I hope all is well. I was recently reading “How to tell if
an early stage company will succeed in 1 meeting” and I thought it was an
interesting assessment provided by Liron Petrushka. The points are spot on
target and are logical indicators as leading success factors to whether or not
to seriously consider investments within certain startups. As a young
entrepreneur who created specialty backpacks with a business partner and
developed websites, I believe the most imperative point is regarding strategic
product decisions. I implore you to understand your role in the startup, and if
you consider yourself the CEO/Co-founder, then it should be communicated and
agreed upon that you have final decision. Conversely, if you are there to
support the CEO, then present solutions and when strategic direction is agreed
upon, follow the plan and add as much value to the team as humanly possible.
Here are the great points made regarding early startup success.
1. Does the founder want to be right rather than rich? It’s
important to see how founders lead discussions. Being open during a product
meeting and actively evaluating other solutions, ideas, or ways of thinking is
a show of strength. Alternatively, stubbornness at all costs is a show of
weakness and is unsustainable over the long term.
It’s true that some of the CEOs we look up to, such as Steve
Jobs and Jeff Bezos, are known for having been particularly stubborn, but they
are also likely the exception to the rule and should not be mimicked. The road
to failure is lined with people who thought they were Steve Jobs. It is okay —
even fundamental — to be passionate about an idea and market direction.
However, if you fall in love with the wrong idea and do not listen and evaluate
information from your product people (customers) or engineers, then your
stubbornness can sting.
2. Strategic Product Decisions: If strategic product
decisions are being made by the non-founding engineering team, this can be a
big red flag. Founders, product marketers, and those who are actively analyzing
the market and customer needs should be the ones to make such decisions.
Alternatively, it can be a problem if you notice a technical CEO micromanaging
all aspects of product, or if a non-technical CEO seems completely separated
from the product development process.
At the very early stages of a company, the CEO should be
very close to the market and customers. They should be ready to make a move or
pivot, without hesitation, based on customer feedback. Often, this early
feedback is tied closely to company vision and mission.
3. Team Discussion Dynamics: Does the team come to an
agreement and then respect that agreement? Does the team get along, or is there
tension, frustration, one-upmanship or brinkmanship? For example, the vision of
a product manager should be aligned with that of company leadership. The team
should move on after a major product decision is made rather than holding on to
their earlier ideas and not letting the issue go. It’s important to constantly
move forward, to execute, and if old ideas are constantly rehashed on a daily
basis that is a recipe for disaster.
4. Respect for Leadership: Is the CEO the final decision
maker? This is an especially salient question when there are multiple founders
in a startup and they are equal cofounders. In fact, I encourage very early
stage companies with multiple founders to have this discussion early and agree
that the CEO founder is the one who makes final decisions. The vision of the
company emanates from the CEO and must flow down to the rest of the company —
and that includes the other cofounders. Otherwise, it is extremely easy for a
company to change course from one day to the next. Strong leadership is tied to
building a clear and rock solid company mission that informs daily decisions.
Rather than predicting long-term success, the process of
watching a company product meeting and evaluating the discussion based on this
rubric will reveal any red flags and will highlight the possibility of
short-term failure. Knowing that something is not working is the first step
towards rectifying it and marching towards success.
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