“Argh! This thing is not selling. It’s boring people to death!”
“You’ve got to be kidding! That startup just announced a product like ours? Argh! Then they are nearly a year ahead of us!”
“What do you mean, you can’t make it work like you said you could? We are depending on you to deliver the impossible technology, awesome, game changer, disruptor!”
Or, “Cash is burning, I can’t find a new investor interested, the end is in sight.”
Encounters like those happen to even the most respected startup leaders after their second or third startup. History shows most new enterprises get into such serious trouble that it threatens the survival of the fledgling new business. And in most cases the startup will eventually go out of business (numbers for successes and failures are cited elsewhere in this book). Internal and external troubles happen to every startup, with most CEOs finding that the accumulation of bad days finally results in their startup turning out the lights, permanently.
But bankruptcy does not have to be the outcome. Swift and clever action, bold and wise, can save the day. There are things you can do to turn around your stalled, threatened, sinking business. Serial entrepreneurs know what to do to turn flop into a pop, a fast selling new product.
When the terrifying bad news is encountered, startup veterans waste no time. Here’s the pattern I’ve seen the startup pros take when big trouble arrives.
- They first take control of their emotions. They avoid seeking someone to blame, to fire. Instead, they begin with a deep breath, calm down, get centered so they have clear minds, able to make challenging decisions.
- Next, they do a quick diagnosis of what’s happening, mainly to make sure the situation is not temporary.
- Then the CEOs will gather the company’s leaders to assemble available facts about what’s going on, what’s gone wrong, using care to separate fact from fiction.
- Then they ask for assistance, communicating this dire situation to affected stakeholders, from employees to investors, asking for support and tips on what might be done next.
- Finally, they turn their minds to figuring out ASAP what should be changed, what could be done differently – to get sales turned around, rising, fast, very fast.
In contrast, first timers are struck by fear, frozen in the headlights. They grit their teeth, dig in, and shout to employees “We’ve got to try harder!” They think that if they work 38 hours a day, eight days a week, then surely things will get better. “Our first product is nearly great, I’m sure it will be great, someday soon. Just believe!”
Unfortunately, dig in and try harder tactics most often produces dead bodies like World War I trench warfare.
In contrast, veterans swiftly begin experimenting, trying, changing, week by week, testing alterations in what the company is doing in order to see what those changes will do to customer responses and sales, to suppliers and investors. Over and over, the leaders test, measure, analyze, decide. Over and over.
Sometimes a couple of early repairs will stabilize, even turn the situation positive. I’ve seen that happen when the leading tech coder was fired and the replacements turned the busted product into a winner.
It might mean simply changing boring brown labels of organic face creams into invigorating pink. Or a simple change in the business model: subscriptions that pushed product users away are converted into free-to-use memberships. Perhaps it is just a bold marketing move, in the form of a raffle that gives away a new Tesla as rewards for consumer responses to a customer survey. I’ve seen several creative marketing minds make such clever, small moves that resulted in sales growing again.
But most of the time I’ve found veterans who succeed will have to be courageous enough to make big, bold changes. Often that means the leader will decide to turn the company in a different direction, even into a different business, via the proverbial pivot move.
When those big, confronting encounters arrive, when very bad news shows up, it’s mandatory that the leaders are people with strong courage and able to do bold thinking. Whatever you call them: startup builders, movers of startups, executioners of business plans, company fixers – all have guts and fast action in their souls. I’ve also found them very clever and creative. That’s how they became game changers, disruptors.
I wish you The Best on your Adventure!