Business Advice: How Startup Founders Can Prioritize Efficiency

Forbes Publication

As an entrepreneur or startup founder, there are numerous tasks that you need to work on at any given moment. The skill is figuring out what to work on, when to work on it and what deserves immediate attention. Why is it so hard to prioritize in a startup business? At times:

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• A huge deal is in progress that requires collaboration. Employees’ attention is now diverted.

• Clients are unsatisfied. Employees are now focused on customer service.

• Stakeholders in the organization want to change things around. As the founder, you’ll have to placate their needs.

• Technical issues slow the startup down.

• A potential partner wants to invest in your business. This requires drafting contracts and meeting deadlines.

You may find yourself leaping between these tasks daily. So, how can you prioritize the ins and outs of your startup? Let’s discuss exactly what you should be focusing on to ensure continued success.

Why do so many startups fail? 

To understand what you should focus on, it is first important to recognize why so many startups fail — lack of proper prioritization is only the tip of the iceberg.

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One of the reasons startups fail is because they run into the problem of having little or no market need for their particular services or products. Typically, this happens because there isn’t a compelling enough value proposition to motivate consumers to buy.

Startups may also face improper market timing. Ideally, startups should be ahead of the market, with proper forecasting enabling them to deliver products and services strategically.

Lack of prioritization also contributes to startup failure. Improper planning manifests as an ineffective management team. Unfortunately, inadequate management is a problem for many startups. Weak management teams make mistakes, including poor execution and not prioritizing key projects.

A lack of prioritization can eventually contribute to cash flow problems, another reason why many startups go under. One of the key responsibilities of a CEO is understanding cash flow and whether it will carry the company from quarter to quarter.

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What do startups have to prioritize above all else? 

Above all else, I believe startups need to prioritize workplace efficiency. Startups in particular have returns that are under pressure. Put a spotlight on the value of employees carrying out the right tasks at the right time. By working efficiently, your team can produce more in the same amount of time. This will maximize productivity, contribute to positive cash flow, achieve more at a lower cost, and lead to higher returns.

Before tackling issues when it comes to workplace efficiency, it is important to recognize if your startup is productive in the first place. Productivity is vital for continued success, especially since the economic model of a startup can involve a lot of uncertainty.

You can measure your startup efficiency through several methods, with one of the popular methods being time management productivity. This method measures productivity by recording how employees use their work time. There are software programs that measure how much time employees spend being productive and dedicated to efficiency. Daily updates from employees, progress reports and transparency on daily tasks will not only measure efficiency, but also encourage dedication to the startup’s mission.

One of the best ways to encourage efficiency in the workplace is to properly onboard employees and respect their autonomy. Onboarding refers to the process of orientating new employees for success, and it goes beyond making a new employee feel welcomed.

Give employees the tools to familiarize themselves with their daily tasks and work culture. Then, give them opportunities to contribute to the culture. A successful onboarding program includes a thorough introduction to the startup’s mission, key players and roles that specific people or departments have.

Proper onboarding leads to autonomy. It is an essential element in an efficient workplace. I’ve found that it empowers employees to shape their environments and helps them realize that startup founders rely on and respect their contributions. Furthermore, it helps thwart feelings of disengagement, work dissatisfaction and apathy. An efficient startup includes efficient employees who feel like they are being understood.

Survival Of The Fittest: How To Overcome Common Startup Problems

FORBES Publication

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Creating a company that is not only going to survive but thrive is difficult. However, with a certain combination of elements, strong willpower and the right information, you can create a business that will stand the test of time.

Lack of funding is one of the biggest issues that new companies face, but other issues include product-market fit, not properly defining a custom problem and HR/people problems between founders and team members.

As a startup founder, I’d like to dive into each of these problems and lay out how startup founders can mitigate these issues to help ensure their companies survive and thrive.

Product-Market Fit

To start a successful business, you must offer a product or service that is sellable and that fits into a market, either niche or mainstream. You can have a product or a service that is fantastic and that you have spent years thinking up and developing, but without a proper market, it will be extremely difficult to secure investors who share your vision.

Consider this: 42% of businesses failed because there was no market need for them, according to 2014 CB Insights data. So, here are some key ways to determine whether or not you have product-market fit.

• Talk to your target audience via customer surveys to determine if there’s a need for your product or service.

• Make sure that the value proposition you’re proposing will address the current and future needs of your customers.

• Look for investors who not only want to sell your product but also invest in its development.

Defining A Custom Problem

Unless your product solves one specific problem, it will be difficult to justify why an investor should throw their hard-earned money into your idea. Your product needs to serve a purpose and, again, be sellable in order for investors to see that it has potential.

Investors need to know that you’ve considered not only the viability of your product, but also ways your product could evolve. Ask yourself what assumptions you’re making and whether you’ve validated your assumptions.

