As we enter the new financial year, it’s clear the challenges of COVID-19 will be with us for at least several months more. Fortunately, there are technology solutions that can help small business during this difficult time. They can boost the likelihood of being paid promptly, reduce the compliance burden of tasks such as JobKeeper, Read More…
Let’s Talk: Startup founders
Wed 11 April 2018 - 7:15 amExpert | Featured | Let's Talk
A CEO landed himself in some hot water, this week, due to his participation our latest “Let’s Talk…” feature. When asked by Dynamic Business to name a bad habit startup founders need to break, he sent the following response by email…
“I’m currently on holidays and upon arriving at my hotel, I asked my wife, ‘So, what bad habit do I need to break as the CEO of a startup?’ She replied, ‘Checking your emails on holidays – stop it!’ She has a great point…”
Other bad habits named by this week’s lineup of 28 thought leaders included… Idolising Kodak. Resting on one’s laurels. Being distracted by shiny things. Wearing too many hats. Adhering to insane to-do lists. Neglecting mental and physical health. Not being sales focused. And short-termism. Raising finance without a clear plan. Failing to account for contingencies. Measuring progress with vanity metrics. Confirmation bias. Staying on the wrong side of fear. Ignoring one’s instincts. Failing to do market research. And overlooking opportunities for external funding.
Read on for further insights from startup founders and other business leaders…
“What is a bad habit that startup founders need to break?”
Danielle Fletcher, Marketing and Strategy Director, Kimberlin Education & Portfolio CEO, Heads Over Heels: “In my experience, the worst habit is the want to remain in control of every element as your business grows. It’s a habit that can form deep roots early on, when as a startup founder you are tasked with doing everything from business strategy to washing the bathroom towels. As you grow, you need to relinquish control to those smarter individuals that you hire in to help your business grow. For some it comes easily but for others handing over control can be a struggle that leads to micromanagement and high stress. Two leadership qualities that have never been touted as effective.”
Phoebe Netto, Founder of Pure Public Relations: “Stop working with insane to-do lists! As a business owner, your to-do list is always long and full of vitally important tasks. However, if you find there are tasks you never get to, so you continually roll them over to the next day’s list, then stop. Insanity is doing the same thing over and over but expecting different results. If you haven’t made the time to do that task after a few days, then there is a good chance that it doesn’t need to be done, can be revisited or can be outsourced. And if the same tasks are on your to-do list each day and you do them, ask yourself: can they be automated? Can I design a system that saves time? Can someone else be trained to do it? Your time is precious, be smart about how you invest it.”
Sabri Suby, Founder of King Kong: “Not focusing enough on sales. I believe the number one rule in business is: sales trumps ALL. Sales is the oxygen to any business, and without sales your business will die very quickly. As the founder of your business, your job first and foremost is to sell. Selling is not a side thing or something that you can completely delegate. It is the single most important job of any business, and consequently for any founder.
“After working with thousands of business owners, I’ve realised that most business owners don’t really understand the business they are in. The baker thinks they are in the baking business, the builder thinks they are in the building business and the dentist thinks they are in the dentistry business. But they are actually in the business of SELLING those things. Of course, excellence, customer care, business savvy and authenticity are vital – but without sales you will not have a business to demonstrate those qualities in.”
Jonathan Englert, Founder of Andiron Group: “Changing their communications every time they change their minds.”
Anneke van den Broek, Founder and CEO of Rufus & Coco: “Startup founders are often visionaries fuelled by a passion to change the future with innovative ideas and more efficient and clever ways of operating. The downside of this, and something I have experienced myself is “shiny penny syndrome” – the risk of becoming distracted by new and exciting ideas. Startup founders need to learn to focus and not take on so many projects that the execution will suffer. Working closely with my mentor Andrew Smith, CEO of CEHS, I’ve learnt to become laser-focused and keep my team pinpointed onto shared goals.”
John Webster, CEO of Shiftiez: “Your business idea is highly unlikely to arrive fully formed and ready to turn into a success straight away. Talk to everyone you can about what you want to do and listen to their feedback. Then pivot. Then talk to a lot more people. Rinse and repeat. Jumping in to build something early feels like success but it’s the most dangerous habit for a founder to have.
“Look at Kodak or Blackberry. Piles of money, all the expertise in the world and massive market share. As soon as they didn’t make things people wanted they disappeared. You haven’t got the money or the expertise yet, how can you build if there’s no want?
