Recently, a colleague of mine sent me a guest post from GeekWire that talked about ‘full-stack marketers’ and the value of having marketing people with broad skill sets in startup companies.
Great article. And I would add that startups need full-stack people in every position. Having just sold TappIn where we began with three people, starting from a music store warehouse in Fremont, it would have been almost impossible to grow the company (and then successfully exit in 11 months for $17 million) with a team of “never-done-it-before-one-trick-ponies.”
Many of the comments posted on the story were related to what makes startup companies successful. I started to post a comment, but it evolved into more of “hard lessons learned” for those thinking about joining or leading a startup.
Having spent the last 12 years in the startup school of hard knocks — including some that made a mark and others that fizzled out — I’ve learned a great many lessons and earned a Ph.D. in venture-backed startups.
I’ve also become a better marketer, executive, leader, teacher and human. Startups gave me a much-needed dose of humility, but also taught me how to create real value, make measured choices quickly and the importance of recognizing and valuing people by what they do — not talk, title or reputation. If you are thinking about joining or leading a startup, these lessons are for you — in hopes you don’t have to learn them the hard way.
1. Cash is everything. It’s more important than you! Really, no matter who you are — founder, CEO, CFO or whatever. You must understand how and how much your business will create value and earn cash. Your business can earn cash from customers or investors, but you better know how you are going to fuel the company with cash and manage it to get the best mileage. As we all know, it sucks to run out of fuel before you get to an exit.
2. Startups are fun, but also hard work and high-risk. If you and your team really knew everything that was going on in your market, your competitive position and the real opportunity, you would most likely have never started, invested in or joined the company in the first place. Get over it, roll up your sleeves and go take your share of the market before the money runs out!
3. Don’t wait to be perfect. No matter how much planning, market research and development you do, you are likely wrong about something anyway. Get the 80 percent solution done, adjust as you learn and focus on execution, execution and more execution! Your market response and customers (or lack thereof) will guide you.
4. Revenue and revenue growth will cure a multitude of illnesses in a business. This is true at almost any stage or type of company. Side note: No matter what size company — public or private — I have yet to meet an investor who didn’t think they could easily solve your expense problems.
5. You are what you contribute. In a startup, you must be a valuable resource of content for business experience, salesmanship, marketing, connections, product knowledge – something! Then, you must be able to communicate and inspire others. Being ‘really smart’ or having a ‘great rep’ and then sitting in the corner and not leading by example doesn’t help a damn thing. Note: If you are currently in a large, well-funded division of a big brand company, please do not join my startup. Start your own, learn some lessons and then call me.
6. There is no On the Job Training (OJT) in early stage companies. If you haven’t done it before, you are a liability. However, if you have direct experience, it’s 10 times more valuable because the company can’t afford ginormous screw-ups. This is especially true of the management team. No matter how hard you work, how confident you are, how great you think your product is, how really big your market becomes or even how much money you’ve raised, if you lead the company in the wrong direction and make a series of poor decisions you will waste cash and time, which are precious in companies with very finite resources. This frequently results in your investors finding someone else who does have experience!
7. Absolutely no one – and I mean no one – is irreplaceable. This includes founders and executives. Furthermore, arms and legs are an easy fix. Don’t waste ten seconds worrying about someone leaving the company. Wish them well for five seconds and then log in to LinkedIn and start soliciting your contacts for a replacement. Sales, marketing, development, finance, support, administration and IT – you name it. You can hire contractors or temps to do damn near anything while you find another – best fit. Sounds harsh, I know. Having said that, never forget or minimize the value of people who perform well and stay with you. It’s called loyalty. It’s critical your team members understand they and their contributions are valued and respected. I recommend 90 percent listening and doing — 10 percent talking as a good way to demonstrate that you value and respect your team.
8. Change not churn! It isn’t important, necessary or even desirable for everyone to know or react to everything all the time. Don’t wreck the productivity, momentum and goals of the organization with every thought, turn and twist that comes into your head from a customer call, business development meeting, late night premonition, wine-induced brainstorm, plane ride to your next airport or discussion with the board. Of course, there will be changes and the joy of working for a small company is the ability to change rapidly. However, it is critical for everyone to understand his or her contribution and how it moves the business up/forward every day. These goals need to be stable. If you are churning your team with new initiatives, goals and objectives – you won’t have any because your team can’t align and create value.
9. It’s not about the salary. However, it is about doing something you love, small team changing the world, creating a market, making an impact, honing a skill set, learning from an expert, chasing equity for an IPO – all good reasons. Keep that in mind when hiring, managing and motivating your team. A hint for new founders and executives: It’s OK if the VP of Sales or one of the sales team members is the highest paid person(s) in the company – even if they make more than you. If you built the right compensation and margins into your plan, high commissions mean great sales. Great sales with reasonable margins generally mean you are generating CASH! I believe the best teams only have two kinds of sales people — rich and new!
10. Never ever work with or hire assholes. I don’t care how big the opportunity is or how brilliant they are (or think they are). Life is too short, you spend a lot of time together and therefore the price is way too high. Just like Kindergarten, if someone fails to ‘work and play well with others’ don’t let them in your sandbox. The older you get, the truer this becomes.
Make no mistake, I love the startup world and suspect that it would be incredibly difficult for me to return to big company life. If after reading this you still want to take your shot, go for it! Contact me if you have questions and I’ll do my best to help.