Startups rarely fail because of a bad idea. Most novice entrepreneurs blame failure on external factors, market shifts, unforeseen circumstances, or the more famous "we ran out of money" excuse.
But in my experience, startups almost never fail because of these reasons. Startups fail because of the flaws of their founders. We humans are all deeply broken. Consequently, we bring this into our startups. Our financial immaturity, lack of wisdom, poor planning, passive aggression, fear, sub-par management skills, the absence of marketing knowledge, weak leadership, and the list goes on. And while we'll never remove them all, here's three practical flaws that that will place your startup on death row.
1. Cheap Equals Chince.
Look, I get it. You’re a startup. You have a limited budget. You’re an entrepreneur willing to do things yourself. And that’s all very admirable. But if you’re launching a company that hopefully one day will become something great, and you’re unwilling to invest in the parts of your startup that really matter, then you’re better off having never launched your business in the first place.
Reading some of the entrepreneur sites about cutting costs, it becomes clear in about 2 minutes that if you just keep bootstrapping, you'll eventually bootstrap yourself into a crummy website, crappy business cards, a poorly planned office environment, and a low budget video for your company's home page. And as they say, if you win the rat race, you’re still a rat. The guideline is this:
You never cut corners on the things that truly distinguish what you’re doing.
Yet, I see it all the time. Online businesses who develop or design their own website because they believe it's not worth the $2,500. Or tech companies who develop their own explainer video. You know the number one message that every potential customer will see when they hit your site, the sales pitch that will drive the almost all conversion required to pay back the investment of launching your company? That video.
It's areas like these where entrepreneurs should never be cheap. Instead, you're patient. You save and you spend smart. You don't hire anyone either. You research and interview and plan. And when you find the best person for the job, the guy who's talent is worthy of putting your baby in their arms, you pull the trigger.
To push it a bit further, you pay them on time and you expect first class results. And then, and only then you experience the magic. A deliverable that is beyond beautiful. A masterpiece of a website or a genius video that provides you (the new entrepreneur) the confidence required to run with the best.
On the other hand, you can join the camp of folks who paid a friend because they gave them a "bro-deal". And you end up with a mediocre website that looks just like everyone else and a video that resembles the commercials from your hometown's insurance company on Main Street.
Let's face it, entrepreneurship is almost always expensive. There is a cost to be in this club. But it's those who pay to play that win in the end.
2. So Fast You Hurt People.
On January 3rd, 2013 a mentor of mine asked me point blank,"give me 10 important memories from last year." My response was less than impressive. I couldn't remember much. I was so busy making a living that I literally forgot to make a life.
My dream of running my startup had created a blurred mental history that wasn't healthy for anyone.
He later told me his question was prompted from his view of my life's unsafe velocity. Over the recent months, I had become so engulfed in the achievements at my feet that I had forgotten to look at the future. I was unprepared for meetings. I would forget to ask important questions during critical phone calls. I would make purchases, hires, and important decisions with little thought and I almost never kept my promises. I was late to meetings, late to home, and late to bed.
Speed is great when you work by yourself. When you're the only one feeling the consequences. But entrepreneurs who have spouses, kids, employees, contractors, vendors, interns or freelancers should tread slowly. It reminds me of one of my favorite quotes:
If you want to go fast, go alone. If you want to go far, go together.
At the time, I ignorantly wanted both. I thought I had this super ability to make quick good decisions. But I didn't. Looking back on my speed I saw a wake of destruction and bad decisions. Everything from my marriage and my staff to growth strategies and investor communications. I hurt people and cost the company money. But after my revelation, my mentor said this,
"Dale, I love that you can drive fast. It's what makes you so good. But driving at 120mph is dangerous for everyone. I'm not telling you to drop to 45mph, but let's keep it around 80mph this year."
3. Cocky Breeds Fallout.
There is nothing worse in the world of business than classic egotistical arrogance. Everyone know’s that guy who just can’t help but tell everyone how great he is. But the truth is–if he was that great, why would he have to tell anyone?
When I look back at the kind of people I want to rally behind or listen to it's never someone who's loud, out-spoken, or flashy. Instead, it's a man or woman who walks into the room and commands everyone’s attention, without asking for it. They are gentle but strong. They are humble but genius. They are calculated and well planned.
He who has the most power in the room, often speaks last.
Confidence is not something that comes from what you've accomplished or how much attention you draw to yourself or even how much money you’ve made. It's a trait you must nurture by taking daily steps to confront your fears. Self-esteem and personal fortitude are characteristics you must decide to sharpen. Confidence is about what you believe you can produce in the present. It’s the manifestation of your level of self-worth.
The problem is, entrepreneurs usually have too much or too little and finding the right amount and how to show it, is a delicate balance.
A few years ago, I had crossed the line from confident to cocky. After looking back, you could almost watch the people leaving me. Nobody wanted to work for a leader who believed he was more important than the rest. At the time, it frustrated me. It got to the point where I was almost forcing people to follow me. It's this moment where entrepreneurs get in trouble. Your business is only as good as the people who are following you. If people are following you for a paycheck instead of your vision, you're putting your company at risk.
Solving this problem is hard. It's humiliating, embarrassing, and awkward. And there is only one way to do it. Get in a room with 4-5 people who are willing to speak truth to you. Ask them point blank, "how do I come off to people?" And then, to make it even harder, you must apologize. An empathetic, gut-wrenching apology that conveys to people that you are now leading with new eyes and a restored view of others. It's this change that will kill your cockiness and hopefully put others willingly behind you.
Have you struggled with being cheap, fast, or cocky? What have you done to mitigate the consequences or grow through them? Let me know in the comments below.