startup killers before I learned what it really takes to plan, staff, and run a business – and I’m still learning. Yup…I was one of the incompetent jabronies I speak of. And it cost me plenty to learn how to do it right, which makes me totally qualified to lay it down and call it as I see it! I’m not here to help you guess. I’m telling you because I know. I’ve made the mistakes, made and lost the money, and have also learned how not to make the same mistakes over and over again (for the record, even though I love me some risk, these days I make way more than I lose).
How to Build a Business That’ll Survive and Thrive
Ok. Now that I’ve shared my thoughts around three ways to kill a startup, let’s talk about what you can do to build a business that’ll survive and thrive.
First, make sure you’ve taken the time to lay out a solid plan. The most idiotic thing you can do is launch a business without a solid plan. It’s like buying a new car and driving it off the lot with no oil in it – you’re destined for a rough ride. I love flying by the seat of my pants just as much as the next guy and I’ve definitely got that latent impatient entrepreneur gene, but every time I’ve rushed to launch without even a minimally viable plan, I’ve Failed (note the capital “F”).
Don’t labor over the planning phase – it doesn’t have to take months or years. Take some time to pull your thoughts together, validate it against the real world/marketplace, and bounce it off some people you trust. Done.
Next, if you’re starting a business and you couldn’t lead a Weight Watchers outing to Carvel, find someone who can. Make sure that person knows how a business is supposed to be planned, staffed, and run and shares your passion for The Plan. As for hiring right – getting the right people on the bus – make sure your leader gets it. Only the right people belong on the bus. Keep in mind that it’s never too late to fix bad hiring mistakes. Simply pull the bus over and discharge each and every person who doesn’t belong.
What do you think? Are there other things you’d add to my three ways to kill a startup? What about some of the things you’ve learned/done to build a kick-ass business? Leave a comment – I’d love to hear from you.