Why I Love Startups

© Jeanne-Elise M. Heydecker, 2012. All rights reserved.

Having spent the past 25+ years taking startups to the next level, strategy and marketing-wise, here’s my take on what they are and why startups are great. I love building things. I will not live forever, but perhaps something I’ve built will live on beyond me. While many startups are well run by experienced serial entrepreneurs who have learned the hard way how to build companies, most startups have a reputation for the following:

  • smoke & mirrors (no product ready to ship yet)
  • R&D’s undelivered promises (the tech doesn’t work yet)
  • deadlines not met (postponed launches, cancelled press tours, nothing to show at a conference, etc.)
  • constantly shifting product specifications (developers can’t always simply add a feature — it may require a complete do-over)
  • salaries paid on ad hoc schedule (if you’re funded, your burn rate could could be out of control; if you’re bootstrapped, cash flow can cause huge issues for payroll)
  • inexperienced leadership (no financial management, no growth strategy, no monetization experience)
  • job role roulette (yesterday, you were making collections calls, today, you’re running marketing, tomorrow, you’re in charge of customer service)

These are some of the many reasons why many of the more brilliant talent out there aren’t interested in working for startups. These companies give startups a bad name, and you can figure out which are worth your while by asking about these situations (other than the salary issue, but you can ask about how they are funded and how long they have until the next series of funding or product launch dates) during your interview process. If you identify any of these issues, you may want to look a little closer at the organization before accepting their offer.

The company can be any size, but generally under 150 people. Maybe funded, maybe bootstrapped, usually runs lean, doesn’t have a lot of processes and a (mostly) flat hierarchy. I saw a lot of changing business models, which is VERY difficult for established companies to do with their entrenched staff and systems (particularly if there is a labor union involved). Changing company divisions from cost centers to their own P&Ls dramatically changes the way a company does business. Reorganizing a sales department’s income structure, incentivizing new business over old, to improve a sales funnel — that will significantly change an older business to a startup structure.

One company that definitely wasn’t a startup brought me in to work “under the radar” and I was told by my boss, “It will be easier for you to be forgiven than ever get permission here.” I worked as a (mostly) lone wolf, with no support except my boss and the Board, and implemented significant change that was certainly not liked by the staff and their union, but propelled the organization into the top recognized in their industry, winning many awards. (I didn’t win any friends, for sure, but I did win a Webby Award for the effort.) Without my experience in startups, I couldn’t have accomplished what I did there.

Startups have their place and a lot of people can’t work there. Startup staff need to be able to take up the slack, bully their way through projects to make things happen. They may have to take out the trash, feed the fish and water the plants. When I co-founded a company, the founder and I always argued over who’s turn it was to clean the bathrooms and do the vacuuming. Once we brought on other staff, we all shared the cleaning of the office. Leaders need to be able to lead by example as well as present their mission effectively and build solid teams that understand their targets and goals. Let the brilliant people do what they were hired for and get out of their way.

The startup mentality is hard to implement in larger companies because of the cultural attitudes of middle management. People don’t like to take risks, especially those that may affect their career. They have a fear of the unknown. People are incentivized to make things complex in order to create value for their work — a good example would be the endless amounts of paperwork to be reimbursed for your travel expenses. (I’ve given up on that one.) Many owners want to call all the shots and don’t give their executives any authority but all the responsibility. Executives need to be able to assemble a decent team, eliminate waste (in staff and processes), and implement decisions on the fly according to changing business conditions. In one company that I worked for, that meant eliminating half the staff. In another, working nights to be in constant contact with my clients on the other side of the planet. Without the freedom to make these difficult changes would have meant failure, not just for me, but for the company. Excellence comes from providing talented staff with the right tools at the right time for the right purpose, and providing measurable incentives for measurable deliverables.

During the tech bubble I saw a lot of inflated salaries, offices and arrogance (if I ever hear “focus on the eyeballs and the money will come” again, I’ll have to kill that person.). The burn rate on some of these dotcoms was sheer greed and ego. These “kids” had an idea and a presentation and no idea how to make money. I was typically hired for my experience and then had to listen to these kids tell me that, “one year of dotcom experience was worth five years working in brick and mortar companies, and to do it their way (no offense).” But I love revenue. I wanted to focus on making money. They didn’t.

They were only successful because of one thing. What I saw was lucky timing — in an emerging market early with first mover advantage. What I also saw was exit strategies — IPOs & buyouts were the preferred methods because actual earning of revenues was work and took waaaay too much time.

Bitter? Not really… well, except when I meet the rich ba**ard at a function and learn he’s still rich, and I’m still not. :-/

But I love a good startup with a good idea, especially one that does good for the community at large. I love the potential of growing a business. I’ll always take the “road not taken” because that will always be the more interesting path on which to tread. But tread lightly if you take this path; be fleet of foot, flexible, and ready to make a move at a moment’s notice. It is important to your success.

“The world is moving so fast these days that the man who says it can’t be done is generally interrupted by someone doing it.” — Harry Emerson Fosdick