Most startup companies fail. The reasons are many, but most research points to lack of market need, poor product-market fit, running out of cash, team dynamics or timing. I find myself asking why. Why didn’t the founder see the lack of need, an inadequate solution or shift in the market? Why did the company run out of cash? Why did the team implode?
My conclusion is always the same: People. We underestimate the importance and complexity of intentionally focusing on humans. You, your team, your customers and your investors are all humans with different talents, motivations and needs living in complex, dynamic environments. That’s a lot to wrap your head around. Leading, managing and influencing people is hard but critical work.
Where do you begin? Start with…
You. Understanding where you excel and add unique value is critical to leading a successful startup. Be intentional about leveraging your strengths. You’re not equally good at everything. Take time to honestly assess your strengths and get feedback. Doing everything yourself is a recipe for failure.
Understanding your values is equally critical. What motivates you? What is the red line you will not cross? Put your values in writing. Having them on paper makes them feel real. It’s easier to reflect on them and get feedback. Be open to sharing your values and exploring how those values are reflected in actions. Your values drive your company culture.
Your Team. Build an intentionally diverse team and surround yourself with people who are smarter than you. The research consistently shows diverse teams outperform. Be intentional, transparent and consistent in reinforcing the company vision and mission. Anything less will only increase your burn rate and risk of failure.
Hire slow. Work to understand their strengths, motivations and fears. Fire fast. Unlike established companies, startups don’t have the resources to tease out and address underperformance.
Your Customers. It sounds obvious, but we often forget. Our customers are people, not corporations, brands or data points. Ask questions. What makes their job hard? What do they wish they could do? Who depends on them? Why? Listen carefully to their answers. Listening helps you build a solution that solves their problem and builds trust. Trust helps build relationships. Relationships expand your network of advocates and influencers for you, your team and your brand. You need relationships and a growing network to scale.
Your Investors. At the risk of sounding redundant, we often forget our investors are people, too, not simply bank accounts or brands. Not all investors will share your vision, mission and values. Take time to research potential investors, the company and the people. Ask questions. What do successful startups look like? What do failures look like? What motivates them to be an investor? Who depends on them? Why? Listen carefully to their answers. Openly share your values, not just your pitch deck. Watch and listen to reactions. Investors will be a critical part of your team. Are your values aligned? If not, the likelihood your team will implode just exponentially increased.
Ringing in the new year with a startup idea? Let’s make a resolution to improve the odds of success. Put humans first, hone your listening skills and leverage what you learn.
Mindy Baierl has decades of experience as a founder and corporate executive in marketing, sales, and operations.
