Over the past 15 years, I have spent a lot of time working with startups. I have worked with software, hardware, analogue, VC-backed, bootstrapped, and Kickstarter startups. Some of them went public, others went out of business. Some of them found the right product-market fit, while others did not. Here’s how to approach startups and early growth in 12 points.
1. Your success depends on making good enough decisions, fast enough. Most of the decisions I am talking about here are not made by overthinking and carefully handling the data you already have. Essentially, it’s about taking meaningful action that leads to an outcome, and learning from it in a feedback loop.
2. Consistently making good decisions is orders of magnitude more important than a brilliant idea or a 5-year roadmap.
3. How you make those decisions is less important than the fact that you actually make them. If it’s a project with known unknowns, it may be best to hire only experienced people and engage them in a collaborative culture. If there are many unknown unknowns, use an agile process, iterate and repeat. Choose a project management technique that works best for your team and type of project, and adapt it to minimise friction.
4. Decisions are hard to measure, but the one metric you should always keep in mind is the outcome. The definition that has worked for me is based on product design: outcome is a change in human behaviour.
5. The sunk cost fallacy is your biggest bias. If you do not achieve a desired outcome, learn as much as you can from it, but also drop it without batting an eye. You can not optimise your path if you are climbing the wrong mountain.
6. Strategy is a function of decisions, and decisions are a function of execution. The better your execution, the better your strategy. And yes, you get better at strategy as your execution improves.
7. Learning from mistakes requires a feedback loop, and a feedback loop requires good execution. If execution is inconsistent, random, or chaotic, there is no feedback loop because the results are not reliable.
8. A tight feedback loop means fast decisions. The faster the feedback, the faster the decisions needed for product development. Never outsource anything that keeps you in the feedback loop with your users, at least not in the early stages. These capabilities will give you a competitive advantage.
9. Never make an artificial number your goal, because then it is no longer a useful metric (Goodhart’s Law). Metrics are an input to decisions, not the decisions themselves.
10. You have no choice but to strive for a high ownership culture, and once it is there: protect it at all costs — it is your most valuable asset. Therefore, never delay a decision, because by doing so you block progress and normalise inaction. These are two killers of motivation and engagement. Avoid at all costs the death spiral of bullshit (yes, it really exists).
11. Prefer consistency over intensity. It’s hard work to deliver a really good product at a good enough pace across the organisation. Make sure you have a culture that makes this consistent, repeatable and efficient before you think about scaling.
12. Premature scaling is the most common reason startups fail. Read this report.