There's No Guarantee Sudden Startup Success Will Last. Here's What You Need to Do to Achieve Long-Term Growth.
Grow Your Business, Not Your Inbox
Investing in a startup within the first year can be both thrilling and nerve-wracking, but it's best to keep your heart rate steady, your mind open and your eyes clear. Once they've had a taste of success, entrepreneurs tend to shy away from outside help with raising money or improving their innovations. They think they should steer clear of outside influence for fear of losing momentum and trajectory.
Based on my 25 years of senior management experience in startups and publicly traded technology companies, through many investments and success stories, as well as misses, I've learned that this just isn't the case. Of course, there are always the edge-case scenarios, but let's be honest, we can't count on that any more than winning the lottery or a starting position in the NBA. I've seen far too many entrepreneurs put blinders on and refuse help that could have been a pivotal factor. In almost every case, high-caliber outside resources actually help startups grow -- they apply real-world pressure on the nascent business to be bigger, better and more competitive.
For many talented entrepreneurs, there's a spike of success -- a surge in sales, customers, investors or publicity -- that feels like confirmation you're doing everything right. At this stage, many feel they know exactly what to do -- even to the point of turning down help, advice or funding. And so begins one of the biggest mistakes young businesses make. You can't afford to believe that the spike will last, or that your trajectory will stay in a straight line. Business doesn't follow Newton's laws, and anyway, there are plenty of outside forces to throw you off the straight-ahead line of momentum.
The trick is to be ready, willing and able to adjust quickly -- much easier said than done. Small-business owners and entrepreneurs have to identify what creates forward progress toward your vision and focus on that. It might seem obvious that you want to follow an upward course, and you want the energy to be all about sales. But, that instinct isn't always the right one for achieving sustained success. If you're only focused on making profits right away, you'll miss important feedback and lessons from the market.
The most important thing for startups to learn and engage with, especially if they've had a spike of success, is why customers like and use their product. There are nuances here: Find the customers who are actually using the product, not just trying it. Understanding why they continue to use it may be illuminating in unexpected ways. Based on this understanding, you might step on the accelerator (we got it right, let's keep going that way, faster!) or you might need to pump the brakes. If customers are using your product in different contexts or patterns than planned, that should give you cause for reflection. Does the unexpected use present an opportunity to explore new features, use cases and markets? Or does it mean your customers have misunderstood, rejected or missed your selling points?
If you're not seeing anything enlightening in how your customers use your product, don't assume your work is done. Make sure your assessments are honest, and circle back for another go around after some time has passed to see if use patterns or contexts have changed. If you suspect you can't see it objectively, ask for help from someone with an unbiased view.
Build a moat around your customers. Protect them and keep them at the center of your kingdom. Think every day about how to delight them. Read online comments and reviews, and pay special attention to the middle 60 percent to 80 percent. High praise and severe criticism represent outlier experiences, but you need to understand the experience of the more typical user. You need that middle bulk of customers to stick with you. Sustainability, after all, is everything. No one goes into business to be a one-hit wonder, stuck playing low-rent venues (or vanished into obscurity) for the duration. To ensure long-term success, always stay focused on what's best for the customer. There will be occasion to focus on the bottom line, but in the early days, it shouldn't be the guiding force.
It's not easy for entrepreneurs to stay open to outside advice and criticism. They have a deep sense of ownership (rightfully so) over their ideas and the fruits of their hard work. It's difficult to absorb advice you don't want to hear, especially if it means changing something you consider essential or special about your product or service. It's very hard to hear "slow down" when you're on a roll, hitting every shot -- nothing but net, as they say. But, the great players are always refining their moves, working on their stroke or swing. Hard as it may be to believe in the heady flush of early success, there will come a time when you aren't winning every play, and you'll be glad you put in the time working on refinement, resilience and resources.
I like to use the Google as an example, which you can read in detail in The Google Story. The founders, Larry Page and Sergey Brin, were just over two years down the road when they brought in an outside CEO, Eric Schmidt from Novell, under the advisement of VCs John Doerr and Michael Moritz. Even though they are arguably among the world's most brilliant and successful innovators, Page and Brin brought in an experienced set of hands on the steering wheel and let Schmidt drive them toward growth and sustainability. Yet, no one takes any of the credit for Google's dominance away from the founders; their legacy stands.
I advise entrepreneurs to check themselves regularly to maintain a clear self-awareness. The No. 1 question is, "Would I eat my own dog food?" If you wouldn't enthusiastically use your own product or service, why are you selling it? Try your product every day. Pretend to be a customer and write anonymous comments to your team. Do they act on it? Does the feedback make its way to you? Follow through and use your powers of ingenuity and insight to solve customer problems in a way that results in lasting, positive changes for your product.
Related: To Move Quickly and Solve the Right Problems, Leaders Need to Ask Better Questions
It's a big, competitive world out there. It's easy to get lost in the fray when you're a small business or rising entrepreneur. Scaling up is a particularly fraught time for startups. During periods of intense growth and expansion, be sure to stick to your true north. Don't branch out into being too many things to too many people, or trying to set up too many revenue streams. As a startup trying to make your mark, it's better to be great to a small group than just average to a larger group.
Use the energy generated by your early success and best ideas to attract help and talent, instead of assuming that one spike means you've got it all figured out. In the long run, the discipline required to control your acceleration, check your hubris, center your customers and listen to advice will become the framework that keeps your business vibrant, competitive and profitable.