The Vast Majority of Startups Failed

10 Practical Tips for Startup Survival and Effective Leadership

10 Practical Tips for Startup Survival and Effective Leadership

The Vast Majority of Startups Fail

In today’s competitive business landscape, having a great strategy is no guarantee of success by itself. On the contrary, and mainly for startups in the first 3 years of existence, a well-executed strategy implementation is more critical for survival than The Perfect Strategy.

All these tips would work well either in startups within established organizations or in new ventures from scratch, just in industrial-based or service-based business. 

© 2016 Amadeo Farías

Sometimes to achieve results in complex working environments, you would rather ask for forgiveness instead of asking for permission…

© 2016 Amadeo Farías

THE NEW PRODUCT LAUNCHYou must prevent any potential product failure at the launch phase.

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Speed and Lean are good, but… Be sure that your product will not fail in the initial sales to early adopters. If the product failed, you would lose time and money, and damage your fragile credibility.

Do not harm your cash flow. When launching new products, sometimes it would be better to deliver a quality overrun if necessary (and reduce it slowly over time) than dealing with multiple quality complaints at the early stages.

1© 2016 Amadeo Farías

THE BUSINESS PLANPlan for the best, be prepared for the worst.

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A startup must has a detailed business plan, yes. But you must consider that almost certainly things will not go as expected (mainly those related to sales revenue…).

So, the plan must be consistent but based on tactical flexibility, faster response to unexpected problems and effective coordination between the team and all areas involved in the project.

2© 2016 Amadeo Farías

BUSINESS PLAN FORECASTSWhen planning a startup, you might be an optimistic pessimist...

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After more than 20 years of career, the most effective way I ever known to prevent new business forecasts fall short of the mark, is to serve clients superbly well since day one, and estimate your revenues lower; and operational costs higher; than what you expect them to be. Period.

Do not waste too much time ( other than that strictly necessary) making a perfect estimation of an imperfect future...

3© 2016 Amadeo Farías

SHORT TERM RESULTSWake up son, in business miracles do not happen.

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Optimism is key to success for new business, but be realistic. It is almost certainly that the first year results will fall short of those planned. Do not despair, be prepared for the unexpected and forget about short-term  extremely optimistic results. Do not behave like a rookie…

Use all your available resources to make the project achieve tangible positive results quickly - to reduce investors/committee

anxiety ;-) - but consider that real sustainable business value will only be built in the long-term.

4© 2016 Amadeo Farías

THE TEAMSpend enough time building a strong team.

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The team is the backbone of your project. Whenever possible, try to hire people experienced in startups, flexible and specialised, able to perform in any context outside their comfort zone and to make an impact on the business quickly. Building an inconsistent team will only put additional pressure on you (and your cash flow) and can drive the business to failure.

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SALES:THE BLOOD OF YOUR BUSINESSConcentrate all your firepower on gaining initial sales.

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Gaining the first orders is a complex mission. You almost certainly will get more “NO's” than “YES's, and the team will need extra resilience to overcome this stage. If necessary, consider hiring an interim sector specialist, who can help you to accelerate the pace of this phase. Lead to results.

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THE NEW PRODUCT ADOPTION CYCLECustomers will need time to adopt a new product.

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Clients need time to understand the real value of new products before repeat sales start to flourish. You have to know the time this cycle will take. I called this phase The Wall.

Every new product must overcome The Wall, either at a fast or slow pace. However, you can help the market to understand your product’s competitive proposal quicker by using an early-stage communication strategy.

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EARLY-STAGE COMMUNICATIONDo not waste time, start to promote your business since day one.

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Establishing a smart dialogue with the target audience during the early stages is critical for leveraging sales, especially those of years #2 and #3. Advertising is more effective in the early stages than in the mature ones. The sooner the clients understand your USP, the quicker the product adoption rate will be. Remember  to allocate a reasonable marketing budget to promote the business launch.

(** In the industrial-based business sector there is a widespread trend to

invest heavily in CAPEX, but to allocate poor marketing budgets to promote

the commercial launch. Do not copy old bad habits) 8© 2016 Amadeo Farías

STAY FOCUSEDSon, good things take time...

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It is critical to stay focused during periods of intense pressure. You must built your resilience and that of your team. In front of a complex situation, you should consider the worst-case scenario and have a Plan B ready to be implemented if necessary (-nevertheless, you do not have to disclose your plan to everyone in

advance -)

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THE OPERATIONAL DISCIPLINEWhen everything feels like an uphill struggle, operational discipline will be essential for achieving success.

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The weekly meeting to control the progress of the plan will be essential to an effective management. The leader should be tolerant of small mistakes, but must pay attention to those who under pressure failed a few times to meet that deadline...

A project implementation do not fail due to an only one reason. If you choose a wrong tack, the project will send you small warnings before reaching the tipping point. Use your intuition and experience to read those warnings in order to correct the course of the project quickly.

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© 2016 Amadeo Farías

INTERPERSONAL WORKING RELATIONSHIPSMaking things happen usually disturb the comfort zone of others.

Bonus10

You will have convinced supporters, unconvinced supporters and convinced detractors. Interpersonal relationships really matter in the corporate world, even more when you are leading a startup or new project within established organizations.

You must build your network of supporters throughout the organization and use it to leverage the positive progress of the project (and of course, your role as a leader..)

© 2016 Amadeo Farías 10

About the autor: Amadeo Farías

I am a business and marketing consultant, speaker, a co-founder of OneGrow, and an ex-executive from large multinational PLCs. I've spent the last 20 years of my career creating, launching and managing new businesses in several countries.

I collaborate with companies to create new ventures and identify effective ways to boost sales and profits. You can discuss your case or connect with me on Twitter, LinkedIn or my Blog. 

info@one-grow-com

© 2016 Amadeo Farías