Never Make These 4 Startup Mistakes

In September of 2011, alone in Copenhagen after a full day at an industry conference, I sat in my hotel room on the phone with my good friend Anne Dwane. She was the CEO of our company, Zinch. For weeks we had debated whether to sign a term sheet for a series C venture financing or to sell the company, and this call was the news that our decision to sell was complete. Anne delivered it in her own style: factual, brief, and with a simple congratulations. It was all the call needed. I hung up the phone, paused for a minute, and then burst into tears. I didn’t know why I cried, but it was probably something between joy and cathartic relief. In those moments I experienced an overarching reflection on the 5 years of struggle to launch and build Zinch, the highs and the lows, the triumphs and the abject failures. As I looked in the mirror, so to speak, on my life, and who I had become, I realized that somewhere amid all of the good decisions, my bad decisions and mistakes had a profound impact on me and my team.

I want to share four of these mistakes with you, and I’m going to try to avoid the tactic of thinly veiling one’s strengths as weakness (you know what I’m talking about: the interview in which you’re asked about your weakness and out comes “I’m impatient for great results” or “I’m hard on my team and sometimes push too much towards success”). No self-complimenting here. This will be raw Sid, mistakes exposed in all their ugly glory and recognized for what they were: poor decisions that wasted time, energy, and money.

I caveat all of this with a two additional details: 1) As one of 3 co-founders in Zinch, I recognize that my cofounders had different experiences & perspectives within our journey. This is not the “Zinch story” by any means as that story is one best told by many and from differing perspectives; and 2) our journey was moving from $1–10M in revenue, and therefore had those unique and particular challenges common to tech companies during this startup phase.

Mistake #1: Failing to fully rely on team members

As we grew and hired people with diverse strengths, we moved away from the ‘wear all hats’ model and towards specialized roles. Even though these hires were by intent more competent in certain areas than us founders, I found it difficult to give up the reigns when their way was different than my way. My instinct is to lead, to set the pace and example, and to expect others to follow. So when people didn’t rise to the occasion quite in the manner that I expected — or sometimes simply at the first sign of struggle — it was all too easy for me to remove my trust and confidence in them, to take back the reigns, and to effectively say, “Fine! You know what, I’ll take care of it.”

This was a problem! I undermined my own leadership, the progress of my team members, and their confidence and trust in me. The consequences included getting less from team members, an increased demand on my own time, and the opportunity costs of skimping in other areas of the business. In one particularly painful case, my negative interactions pushed an employee into a corner that unfortunately she never escaped. It was my failing and both of our loss.

Mistake #2: Looking outside our company for silver bullets instead of building internal competencies

Wisdom prods us to find ways to accomplish things more quickly and with fewer resources. So we look for the senior hire, the perfect strategic partnership, and technology re-writes, with the hope that these will move the needle for our business. The trap I fell in was to believe the old adage that ‘the grass is always greener on the other side of the fence.’ I looked outside of our company for the fix, and in so doing expected too much from people external to our team with misaligned interests who were not intimately familiar with the business.

A few of those senior hires quickly mucked things up because they had little to no in-the-trenches experience. Other senior hires refused to get their hands dirty, and required an expensive team to deliver on the promises made.

I don’t recall a single sales partnership that ever contributed meaningfully to revenue. I do recall signing docs and training 3 of them and then waited for them to put the same energy into sales that was expected from our team. Silly expectation. Lesson learned…eventually.

An acutely painful memory was my decision to listen to external advice for a complete technology overhaul while ignoring the counter advice from my own team. It turned out to be a premature and expensive mistake that made me the fool. Fortunately, our long-time CTO is still a good friend and can wink at me now when we talk about this fiasco, as hindsight is 20/20.

What did I learn? Don’t look externally for the silver bullet. Make success by creating team competencies. Tackle the hard problems together. The formula for most of our startup success was internal innovation coupled with lots of hard work.

