By David Ahn of SalesLoft
In the startup world, where the failure rate is pegged at 90 percent, failure is all but an inevitability.
Having worked purely in the startup scene thus far in my career, I’ve had the opportunity to learn from founders and team members at both wildly successful and wildly stagnant startups. I’ve even failed at my first attempt at an entrepreneurial endeavor. These collective experiences taught me four important lessons.
1) “A startup is not a small version of a large company.”
This is one of the underpinnings of Steve Blank and Bob Dorf ‘s, The Startup Owner’s Manual. I only wish I had read this before I quit my day job to help launch a company.
A startup, by definition, is an organization formed in search of a repeatable and scalable business model which is uncovered by performing a series of tests to prove or disprove a set of hypotheses. Startups must explore the unknown and be flexible and adaptive to find their business model. An established corporation, on the other hand, has an existing, proven business model. For example, a new startup in the landscaping industry would be foolish not to adapt its business in order to accommodate things like an online landscape design tool that is designed to make your job easier.
Founders can’t afford to be stubborn. Being agile at all times is key to success. Read Blank and Dorf’s book before you begin. Doing so will better prepare you for the rigors of startup life. This might also include employees at some point in your startup and soon they will be representative of your business so having something like invoice templates could help you to keep on top of what is needed within your business.
2) “Great [venture] companies are led by missionaries, not mercenaries.”
Famous billionaire investor John Doerr often discusses one important aspect of the world’s greatest entrepreneurs: they lead their companies as missionaries, not mercenaries.
While these two leadership styles may seem synonymous, there are several striking differences. Here’s how Doerr distinguishes between the two:
Mercenaries are driven by paranoia; missionaries are driven by passion. Mercenaries think opportunistically; missionaries think strategically. Mercenaries go for the sprint; missionaries go for the marathon. Mercenaries focus on their competitors and financial statements; missionaries focus on their customers and value statements. Mercenaries are bosses of wolf packs; missionaries are mentors or coaches of teams. Mercenaries worry about entitlements; missionaries are obsessed with making a contribution. Mercenaries are motivated by the lust for making money; missionaries, while recognizing the importance of money, are fundamentally driven by the desire to make meaning.
As an entrepreneur, our mission is to change the world by solving a problem that we’ve experienced or, as a visionary, solving a perceived problem that people are not yet aware.
In my opinion, effective leaders are those who change the lives of those they employ. They are servants, not kings. Leading with an open heart, not an iron fist is empowering.
3) “Culture is king.”
In the startup world, it is said time and time again that having a strong culture is a leading indicator of success as it is THE most important element to building a winning team.
A fruitful company cannot be built on the thoughts of financial success alone. Much like how a startup leader must lead with missionary zeal, their people must also be advocates and champions of each other.
There is nothing more poisonous to a startup than a lack of company culture — which starts with an overall greater mission and core values that are immutable.
This is one of the greatest lessons that I’ve learned during my previous attempt at entrepreneurship and during my current role as a marketing “Rainmaker” at SalesLoft. After launching SalesLoft in 2011, CEO Kyle Porter experienced 14 months of failing to gain traction before making the tough decision to destroy and rebuild the company. Through this process, he learned to “put culture and core values at the center of everything.”
In a recent company update, he explained in detail that what we do and the business decisions that we make as a team will always be weighted heavily by our culture and values.
Putting culture above everything creates a company of evangelists … and that requires buy-in from every level within the company.
4) “You have to know when to cut bait”
The hardest lesson learned during my failed attempt at helping launch a startup was to know when to cut my losses and move on.
Entrepreneurship, and working in the startup industry in general, is extremely risky; nearly 90 percent of all startups end in failure.
Personally, it was hard to let go of something into which I had poured blood, sweat, and tears. But if certain elements like business model, leadership or culture are irreparably broken, then it may be time to seriously weigh the financial risks and effort against the potential return. I did and do not regret my decision.
While the journey building the startup was a rewarding one, a business cannot be founded without financial backing. Some people may choose to fund their business with their own financial resources while others might reach out to potential backers. One option you may want to explore for your own business is obtaining a small business loan. You can visit this website to see which loan works best for you: https://smallbusinessloans.co/.