If you’re a startup founder, you probably spend a lot of time thinking about the viability of your company.
Today I want to talk about why companies fail, and so many startups fail. But first, I want to talk a little bit about what it’s like to be a startup founder in the first place.
In the beginning, you have to do everything yourself.
You’re the marketer, the support person, the technical product person, and you’re also the one cleaning the dishes as well as answering the door. (That is, if you even have a formal office yet.) Basically, you’re doing everything in the beginning.
When you’re doing everything yourself in the early days, it’s easy to move fast — but it’s also easy to get burned out really quickly.
If you think running a startup is going to be rainbows and ponys and butterflies, you’re in the wrong space.
In the beginning, you have to do everything yourself.
There’s a great quote in The Hard Thing About Hard Things, by Ben Horowitz, where he tells a story about someone asking him about how his company is going.
Ben starts explaining everything and says something like, “Well, we’re going to run out of money, no one wants to work on this project, we’ve got a problem with…”
And Bill, the guy he’s talking to, let’s him finish and says:
“Ben, no one cares. Just run your company.”
(Note: I was wrong. Whatever.)
Just run your company
But what do you do in this situation? It’s easy to tell someone to run their company — but that’s exactly what you’re trying to do already.
How do you know what to do next? How do you know that you’re doing the right thing?
The real problem behind doing everything yourself in the beginning is knowing how to make decisions.
Making great decisions is the heart of the startup.
This is why 90% of companies fail.
Over the past two and a half years — and trust me, I don’t know if I’m doing everything right, and I’m making a ton of mistakes as we go here at One Month — there is one thing I’ve learned.
You have to keep moving. To make a great decision, it’s less about being perfect every time, and more about setting up habits for success.
Two ways to make better decisions for your startup
Instead of thinking about the next two, three, five years (which yes, you also have to think about), focus on how you can move ahead right now, this week.
Break big things down into really small tasks.
Take the huge, large, complex tasks (like “grow One Month into a world-class online entrepreneurship school”) into something you can tackle this quarter. Then, break it down into months and weeks. Move forward every week, and every day. If a task is too big and you’re not moving forward on it, you’ve made it too big.
Break things down — these huge, large things, into really small tasks.
Ask yourself: what’s the next step that has to happen?
And after that?
It’s like the story about eating a whale. How do you eat a whale?
One bite at a time.
Build an MVP as soon as possible.
If you take too long, you won’t have enough time to test your MVP. You want to build the next smallest version of your product or idea as soon as possible, and get it into the hands of users as fast as possible. If your MVP is taking six months or twelve months to build, you’re taking too long.
If it takes you a year to launch something, it’s not an MVP.
Release it early, early, early. Sooner than you think. Most people wait too long to put their first product out there. Before you build it, test your idea by creating small versions of your product. You don’t have a business if you’re not making something that people want.
Find out if they want it.
There’s a great post from the founders of Everest about the fall of a company and the lessons learned from a failed startup. (Remember, about 90% of startups fail. This scares me every day.) They took twelve months to build their first prototype and in the end, their burn rate is what killed them. They didn’t have enough money.
This is one of the reasons we started One Month in the first place. We believe people should learn how to build a product in a few weeks, release it, and get feedback on it. It shouldn’t take longer than 30 days. You should be able to build your first product (even if you’re non-technical) by scrapping it together in 30 days. If you’re taking longer than that, it’s taking too long.
So these are some of the problems that startups face.
Key Takeaways
- Most startups fail.
- In the beginning, you have to do everything yourself, which means you need to get great at making decisions above all else.
- Learn how to do the next smallest thing and move forward on big goals one step at a time.
- Release your MVP as soon as possible. Ideally within 30 days or less. If it takes a year, it’s taking too long.
If you want to see more of these, share a note in the comments and let me know what you think.
What challenges do you face in your business or company? Any questions we can answer for for you?
