Starting anything from scratch is no easy task. The odds are stacked against you.
While starting companies, divisions, departments and even a new role will always come with a highly likelihood of failure, there’s more than a few things to be said about putting yourself in the best possible position NOT to fail.
From years of failures, usually 20 or so before I hit paydirt, there is definitely a number of things that you can do to help yourself out.
Here’s 10 things to think about when it comes to failing less at the start.
(Regardless of outcome, always remember that failure does not mean the end of the world. Failure lies behind every success.)
Have a budget and manage a profit and loss statement from the beginning
Numbers don’t lie. Understanding the total available investment or budget prior to starting anything is critical for you. A definitive number makes goal setting realistic and time frames for success or financial return clear. Having this number to start and a profit/loss statement based on it that is reviewed each month makes the financial realities more clear for the team around you.
Know your drop-dead date
There is only so much money and time provided to you for an investment return. It is vital that the number of months an operation can remain viable with existing cash reserves is known across the entire team. Doing this will ensure your work efforts are better prioritized and the urgency to deliver is heightened. It’s also a great way to understand your investment partner’s expectations.
Speak with investors and stakeholders frequently
Unless you are using all of your own money (in which case you may already be talking to yourself) to start, it is paramount that frequent, open and candid conversations are had with your investors and key stakeholders about progress or lack thereof. Remember that it’s their money, name, reputation, life too. Not only is this a simple respect thing, it also allows you to demonstrate command of the operation, project potential pitfalls, discuss failures and even gain empathy, which will be needed often in any early stage company, business unit or project.
Hire a team of people that already know what to do
A startup or new business division does not have the luxury of time. It is very difficult to quickly achieve profitability if you have to spend half of your day training others or learning how to be proficient in your core tasks. You should hire those that already know what to do, show an aptitude for more and when they don’t know what to do, can learn quickly. This might mean spending more money on talent than you anticipated.
Speak to as many customers as you can
It is easy to be given false hope by only drinking the kool-aide supplied by industry media and manufacturers. It is easy to get caught up in the pure awesomeness of a new product or service. It is hard to admit you don’t know shit and spend time speaking with as many customers as you can about the reality they see. You will learn more doing this and greatly accelerate the startup or business units ultimately direction and success. You will also save time and money. Likely lots of it.
Pull takes patience, push takes perseverance
Regardless of your go-to-market strategy or the individual strengths of a team, it won’t change the fact that pull (inbound) marketing takes time (6 to 9 months), while push (outbound) selling takes a determination not found in many. This makes knowing your financial realities, investor/stakeholder expectations and early customer wins integral in ensuring early stage success. Depending on the initiative, get a large customer commitment or a few smaller paying companies before raising any funding (even for internal business units or projects).
Confront and communicate reality daily
Early stage companies, business units and projects are not for the faint at heart. Second place does not get a ribbon (or gold star). Success is pass-fail. Meetings, emails and in-person communications must be candid, direct and confrontational of the current realities facing the team. This does not mean you need to be a prick, this simply means that everyone needs to hear the plain truth, especially with hurdles, issues and threat. No sugar added please.
Fail faster so as to learn more, but don’t quit too early
There is a lot to say for failing fast and learning from failure. When combined, the net for an early stage company, business unit or product is fast learning (about the customer, product, industry, business model). Yet when applied with a maniacal focus, the mantra can cause you to quit too early. It’s important when facing failure to understand whether you are simply in a dip you can push through or a trough you can’t recover from. It also helps if you know your drop dead date.
Manage numbers and metrics, not people and tasks
It’s easy to get caught up in getting things done, rather than getting the results, after all there is always something to do at the start of any company, business unit or project. From the start you should establish critical numbers, key performance indicators, and daily, week check points for each that ensure your initiative is on-track to hit its larger goals or targets. If you’re looking at these numbers daily, speaking with lots of customers and confronting reality, you should be able to adjust course quickly to give yourself a better shot at succeeding.
Groom or find a successor
If you work hard, work smart and have some luck you will outgrow your role and often your creation will one day outgrow you. Very early you should begin to think about your exit strategy, whether it be find an operator, successor or integrating into other daily operations. Having an end in mind, however far off or ever changing it may be, is something that should be discussed and reality confronted when time comes to execute.