Happy days are a mixed blessing for startups. Growing rapidly is definitely energizing and exhilarating. And it can be plenty enervating as well so you need to try to pick your best shots and also to conserve some of your energy and resources for the inevitable bumps along the way. It’s pretty easy these days to grow your top line in double digits every month – especially when you’re starting from scratch - but that’s only one metric of many that will matter if you’re trying to build a real and sustainable business. Maintaining a conscious and thoughtful balance between all of the vectors of your business’s growth is tough, but it’s essential to your ultimate success. Overemphasizing any one of the objectives or the directions in which you’re moving forward runs the serious risk of tilting the whole enterprise into an unrecoverable tailspin. Getting big quick is nowhere near as critical as getting good consistently at what you’re doing and learning to do it well over and over again. And racing like crazy to be everywhere as soon as possible killed millions of startups in the dot.com era and hasn’t been demonstrated to have worked that well for much of anyone this time around either.
And it’s also easy in these days of quick and easy money chasing deals to get carried away doing the fundraising fandango and running around the country looking for new investors and new money instead of minding the store. That’s a good way to end up going nowhere fast. There are lots of people with their own agendas happy to blow smoke up your behind and tell you that you can walk on water (and everything thing else that you want to hear) and also how they can help get you there for a piece or a fee or a few shares. And you can also kid yourself all day long and claim that all the road trips, all the pitches and all the demo days, conferences and speeches are great for brand-building and marketing, but somebody near to you who’s paying attention (and whose counsel you respect) probably needs to tell you to give it a rest and get back to paying attention to the basics of the business that got you this far so far.
I understand that sometimes all the motion and all the activity is just one way to try to suppress the anxiety that’s also part of the startup process and I get that sometimes, truth be told, even while everyone else is hooting and hollering; it can feel to you like you’ve got a tiger by the tail and that you’re barely hanging on for dear life. One moment may be jubilation and the next sheer terror and very often it’s only you (and a precious few others in the company) who may know just how close to the edge things are really running. That technology that looks so slick from the outside has more gaps and holes - with only duct tape and chewing gum solutions holding it together - than anything MacGyver ever dreamed of. You can find yourself moving daily between sadness and euphoria, but, at least on most days, you don’t have the time to be bored although I don’t think that’s much consolation. And those are the good days.
Even more importantly, apart from the everyday emotional drain of the run-up roller coaster ride, and the funding frenzies and flavor-of-the-week fashion shows, the kind of radical ramping of revenues which the new digital economy enables (mainly because the barriers to inexpensive customer acquisition and product distribution are virtually non-existent) can disguise and/or conceal a host of operational, accounting and control problems which are guaranteed to come back and bite you and your business in the ass at some future (and usually worst possible) time. And the future may not turn out to be that far off because – if you take your eyes off the ball and get carried away – you may find that you don’t have that much of a future to look forward to.
The truth is that far more critical mistakes are made by entrepreneurs in good times than in bad times and many more promising companies lose their way and are killed by distraction, indigestion, and the inability to focus and/or handle hyper-growth than end up starving because they ran out of cash and slammed into a wall. I’m seeing way too many young companies chasing expansion and new markets before they have a firm and consistent grasp of how to successfully and repeatedly execute and deliver their core business services in their initial marketplace. There’s a reason that the smartest entrepreneurs nail it first and then scale it.
If you want to quickly determine whether your own ship is more than a little out-of-control and whether you’re a bit too far out over your own skis, ask yourself these few questions and try to answer honestly. By and large, the NSA notwithstanding, no one else is generally listening when you talk to yourself. But, of course, this only helps if you’re not only talking, but listening as well.
(1) You’ve Got No Middle Management
The business was easy when you did everything yourself and made sure it was done right. Now you find yourself looking around for someone to pick up that job and do it with the same passion and attention to detail as you did, but there’s no such animal in the place. No one’s as careful or as crazy as you and it shows because balls start getting dropped all over the place. It’s not necessarily that they don’t care; it’s just that they don’t know any better and they certainly don’t care as much.
(2) You’ve Got No Idea of the Money in the Bank
If you had to guess how much cash was in the bank or whether the important bills were getting reviewed promptly and paid on time – especially those submitted by the folks who were there for you when you needed a break – and you were honest, you’d admit that you just don’t know and – worse yet – you just hope that someone else does. But guess what? The guy in accounting just wants to process the weekly checks – he’s not checking half the things that fly over his desk – and the people in purchasing don’t have the time or the inclination to look for the best deal or the smartest deal – they’ve got a budget and they’re gonna spend it – one way or the other. It’s not “their” money anyway.
(3) You Forgot What a Customer Looks Like
When’s the last time you were meeting with some of your oldest and best customers instead of bankers, brokers, journalists and other entrepreneurs? Not only don’t you see many of these important customers; you never take the time to stroke them any more either. And they do notice the difference – they just might not mention it to you, but they do. Not to worry, however, because this is a self-liquidating problem. Customers’ expectations are progressive and, if you’re not improving and building a better connection and relationship with them on an ongoing basis, you won’t have to worry about them for too much longer. They’ll be gone.
PS: “You Get What You Work for, Not What You Wish for”
