Dangers of a Startup Becoming Too Startuppy


Guest post by James Burbank, editor in chief at BizzMarkBlog

There can be no doubt that startups mark a new era in the world of business. We are currently living in the early days of this new business reality as young new companies from all over the world launch their products and services, changing our everyday lives and making innovation the currency of the future.

Its most important asset.

While startups and the startup culture in general are making the world better through introducing new concepts and making sure the big players do not rest on their laurels, the startup culture often displays certain traits and habits that are less than positive. When we say positive, we mean in a way that harms these startups themselves, often leading to troubles and even the ruin of these startups.
In short, many startups become too startuppy for their own good.

 

The Singlemindedness of Startups

One of the most common root problems in the startup world is the singlemindedness of the decision-makers, i.e. the founders and the management (who are often the same people). If one is more understanding, this singlemindedness actually makes a lot of sense. Startups are usually built on the foundations of a singular great idea and the drive of the people behind this idea.

Unfortunately, once the startup becomes an entity of its own, this singular approach to everything more often turns out to be a drawback than an advantage. Startups sometimes ignore initial poor results, thinking that their product is exactly what their customers want, even though the reality is completely different. They are not veering off their original path, even though it has long become obvious it is the wrong one.

This singlemindedness can also be applied to a startup’s culture where the only people who get hired are those who share the same views and opinions of the startup’s founders and/or managers. This is the so-called cultural fit trap that many startups fall into without even noticing. Sometimes it can grow into pure nepotism in the workplace which will result in a uniform workplace where a singular approach to every problem will often lead the operation of such a startup into a cul-de-sac, for the lack of a better expression.

Sometimes this singlemindedness will go so far that startup owners will completely ignore anything that does not conform to their idea of their startup, even if it is slowly (or quickly) driving it into the ground.

 

The Hubris of Startups

When talking about the hubris of startups, it is important to point out that it is more often than not also complemented by an involuntary dissonance of what startup owners think they are able to do and what they are actually, realistically able to do. This would probably be best explained with an example.
For instance, a startup owner of some kind who does not have any financial background or knowledge decides to take it on themselves to work out a funding agreement with an investor. Perhaps they do some research and start thinking that they know enough to work out a deal that will benefit their budding startup. Of course, since startup funding and venture capital investments are an impossibly complex and hazardous field, they end up signing a deal that all but voids their ownership of the startup for a paltry sum. We will not even think about what happens with the stock options that their employees own.

This same approach is often brought to other aspects of running a startup, such as marketing, business analysis, human resources and so on. As is perfectly natural, dabbling in these often gives poor results, to say the least.

A much better option is to think long and hard about one’s own skills and abilities and perhaps, just perhaps, reaching out to professionals for help. Perhaps find a partner?

 

The Bling of Startups

One of the inseparable aspects of the startup culture have traditionally been the unique offices and approach to running a business that often emphasizes the uniqueness of this particular business. This often entails offices in a hip (and unnecessarily expensive) neighbourhood, designer furniture and all kinds of amenities that the employees try out a few times and then forget about.

This “bling” is absolutely non-essential and something startups should think about only after they have become a solid business with a steady revenue and a firm customer base.

The same is true for websites and apps that cost hundreds of thousands of dollars and other similar expenses that are in no way necessary for the growing of a startup.

These are luxuries and should be viewed as such.

 

Closing Word

It is important to differentiate between a picture of a startup and the reality of a startup. Being too startuppy will more often lead to the demise than to success of it.

AUTHOR: James D. Burbank has spent many years in the trade show industry, helping businesses, startups included, exhibit in “less traditional” markets around the world. He is the editor in chief at BizzMarkBlog and a big NBA fan.


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