To succeed in your startup, you'll need Energizer Bunny-level stamina and the wisdom to know how much you don't yet know.
3 minute read
As the fearless leader of a startup, if you haven't heard the all-too-familiar dire warning, you will. Consider it an entrepreneur's rite of passage: "You do know that 20 percent of businesses fail in the first year, right?"
Yes, that sobering statistic is true. Running a successful startup is hard. There's a lot to balance at once. Plus, you'll be strapped by the stressors that come with having limitless passion but finite resources. No wonder so many fledgling companies shutter -- fast!
What exactly causes new businesses to go bust? Something I've termed "visionary complex" is a big culprit: Entrepreneurs place outsize stock in their ideas. They have to! It's the nature of starting a business. Everyone thinks they're Steve Jobs and that a successful founder ignores criticism at all costs, constructive or otherwise. But true leadership looks like a willingness to pivot when presented with new information (if appropriate) as well as knowing when to hold the course in service of your vision. Blind adherence to ideas can upset that balance. The result? Founders blow through six figures to build out a full-fledged product that no one wants to buy.
Another reason for startup failure lies in founders over-trusting their instincts. It's fine to listen to your gut, but it's critical to back up your "Spidey-senses" with a basic understanding of the fundamentals of running a business.
Obviously, not all businesses tank. Plenty enjoy steady growth and success. If that's your biggest goal (of course it is), you'll want to put some practices in place to stay humble. Here are five great ways to start:
If you haven't read Rob Fitzpatrick's The Mom Test, grab a copy. The book highlights how tricky it can be to get authentic feedback when you need it most. And make no mistake: You need authentic feedback. That input can validate your concept and ensure you're on the right track, or it can reveal what needs tweaking before you've headed too far in the wrong direction.
What's the most cost-effective way to conduct research? Embrace the power of the prototype. Deliver minimally viable prototypes to a small representative of a sample target audience. Record the response. Then, make more prototypes. You'd be surprised how much data you can collect, even with rudimentary, non-functioning prototypes. And it's a whole lot cheaper than paying for an actual functioning product only to find out it stinks.
As a founder, you're used to ignoring naysayers. Don't eschew good advice that challenges your initial vision, though. The more open you are to take in new information that you didn't expect, the more effective you'll be in the long run.
History is paved with examples of businesses that became stuck in their ways. Guess what they're called now? Another business failure statistic. Rather than going extinct, be willing to view things from alternative angles.
Want a fast education on how not to fail? Learn at the expense of others, such as mentors. Mentoring is one of the most reliable resources entrepreneurs have. It can also double your chance of survival.
Don't fall into the category of founders who lack the humility to hire a good coach. If you want to perform at your highest ability, surround yourself with "been there, done that" leaders willing to tell you what's up. Consider joining an incubator. If you're already established and growing, I highly recommend EO's Accelerator program, which offers mentorship with EO members.
The sooner you start codifying your processes, the better. This means rethinking the ad-hoc workflows you created as an early-stage company. Write down all your in-house procedures as soon as possible. You can change them later as operations expand. For now, they'll ground your systems.
Avoid overthinking here. It can be tempting to over-engineer your processes for any eventuality at any scale, but that's not practical. Build the framework and expect to continually maintain it as a living document. Give yourself enough runway, craft a creative path forward, and wait as long as you can get away with it before automating. Slow and steady often wins the race when it comes to sweeping changes.
I'm not the first to analogize entrepreneurship with chess, but it remains a terrific metaphor. You must be able (and, perhaps more importantly, willing) to always see several moves ahead. In other words, view the world ahead through a lens that allows you to consider best- and worst-case scenarios.
With these scenarios in mind, play out each one. Conduct a SWOT analysis. Ruminate before making edicts. It's harder than it sounds, especially when you're putting out fires or trapped in analysis paralysis. Nevertheless, being aware of what could be over the next hill ensures that you're prepared for anything.
When it comes to entrepreneurial success, a little planning and business growth strategy goes a long way. Leave the failure to others. You have a dream to realize.