Matt Johnson, Product Manager at BlueChilli: “My favourite definition of a startup is a ‘vehicle to rapidly test and validate an idea’. It’s worth keeping this in mind when making decisions in the early stages – everything we do at this stage should be tied to maximising learnings and quickly invalidating the assumptions we hold about users, their problems and the market.
“Eric Reis defined a roadmap as ‘the number of pivots remaining before a startup runs out of cash’ and this illustrates the need to be experimenting with everything we do. There’s not much cash or resources available at early stage startups, so don’t waste it on features that won’t contribute to your understanding of whether you’re on the right path, or in need of a pivot.”
Colette Grgic, Chief Innovation Officer at BlueChilli: Startup founders need to stop thinking that more equals better. More features. More hours worked. More team. Every ‘more’ adds an incremental cost to the business, whether that’s technical debt or time your attention is diverted away from your real focus. So, you have to choose what you want to have more of carefully.
“To combat this, I encourage the startup founders in the BlueChilli portfolio to get into the habit early of setting up a weekly and monthly goal along with five metrics to track along the way that gives you an indication of whether you’re making progress towards your goal. It’s very important to check with a mentor if the metrics you’re measuring towards your goal makes sense, as these become the only numbers you obsess about for the goal’s period. Then, when it comes to accountability time you can’t hide behind ‘more’ vanity numbers. It really helps with decision making in the early days by forcing founders to ask, ‘does this action get me closer to my goal?’”
Richard Kimber, Co-founder and CEO of Daisee: “There are many bad habits that all startup founders are guilty of having at one time or another. The key is to recognise and address these habits before they start heavily impacting the business.
“One habit that founders need to avoid is having too many short-term goals. Instead, a start-up founder must establish clear long-term goals for the company and develop a planning cycle to achieve these. When the focus is on too many short-term goals, startup leaders can run the risk of losing sight of managing fundamentals, such as cash flow.
“Going hand-in-hand with this, start-up founders need to remain both physically and mentally healthy so that they can focus on growing the business. The key to this is ensuring they are delegating effectively and have a strong leadership team in place to manage different parts of the business as well as scheduling in time for regular (daily) exercise.
“Beyond these pitfalls, start-up founders need to ensure there is always time every week for winding down and having fun with the team. The mentality of frantically working into the early hours of the morning to get a task done is synonymous with startup culture, but employees are what drive the business, and it is crucial to recognise them for this and to take the time to enjoy the journey with them.”
Ed Mallett, Founder and Managing Director of Employsure: “Don’t try to do things on your own – get the right advice. Hiring people is a big milestone for a start-up, but becoming an employer can quickly become a paperwork burden and can distract you from your business objectives.
“Having seen many small businesses struggle with issues including wages, contracts, policies and procedures, dismissals, and workplace health and safety compliance, start-up businesses should break the bad habit of doing the paperwork and compliance on their own.
“Just like a small business requires financial advice, tax advice and so on, it’s important that you access experts that have the knowledge and support for your workplace compliance. Outsource to experts to set you up and continually guide you as your business grows and evolves. Don’t overlook compliance no matter how big or small your business is.”
Emma Bannister, founder, Presentation Studio & author of ‘Visual Thinking’: “In the early days of startup land, it’s all-hands-on-deck. You’re filled with passion and purpose, and your adrenaline gets you through. But, as you grow, momentum wavers, and it’s just not sustainable personally, let alone professionally, to cope with a never-ending workload. As the founder, your priority is to stick to your strengths. So, if you want to scale your business, you must outsource and delegate the roles that cost less than your charge out rate, or those you simply can’t do well. Hire for personality and passion (can they think outside the box?) over paper-based qualifications. Your vision must remain crystal clear, so everyone around you is motivated by the same goal. You need to remain the heart and soul of the business.”
David Jackson, Committee Member of Sydney Angels: “Startup founders need to let go of the idea that bootstrapping is the only way to succeed. Yes, startups require hard work, but every successful business relies on strategic delegation. Startups are no different. Don’t delude yourself into thinking you have to do everything yourself. This self-imposed burden leads to overworking, which will result in burnout before it produces success.
“Startup founders also have a hard time letting go. Sometimes it’s a matter of pride, sometimes it’s cash flow. As a founder, you need to recognize when it’s time to bite the bullet and release that cash or oversight to free yourselves up for a more critical task.
“I also caution founders not to forget the logistics of growth. It can be tempting to chase quick money, but this short-sighted thinking will hinder efforts to achieve sustainable managed growth, which is what your startup needs to succeed in the long run.”
