Most prospective entrepreneurs know that the success rate of startups is a challenge, even for the most experienced founder. In fact, studies show that a mere 10 per cent of all startups succeed, and the average lifespan of most new companies is approximately 20 months. It’s a true testament to the possibilities offered by entrepreneurship that so many people still start companies from scratch, even in the face of daunting statistics.
In order to avoid joining other companies in startup heaven, leaders must be diligent from the moment they decide to launch, and they need to have a plan for navigating the choppy waters ahead. While some functions will evolve naturally as the company grows and changes, there are certain tasks that need to be addressed as early in the startup’s life as possible.
Enshrine your core values at the center of the company
Your vision and your core values drove your decisions when your company was nothing but a nascent idea, and they’ll also be what drives it when it’s an expanding business with employees, customers, and assets. As a leader, it’s up to you to keep sight of these values as the organization begins to take shape, and to get everyone on board with your vision: It’s only when the decisions made at all levels of the startup reflect these values that you will operate cohesively and with a common purpose.
Many entrepreneurs quickly shed their commitment to their values early in the company’s lifespan, and it’s easy to see why it happens so frequently. Rapid growth necessitates upheaval, and leaders are often content to make whatever decisions they can in the moment and deal with the potential fallout later. But if these decisions contradict your core values, it’s difficult to come back from that once you’ve transitioned into a larger entity.
By that point, the direction of the company will be in the hands of numerous different parties, all of whom will be acting without established guidelines from the top. However, when the leaders of your company base all of their decisions during the growth phase on the core values, those will become a cornerstone of the organization in the future.
Hire a team you can trust, and delegate accordingly
Think about this: Companies that have endured for hundreds of years, such as DuPont and Citigroup, are still being impacted today by hiring decisions that were made during their infancies. Therefore, if your startup is still in operation 100 years from now, the hiring decisions you make right now will still have an impact long after you are gone.
It may sound overwhelming, but it’s actually helpful to visualize the true importance of developing a reliable and trustworthy team early in the company’s existence. These new hires will learn your company culture, make their own positive (or negative) mark on it, and eventually help develop future leaders who will do the same.
Leaders must take an active role in hiring colleagues they can trust to make the many big decisions that occur during a startup’s initial growth phase. You have to focus on finding people who will buy into your vision, consistently execute it, and fortify and expand your company culture in value-added ways. This means you also have to be prepared to identify people who are working in opposition to your core values, and part ways with them before they can do lasting damage to your culture and performance.
Look for partnership and outsourcing opportunities
If there’s one piece of advice new entrepreneurs should internalize, it’s this: Know what you do better than anyone else, and focus on making that the backbone of your company. Any other functions except this core competency are fair game for outsourcing. If it’s not directly related to your singular value proposition, then you don’t have to do it by yourself. In fact, it’s better in many cases if you cede the responsibility to someone else.
The reason is because professional services companies can specialize in specific areas and develop operational and cost advantages that are honed through years of experience. Meanwhile, you’re simply trying to service your growing customer base and figure out how to scale the business properly. You could spend a lot of time and money trying to develop a social media marketing strategy that works for your business, or you could get help from an expert who can the work more effectively for you. Outsourcing a function doesn’t mean your startup has failed at that task; it means you recognize where you can afford to delegate to the experts.
Grow at the rate your business demands
Many entrepreneurs crave meteoric growth for their companies, and on the surface it makes sense. Fast growth makes headlines, attracts investors, and can turn humble entrepreneurs into household names.
The biggest issue with this way of thinking, however, is that not every company is meant to grow rapidly. Some organizations need to start with a small stable of reliable customers as they build a steady stream of revenue over several years until they’re able to expand their operations. This doesn’t make them any less viable, worthy, or effective than startups that sign 1 million new subscribers within three months of their launch. They’re just operating under different business models.
Ultimately, you have to grow in a way that distinctly makes sense for your organization. Carefully analyze the opportunities in front of you, and don’t be afraid to pass on them if they don’t mesh with your plan and vision. The promise of rapid growth is exciting, because it, and everything that goes along with it, is a form of instant gratification. But that’s not why you’re creating a startup; you’re building an organization that will be able to survive and thrive for the future.
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