30 YEARS, 30 BUSINESSES, 16 STARTUPS, 3 LESSONS LEARNED
I have worked in a lot of businesses over 30 years. I started in sales and eventually ended up in one management position or another on the customer side of the business. I went to school to learn to code but quickly found that was not for me.
I have been fortunate enough to work with what was futuristic speech recognition technology at Dragon Systems back in 1991 (now Nuance), then Open Market where I met some of the smartest and most driven folks I have ever worked with and far too many others to mention. All told, I have worked at or advised almost 30 different businesses including 16 startups. I have learned many things. Here are three of them:
- Getting “through the knothole” at a startup is really, really hard. Most do not have the stomach for it. Coming to the realization that your original business plan never survives first contact with customers (credit to Steve Blank) seems unusual for most founders. (After all, 75% of us, when asked, think we are above average.) Here is how it usually goes. You had a great idea, (everyone tells you it’s great), you spent a lot of time and money creating something based on this great idea. Then you start asking strangers to pay for it or spend their precious time using it and reality sets in (or does it?) Tip: When you hear yourself or others say, “they just don’t get it” following a few tough meetings (let’s go with 3), think about changing “they” to “I” and find out what you are missing…fast! Most folks fall in love with their own ideas and forget that successful businesses fill a need where enough customers will pay enough money so you can drive a profit and have cash to fuel growth. Fall in love with the customer and the problem. Easier said than done as you must constantly remind yourself that no one cares about your idea unless it solves their problem better, faster, and/or cheaper than what they are doing today. As aforementioned Mr. Blank says, “Get out of the office.”
- Once through the knothole, there is no rest for the weary. Congratulations! You have now made it harder on yourself as your success has caught the attention of the market who want some of what you have and your investors who are looking to see if you and your team can run a real business (ask me about the secret memo). To celebrate, take the weekend off and get back to work on Monday. Stay focused, keep innovating because, these days, it is a lot easier for competitors to quickly copy what you worked on so hard and so long to create. Even worse, they have the easier job of only having to figure out how to do it better, faster and/or cheaper. (Also, where did all these employees come from anyway!) Easier said than done as many folks get sucked into the day to day running of the current business and lose sight of and touch with…? You guessed it….Customers and possibly Employees.
- Through the knothole and now focused on the next steps. Most of the things you did, the decisions you made just happened sort of organically or maybe by accident. Now you have to revisit every important thing in the business and make sure each is being done deliberately with common purpose and direction. I have come to appreciate that four main decisions need to be right to scale a business in a healthy and profitable fashion — People, Strategy, Execution, and Cash. I have also seen that Founder/CEOs rarely realize that their “product” just changed from being the product to being the business itself. You now have to lead. That means letting go of almost everything you used to do and work on the business instead of in the business. You have to coach instead of doing. You need to show your team the future, create the roadmap with and for them, show them how they contribute to the journey and make sure you are heading in that direction every day, every week, every month, every….(you get the picture). You need to create a culture of learning, openness, and innovation. You have to scale but not run out of money. Growth sucks cash as you have probably learned already. It is only when you know you are expendable that you have made those four decisions the right way. Phew! That’s a lot of stuff to do and I am sure I missed a few things. That is a lot of pressure. You cannot do it alone so do not even try. Tip: Surround yourself with the best brains to advise you on every aspect of the business, hire a strong team, teach them healthy conflict, learn, learn some more (don’t stop learning) and lastly execute super fast as those competitors are not slowing down behind you. Easier said than done as, again, CEOs can be seduced by the siren song of the day to day operations and decisions they have become so familiar with. Some become insulated, some complacent. When any, some or all of these things or other things yet to be mentioned happen some have forgotten what got them here, maybe begin to lose touch with the most important stakeholders — Employees and Customers (there they are again).
If you have gotten through the knothole, you should know that you are in rare company as only about 10% get through that phase. If you then have created a healthy and profitable business, you are in elite company you as only about 10% of those companies make it past a few years. You truly are exceptional. You have created jobs for lots of people and helped the economy to grow among myriad other contributions you have made and enabled. Truly a wonderful accomplishment. On behalf of millions of others, I thank you. Keep up the great work!
If you have not yet made it past these difficult hurdles, there are plenty of folks out there who can and want to help. Reach out, read a book, try some stuff, fail and try again, ask good questions. If you truly are out to solve a problem that is meaningful to enough people, it will happen. I believe what Alan Fine says about all of us in You ALREADY Know How To Be GREAT. Just remember that sometimes you need to get out of your own way.