Chris Cardinal, Arizona-based Entrepreneurs Organization (EO) member, is the founding principal of Synapse Studios, a product and software consulting firm that solves complex challenges and helps businesses Leverage technology to move forward. We asked Chris to share his thoughts on how startup entrepreneurs can avoid common pitfalls and lead them to success.
As the fearless leader of a startup, you won’t hear this all-too-familiar dire warning if you don’t. Think of it as an entrepreneur’s rite of passage: “You do know that 20% of businesses fail in their first year, right?”
Yes, this sobering statistic is real. It’s hard to start a successful business. There are many things that need to be balanced at the same time. Plus, you’ll be held back by the pressures of unlimited enthusiasm and limited resources. No wonder so many fledgling companies fail – quick!
What exactly caused the new business to go bankrupt? What I call the “vision complex” is a big culprit: Entrepreneurs put a lot of money into their ideas. They must! This is the essence of entrepreneurship. Everyone thought they were Steve Jobs, a successful founder who ignored criticism at all costs, constructive or otherwise. But true leadership looks like a willingness to turn when new information comes in (if it’s appropriate) and knowing when to persevere to achieve your vision. Blindly clinging to ideas can upset this balance. result? The founders built a full-fledged product with six numbers that no one wanted to buy.
Another reason startups fail is founders over-trust their intuition. It’s good to follow your gut, but it’s crucial to back up your “Spiderman feel” with a basic understanding of the basics of running a business.
Obviously, not all businesses are in trouble. Many people enjoy steady growth and success. If that’s your biggest goal (of course it is), you’ll want to take some steps to stay humble. Here are five good ways to start:
1. Make friends with research concepts
If you haven’t read Rob Fitzpatrick’s The Mom Test, get one copy. This book highlights how tricky it can be to get real feedback when you need it most. Make no mistake: you need real feedback. That input can validate your concept and make sure you’re on the right track, or it can reveal what needs to be tweaked before you go too far in the wrong direction.
What is the highest cost-effective way to conduct research? Embrace the power of archetypes. Deliver a minimally viable prototype to a small representative of the sample target audience. Record the response. Then, make more prototypes. You’ll be amazed at how much data you can collect, even with rudimentary, non-functioning prototypes. And it’s a lot cheaper than buying a product that actually works only to find it stinks.
2. Actively challenge your assumptions
As a founder, you have a habit of ignoring naysayers. Don’t shy away from good advice that challenges your original vision, though. The more open you are to new information you didn’t anticipate, the more effective you will be in the long run.
History is full of examples of struggling businesses in their way. Guess what they are called now? Another business failure statistic. Rather than extinction, look at things from a different perspective.
3. Looking for an experienced personal advisor
Want a quick look at how not to fail? Learning at the expense of others, such as mentors. Mentoring is one of the most reliable resources an entrepreneur has. It also doubles your chances of survival.
Don’t fall into the ranks of founders who lack the humility to hire a good coach. If you want to be at your best, surround yourself with “be there, be that” leaders who are willing to tell you what’s going on. Consider joining an incubator. If you’re established and growing, I highly recommend EO’s accelerator program, which provides mentorship to EO members.
4. Simplify systems and processes
The earlier you start writing processes, the better. This means rethinking the ad-hoc workflows you created as an early-stage company. Write down all your internal procedures as soon as possible. You can change them later as the operation expands. Now, they will provide the foundation for your system.
Avoid overthinking here. It may be tempting to over-engineer your process for any possibility of any size, but it is impractical. Build the framework and expect it to be maintained continuously as a dynamic document. Give yourself enough runway, chart a creative path forward, and wait before automation for as long as you can get out of it. When it comes to radical change, slow and steady usually wins the game.
5. Make thoughtful decisions
I’m not the first to compare entrepreneurship to chess, but it’s still a great analogy. You must be able (and perhaps more importantly, willing) to always see some action ahead. In other words, look at the future world through lenses that allow you to consider the best and worst-case scenarios.
Take these situations into consideration and play them one by one. Conduct a SWOT analysis. Reflect before making laws. It’s harder than it sounds, especially when you’re putting out a fire or getting into analysis paralysis. Still, knowing what to expect on the next mountain makes sure you’re prepared for anything.
When it comes to entrepreneurial success, a little planning and a business growth strategy can go a long way. Leave the failure to others. You have a dream to come true.
