PADT is a company focused on helping companies bring their physical products to market. As “We Make Innovation Work” for our customers, we learn a lot about what does and does not work in technology startup companies. In addition, we were once a startup ourselves and we now participate in Angel investing. All of this has taught us a lot of valuable lessons.
In this series we will share some of those lessons learned and explore the basic concepts and ideas that will help startups overcome the odds and become successful.
We hope that you find it useful and we look forward to sharing our thoughts on this topic with you.
If you spend time around startups you have seen it before. Someone comes up with a great idea and they have the technical understanding, the connections, the money, or the drive that allows them to start a business around the idea. But then the business fails because some important skill or capability was missing and the founders could not, or would not, recognize and deal with the need. On the other side of things, we have all seen a company stumble because they spent a large amount of time and money trying to accomplish something using expensive outside resources that the founders could have easily done themselves.
Both of these situations stem from the inability of people who start a technical company to be honest and open about their own strengths and weaknesses. They end up not doing what they can do, and doing what they should not be doing. Both can waste time and money and even bring the company down.
The Technologist Trap
The most common manifestation of this problem, so much so that it is has become a stereotype, is the technologist that tries and fails to start a company because they did not understand business, sales, marketing, or manufacturing. It is an unfortunate reality that the capabilities that make a person a great innovator are not the same capabilities that make someone a great CEO or even a good manager. There are exceptions to this, but more often then not if you look at successful technology startups there is usually the “the technology person” and “the business person” Only rarely are they the same person.
What does this mean, because this certainly does not apply to you? It is your idea, your understanding of the science behind the idea, your intimate knowledge of the market that created the company. Doing that other stuff required to get things off the ground is simple by comparison. But the hard reality is that a technically capable person usually does not have the skills, experience, knowledge, or desire to do that other stuff. And even if they do, they usually do not have the bandwidth to get it done. And that other stuff is required to build a company.
To deal with this trap, the best place to begin is with the assumption that the you, the technical innovator, should start in the founder and chief technologist role. Just plan for that when you start a company. It is much easier on everyone involved for you to add roles then for you to have to give them up. Stepping forward is much more pleasant than stepping back. And it is much easier to be honest about what you are good at when you are looking at it as adding responsibility, rather than giving it up. Human nature, no matter how hard you try, will always tint your self-view when you have to admit to others that you can not do something.
Even if you retain control of your company, delegate as much decision making responsibility as possible to those who are best suited to make the decisions.
So far I have been focusing on skills and capabilities. But another area where the founders of a startup have to be brutally honest with themselves is in taking advice from others. This is not the same thing as just doing what others tell you. It is about being able to put your preconceived ideas aside, leave your pride at home, and really listen to what other people are advising you.
If you have ever spent time around a great leader you will notice that they are masters at soliciting input from others, reviewing it, and turning it into the right decisions. As a leader in a technology startup, you have to also grow this ability to first actually listen, then make honest and accurate assessments of the advice. The first step in doing so is letting go of ownership on ideas.
When you internally claim ownership of an idea it is hard to accept that someone else’s ideas might be better, because that implies that yours is wrong. So start off by letting go of the ownership and evaluate each idea on its own merit and not based on who it came from. Learn to be honest with yourself about the fact that your ideas may not always be the best and that in most cases, a combination of multiple ideas from multiple sources is the best solution.
Confidence, Not Arrogance
To be successful in a small business you must be confident. Without significant confidence you can never survive all of the obstacles that face you. But if you are not honest in your view of yourself, that confidence can turn to arrogance, and arrogance leads to making bad decisions that can ruin your company. Confidence is telling yourself “yes, I can make this happen.” Arrogance is telling yourself “yes, I am always right.” A confident leader in a technology startup knows that they can make the journey to success regardless of where the path leads, the arrogant leader thinks that they already know the path to success.
The way to avoid slipping into an arrogant stance is to really be honest and look at how you make decisions. Are your decisions based on the facts you have in hand and maybe some intuition, or are you making decisions based upon what you want the answer to be, or how the decisions make you look? You should be using facts and intuition.
We have actually had situations where we have told customers that their idea has a significant problem that needs to be dealt with. And their response was “I don’t want to hear negative information.” That is taking confidence into arrogance if not just plane crazy. A confident leader will take in the information and say “what do we need to solve this problem, I know we can overcome this obstacle.”
Being Honest is also about Strengths
Anecdotes about startups that failed because the owners just did not listen to others, or tried to do things they were not qualified to do only show part of the story. Being honest about your abilities is a two edged sword. Not leveraging your strengths can be just as deadly for a startup, especially if a founder considers themselves too much of a nerd or a “techie” to do non-technical things. Or if they lack the confidence to assert their point of view when they should.
Many innovators are multi-talented and they may have chosen a technical path for their education or career. This does not automatically disqualify them from being a successful business person, it just requires that they follow the advice above and work to have an honest understanding of what their skills and abilities are, and work to make the right choices in filling in the missing pieces.
Look in the Mirror
Let’s be honest, it is very hard to be honest with yourself. Your thought process on which accounting package to use probably has more to do with the way your mother responded to the finger-painting you brought home from kindergarten then any of us want to admit. We are complex creatures with conflicting emotions, memories, and desires. And they are very hard to see from inside, and even harder to adapt to. Most of the time this does not matter, but when you are trying to do something as hard as start a technology company, it is a big deal.
The best way to deal with this honesty stuff is to learn to really look at yourself in the mirror, make it part of your normal process. When you are making a big decision, ask yourself why you decided to go a certain way. When you take on a task, look at yourself in that mirror and ask if you are the right person for the job. When you are looking to bring in an outside expert, make sure you really need them.
Just be honest with yourself, and success will be a lot easier to find.
[A Note on the cheesy images:
Sorry. I know they kind of suck but I’ve taken it as a mission to find the most stereotypical business images to highlight the message of each paragraph. Hopefully you will find them somewhat funny… or at least not too annoying…]