Shendon Ewans, Co-founder and CEO of Gobbill: “I’m on holidays and upon arriving at my hotel, I asked my wife, ‘So, what bad habit do I need to break as the CEO of a startup?’ She replied, ‘Checking your emails on holidays – stop it!” She has a great point. Gobbill is in its third year as a startup and as a co-founder it is still incredibly difficult to find the time to switch off. There are so many things to attend to when part of an exciting small business. And with connectivity and mobile devices it is easier than ever before to keep working. However, this does not mean we should! As startup founders, we need to try and break the habit. What I personally try to do is keep a full day off to rest and reset each week, and while on holidays, aim to have phone free periods. It is easier said than done but forming good habits is just as important as breaking bad ones.”
Phil Argy, Committee Member of Sydney Angels: “First-time business operators often seek finance before they have a clear idea of what they need and why. Asking for too little, asking for too much, or asking for an amount you selected based on what others seem to have done all indicate that you don’t actually know what your business needs. This approach won’t instil confidence in any investor, and you’ll likely walk away empty handed.
“If you’re a first-time business owner, you should be able to articulate and explain your assumptions in revenue projections. Your cash flow should be underpinned by a credible business plan. So, set yourself up for success, but don’t forget that things don’t always got according to plan. If you don’t allow for contingencies, that will be another red flag to funders.”
Jamie Pride, venture capitalist & author of ‘Unicorn Tears’: “The single biggest bad habit that startup founders need to break is confirmation bias. One of the single greatest things about founders is that they have a passion and drive for the problem they are solving. Often this leads them to overlook problems or data that doesn’t support their solution. Breaking this habit of only ‘seeing the good’ is critical for entrepreneurial growth. Getting out of the building, speaking to customers and potential customers and analysing data with an unbiased perspective will make your startup stronger. Don’t fear it.”
Alan Manly, Managing Director of Group Colleges Australia & Author of ‘The Unlikely Entrepreneur’: “Launching a startup is always more demanding than anticipated and equally more rewarding. The success in establishing a business that didn’t exist will give the founder a new confidence whilst doubters are left just looking on. The temptation for the now successful and driven founder can be to indulge in a bad habit of many founders and that is that the battle is over, therefore a more urbane, consensus team leader emerges. Decision making devolves into a consensus approach. Naturally the new team is delighted to see a nicer side of the founder. That’s when many founders fall for the trap of allowing the desire to be accepted as a winner, and this causes a drift away from the very individualism that separated them from the crowd and afforded them this early success.”
Evette Cordy, co-founder of Agents of Spring & author of ‘Cultivating Curiosity’: “Start-up founders are always on and often juggling many hats and demands. They need to break the multi-tasking habit and become single-taskers. We all think we can try to save time by doing multiple things at once, switching from one task to another, or performing tasks in rapid succession. But the reality is that we are wasting time. Research shows that multi-tasking, even brief mental blocks created by shifting between tasks can reduce productivity by 40%. Our brains are not designed for multi-tasking. To break the multi-tasking habit, focus on the task at hand, not several all at once, and switch off as many distractions as you can, including notifications on your devices.”
Melissa Richardson, Managing Director, Art of Mentoring: “A bad habit startup founders need to break is moving from doing ‘the work’ and performing multiple roles at once to managing the people doing the work. This is especially so when the founder is the subject matter expert and feels that no one else could possibly know the product as well. Learning to trust others with your own product, business and livelihood is not the same as simply delegating when you are an employed manager in a company. The founder’s identity is so interwoven into the fabric of the business that it can be hard to separate and move out of the way, or even recognise that you are doing other people’s jobs for them instead of leading them.”
Rachel Kidwell, Founder and CEO, TCPinpoint & SBE Australia Springboard Alumnae: “Definitely breaking through fear and self-doubt. Every founder at one stage or another will feel scared, insecure or not good enough. Startup founders need to shake off the fear of the unknown and break through these self-limiting beliefs to get to the next level of their business. Reminding yourself that growth happens when you step outside a comfort zone is important. After all, “everything you’ve ever wanted is on the other side of fear”.
Anne Moore, Founder and CEO, PlanDo & SBE Australia Springboard Alumnae: “Thinking too small. Startup founders need to recognise where they need to focus their energy. It is important to stay focussed on the prize and do what matters first every single day. Don’t be distracted by the 3,001 interruptions and demands upon your time that take you away from your main game. This can easily happen while you’re busy scouting for leads, connections and opportunities. Remember the bigger picture.”
