Starting a business and joining the ranks of entrepreneurs is an exciting step. Here are some first steps that you can do to guarantee that you have a better chance of succeeding. I focus here on self-funded/bootstrapped companies rather than venture funded but these ideas are applicable to all types and sizes of companies.
- Determine your true core business solution – this may seem obvious but you must know what the actual business problem that you are solving is. Without that, you are guessing at providing solutions and cannot make decisions to allocate resources properly. An example of this is Twitter – people assume that it solves the ‘I want to tell everyone what I am doing’ problem but what it does is enable short, targeted communication with the ability to target specific audiences via hashtags. It is not immediately obvious what problem Twitter was solving, but it is clear in retrospect what problem they actually did solve.
- Ensure that you actually have a target market – if you want to know what startups will fail, look for those with the target market of everyone. Maybe this worked at one time (I can’t really think of anything in the last 50 years that started that way), but it does not work now. You may eventually be able to expand your company’s reach to include everyone (although even this is not really everyone unless you are Coca Cola or Pepsi) – starting this way, however, will assure failure. It takes time to grow anything – a tree, a garden, a business. Focus on one niche at first, learn your lessons, and then expand to other areas and markets.
- Ensure that your target market will pay for what you are offering – so, you have a great solution to a pressing problem; however, if no one will pay you for this solution, what you have is a very expensive hobby (or perhaps, lead generation). Ensure that you have profit from the beginning (or as close as possible). Note – this may not be true for venture-funded companies; even in this case, however, having profit as early as possible makes you more enticing for eventual acquisition.
- Ensure that everyone in your company knows the answer to question one – everyone (and I mean *everyone* – CEO, programmers, social media people, receptionist) knows exactly what you are doing. Each person in your organization makes dozens of decisions a day for your company – having a clear, unambiguous, common goal will ensure that these decisions have the best chance of helping your company work.
- Ensure that you have leadership at the top – people are what will make a startup succeed. Whether it is one person (for a smaller, bootstrapped company) or dozens (for a well-funded startup), in the end, people will determine whether the startup survives and thrives. One of the best ways to ensure that you will fail is to have senior management and leaders that cannot build company culture and do not understand the importance of people in startups. There are a number of studies showing that the most successful CEOs are those with sociopath tendencies (i.e., the exact opposite of what we are discussing here). Note, however, that all of these studies are done in larger enterprise organizations and that the definition of ‘successful’ tends to focus on the CEO, rather than the companies. Bad managers can kill your team formation, productivity, and collaboration – they are poison and must be avoided or excised.
- Unless you have an exact idea of what your solution is, use Agile development – when you have a general idea about how you are going to solve your business problem but not an exact solution, using Agile frameworks will allow your company to make changes and optimize your solutions for your target market.
- Hire the most senior development staff you can afford – it is better to have one very experienced developer than two junior or fresh-out-of-school developers when you are first starting; hiring those juniors is much better to do later in your company’s life cycle, after you have profits and a good market fit. As well, hiring fewer but senior testing staff will massively improve your productivity as they will know what and how to test, and will incur fewer communication channels.
- Automate everything – by this, I do mean everything. Testing, deployment, determining ROI on marketing, everything. There are many free or reasonably priced programs and tools to help you do this but the goal is save time each you do these activities. As you will be doing them constantly and continuously, you will save a lot of time in the end.
- Don’t bother with tracking time – unless you must do so for government programs or client billing, do not bother doing this. It is annoying for staff, worthless for most productivity metrics, and downright harmful for planning purposes unless your people spend so much time categorizing and classifying what they are doing that they cannot actually do any work. You will not get useful results for these sorts of measures; thus, the suggestion of Agile, which will give you a good measure of how much your teams can and do deliver after a few weeks.
- Encourage your people to explore – it may seem counter productive to encourage your people to be less productive (i.e., encourage them to do research and read industry news) but these sorts of activities have multiple benefits.
First, it is a dirt-cheap way to improve morale by treating people like adults – you are giving them goals and letting them figure out how to accomplish them; you are not mandating that they must working all of the time on these activities.
Second, encouraging this sort of activity will ensure that your people take regular breaks and thus have maximum cognitive power focused on the work activities when they do them.
Third, learning about things not directly related to what you are doing help broaden the knowledge possessed by your people and give them greater creativity to solve the tough problems when they hit them.
Most of these suggestions are business or people related – that is because technology is a force multiplier and cannot save a bad business or business plan. Technology cannot create a new audience or make that audience pay. What other things have you found that help you and your company succeed.
Image courtesy of JD Hancock / flickr.com