Steve Case makes a strong case that the major reason for startup failure is the use of the classic Product Development management process rather than the emerging Customer Development process. The Customer Development Model is an excellent slide show on the subject.
I am considering how to apply these concepts to “Saxworks”, my new small business.
Abrevity, the start-up company I co-founded in 2003, was shut down during August for many reasons that I am not going to discuss here. I purposely delayed this post until all interested parties had time to officially hear the news.
When we started Abrevity I was both emotionally and economically comfortable with the handful of probable start-up outcomes which are:
1. A Huge Success
2. A Moderate Success
3. A Living Death (The company has enough revenue to be alive but cannot grow.)
4. A Complete Failure
I would highly recommend that anyone involved with starting or joining a start-up company should clearly be able to visualize the personal consequences all of these outcomes before joining a start-up or starting a company.
My enthusiasm for new companies is still strong as I have recently restarted one of my earlier small business companies “Saxworks” and filed a patent application for its new saxophone accessory product.
Each team member in a startup company is like a link in a heavily loaded chain hoist. For the the hoist to succeed no link can fail. Similarly, the contributions of all of startup’s team members are required for company success.
When hiring people it is extremely risky to promise business outcomes because the fate of any project or organization is too uncertain for guarantees. So what can be promised to a prospective employee? By providing an enthusiastic blame-free culture that emphasizes positive empowerment, I have learned that I can promise that an employee’s skills and positive attitudes will be enriched as a result of being part of our team.
The best example for this goes back to the early nineties. I was running an early computerized machine shop focused on quickly delivering prototype mechanical parts to Silicon Valley customers. One employee was a very skilled manual machinist who had never touched a computer. After half a decade in our organization, he had become an outstanding CAD-CAM machinist After a decade of well mentored service with another organization he now works at the mecca of prototype machine shops: Apple!. He now gets to make the prototypes of iPhones and other amazing Apple gadgets.
Every time a small company grows by three times in a significant dimension of employees, customers or revenue, the existing management systems are usually broken. The corollary is also true. Using a management system that works for 30 people can easily over constrain a 10 person team resulting in a decision process that is too slow and stifling. It is important to evolve the appropriate management systems to match the current size and activities of the organization.
Startup companies have a distinct advantage over large established organizations in being able to dramatically change the world. This post clarifies some of these advantages.
One Mission
This is the clear visionary statement of how the world is going to be changed by the success of this endeavor. Everything else for the company is derived from this simple statement. The startup advantage is that the mission statement evolves rapidly by the founding team without the bland, bureaucratic constraints usually imposed by large organizations.
My present favorite for a current and clearly audacious mission statement is that for Greg Wyler’s o3bnetworks:
“At O3b Networks, our mission is to make the Internet accessible and affordable to everyone on the planet. We will enrich lives and ensure equal and fair access to information through ubiquitous, high-speed connectivity to the world’s content and applications.” http:\\o3bnetworks.com
One Leader
One strong leader really shortens the decision process and insures that all activities are clearly focused only on the mission. I believe that outstanding leadership is the most precious resource in business. Startups have an advantage of being able to attract excellent leaders.
One Team
A new organization has the distinct opportunity to establish a hiring process that selects team members that exactly match the company culture and implementation requirements of the mission.
One Facility
The use of a single facility can create a resonant communications process that inspires creativity and shortens the decision processes. I am from the old school that believes that face to face contact with a white board consistently beats online methods as the web has not replaced the creativity available at random water cooler conversations.
While the behavior of chronic enthusiasm can really help to inspire and motivate a team to a high level of achievement , I have personally experienced a potentially serious downside. I can remember several instances where a concept, company, product or something was presented, discovered or discussed and my personal positive response was interpreted by a team member as a call to action. Chronic enthusiasm can be easily be confused with commitment. I had to learn to consciously temper my enthusiasm by adding a qualifier on my level of commitment.
For an example, I recall an experience where a software vendor presented a really cool software package that did not easily apply to our business situation. I was really impressed with the novelty of the product. One of my team members erroneously took this enthusiasm as a signal to follow up with subsequent meetings with the vendor.