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The Top 2 Mistakes Founders Make That Hinder the Growth of Their Companies Here are two of the biggest ways founders sabotage their own success — and how to fix it.

By Paul Sullivan

Key Takeaways

  • Founders often make the mistake of prioritizing cost over experience, especially in areas like hiring and technology.
  • Founders hinder their own success by neglecting to create cohesive working environments and not operationalizing early enough.
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Startup founders are often their own worst enemy. We have been working with founders for nearly a decade, and we consistently see them make two major mistakes that impact the growth of their companies.

By making these two mistakes, founders get in the way of their own success, and in this article, I'll share a few tips on how they can fix those mistakes.

Cost does not equal value

The first of these is around budget management. We get it, whether you've got funding or not, budgets are always top of mind. Obviously, everyone wants to get a deal to make those budgets stretch further, but often the phrase, "buy cheap, buy twice" applies. Thinking that not spending money will get you the results you want is a fool's errand.

For instance, we often see startups hire grads to help build major pieces of their operation, such as their go-to-market. A fresh out-of-university student does not have the expertise needed to build your positioning, messaging and story framework; you'll pay them a little more over 12 months than you would an agency in three for a sub-standard outcome that will negatively impact your go-to-market. Price isn't more important than experience.

That experience is also needed earlier, much earlier, and founders often hesitate to hire, whether due to cost or ego ("I know my product best"). Most are technical founders with amazing knowledge about their products. However, they're very likely not SEO, sales enablement or marketing experts with the experience needed to build the necessary engines — and related experiments — to take their product to market and succeed.

This means that they're often reactionary instead of strategic when it comes to hiring and adopting technology. You cannot hire people to solve problems. You get ahead of the problems by hiring the right people to help you deliver the business strategy.

You also cannot cut corners on tech. So many founders we work with come to us with a Frankenstein's monster of an operations system, with bits cobbled together that don't communicate well. Their teams spend a lot of time connecting the dots and trying to piece together insights instead of doing what they've been hired to do.

Both of these errors cost time and revenue, and they take founders backward instead of forward.

Related: 7 Ways Entrepreneurs Stymie Their Own Success

Building a sustainable growth culture

Another key area where founders get in their own way is in the working environments they create. This often comes from not operationalizing early enough, which can happen because startup leaders are unsure of how to go about doing so. They often mistake revenue operations as a strategy for a more mature organization. This means that marketing, sales and customer success become siloed instead of having revenue functions aligned around one source of truth.

As they start getting traction and product-market fit, these teams start to fracture because there's no cohesion or process. And so everyone's now on their own journeys, from tech to initiatives.

When everyone's out for themselves, when sales inevitably pulls the, "We bring in the money, so we deserve the budget" card, this only serves to sow more division and often becomes toxic, with tensions between teams and people separating into camps.

So many founders don't nip this in the bud, they feel it's inevitable, and they tolerate it. But they shouldn't. This doesn't build high-performing teams. Unify your operations into revenue operations; at the very least, make them start working cross-functionally with shared objectives.

Sadly, there are many startup leaders who are directly responsible for creating unsustainable growth environments. This company is their baby, and they just can't stop hovering. But it really does take a village to raise a child.

We've seen so many talented, dedicated professionals leave, get pushed out or fired because founders felt they knew better than the very smart person they hired. You cannot hire people who are experts in what they do, particular senior leaders, then think you're smarter or that you can do their job better. Ninety-eight percent of the time you can't — nor do you have the time, even if you could. Stop rewriting those marketing emails. Stop telling sales leaders how to hit targets.

Speaking of sales, what's with the unsustainable revenue targets with zero focus on retention? Setting higher targets is not bad, but setting nonsensical targets is. These should be based on the number of people employed, the previous rate of closure, the number of deals on average closed last year, factoring in reps' level of experience and the previous numbers they've hit. They should be realistic but attainable (through hard work).

Related: 5 Ways Leaders Unconsciously Sabotage Their Own Success

So often we see numbers pulled out of thin air that are wholly unachievable. And the entire burden is placed on the sales team's shoulders, instead of utilizing customer success for upsell/cross-sell and retention. This can lead to an environment where low morale and high staff turnover dominate — defeating the whole process.

This often coincides with a setting where sales reps are getting very little time to embed and there is minimal or no sales enablement. Realistically, the average salesperson needs three to six months to come up to scratch. This means understanding the product, the target audience, the pitch and the team dynamic.

If there's no structured onboarding, little or no training or no sales enablement collateral — then these people are being set up to fail. And then the sales leader takes the fall. Another smart person fired. Another time-consuming hiring and embedding process to be done.

And actually, it's all because there's no real understanding of what's achievable in the market or of what their team's capabilities are, because founders are often being reactionary instead of strategic — and because they're not building a team structure focused on sustainable growth.

It's time for founders to stop being blockers instead of enablers. Get the expertise you need — either internally or externally — but get it sooner, and let the experts do their job. Align your teams. Invest in the right tech for your business. Remember cost does not equate to value.

Paul Sullivan

Entrepreneur Leadership Network® Contributor

Founder & Chief Strategist

Paul Sullivan founded Digital BIAS, a product marketing agency that works with B2B SaaS and Fintech teams across the go-to-market lifecycle. He is also the founder of Leevr, a competitive strategy platform. Paul has recently been listed as a 50 under 50 Disruptor in Tech.

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