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Startups: the good, the bad and the ugly Startups: the good, the bad and the ugly
by Joseph Gatt
2020-11-27 11:20:49
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A few additional reflections on startups. Why some succeed and many fail. Notes in no particular order.

-The “messy” startup. A grocery store is simple to operate. You purchase fridges and freezers and shelves, display items on the shelves. You purchase the items from distributors and receive your invoices. You keep the invoices. Clients come make purchases and you keep the money and the change in a cash register. And you do that all year long.

star001-Startups, because of the complicated nature of their business models, really need impeccable organizational skills. Startups often use a mixture of online payments, orders and data, along with hangars and storage facilities where they keep their products. They receive online and offline invoices. Their clients come through a myriad of ways, in person or online. And the range of products is not just food, beverages and accessories, but a wide range of complicated products, from selling data to selling products and tools for professionals, for big businesses, for small businesses and for private users.

-This means startups really need “huge organizational IQ” to succeed. CEOs and startup leaders need to know where to keep their files, how to store their invoices. They need to keep their tax files, legal files, property files, and archives in perfect order. They need to juggle financial information, marketing, product development and growth. That's a lot of good organizational skills.

-Problem is: a lot of startups are launched by ambitious 22 year-olds who couldn't put their socks in the laundry basket, much less dispose of their empty bag of chips or put the half-empty beer bottle in the trash if they're too drunk to finish drinking it.

-So these kids may be tech geniuses and who invent excellent tech products. But they are often people who can't get organized when it comes to keeping track of product development, financial expenses, and legal archives among other things.

-These kids are good at filing loan applications and selling their dreams and ideas to banks that are willing to loan them huge sums of money. But if I were to loan money to a 22 year-old kid, I would try to make sure that kid can get organized and keep his or her archives in check.

-Startups also mean being able to handle astronomic quantities of information, and thinking about several problems at the same time. So handling a startup is a mixture of long-term planning and improvisation. Startup leaders need to know what information has the priority, and what information they can access later, and what information they can delegate to someone who will summarize it for them.

-Problem is, these kids didn't grow up reading newspapers and magazines and sorting that information out, these kids grew up getting all their information from Facebook and Twitter feeds, and only clicking on those articles that they want to read.

-In sum, many failed startup leaders can not handle the excessive overflow of information, and often select the information that they want to look at, leading to many blindspots when it comes to information.

-Add to lack of archiving and organizational skills to lack of information access and management skills, there is sometimes a huge motivation problem among startup leaders.

-These are often kids who grew up doing whatever they wanted, whenever they wanted. Let's just say that I've met many startup leaders who were obsessive about what to have for lunch and dinner, and I was under the impression that they were busier planning lunch, dinner, snacks and parties than they were managing their startup.

-Absence of business model. A startup could be a great technological idea or an excellent new tool that would be very useful for people or professionals to use.

-But for that, you need a carefully crafted business model. How are you going to sell the technology or tools? How are you going to convince individuals and companies to purchase your tools? What if individuals want “special features” in your tool that you hadn't originally thought of? What if many people want the tool to be customized? What if someone else comes up with a very similar tool, or a better tool?

-More importantly, where do you find the clients? Do you go visit them at the office? (Note: most companies do gladly welcome marketing agents and listen politely if they have to offer a product). Do you advertise on social media? Do you put flyers in people's mail boxes? Do you knock on people's doors? Do you purchase TV ads?

-Let's finish with this: a lot of startup leaders tell me “technology constantly evolves. If I don't make millions (or billions) of dollars right now with my idea, 3 years from now the technology will be obsolete, and I will have lost my chance to make millions of dollars and retire at coconut island.

-Problem is, again, the tool is probably super useful. But you're often going to need two or three years just to get started. And then, you won't retire in three years' time. Your customers are going to constantly ask you to customize your tool or product. If you listen to your customers and customize the tool in ways that they need it, you will be in business for the next 40, 50 years or more, because you will be giving clients what they need.

-Finally, finally, your clients are going to be asking for all kinds of applications that go with your tools. Clients are the ones who asked Bill Gates for MS Office and Hotmail to go with Windows. Clients are the ones who asked Elon Musk to customize PayPal in ways it could be used at auctions on EBay (the original PayPal was a portable “electronic portable credit card the size of a Visa Card” and EBay asked Elon Musk to come up with the online version of the product. And some clients asked Apple for Tablets that they could make landline and cell phone calls with, and Apple has that product. You get the idea.


    
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