Getting Started is the Hardest Part

Start-ups are in, or at least they have been for several years, but they might also be on their way out. Recently we have seen more than a few unicorns turn out to be horses with a party hat on, instead of the mythical creatures their investors hope they had found. WeWork, Uber, and Theranos are just a few examples of companies that turned out to be dressed up horses.

One might say that Uber was successful since they have been trading on the New York Stock Exchange (currently at $32.40/share as of 5-13-20 before market open) since last May when they IPO’d at $45/share. Although that is true, it misses the critical detail that they have yet to turn a profit. No margin? No mission. Unless your firm is fed billions of dollars in capital by investors every year in the hopes that one day that might change. Let us look at a few other examples of start-ups in recent memory and see what lessons we can learn from their outcomes.

A Quibble with Quibi, Not Solving A Pain Point

This week the creator of Quibi, an app that seeks to help you watch your favorite shows in just 10 minutes, blamed the problems with his service on the Coronavirus pandemic. A glance at the analytics of streaming giants like Hulu and Netflix shows this analysis to be faulty. Quite to the contrary, streaming services are experiencing a significant uptick in their use during this lockdown.

So, what was the actual problem that plagued Quibi? The same problem that has been the bane of multiple start-ups; they were not solving a pain point for the customer. Those I know like to watch multiple series at the same time and switch between three or four shows regularly. There is a small pain point of wanting to view all of the content that one's heart desires, but Quibi’s user data shows that it is not a significant enough issue to dedicate phone space and money to solve. At only 1.3 million active users, it is not surpassing TikTok, let alone putting a dent in Netflix or Hulu.

So what should a leader do when things are not going well? Former U.S. Navy Seal Jocko Willink answers this question in his book Extreme Ownership. Do not make excuses or blame others. Realize that a mission's success or failure was partly due to you, especially if you are in a leadership position. Were the deadlines not clear? Did the team not understand the importance of the project? Was there adequate follow up from leadership, and were people checking in with each other to make sure tasks were completed in a timely fashion? Every person on a team, regardless of their functional role, is responsible for the combined success of the mission.

Engage the Customer

Though agile development was initially developed for software development, it lends itself well to other industries and tasks. Agile is a way to approach a task and handle change by continually adapting and sending out new versions to get feedback. This method emphasizes front-line workers collaborating with other cross-functional teams to solve problems and refine the product. At its core, agile is a mindset that ensures teams are working on meeting the customers' needs.

Click this link to learn more about the twelve principles of the Agile Manifesto.

From the very first steps of your product/project, engage them! Ask customers what they want and how they want it delivered, then give it to them. Long gone are the days of working in secret and debuting something without at least doing a test run or asking for feedback.

Imagine your team was working on a project, say a piece of software that we will call Phoenix, and you never let anyone else see it. Your team works on the software for two years filled with long nights, pressure cooker levels of stress, and the numbers of all local delivery options on speed dial. The day finally comes when you launch it out into the world, and your team could not be happier.

Until you get flooded with reports of bugs, design features you should have added, customization options that you never thought anyone would ask for, and a laundry list of changes that need to be implemented. Every day that it goes unresolved, Phoenix is slowing burning out, and so are you. Even if your team makes all the necessary revisions in a week, customers have already left, and it can be a tough sell to get them back.

Feedback is critical, especially in the initial stages. It can tell you what matters to customers, and shifting your approach early on is less resource-intensive than waiting until after launch. Listening to your customers is a way to show that you care about their experience with your software or product. The last thing you want to do is give everything you have and deliver a product or service that is dead on arrival.

Culture

The culture of a 100-year-old accounting firm matters just as much as the culture of a start-up. Employees and job seekers alike assess a company’s culture to see if they believe it will be a good fit. Dress code is only a small part of it; what matters is how you treat your employees and what it is like to work there. Is it a high-octane environment where you run on all cylinders but can still share a laugh? Or is there a climate of fear, where the slightest error can have you packing your desk? Do the employees genuinely seem happy to be there? Do those previously employed at the company speak well of it?

Though not the entire reason, the extremely toxic culture of Uber has contributed to their inability to right the ship. It is hard to want to stick around and fix things if someone must worry about the next incident. Please, learn from Uber, do not let a major problem go unchecked.

On a much lighter note, let us also look at the concept of culture fit and hiring. Not everyone is the same and shares identical values, strengths, weaknesses, and mindset, and thank goodness! Not only would that be incredibly boring, but society would not have advanced as far without intellectual diversity. We need detail-oriented people and those who are focused on the big picture. Some are happy to think inside of the box, and they are just as vital to our success. But we also want someone who does not even see a box because it would constrain their innovative instinct.

Teams want to work with people who share their same drive, have a good sense of humor/are fun to work with and have a complementary skillset. Although it may be comforting to surround oneself with people who have similar viewpoints, it can create an echo chamber and cause stagnation. By adding divergent thinkers to the organization, you can approach problem-solving from multiple angles and craft solutions that a team might otherwise not have arrived at.

The kind of environment that an organization should seek to create is one where people are engaged, not only in the mission but with each other.

One of the main reasons why I enjoyed my internships and past job experiences was that they all had a welcoming culture, which encouraged the development of strong friendships with my coworkers. Some of whom I have stayed connected with even though we have not worked together in four years.

CHALLENGE: Next time you see an article or news story about start-ups, check it out! There are a lot of lessons to learn from fledgling companies, and it can be an asset to understand how they view challenges without the advantages of an established organization.