A startup is first and foremost a team of people. As your team starts to grow, make sure that you bring onboard highly talented and wonderful people. Be sure to employ people who teach you new things every day, challenge you, and push the boundaries of your knowledge. If not, then you’ve made a mistake.
There is a simple equation here: the more time spent teaching them, the less time you have for working on projects and building your business – this can significantly impact your bottom line. As you scale you’re more likely to employ juniors and younger types; at this stage, attitude takes priority over competence, whereas with your first hires the two are essential.
How do you test for attitude? In our experience, performance and delivery are key indicators of the right attitude. If an employee isn’t performing well (i.e. not engaging with the rest of the team, not raising red flags when they should, not questioning the work of others) nor delivering (i.e. producing quality output) then you will only encounter major headaches, and in the long run, various disasters.
My business knowledge is far from complete (no one’s knowledge is ever complete) and I’ve always run businesses with minimal funding. In the same way that oxygen keeps our bodies alive, cash in the bank (i.e. funds in the form of working capital) is undoubtedly what keeps a business alive, for it allows you to get your business up and running, hopefully in the right direction (occasionally in the wrong direction, which is fine so long as you identify this quickly enough – the trick here is obtaining insightful data and keeping a strong record of KPIs!). Cash also extends your runway and gives you enough space to be able to learn from your mistakes and make rational, strategic decisions, such as pivoting in a new direction. The truth is, without funding, without significant cash in the bank, it’s really hard to make any quality decision with a calm head, unless you’re Maverick!
3. Business Model
Unless you are doing something entirely pioneering, a business model for what you are doing will be in the public domain. Do not waste time making one up – do the research, learn about it and how particular models work for similar businesses like yours, then tweak it to suit your business. The early days of the tech boom are over and within the space, the path is well trodden, in some areas, perfected. Business is of course continually evolving but we don’t have to forge the path ourselves; some poor sod or pioneering militant has already done the hard work for us – find them, read their lessons, learn about mistakes, and apply these to your business however you need to.
Ultimately, everyone and everything suffers from a lack of good communication, and that’s not just in business. Clear, precise, considered and effective communication goes a long way to removing the banana skins that are strewn across the road. Your role as a CEO is a lot to do with communicating the vision of the business, and the reasons for your decisions. If your intentions are honest and include the well-being over everyone in your business, then no matter how hard the subject matter is to communicate, everyone will listen and, more importantly, appreciate the transparency and courage required for tackling tricky and challenging issues. Never fear open, honest conversations – you’ll feel relieved, if not enlightened, afterwards 🙂
The time for collaboration is when creativity is required. Naturally, I will tend towards working by myself, however, good collaboration is what work is really about. In a short space of time, you are able to solve problems which may take an individual days or months. Equally, in my experience, it is truly enjoyable too. Of course, it depends on the individual and the problem, but it is important to consider if collaboration becomes an indulgent conversation with reducing marginal returns. Sadly, we’re not in a world of abundance yet, we’ve still got a few problems to solve to bring home the smashed avocado…!!
6. Keep your hands on the wheel, son!
The temptation is to rest up once you’ve done the hard work – resist this with all your might, do not take your hands off the wheel!! When times are good it becomes all too easy to sit back and relax, enjoying the moment and letting go a bit. But this is very dangerous because before you know it, time slips away and you soon find yourself facing tough moments and increasing pressure to pay the upcoming salaries, expenses and just keeping the business afloat. No matter how good the times are, it’s crucial that you keep your eyes on the road ahead, working hard on the core business activities (e.g. sales, marketing, product development) to maintain strong momentum and consistent, steady business.
7. Equity and ownership
You might have heard the saying that it’s better to own 1% of something than 100% of nothing. So long as that 1% is something you truly believe in and possesses a good deal of value, then keep it and continue working for it. Too many startups have died because founders got greedy – they wouldn’t let go of equity because they not only wanted their cake but they wanted to eat it too. As it turns out for too many founders, they only ended up starving and with 100% of nothing.
Equity requires one thing and one thing only – Fairness. Equity stakes must be divided in a fair and reasonable way. This means that if one founder is working twice as hard as someone else, then it’s only fair and reasonable they own a larger slice of the business; it may not be twice as much but the equity stake should be proportionate to the time, effort and value that the hard-working founder is providing the business. If equity is not proportionate then someone is working for nothing, and this will only cause trouble – conflict probably – somewhere down the line.
Moverover, do not fight and squabble over equity. Coming back to communication, be open and honest about the time, effort and value that founders and other equity holders are bringing to the table. The key point to remember though is this: fairness. Equity stakes must be fair and reasonable. If not fair and reasonable, founders and stakeholders will become demotivated and thus less dedicated to the mission of setting up a brilliant business.
With that said, let’s now get on with building and growing our own businesses! 😀