Tag: Startup

Startups are hard to keep moving forward

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Being a leader of a startup — especially in any operations role — is one of the hardest things to do properly in business.

This is what it typically looks like inside the primordial soup during the early years.

  • The company is still trying to find product/market fit. You think you may have it but “think” and “know” is the same gap between “alive” and “dead”.
  • There seems to be more going wrong than right. Every early stage brings with it a bevy of new growing pains that typically emerge right after the previous problems were solved. This IS evolution and IS good but makes it feel like there is never any progress…but there is.
  • Decisions are fast, furious and frustrating. Being nimble and reactive in the early years means decisions are often made quickly and communicated poorly.
  • Process must be malleable to absorb feedback and lock in P/M fit.
  • There is no HR and morale is very hard to maintain. The work is often repetitive and stressful. This means working in a startup has a very high burnout rate for early employees.
  • Wages are low and benefits often don’t exist.

Founders and early employees are battling on all fronts as they try to figure out where the company fits in the world, how to attract and retain great people, service early customers (if you can convince them to BE a customer), keep rolling out new features and prop up company morale.

It’s an endless cycle and it lasts, in various stages, for years.

Challenge your team

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The most important thing that leads to startup success (even more-so than luck, timing, hard work and persistence) is solving a problem in a different way from competitors.

There are very few truly unique ideas, just iterations and evolutions. Success or failure is really determined by the uniqueness of the approach.

This is why it’s important to always challenge your team (or yourself) to go beyond the easy path. For a company like Trexity, it would be easy for us to follow the same path as our competitors and find a warehouse, hire a sorting team and end up looking exactly like everyone else. Trust me, we’ve thought about it, fantasized about how easy it would be to create a mimic. When we start leaning to looking like everyone else, we double-down on going in the opposite direction.

Challenges differ in every aspect of the business. It could be a different business model or a different target market to solve for. It could be automating aspects of the business that are very human-dependent. It may even be finding a way to not hire another person until a certain level of efficiency has been achieved.

Whatever it looks like for you, the main thing to do is to challenge your team to avoid taking the easy path. Every company that failed before you took it. Every company that has succeeded didn’t.

What’s in your control

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There are two types of businesses — the one that you control or the one that controls you.

Let me explain.

I met with another co-founder who had recently raised a Series A investment of $10M. His hardware company was founded in 2016 (8 years ago as of this post), raised a seed round in late 2019 and, despite his business being severely impacted by the pandemic, survived and is now thriving.

How?

Cashflow.

He was always in a position to be able to survive. He ran the business very conservatively, knowing that a small wobble in the economy or in manufacturing could kill his business. He built for contingency and that paid off. It always does. He controlled his business.

The founder explained that he always grew from a place of profit — never too quickly as to expose the company to excess risk. When he went to raise his next funding round he didn’t need the money.

Contrast that with many of the businesses that don’t survive despite large investment rounds. Often the founders feel that there is always more investment coming so they build on losses and when the money runs out, the investors do as well.

To build a real business you need to build a real business. There needs to be proof that it can survive on its own and this simple fact often gets lost along the way.

Controlling the growth, the spend, the scope and the scale of the business until it is proven, earning, profitable and can stand alone is how to build a real business that you control.