I have been writing last year mostly about best practices. However, I believe it is equally important to learn from mistakes. That is why my first article in 2023 will be about common mistakes that impede startups efforts to pave their way for growth. If you feel that you have a great product idea that can solve the problems of many customers but for some reason your business development is too slow, I hope this post will help you find a new inspiration for the 2023 activities.
From my observation there are some common mistakes and beliefs that can significantly limit startups’ efforts to grow. This is the shortlist of those which in my personal opinion can especially harmfully affect startups’ development.
Strong belief that a good product is enough to win the market.
Usually, it’s not enough. Having an MVP (Minimum Viable Product) is the first step to build stable sales. What you need then is the entire commercialization strategy.
You need to sort out ICP (Ideal Customer Profile), understand customer’s ability to pay, design relevant offer structure and pricing, and then build efficient channels and activities to reach the customers. You also need to analyze first sales and usually be ready to improve your initial idea to achieve optimal product – market fit. Otherwise, you may get stocked with your product and frustrated that the market is more difficult than you expected.
Belief that quick acting is enough to build traction.
Ambitious founders have the tendency to immediately act upon the ideas they have. For startups’ founders to be goal oriented and bold is a very important feature. However, a strong belief that there must be a market for our product should come together with a thorough validation of the product and market potential as well as methodical implementation.
Business knows examples of those who were first with the idea but not necessarily ended up winning the market. Without thorough analysis we can waste our resources on solving irrelevant problems or solving actual problems with irrelevant solutions, or selecting wrong channels to reach our potential buyers.
In fact, the less resources we have, the more planned approach we need.
Inability to prioritize
The great strength of visionary founders is their creativity. But in the same time, this can be their weakness.
Visionary product owners incubate many ideas and it seems very tempting to follow all of them at the same time. Every idea seems to be a great opportunity that cannot be missed. Inability to prioritize is one of the biggest internal threats for startups.
With limited resources founders strive to allocate new ideas to the same team. This limits the amount of time that the team can allocate to each activity and reduces the quality of work. In the worst cases it can even severely damage the business continuity when new activities are being introduced while the old ones are not yet completed.
Belief that a small company doesn’t need processes and structure.
This belief translates often into the assumption that startup work culture means everybody doing everything and that structures and process can wait until the startup gets bigger. In fact, the less people we have, the more we need a clear structure and role division. Every duplication in role and task means time wasted. When we have small team, every working hour counts.
People need to understand clearly what is their role in the team, what is their responsibility, what are the activities that they account for and how they should interact and cooperate with other team members. People in startups should be like runners in a race in which one runner hands a baton to the next runner. The rules to changing over the baton should be very clear, otherwise the baton will be dropped and work continuity broken.
The startup work culture should mean everybody being able to go an extra mile to help the team to achieve their goals, but not duplicating their jobs and tasks.
Belief that a small company doesn’t need financial control at the beginning.
It takes a simple excel spreadsheet at the beginning to help the founder control the workload of the team as well as the fixed and variable costs. For small companies regular cost control is important to secure their financial stability as well as a great source of information about a startups’ sources of efficiencies and deficiencies in such important areas of business model as logistics, R&D, production or distribution.
Financial control should be implemented from day one of a startups’ life and used as an important toolkit for managers to improve the entire business strategy.
The lonely leadership model
This subject deserves a separate article, but cutting the story short there are more and more voices that the lonely leadership model which sees the leader elevated highly above the team isn’t the most efficient way to manage the organization.
I often come across the opinion that a founder, a CEO is a lonely duty and a huge responsibility. Founders often feel overloaded with tasks and have the feeling that there is no one else who can do it except themselves. For those reasons they also think they deserve all the merits and exposure that the company gets.
It is true on one hand, but it doesn’t have to be that way. This is the way of thinking that comes from a traditional model which sees the leaders distanced from their teams, acting on their own, and having answers to all questions. Assuming that the leader already has the right people in the team, this traditional model has significant deficiencies and can be harmful for the business.
The lonely leaders have the tendency to decide by themselves. They don’t share their ideas with the team. They don’t communicate with the rest of the organization early enough. Instead, they delegate tasks and control without actually involving.
The team which was not involved in the process early enough usually finds it hard to understand what the leader wants to achieve. People miss the context, don’t see the big picture. With a limited amount of information, they manage the tasks operationally but don’t understand the strategy behind. With no surprise the leader often gets frustrated with the lower quality of execution than he was expecting. But the actual reason for this is that the team wasn’t involved early enough.
It is also worth mentioning that such an approach distances the leader from the team. The most talented people don’t feel they are actually part of the company, are more prone to feel underrated, demotivated and are more open to look for other job opportunities.
Agnieszka Węglarz is an independent consultant, business strategist and practitioner in B2B and B2C, as well as lecturer, speaker and blogger. She has over 20 years of professional experience working as manager in both large corporations and SMEs, where she was responsible for strategy, marketing and business development. She uses her long term executive experience and training expertise to assist companies and their managers in building their business strategy using a workshop methodology. She specializes in business modeling, segmentation, value proposition, sales and marketing strategies as well as consultative selling. She runs her own consultancy business, as well as cooperates with Google for Startups Campus in Warsaw as the business modeling expert and mentor in the acceleration programs. Agnieszka is an author of many business publications. You can read her writing on her business blog on www.agnieszkaweglarz.com. You can contact her by writing to: agnieszka.weglarz@g2m.biz.pl or directly by sending a message via LinkedIN