Startup Sins
Submitted by jeteye on Mon, 08/18/2008 - 11:04am.
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During my 10 years of helping start and working for start-up companies, I have learned a few things from all the mistakes I have made and from the mentors and advisors I have met and work with. Though there are dozens of things you may have to worry about when starting a company, I will highlight the 3 deadly startup sins that will pretty much guarantee your eventual failure.
Read entire article at: http://macromental.blogspot.com/2008/08/startup-sins.html
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Generally agree with 1 & 2, but not necessarily 3 (and you know my position since we spoke about it).
Leadership is a critical element. But so is "vision." To some people, a "charismatic leader" is what is needed to motivate others to row in the same direction. The question, then becomes one of ego. Many people believe that a successful entrepreneur has to have an ego, not one that gets in the way, but one that makes that person believe in the decisions being made.
Strategy / Marketing / Positioning is the basis of any successful venture. How a business gets that expertise is another issue. Most start-ups can't afford to hire you or me to be part of their management team. Many tech start-ups are started by technologists who are not inherently able to understand the purpose of strategy. If nothing else, everyone needs to remember that patents are "nice" to put on your wall, and may even be there reasons why an investor gets interested in the company, but patents do not pay salaries...its all about sales and cash flow.
Greed is where I differ with you. In one way, "Greed is good" as the fictional Gordon Gekko once said. Without the motivation to make alot of money, what else is there? The key to that, however, is balancing that with the recognition of sharing and incentives for your team (I've referred to it as the "Big Bird" element). This is generally expressed by an entrepreneur by saying "I won't give up control" (so when an investor is ready to put up the money but wants 60% of the company), they cry.
What is "control" anyway? Control is the ability to get things done when they need consensus. I own less than 1/3 of my company...when I needed to get shareholder approval on an action, I got 97% of the shares voting in favor. "Control" is also inherent in the knowledge of the entrepreneur (goes beyond knowing where the bodies are buried); how much of the total knowledge base of my company is documented versus still in my head?
Everyone on my management team follows my lead(ership) because we share the vision (and I've been able to get everyone to also share my passion and my belief in our mission), have jointly crafted the strategic plan, and will all share in the success. Now "all" I need is the "x" million dollars from an investor.
Good post to start an interesting discussion.
There is good greed and then their is drive. Greed is self centered, where drive is usually based on an internal desire to help others, make the world a better place, or solve a pressing problem. The motivation internally may look similar, but the end game is quite different. Sort of like the motivation between the Joker and Batman in the "Dark Knight" movie.
I still don't really see "greed" and "drive" being opposites or counter to eachother. I've been called "driven" and I've been called "obsessed" (by people who like me). Am I greedy? I want to make as much as I can possibly make, especially now that we're starting to "see the light at the end of the tunnel."
Have you ever hear of David McClelland? Back in the 60's he wrote a book titled "The Achieving Society" in which he characterized "successful entrepreneurs."
"Stuff" from my T2 presentation next month:
? Achievement is more important than material or financial reward
? Achieving the aim or task gives greater personal satisfaction than receiving praise or recognition.
? Financial reward is regarded as a measurement of success, not an end in itself.
? Security is not prime motivator, nor is status.
? Reliable, quantifiable and factual feedback is essential, because it enables measurement of success, not for reasons of praise or recognition
? Achievement-motivated people constantly seek improvements and ways of doing things better.
? Achievement-motivated people will logically favor jobs and responsibilities that naturally satisfy their needs, i.e. offer flexibility and opportunity to set and achieve goals
The construct of achievement doesn't preclude greed...while it isn't the primary motivator, it still plays a role. I still contend that a combination of achievement motivation and a healthy dose of "greed" goes a long way...I just don't have to own all of the company to get what I want.
Greed is good, when you know that you need to share in order to win the game. Any entrepreneur who thinks he/she can do it alone, or without a strong team is a fool.