Startups Are Hard
By WNT Guest Writer John Olsen
Prior to moving to NZ in 2018, John was the Vice President of Human Resources for the Worldwide Operations Organization at Amazon. From 2012 to 2016, John led HR during the hyper growth of Amazon’s devices organisation.
John works closely with WNT Ventures providing one-on-one support for founders, helping them think about their startup’s culture, how and who to hire, and how to scale their company from the outset.
STARTUPS ARE HARD
By some estimates, 9 out of 10 will fail. The overwhelming majority of conversations I have with founders start on questions around burn rate, product market fit, business model, and the next funding round.
All are important topics and, as a post-mortem study of 101 startup failures found, are some of the key reasons why startups fail. I also find there are lots of people who are willing to have these conversations with founders. Often the complexity for founders is figuring out whose advice to take and when.
What I do as part of the support WNT Ventures provide for early stage companies is to focus on topics that don’t get a lot of air time but are critical to success. In that same study issues around having the wrong team, ignoring customers, pricing issues, and a user unfriendly product, amongst others were listed. The critical thread on these issues – leadership and the team supporting you in the pursuit of your dream.
I help founders in 3 specific areas to improve the chances that their startup is successful:
“Don’t Leave Culture to Chance”
The right culture increases your chances of success. When I talk to founders they almost universally agree that culture is important but place little effort or thought into the challenge. I often find founders
don’t want to think about culture till they have somewhere between 10 and 20 people and/or there is an issue – such as a major missed milestone.
The problem with that approach? Assuming you catch the problem in time, it is possible to fix your culture but it takes time, focus, and effort. These are three things that are often in short supply when you are watching your burn rate.
It is more efficient to start thinking about culture from day 1. Think about the behaviors and environment you need to make your startup successful. Don’t know where to start? I often ask founders “Why were you able to invent something no one else has?”. No two answers have ever been the same.
Use the answer to that question as a starting point to screen people for your board, as employees, or as mentors. Use it to create processes and team rituals that support and promote the behaviors your business needs. It is a simple way to build a team that is as unique as the product you are building.
“Grow as a Leader”
I love working with founders and learning what motivated them to start a company. It takes vision, courage, comfort with risk, and energy to start your own company.
As you add staff, investors, or customers you will invariably be asked to work on things outside your expertise. I spend time with founders helping them figure out the things they need to spend their time on, where they need help, and then building a plan to close any gaps.
What are some simple first steps you can take to close those gaps? First, be honest with yourself about the work that needs to be done, what you are great at, and what you need help on. Seek out mentors in areas of the business you aren’t familiar with. Build a board that complements your skills and prioritises helping you make the business successful. Screen your sources of funding with companies who can help beyond just a cheque. No matter what you do, hold a high bar and associate with people who share your passion for the mission you are on, people who aren’t afraid to give you feedback, and have a level of expertise that can move the company forward.
“Hire Your Way to Success”
No startup succeeds without hiring.
With limited funds and limited opportunities for mistakes, I spend time helping founders figure out what to hire, who to hire, and how to hire.
Hiring is a skill.
You get better at it the more you do it. The key is to treat it like a process and continually refine that process based on successes and failures. There is no shortage of resources to help establish a hiring process that increases your chances of success.
But the key question I am often asked is what to hire. Should I hire a bunch of junior engineers? What about that sales person I need for revenue to get more funding? Should I spend more than my budget on an experienced engineer?
I don’t start with what to hire when talking to founders. I talk to them about their timelines (which includes burn rates and budgets), how much invention is left to do, and what are the things that only they can do for the company.
From there we are super clear on what problem we are trying to solve through hiring, those things that only the founder can do (and by extension the things we cannot hire someone to do for them), and the priority of those problems.
Prioritisation is key.
It clarifies where the founder must spend their personal time, what things we need to resource for them through hires, contractors, outsourced service providers, and the things to just drop.
With a focus on culture, growing your own skills, and being great at hiring you will improve your chance of being that 1 out of 10 startups that succeed.