Have you ever felt discouraged by the stat that 75% of startups fail?
Are you more interested in hearing about startup mistakes (versus success) so you can apply those lessons to your business?
From my experience working with over a dozen startups, launching my own, and coaching CEOs, one thing I’ve learned is that most great startups have a long list of painful lessons learned along the way. One difference between good startups and remarkable companies is those who persevere through the trials and tribulations.
A few years ago when I was working with author Derek Sivers to launch his book, he told me about his $3.3 million mistake involving not fully reading and understanding something before signing it. (Ouch.) Though painful, he dealt with it, moved forward, and went on to make many more millions.
Part of what you’re signing up for with a startup is screwing up. Making decisions you’ll regret. Feeling as though you’re alone in the midst of a mess. (You’re not alone.)
The sooner you get real about your missteps, the faster you can clean up the mess and move on.
Last week I caught up with my friend Mike Del Ponte. He’s spent a year and half pouring his heart and soul into building Soma, the smart, beautiful, sustainable water filter, which launched yesterday. (The idea is to be like Brita but way better.)
We chatted about his biggest lessons, most challenging mistakes, and what he’ll never do again. Here’s what he shared with me:
1. Deciding on partners or cofounders too early.
Before putting a ring on it, have a dating period. A startup is like a marriage, and cofounder breakups can be ugly if you don’t do your homework.
A few questions to think about in the early stages:
- Does your cofounder have complementary skills and viewpoints (i.e. sales and marketing versus coding and design; dreamer versus pragmatist). Are you greater than the sum of your parts?
- Can you spend 14 hours a day with this person for the next two years? Would you sit next to the person on an overseas flight? Is your relationship entirely professional, or can you be friends and hang out with this person outside of work?
- Do you have a vesting schedule in place? Are you taking equal shares in equity?
2. Not firing fast enough.
A problematic employee can radiate negative ripples throughout your company and hurt productivity and morale with your best employees. Time spent managing underperforming employees is time that can be devoted to higher leverage growth drivers within the company. Address the issue immediately and create a timeline for getting a solution or separation. Keep in mind, though, that people rarely change their habits, and although course correcting a misaligned employee is recommended, don’t hesitate to cut ties and move on if it’s just not working out. Be cordial, but firm–it will be in both of your best interests in the long run.
3. Trusting experts, rather than your gut.
No one is as passionate about the mission of a company as its entrepreneur. Since entrepreneurship is like diving into the ocean with a blindfold, the tendency is to value the wisdom of those who have traveled the path. But each path is different, with different peaks and valleys, unanticipated roadblocks, and new unsteady ground. As a founder, you’ve obsessed over every detail, so define your own destiny. Listen to experts, but also listen to your gut, and ultimately implement your own vision.
4. Settling for “good enough” instead of pushing toward ideal.
Startups move fast. Entrepreneurs get tired. The tendency is to choose the path that is easiest, and when a project, website, design, or product gets to the point where it’s “good enough,” many entrepreneurs stop there. While perfection is not the goal, sometimes it does pay to sweat the small stuff. If your gut tells you something can be better, push until you get where you need to be.
5. Caring about hype, not revenue.
Don’t get distracted from your number one objective: revenue. For a company, there is nothing more important than figuring out a business model that allows your company to consistently make more money than it spends. Don’t let the shiny things–press, awards, pageviews–distract you from your main objective. Yes, these can all lead to revenue and help boost morale, but that’s entirely the point: the shiny things are merely a means to an end. Not an end unto themselves. Stay focused.
What mistakes have you made and what lessons have you learned? Share your experiences in the comments below.
[Image: Flickr user Jimmy Brown]