Nobody trains you to found a company. You just have to go out into the world and do it. As a result, many founders run into problems quickly and wind up making a lot of mistakes. But don’t worry: it’s not just the little guy who’s messing up. It’s some of the biggest names in tech and design.
Many startups are founded by extremely bright and talented people. The problem is that most people getting into the business world have no experience in managing people, recruiting new talent or dealing with finance and legal issues – common problems for any growing company. As a result, they end up getting into trouble, not because they have a bad product, but because they’re really ill-equipped to deal with all the ancillary paraphernalia of business.
Here are some startups that made some significant errors, to begin with, only to go on to be roaring successes.
Hiring The Wrong People
Gemma Young is the co-founder of a business called Settled. After working with Google for a while, she decided that the time was right for her to set up her own tech company. There was a problem, though. She began to realize early on that she couldn’t just buy the best people in the industry by offering the highest wages. It turned out that some people were just looking for the highest pay packet possible and didn’t share her vision for the company at all. Over time, she realized that the solution wasn’t to keep offering higher wages but to look for people whose hearts were in the right place. Ultimately, she said that she’d be willing to sacrifice skill set for attitude if it meant getting the right people to help her take her company to the next stage. So far, however, she hasn’t had to go down that road, but she would if she needed to.
Elon Musk echoes Young’s take on employees. He says that he has learned over the years that a person’s personality is just as important as how talented they are in a particular field. He’s learned to take personality more seriously and weight it more heavily when deciding whether or not to take somebody on.
Failing To Find The Right Co-Founder
Did you know that businesses with more than one co-founder are much more likely to survive than companies with only one founder? The reason for this is that starting up a business is a massive project and requires at least two people to get off the ground. It’s just too much work for one person, operating alone.
Picking the right co-founder is difficult. The problem, according to Giles Andrews, one of the founders of the P2P payment platform Zopa, is that many founders choose people who are just like themselves. Speaking from his own personal experience at Zopa, Andrews says that his team was way too homogenous. They just didn’t have the range of skills and life experience that they needed to found a successful startup – at least at the beginning. Andrews’ advice is for founders to choose people with complementary skills to their own. If you’re an introvert, find an extrovert. If you’re good at technical things, find a designer to do your market. If you don’t understand HTML5, grab somebody who does.
Bertie Stephens, the CEO of ecommerce platform Flubit, says that it’s essential at the end of the day to find a co-founder you actually like and respect. Many companies that would have been successful fall by the wayside because their founders fundamentally hate each other. There will be arguments, he says. But you ultimately want a co-founder who is able to roll with the punches, pick themselves up and just get on with the job. People who can’t stand criticism are a big no-no in his view.
Opening Themselves Up To Legal Risk
The Founder of Minicabit, Amer Hasan, says that founders should not live in constant fear of being sued or of being thrown a curveball. Problems in business arise all the time and can easily be covered by insurance. Public liability cover from companies like Kingsbridge Contractor Insurance, provides cover if you damage a client’s property and the client decides to sue. Successful entrepreneurs, Hasan says, are those who are able to take a bad situation and find a way to make even more money out of it. For instance, his company, which operates cab bookings in London found itself having a very busy day when tube staff decided to go on strike. Rather than panic about it, his company got down to business and started serving new customers, exposing them to the brand. Ultimately, Hasan managed to make a lot of money from what seemed, at least at the outset, as a difficult problem.
Believing Their Own Hype
As a founder, it’s easy to get caught up in the brilliance of your own product. In a way, this is all a necessary part of the process, since it’s hard to sell a product which you think is rubbish deep down. According to Aunkur Arya, some entrepreneurs get into trouble when they only pitch their product to other people in their industry. In the tech world, people get excited about all sorts of products. But their excitement might not be shared by the wider public – the people who are actually going to buy the products and make the company profitable. Arya says that it’s essential that entrepreneurs do their own, independent market research and don’t rely on people who are already passionate about their particular field to tell them that they have a great product. All that matter is what the wider market things. Stay humble, he says, keep your head down and solve problems.
Don’t Obsess Over Funding
Startups, especially startups that are going somewhere, rely on their funding. But according to Alistair Shepherd, they can sometimes take it too far. Too many companies, he says, see the goal of their startups to get as many resources as they can. But that’s not the ultimate goal. The ultimate goal is to sell a product using whatever resources are available. Shepherd says that his business got lucky and he was able to get the seed money he needed off the back of a couple of Powerpoint presentations.