Renece Brewster, Founder and CEO, Data Creative & SBE Australia Springboard Alumnae: “Not backing yourself enough. Startups need to really listen to their instincts and trust them. Especially when it comes to hiring a team or raising capital. When hiring a team, getting a hire wrong can be damaging to the business and its growth. It’s also good to hire people that can grow into a position rather than hiring someone that will grow out of it quickly. Startups change rapidly and the needs of the business grow, make sure your staff grow with it. Similarly, trust your instincts when it comes to raising capital. Sometimes your heart and head can be at odds but this is when you need to really trust yourself. If a deal doesn’t feel right, let it go – there will be something else, something right. My last point of advice is to delegate. It’s easy to want to do everything yourself but it’s important to share the workload around. It’s not only better for you but especially the growth of the business.”
James Coyle, chief customer officer of SuperEd: “A bad habit that many founders have is failure to do the most basic market research. Essentially, many startups are led by smart, driven people who strongly believe they have discovered a ‘better mousetrap’. What they don’t ask themselves is whether their elegant product or service is really addressing what their potential customers really need. You might have a great answer to a question no one is actually asking.
“Not recognising that this is a problem is a common and unfortunate habit that startup founders need to break if they are to succeed. At SuperEd, we’re really interested in helping people generate a sustainable income in retirement – particularly in terms of how they can spend this money safely in retirement, invest the money they have in a prudent manner and drawing down on that money when and if they need it and potentially still access the age pension. Because of the complexity many people actually underspend in retirement as they are terrified of running out of money and instead deny themselves the comfortable retirement they have earned.
“Knowing what we are trying to solve only gets us half way because we could potentially be helping people address a problem that they don’t necessarily know that they have. Longevity risk (living too long) isn’t top of mind for most people. So, my advice is always be prepared to get out and do your research, listen to customers and their issues and pivot when you have to.
Tim Bos, Co-founder of ShareRing: “Founders can often form the bad habit of being single-minded towards reaching their goal of making their startup successful. They need to take a more holistic view and understand the physical, emotional, cognitive and spiritual impact their focus has on their own life as well as the lives of their staff, colleagues, family and significant others. Finding a balance does not come naturally, founders need to be conscious of it and work hard at it. Also, never forget or downplay the importance of those around you, always acknowledge them and their role in helping your startup succeed.”
Helen Awali, Founder and CEO, Bookmarc & SBE Australia Springboard Alumnae: “Startups have a habit of trying to be everything to everyone and spreading themselves too thin. Founders often find themselves juggling multiple roles generally because they are cash poor. However, as the startup grows, this bad habit actually distracts you from running your business effectively as you are not focussing on the skills that will take your business the furthest. Therefore, it’s important to stay laser focused on the end game and forget about people-pleasing. Make sure the end result is about pleasing the customer and delivering a superior product.”
Ben Thompson, Founder and CEO of Employment Hero: “The worst habit a founder can make is simply thinking of their startup as a cool feature that people will pay for. If this is your sole purpose, you will attract some funding and perhaps a few employees, but you are never going to succeed in the long-term. If you are trying to change the world, if you have a genuine problem that your startup is aiming to solve and if you have a strong, company mission, you will attract partners, not just investors, as well as employees who want to share a vision with you. And that is what will truly make your business a success.”
Co-founder and Head of Strategy of Typehuman, Julian Waters-Lynch: “Overworking, burning yourself out and reducing the wellbeing of yourself and the people closest to you. Whilst everyone can benefit from taking time off to recuperate and adopting regular practices to consciously alleviate stress, such as focused exercise and meditation, this is particularly important for startup founders. This is because the nature of this work tends to be highly consuming and often more stressful, and there are not the institutional systems, such as paid leave, to encourage taking time off.”
Peter Harris, CEO of Digital Stack: “A bad habit startup founders need to break is dipping into their own funds to continue running and building their business. I’m all for bootstrapping the first few years to prove product and market fit, but once it is off the ground, I’d say it’s time to scale faster through external funding options, from revolving credit lines, to capital fundraising. It will help you achieve your vision faster and stay ahead of competitors.”
About “Let’s Talk…”
“Let’s Talk…” is an exciting weekly initiative that provides entrepreneurs and industry experts with a forum to share rapid-fire views on a range of issues that matter to start-ups and SMEs. Every Wednesday, we pose a themed question to a line-up of knowledgeable industry figures, with a view to picking their brains for valuable insights to share with you, our readers.