The three basics your startup should nail
Every entrepreneur I’ve meet has a higher than average tolerance for risk-taking, characterized by a “willingness to take a course of action that is uncertain and to do something unproven,” in the words of Fast Company. It’s this desire to take the path less traveled and embrace ambiguity that separates entrepreneurs from managers and other leaders in the business community. Another trait of successful entrepreneurs is a relentless pursuit to defy the odds and land their companies in the select few that actually succeed. But the lingering question is: how?
Like many others, I began Jama Software with a couple of colleagues and a vision for doing something different—in our case it was radically modernizing the product delivery process. Over the past seven years of on-the-job learning, I’ve made at least a dozen decisions I’d like to ‘do over’ with the benefit of hindsight. When entrepreneurs come to me asking for advice, I think back to the three core elements of building any startup: Building a team, growing the business, and securing customers.
Here’s what I’ve learned about all three:
Focus more on empowering, not just hiring, your team.
Let’s face it, it’s incredibly hard convincing people to work for free (or at least under market rate) in the early stages of a startup. But finding people with the right mix of fire and talent is only half the battle. You have to also learn how to become more self-aware and honest about your own skills.
In a startup, your job description is in constant flux and, even as a founder, you’re not necessarily the best person to fill the most urgent need for the business at any given time. I was lucky to be joined by amazing people, capable of solving big problems, and I saw right away that I needed to allow them to drive significant projects. Early on, I was so worried about making mistakes that I wanted to own every decision. This mindset was actually threatening to become a barrier to our success. Once I subtracted any emotion from the situation, I realized results are all that matter. People might approach a challenge differently than I would, but what they did worked because they were skilled, experienced, and smart.
After I consciously made an effort to let go, I immediately saw the benefit of allowing team members to contribute in more significant ways. With more autonomy came stronger commitment to our common goal.
When it comes to growth, pragmatism always trumps speed.
Founders tend to feel an acute pressure to grow quickly and validate the startup’s vision through external investments, more customers or a larger office space. My advice is to try to resist ‘going big’ in favor of ‘growing right.’
Any startup will need to recalibrate along the way, and entrepreneurs need to spend the time making these adjustments in the early stages so they are better set up for success in the long run. For example, I learned early on that our company pitch to the investment community was rather generic and lost the uniqueness of our solution. We needed to hone our story in a way that reflected the value of Jama so it was easy to grasp. Going slow afforded us the opportunity to fine-tune these aspects before we had too many stakeholders.
In addition, running lean and growing organically makes your startup much more attractive to the venture capital community when the time comes to raise money. With this approach, you’ll be better positioned to raise capital in a fraction of the time.
Remember you are selling to people with unique needs, not to a generic company.
If you really pay attention to the specific needs of each of your prospective customers, you can win them over one-by-one. We had a big opportunity in our early days with leading aerospace company SpaceX. At the time, they were trying to make history and win NASA’s $2.4 billion contract to replace the space shuttle.
We were the underdog because we were up against a large incumbent with a deep history in space and rockets. We thought about the challenges faced by the leaders of this innovative company and put ourselves in their shoes. We decided to grab a camera and produce a short video that allowed us to speak directly to the SpaceX executive team. We described why we felt SpaceX should work with us, we articulated their business problem back to them to show we really understood their challenge, and we showed a vision for their future together with our partnership. We later learned that our approach with the video went a long way to helping Jama win the deal.
Unfortunately, there is no silver bullet or proven program to ensure your startup will become one of the fortunate few that succeed. Every industry, market and new widget has its own special set of circumstances and challenges.
However, there is value in having a clear strategy defining how you’ll build a high-functioning team, grow your business over five-to-ten years, and engage with your customers to provide maximum value. I’d advise other entrepreneurs to take a step back from the frenetic pace in the early stages and really figure out how you’ll move forward in all three areas to beat the odds.
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Eric Winquist is CEO of Jama Software where he helps the world’s most innovative companies build better products in less time. Today, Jama Software employs 120 people and has more than 600 customers. You can connect with Eric via LinkedIn.