Posted by & filed under Entrepreneurship, Startups, Team.

To create something new and innovative you need to also be ready to fail and fail the right way. Failing has become such an essential part of the startup world that there is even a day for it.

So, contrary to the popular belief failing isn’t necessarily bad, it might be even good and necessary. But there are also the failures that should be avoided. The common mistakes that cause the whole startup to break down. Here are 5 of the common ones.

 

  1. Bad validation

Not all problems are worth solving. Some startups think they have the best idea ever. But they forget that is not enough: someone also has to want to buy it, or preferably: need to buy it. It is always easier to sell and get successful with products that solve a critical problem instead of ones that just ”could be fun”.

Still, many startups get so caught up in their brilliant solution that they forget that to get money from it someone needs to see it so valuable that they are willing to pay for it. Often those startups are also the ones that say everyone are their potential customers. If that’s you, stop now and think. The only thing everyone absolutely needs is air. Good luck capitalizing that.

Do you really solve a problem and is the problem critical enough for people to want to pay for your solution? Emphasis on the word ’pay’. Lots of people want free stuff, but that doesn’t put food on the table. Here’s a post that can help you out with validating.

 

 

  1. People need to know your product exists to be able to want it

Your product or service might really be amazing, and not just on paper. You have validated and found that you really do solve a real problem, and problem people are willing to pay to get solved. But that’s not enough.

There are still startups who think that as long as their product/service is good the customers will come automatically. Sometimes that is true: companies get new customers through referrals from their old customers. But you still need to get those first customers. They won’t find your product nor service if it’s hidden in your garage… You need to talk to people. Though of course, sales and marketing are not going to save you if your product is bad. But at the same time, it’s easy to sell a good product.

So, unlike many seem to believe, people won’t run to you if they don’t know about you. Most likely they don’t even know you exist! You need to tell them and you need to explain it simply enough.

 

  1. …and you need to tell them about it clearly enough

Sometimes this is the most difficult part. You know what you are doing, but your customers and investors don’t. And unless you are a coder and your customers are coders, using industry jargon is going to do more harm than good. You need to use the kind of language your customers use and what investors understand.

Don’t talk about how amazing the “UX” of your product is. Talk about the things your customers really care about, and do it in a language they understand and would use themselves. The way of speaking of for example a parent and a coder are very different…

And it’s the same thing for investors. Considering the amount of jargon startups want to use in their pitches, they must think investors are geniuses. How else would they know everything about every industry? Well, I have news for you: they don’t. When the investors don’t understand what you are saying, they automatically stop listening. And jargon usually does exactly that. And then you are wasting both of your time.

So, forget jargon and explain things as simply as possible. Pretty much like you were pitching to a child (no, you are not offending their intelligence by doing that ;)). In fact, if a child can understand you pitch, your pitch is probably going to be really good!

 

Great team ensures you will have great execution of your idea

 

  1. Wrong kind of team

As it has been said over and over again, it’s not the idea, but the execution. And successful execution is all dependent on the team. Jari talked earlier a bit about the importance of team on here, and how important it is to build your team well. But it is not just about having the necessary skills in your team, but how your team works as a whole.

It is surprising how often internal conflicts destroy the whole business. In those cases, the focus goes to drama and not building your success. Or it might be that your situation has changed and for example, the CEO you had at the beginning stages might not be the best person now. You need to hire well and know when changes in the team are needed.

Hire with care, nurture your team and the team environment and adjust when needed.

 

  1. Failing to fail early enough

At the beginning of this post, I pretty much called startups the masters of failing. I should have probably said the successful startups are masters of failing. There are still startups who do everything they can to avoid failing. While not giving up is good, you need to know when to say “this isn’t going to work”. Then you can pivot and start working on something that will work.

The earlier you realize the that the less time and money you are going to spend building something that is not going to work. Thus startups should remember that failing isn’t alway the end of the world, but something they can use to become a much better business.

And there you have it: 5 common mistakes startups make and destroy all their hard work. Remember these and you won’t be one of them! ;)

 

You might also be interested in: How to pitch to an investor to get funding?

 

Posted by & filed under Entrepreneurship, Startups, Team.

Having the right kind of team is one of the key features of a successful startup. Even more important than your idea (read this if that comes as a surprise). There were search engines before Google, social networks before Facebook and so on and so forth. We all know that. What made Facebook and Google be the successful ones was that they executed the idea better. That’s why sentences like ”Execution is king”, ” Ideas are good, but only execution matters” are heard all over the startup world.

Now think about it: what is the difference between good and bad execution? I.e. who are 100% responsible for making your brilliant idea into reality? Your team. It blows my mind when startup founders just hire their childhood best friends, cousins, someone they know who happens to need a job. Noble – yes. Useful – if you’re lucky…

Hiring someone you don’t know means spending hours and hours trying to get people to apply. And then spending much more time on looking through the applications, interviewing and still you can never know what kind of people they really end up being. You just have to take a leap of faith. Or you can just hire someone you know, or at least someone you trust knows. Easy, simple, done. So, hiring someone you know is understandable and even makes sense. But that’s where many startups go wrong. Here are what to look out for.

 

Danger point 1 – just hiring someone you know without thinking what they can really bring to your team – skills, experience, their network…

The problem is hiring someone just because you know them. That’s what many do and then notice the person doesn’t have the skills they need. Then you face the dilemma: should you fire your childhood friend to be able to hire someone your startup really needs or just stay quiet and not destroy your relationship with him or her. Startups just don’t have the money the keep hangarounds in their team. And sooner or later you will have to sack him/her or risk failing. Thus it is better to hire sensible right away.

