In a long-awaited follow up to an
earlier post, entitled, “10
Common Mistakes That Startup and Small Companies Make,” here are 10 suggestions
to improve the chances of your startup’s success:
1. Test your ideas constantly
and be hyper-critical about why you might be wrong–many young entrepreneurs will
prepare the requisite SWOT slide for investors, but don’t really do the
analysis. Validate your ideas with people who will really buy your
product/service. If you can’t get them to work with you early on, your idea is
probably not that compelling … or they “don’t get it.” Either way, you have got
your work cut out and it’s better to know early on.
2. Keep an eye on the market —
If you had a good idea, it is reasonable to assume someone else out there also thought
of it as well. Ignoring the competition
is a big mistake.
3. Keep an eye on the
finances–you will need more money than you think. Much has been written about
this, but it can’t be overemphasized. And be careful with equity. It’s easy to
give out equity early on to save cash, but if you are successful, this becomes
extremely expensive later on.
4. Hire the right people–particularly,
people who complement (not duplicate) your skills, and fit your culture.
Don’t be afraid to hire people who know more than you, as long there is a good
cultural fit. Outsource to buy expertise
you can’t afford in-house, and to perform non-strategic business functions.
5. Stay focused on value, not
fluff–ignore the urge to have a “strategy” for every facet of the business up
front. Stay laser-focused on providing value for customers. Follow your
business plan to make money. You will be a totally different organization once
you have proven your ability to generate cash.
6. Remember, there are many reasons
why a product/service is successful. It may not be the most
technologically-advanced product/service on the market; often it is the one that
is marketed or sold most successfully. Therefore, it is important to know what
you are particularly good at, and then truly excel at it.
7. Encourage a collaborative
environment. There is no monopoly on good ideas. That doesn’t mean that
decision-making is democratic, but it does mean you encourage people to offer
ideas. We give way too much credence to the odd startup with an eccentric
entrepreneur who rules the company by strength of their personality. Also,
credit people for their contributions.
8. Don’t be afraid to be
different. Investors are conservative by nature and will probably want you to
follow the path of comparable companies. If you have a good reason for doing certain things
differently, make sure you can articulate your reasoning , and then ‘go for it.’
9. Life doesn’t have to end
when you create a startup. I have worked in several startups where people stay
late into the night, but they almost always waste a lot of time during the day.
A culture of ‘those who leave early’ are losers, is in my opinion, a poor work
culture. People need to be passionate and diligent about their work, but you should
encourage people to have a life as well. When people feel that they are
respected, they work better and care more. It is not a zero-sum game, after
10. Believe in yourselves–if
you are following some recipe that you found in some ‘how-to’ book, you are
probably on the wrong path. If you truly believe in what you are doing, and you
have done your homework, you stand a much better chance of succeeding. There will be no shortages of ‘nay-sayers’
along the way who will tell you why your idea has already been tried and
Disclaimer: As the veteran of seven startup
companies (two that were successfully sold), these are some ideas that can
produce outstanding results. If you have some additional ideas, feel free to