Expert Advice- What Successful Startups Think About?
Are you the right person to be the CEO of your company? Whilst that question might not be yours to worry about if you run a large organization that chose you for this position, it becomes a very important one to think through when you are the founder and the CEO of your own company. This question was one of the many important points discussed at the ‘Scale Up Bootcamp’ run by INSEAD ME AbuDhabi campus last week. The session was led by eminent domain experts, venture capitalists, and entrepreneurs. This article captures 6 key points that stood out for me in the day -
Are you the right person to be the CEO of your company?
For the number of traits and skills written about great leadership, the truth is that there hasn’t been a single formula identified to mark a great leader. From Mark Zuckerberg, to Steve Jobs, to Paul Polman or Sal Khan each one is unique & has greatness with both exemplary strengths and many times glaring weaknesses — so why is it that some CEOs fail and some succeed? The Clifton Strengths Assessment tool identifies 4 domains of leadership strengths encompassing 34 themes in total- the domains being- Strategic thinking, Executing, Influencing & Relationship Building- everyone is likely to have 1 or 2 areas of these 4 that are predominant in their personality as key strengths, but when running a business- you need all of these domains covered- and that’s where the importance of identifying your own strengths and having a great team with complementary strengths comes into picture, so you and your team complement each other on both behavioral traits as well as functional skill sets. If you as a CEO can identify your strengths and ensure that your team members are taking on roles that allow them to play to theirs, it will become a key determinant in your ability to find success in whatever you set out to do
But what about the weaknesses? Aren’t we required to develop on them? Many performance reviews are deemed incomplete unless an employee’s weaknesses are identified and a project is given to them to work on those weak areas — I think of it as Michael Phelps being asked to take singing lessons because granted he is a great swimmer but you also needed a singer for the national anthem. Specially in the startup scenario, where your resources are stretched, as an entrepreneur your objective needs to be focused on finetuning your business concept to solve a real problem — faster, cheaper, better than anyone else in the world, then make it big to drive the investor ROI and the CEO/Founder equity, it is not to develop people on what they are not good at. You need yourself and your team to play to their strengths by putting the right people in the right job and help them flourish not fail. Do not set yourself up for failure- it burns everyone out- many times very good people and always time and cash.
Cash- the third most important factor to keep an eye on (not the balance sheet)
In a survey of reasons of failure for startups- 29% of companies were found to fail not because they couldn’t succeed (given the time) but because the cash ran out. Across the stages of startup journey- Pre revenue, commercialization, scale up and expansion- cash is key- so questioning every dollar spent- to check how can it be spent better is critical to sustain- it is like the oxygen tank when scuba diving, you don’t want it running out before you surface.
Number Four: Is it alright to pivot? 3M started in 1902 as a corundum mining venture in Minnesota US, however soon the company realized that it was actually a worthless mineral that they were after and therefore had to abandon the original plan, in 1909 they decided to pivot to selling sandpaper- the rest is history. Marriott started as a root beer stand in 1927 and thirty years after opened their first hotel. The middle eastern Unicorn- Souq which was acquired by Amazon in 2017 for $580 mn (after over a $1Bn valuation), initially started out as an auction based platform! The point being if a new & significant market information or reality becomes available to you, then you must act on it and not become emotionally attached or fearful of shifting from your original path. Whilst wandering in the woods and pivoting on personal whim is a significant solopreneur risk- it can waste your time and resource leading you nowhere- a new observation, competitor or information when discovered must be taken into account to think through and spar with your team members and customers to adjust the course as necessary. Give visibility to your stakeholders and investor and even they would see it in positive light if you have thought it through and built the necessary support and control.
Get the unit economics right: Another very important point is getting it right in one market with one product and one customer- before you scale — prove your product and its economies- ensure you learn and course correct from this one implementation before you decide to conquer the world. If you try to scale before you have proven unit economies and workability- you will likely multiply your problems on all fronts- costs, resources, profitability, user experience and ability to course correct.
And finally one topic from a CTO perspective: What should you think about when designing your architecture and database- think agility of small units which are part of your bigger picture- then make it bold- by ensuring that your data, your architecture is conceptualized and built in smaller units that work together as a one big whole like a school of fish- each independent yet moving synchronously in one single direction- this is a very important point and must be kept in mind specially when designing your database structure.
Thank you INSEAD ME Campus and the speakers Prof. Paul Kewene-Hite, Brian Heywood, Heather Henyon, Chirag Shah and Neetan Chopra for your insights and time that helped me put together my key take-outs to share with the wider startup community. Dear Reader, if you have any thoughts, learnings or opinions, please share in the comments
Written By
Bhavna J Mishra, Founder Browzly Ltd, Browzly offers an innovative and proven reading for pleasure literacy program for use by schools, classrooms and families. Twitter: @BhavnaBrowzly