Each and every member of your team needs to have the skills and/or experience you need in your team. And of course, fit into your group dynamics.

 

Danger point 2 – hiring someone who doesn’t match your team and/or way of working.

Some startups have the opposite problem. They get so charmed about someone’s skills or experience and don’t care about how that person will fit into their team. Those are the teams that will spend their days ripping each others hair out.

Now, you don’t have to be best friends with everyone, but too many startups fail because they spend their time fighting each other instead of working. A cohesive team is not only more pleasant to work in, but cohesive teams also get better results. That is why it is equally important to make sure the new hire also fits into your team.

Also, make sure your company’s working style fits with the person you will hire. For example, if that person would prefer to have steady working hours but your startup needs lots of flexibility. Or you would want employees to work at your office, but that person would prefer to work remotely, you might have to reconsider.

Again, think before you hire and you will save yourself from many headaches.

Team fighting instead of getting things done

 

Danger point 3 – team full of similar people

If your startup has 3 members who all are introverted coders who only want to code, no matter how amazing they are at coding, your startup won’t get far. Yes, your code will be brilliant, but that’s it. Let me repeat: THAT’S IT. Even if your business idea was to be a coding subcontractor, you would still need other kinds of people in your team. You need diversity and diversity in all areas.

 

Have the right skills in your team

You need a diverse group of skills, complementary skills that make executing your brilliant business idea possible. You all might be coders, but someone also needs to know how to sell, pitch, do marketing, accounting…. When you only have coders who are interested in coding, you end up with brilliant code. But like I said, that’s going to be it. That’s what they call hobbies. If you want to make money you need more than that.

I overheard a mentoring session in a hackathon of such team. The whole session was spent by the mentor asking who would use their product/idea and the team answering ”but the code is sooooo pretty, anyone. It’s just so so soooo pretty.” They were completely unaware that someone would actually need to also buy it, i.e. someone has to want the product. And that they were not even selling code, but something to make people’s lives better. The whole idea of ”thinking from your customers’ perspective” was completely alien to them. The team also spend the first minute (!) of their pitch explaining how they are uncomfortable pitching/selling, how bad they are at this, this and that…. Let’s just say it didn’t go too well.

You need the dreamers, the organizers, the doers, the specialists, the whole package that gets the work done. Think about it: if you all are dreams, all you get is dreams. If all of you are natural organizers all you end up doing is organizing each other and not doing the work.

The best results require different minds

You need people who have the diverse skills and working styles needed to make your idea into reality (and success!). But you also need diversity in experiences, in the minds you have in your teams. You need diversity of all kinds. Of skills, personalities, life experiences, cultures, genders, what have you. Studies say that by having more diverse minds working on a problem they are going to look at it more thoroughly. That is how you will take all the necessary things better into consideration and how you will create more innovative ideas.

So, while it is important to make sure your team is cohesive, you should avoid the trap of only hiring people who are similar to you. When you work with people who are different from you (from a different culture, education, sex, etc.), you will have to put more effort into working together, solving misunderstandings and so on. But also your results will be so much better. So so much better.

TL;DR: Make sure:

  1. you have all the needed skills and personalities in your team.
  2. your team dynamics work
  3. you have enough of different kinds of minds working together. That’s how you will reach the best results.

 

A post you might also find interesting: You need more than mentoring hookups

 

Posted by & filed under Entrepreneurship, Startups, Team.

An often undervalued part of building a successful startup is the team. Many entrepreneurs just hire their friends and people around them without giving much thought on what they can really bring to the table and if the combination of skills, experiences, personalities etc. is right at all. They forget that it is an important if not even the most important part of becoming a successful startup.

Like Guy Kawasaki famously said: “Ideas are easy. Implementation is hard.” And successful implementation is all dependent on the team. It does not matter how great the idea is if they cannot pull it through. Actually, it often is better to have just a “good enough”  idea and a great (or promising) team as a starting point than the opposite.

It doesn’t matter how great your idea is if your team cannot pull it through. Tweet!

 

Even more important than the business idea?

You are going to hear the same gospel about the importance of the team also when talking to any VC investment professional or experienced serial entrepreneur. In fact, it is often seen even as the main asset of the startup. You might even get the impression that the value of the” obvious” core i.e. the business idea or product, is downplayed. This is not the case, but the team is as much core as the value proposition and product.

Building the team and company is like institutionalizing the right thing to do to do things right. You build an engine to do and repeat what seems to resonate with the real, validated market need. Steve Blank talks about startup as “ … a temporary organization looking for a repeatable and scalable business model.” Building a great team is one important step in getting the engine working. Unfortunately for many entrepreneurs, it is not that obvious.

Why the importance of teams is so misunderstood?

One of the reasons for that is that many (if not most) of the commonly used business tools don’t cover the team properly. Take for example the Lean Canvas. From it, we learn that a well-functioning business model with all the ingredients in place calls for the right balance: value proposition and solution resonating with the real market need, channels built to paying customers and so on. However, the Lean Canvas only regards the team as cost element. But why? Don’t they see the importance? Yes, they do, but you must keep in mind what the canvas is about: helping to iterate and find the right product-market fit. So, it does not downplay the role of the team, you just need to remember to cover it separately.

So, remember to not only focus on building the business model, product and what have you, but also building a team that can execute it all. After all, it is all about execution.