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STARTUPS ARE FRAGILE 
TIPS & TRICKS TO COPE
 

PART OF A SERIES

BUILDING A BICYCLE WHILE RIDING IT

Why Startups Are So Darn Hard To Manage

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FRAGILE

Startups break, easily.

If you respect that, as a startup leader you can avoid or manage what can cause cracks that will damage or even destroy your fledgling new enterprise.

Your objective has two parts:

  • First - Anticipate and avoid the encounter that can cripple your fledgling new enterprise.

  • Second - Detect the oncoming arrival of an unavoidable and dangerous encounter – so you can act swiftly to prevent serious damage.
     

1. Anticipate and Avoid
 

That’s the spirit of what Andy Grove wrote about in his classic book “Only The Paranoid Survive”[1]. His central theme was that the winners are constantly alert for some event that could wreck a great enterprise in the making.

Radar: The sharp CEOs I was privileged to observe in action were constantly scanning for early signs that something really bad was starting. They were passionate about spotting budding situations that could grow large and be dangerous.

Avoid: Acting now to avoid what you see heading toward your tiny enterprise is a fundamental skill of the serial entrepreneur. I’ve watched them: they don’t wait, they move promptly. When a danger was finally clear to the rest of us, those CEOs had already spotted it with enough time to adjust and avoid it.

2. Detect and Act Swiftly

Here are a few examples of encounters I’ve witnessed that break tiny startups:

  • During the early stage of a startup’s life, (Birth and Proof of Concept stages) poor hiring decisions lead to cracks and deep trouble for the company. People troubles can be startup killers.

  • During the First Product Launch stage, danger lies in attempting too much with too few skilled people. You need much more than people: you need individuals filled with special creative abilities, as well as the psychological and physical stuff it takes to ride the wild startup roller coaster.

  • During the high growth stage (Tornado), life threatening moments come because of errors of judgment as the company grows so fast that employees doubt the wheels will stay on. People can burn out, collapse and exit, never to return.

  • During the Arrival stage, serious mistakes can still be crushing. For instance, missing the window of opportunity for the company’s IPO (recession blocks it) or hesitating about sale of the startup to the interested giant corporation (and thus never gets to be purchased).

  • During all stages, I and serial entrepreneurs have experienced that people conflicts are a primary source of what triggered disaster. This comes in a lot of flavors.

    • I’ve seen founders go to verbal war with the board of directors – that stopped all follow-on rounds of raising venture capital.

    • And I’ve watched a startup break when the founder and his co-founder girlfriend broke up.

    • In other startups I’ve listened to founders who realized a key employee had been floundering for some time, making poor decisions – but the CEOs waited too long to replace them and serious damage was done that could not be repaired.

  • Ponder those and begin to collect your own as you learn to detect what could badly damage your budding business.
     

Action Plus Wisdom: When you can no longer avoid encountering a bad event that’s about to happen, then it’s time for you to prepare to act, swiftly, but don’t act alone.

With wisdom you have the best chance of your company emerging in a better condition after it has gone through what’s about to happen. In such dire moments, before making the big decision about what to do, successful veteran startup CEOs I’ve worked with took time to privately discuss the upcoming trouble with people they knew and trusted. Then the CEOs made their moves. Yes, that took a few days or a week or so, but it the quality outcome was worth it, according to the feedback I got from the founders.

Be Ready: Be prepared to act quickly, sooner than you thought.

To make this clearer, picture yourself in one of those tense business meetings in your startup in which you realize there is a people conflict issue that has gotten people in the room upset. You can see that some of your people are getting ready to stop talking and start yelling. The room is so hot you think it might start melting the walls. You sense this is likely to turn into a disaster. What do you the startup veteran leader do?

 

You stop the meeting and declare the elephant in the room – the issue people are beginning to shout about. Then you turn their energy into a constructive discussion about that issue. You have acted and turned something potentially terrible into something good.

3. Skill Learning: I recommend you begin to dedicate time to examine and learn how to be in a condition of constant vigilance, ready to act on your decisions. Be prepared.

Over the decades I found CEOs who produced successful startups learned early warning skills by making a deliberate commitment to studying detection, avoidance, and swift action. With that skill set, each day they felt confident that they would remain sensitive to signs that an encounter was about to happen that could be very damaging. And they were sure they could act before disaster took over.

Because it’s so serious for a founder of a delicate new enterprise, I recommend that you picture yourself as one of those special military forces, alone in a distant mountain lookout deep into enemy territory, watching and listening 24 by 7 for any sound, sight, or smell that signals a lethal threat is approaching. There is only you to make the decision about what to do to survive. That calls for deliberate training.

BOTTOM LINE: Anticipate and avoid. When a bad encounter cannot be circumvented, act swiftly. Learning those skills will help you avoid the consequences that can break your fledgling startup. Startups are small, tiny living creatures who can be crushed by a single blow.


I wish you The Best on your Adventure!

JOHN

Stories from a startup coach


40 Years in Silicon Valley
Entrepreneur
Best-Selling Author

Cornell University
Entrepreneurship Lecturer
Startup Coach
300 Startups $2 Billion Raised

For other tips, try my Blog

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John Nesheim
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