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Don’t Do This! 5 Mistakes Your Start-Up is Probably Making

First in a 2-part series.

A few months ago much ado was made about the “top 20″ reasons start-ups fail. That list was distilled from a collection of 101 post-failure analyses. I have no argument with the list or with the smart people who performed the analysis. I do have a few nits to pick with the math, but at worst it’s a starting point for a conversation. At least this conversation. This post isn’t about that list anyway … er … exactly.

I have a list too.

By coincidence (you’ll have to trust me on this) I found myself with a list as well and there happens to be a lot in common with the prior (more famous) list. I’m not claiming my list as a “top X” list. These items are not necessarily the top five mistakes. I’m merely stating that the five items in my list are among the mistakes start-ups make which lead them to fail.

A difference between a list of top reasons is not the same as a list of top mistakes. Knowing the “cause of death” doesn’t necessarily prevent the cause. This list on the other hand might help a company or two recognize a bad trajectory in time to do something about it.

Five Mistakes:

1. No deliberate, rational, or validated process to measure how the company is progressing towards an MVP.
2. No deliberate, rational, or validated process to prioritize time or money.
3. No deliberate, rational, or validated process to manage and coordinate the work. 
4. No deliberate, rational, or validated process to identify and assign all work to be done.
5. No deliberate, rational, or validated process to collect timely feedback from the market or product developers.

Process-haters take note: Nowhere does this list say a company needs a lot of process or overhead. Nowhere does this list imply that process need to be overly structured or formalistic. To be blunt, it’s not enough to say, “yeah, we talked about that.” Start-ups need to actually think about it and come up with a way to do something about it.

How often have you been involved in any effort (start-up or volunteer effort) where there was a meeting about something and a lot of discussion around what needs to be done but nothing actionable or follow-through occurred after the meeting?

THAT. That’s what you get with, “yeah, we talked about that.” 

Who was supposed to make that happen?

The process need be nothing more than an agreed convention among the staff for how decisions will be made around important stuff like:

• What’s the product buyers want? How do we know?
• Is this the best thing we can be spending time or money on now? Based on what?
• Who’s doing what? Do they have what they need? Are they the right person to do that?
• How are we going to do that? Is that a guess?
• How do we know we’re working on the right things?

Seriously people. Expecting these questions to answer themselves is not going to win any respect from serious investors. And these are easy questions. But they might not be easy if you’ve never tried to come up with a real way to answer them.

Here’s a challenge: Ask everyone on staff to answer those questions anonymously on index cards or sticky notes. Collect the answers and compare.

Don’t make me tell you “I told you so.”

In the next post (which I’ll link to from here once it’s up) I’ll take this line of thinking one step further. What if the causes of start-up failure aren’t really the causes?