Mistake #3: Focusing on work at all costs

The startup mode is one of long days that bleed into long nights, and the constant idea that you are pushing off immediate gratification for something bigger. I thrived on this, and so easily entrenched myself into the role of the stoic founder (damn the torpedoes, full speed ahead!). And this came at the expense of more important matters. But I didn’t realize the penalty while in the moment, because the risks inherent in focusing on work at all costs were counterintuitive to me at the time.

At one point I was expanding our business into China, which required my family to muscle their way through the challenge of living abroad while not having me present for most of the day. During that time we were hit with a health crises in the birth and major health challenges of my daughter. This should have been a time for me to pull back from work and tend to my family, which I had mentally considered as the most important thing. But my actions proved that I had a different prioritization, and I still wince when I think back on how wrong I was.

I was the good soldier, and powered through the challenges by sticking to work, even though I had a capable and functioning team. But this was the wrong thing to power through! I stuck to my daily 1 1/2 hour commute from our apartment to the office in Beijing, and I stayed in China as a single dad for some time while my wife dealt with the health challenges of our daughter by herself in the states. This brought things to the breaking point in our family. Praise to my wife for sticking with me and for helping me to revise my priorities. It took me a while, but it happened, and I hope I never make this mistake again. Now that I’m out of the moment, it’s clear to see that the ‘good soldier’ mentality was not needed for the business, and was marginally beneficial at best, while only negative for my family.

Mistake #4: Acting while angry

I swing on wild emotions, with high highs and low lows. And admittedly I like it this way. It gives spice to my life. But I’ve found that most of my bad decisions have happened when I acted out of fear and/or anger. In cartoons, an angry person’s eyes turn red, and I feel that this happens to some degree with me, because when I’m mad I no longer see clearly. And in that moment oh, how I want to act immediately and smash through the problem in front of me, usually by venting my emotions through a written email or text message. These are my cathartic zingers. Fortunately I often don’t send what I write, and so have a collection of 20+ emails that are somewhat comical to look back upon (“what deranged person wrote this?”). However sadly some were sent, and not a single one of those built anything productive. When the moment of passion is over and I have quiet time to reflect, resolve builds in me to channel anger into productive efforts (e.g., what is our team’s biggest problem that’s getting everyone down?). Harsh words sting (I know that too); harsh emails sting and sting on for as long as the text remains. I’m still stung thinking back on the pain I caused those people who received my heat-driven messages.

The pattern: people

There is a common thread through all four of these mistakes: people. The people who I failed to empower, failed to listen to (by looking elsewhere), failed to attend, and failed to treat with common courtesy or at least sans emotion. Fortunately, the flipside to all of this rings equally true. Here are my hard-earned takeaways.

• Rely on your cofounders and team. As they make decisions back them up. Let them fail when the stakes are low so they’re prepared for when the stakes are high. Learning from failure is powerful. Resist the urge to nit-pick. This means that the way you hire will be impacted, as well, because you need to hire for the ability to learn and progress (their growth trajectory!), not just for their past results. Supporting your team will influence them to support you as a leader in return. As one junior team member astutely told me in response to what turned out to be a bad decision on my part, “Sid, I don’t agree with your decision but I will think on it and support it.” Imagine how I felt when things came full circle and I realized my mistake? I was eager to make better decision moving forward and involve my team.
• Look internally for the solutions to your biggest problems. Leave the focus groups, experts, and strategic partners alone. Necessity is the mother of innovation. So create it purposefully, otherwise you may miss the creativity and potential hiding within you team.
• Determine your core values, and how you act on what is most important to you when they come into conflict. Grief and pain are the result of not aligning your actions with your values. 90% of the time I can manage conflicts by simply planning.
• Get your mind right. If you are like me and often experience red-eyed madness, channel it. If you experience other emotions that swing your perception of reality, recognize this for what it is and plan in advance what you will and won’t do in those moments. Find the way to get your mind right whether it be exercise, meditation, connecting with people, entertainment, or whatever — because you aren’t your best as a leader or contributor until you are in the right frame of mind. In startups we are always in the mindset of do, do, do, go, go, go — and most of the time that’s great. But in a world where a lot of the decisions you make will be wrong, not having your mind right will set you back.

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