Where Ideas, Experiences, and Lessons Learned Intersect

“Acting Like a Startup”

Posted on February 8, 2022 Updated on November 28, 2023

Over the years, I have heard comments like, “We operate like a startup,” “We act like a startup,” and “We are an overnight success that was 10 years in the making.” These statements are often euphemisms for “We are small and not growing as quickly as we would like.”

There are numerous estimates of startups in their first few years. One of the best descriptions I have found is from Failory, but Investopedia and LendingTree have similar but differing take on the statistics and root causes. All three articles linked to are worth reading. The net result is that the outcome of failure is much greater than success, especially over time. So, “acting like a startup” is not necessarily good, even when true. You want to act like a successful startup!

Understanding the data and various causes for success and failure are great inputs to business plans. I have been a principal with successful startups, both early employees and founders. Understanding the data and various causes for success and failure are significant inputs to business plans focused on long-term success. As a Founder, there are a few points that I believe to be key to success:

1. You have specific expertise that is in demand and would be valuable to an identifiable number of prospective customers. How would those customers use those skills, and how would they quantify the value? That understanding provides focus on what to sell and to whom.
2. A detailed understanding of the market and key players is needed to hone in on a niche to succeed.
3. Understand your strengths and weaknesses, then hire the most intelligent and ambitious people who complement your weaknesses and strengths.
4. Understand how to reach those potential customers and the messaging you believe will compel them. Then, find a way to test and refine those assumptions as necessary. Marketing and Lead Generation are very important.
5. Have a plan for delivering on whatever you sell before you get your first sale. A startup needs to develop its track record of success, beginning with its first sale.
6. Cash flow is king. It is far too easy to run out of money while looking at an excellent balance sheet because of receivables. Understand what matters and why.
7. Founders need to understand the administrative side of a business – especially the financial, legal (especially contract law), insurance, and taxes. Find experts to validate your approach and fill in knowledge gaps.
8. Consistency leads to repeatable success. You standardize, optimize, and automate everything possible. Wasted time and effort become wasted opportunities.
9. Finally, there needs to be sufficient cash on hand to fund the time it takes to find and close your first deals, deliver and invoice the work, and then receive your first payments. That could easily be a 3-6 month period.

Those are the foundational items that are reasonably tangible. What is not as concrete but equally as important are:

1. Having or developing the ability to spot trends and identify gaps that could become opportunities for your business.
2. An agile mindset allows you to pivot your offerings or approach to refine your business model and hone in on that successful niche for your business.
3. Foster a sense of innovation within your business. Always look for opportunities to deliver a better product or service, improve the efficiency and effectiveness of your business, and create intellectual property (IP) that adds long-term value.
4. Focus on being the best and building a brand that helps differentiate you from your competition.
5. Become a Leader, Not a Manager. Create your vision of success, set expectations for each person and team, and help eliminate roadblocks to their success. Trust your team to help you grow and replace members quickly if it becomes clear they are not a good fit.

Steve Jobs once said, “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.”

Winning is hard, so focus on the journey. Making your customers’ lives easier and allowing your employees to be creative while doing something they are proud of will lead you to your destination. But when things start going well, don’t sit back and convince yourself you are successful. Instead, continue to focus on ways to improve and grow.

Success means different things to different people, but longevity, growth, profitability, and some form of contributing to the greater good should be dimensions of success for any vision.