• Have you proven that your audience needs it?

• Have you explored (or considered) other ideas?

• Have you mitigated risks to ensure product success and return on investment?

People Problems

Yet another issue you may face involves your co-founder(s). Often, when one founder comes up with an idea and the other wants to go a different way, you may have trouble coming to a consensus about what you to do with the company.

• Write out all your ideas related to the topic in question on a whiteboard and determine the areas where you agree.

• If disagreements escalate, consider bringing in a consultant to facilitate open and honest discussion with your co-founder and perhaps your leadership team as well.

According to the same CB Insights data, 23% of companies failed due to having the wrong team. It is always best to take the time to get on the same page and to try to find a common goal and direction for the company.

• Remember, you’re a team.

• Create an environment where every person’s opinion is valued and appreciated.

• Set aside the time in your busy schedules for team meetings.

• Make effective communication a cornerstone of your company’s culture.

Lack Of Funding

Lack of funding is one of the hardest things for a company to overcome and many simply do not find the investors they need in order to thrive, let alone survive. Thousands of aspiring companies offer similar products. It is your job as a founder to make sure your company is the one that stands out. You must capture the eye, and the pocketbook, of the right investor to help your company succeed.

The key is to collect the proper metrics:

• Revenue generation

• What affects revenue generation

• Features that will drive growth and revenue generation

The goal is to improve the perceived value of your company to heighten its appeal to investors. Finding investors is the next step, which is easier if you know where to look.

• Contact companies that you admire and ask for advice. You may get a better response than if you come right out and ask for money.

• Develop relationships at networking events, conferences and more; you just might find an investor who is interested in your company and eager to invest.

Taking the time to create a strong base is the fastest way to get sound investors and make sure that your company will stand the test of time.

How To Hire For Your Deficiencies In The Early Stages

Forbes Publication

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Hiring for your deficiencies is one of those “it depends” questions.

Who you hire first depends on your team’s current deficiencies, and your deficiencies are defined by what you are trying to accomplish. If you’re a typical startup creating a software product (apps, website, etc.), there are typically a few standard roles and capabilities you’re going to need to fill: product, sales and engineering. These are not the only capabilities and roles you’ll need to fill to make a company work, but they’re capabilities that are 100% necessary.

Who you need to hire depends on what you can do. You already have one or more founders. What can those founders do? While you’re searching for product market fit, do you need sales? Maybe that’s covered by one or more founders, for now. Maybe it’s not, and you are at a point where you need to build and scale a sales team. Can one of your founders code or lead external engineers? Perhaps not, and you need to hire someone to do one or the other.

In general, the main things you should make sure your team can do are the three capabilities I listed, plus one:

1. Product

2. Sales

3. Engineering

4. Vision

Let’s dive into these four capabilities, and who will be responsible for each one:

Vision

Vision is what’s left over, and is almost always the main responsibility of the CEO. Vision is the mental understanding of what your business will be, as well as what it is now. It’s the understanding both of what you think the market will grow to and how you can take your business, as it is today and build it into what it will be tomorrow. Vision has ramifications in all three other areas. It’s what ties them all together and becomes your means of communicating a future view of the world with your employees and your customers.

Product

Product is the job of the person who takes vision and translates it into the different products and services your company provides. They maintain the mental image of what those products and services are now and how they can be modified in the future to help guide the company toward a realization of the vision. A good product person will have the ability to inform engineering on how they should build product, and they should do so in a way that asks for metrics to be collected on the functionality created. Product teams should use these metrics to provide feedback to vision, which will guide which product direction should be continued in the future.

Engineering

Engineering is the technical implementation of products. To build them well, you need to hire quality people who have the capability to implement the products and services you want to create. This means someone on the team has to have the ability to either create quality engineering outputs or to judge them and guide others to create them. This is either a CTO, VP of engineering, lead engineer or manager in the case that they are not technical but can lead.

Sales

Sales is a different animal than the above, but it’s arguably more important. A sales organization is both a sole means for achieving revenue for a company, as well as a feedback mechanism for product and engineering. A good sales lead will have the ability to set up an organization so that it is driven by incentives and judged by concrete metrics. Sales organizations are almost always internally competitive.

So, you’ll need to figure out what capabilities you need and how each person involved is differentiated. You’ll also need to figure out how to distribute equity amongst them. Are they essential to running the business? Perhaps they’re essential enough that you consider them a founder.

If not, think of what percentage of ownership feels motivating but is larger than what a future standard employee will get. An engineer on your already built-out team will likely get one-tenth of one percent of the employee equity pool. A good rule of thumb for equity is to give between that and what you give to yourself — somewhere in that range is what your first hires should get.