When I hear the word startup, I think of spacious refurbished lofts or warehouses filled with unkempt 20-somethings adorned in T-shirts and sandals, seated in front of glowing computer screens. The refrigerators are filled with free muffins and bagels, the stubble-faced boss-gurus hold anything-goes innovation sessions, and work lets out early for company-sponsored “beer-thirty” each Friday.
The word startup also brings about feelings of innovation and excitement. But I’ve come across a few people lately who have thrown around the word startup in their conversation, resume or Linkedin account, and I get the feeling they are using the term incorrectly, based on their experience.
A startup does not necessarily mean starting any new business. According to my research, it seems definitions vary, and I even came a cross an article in Forbes that provided a very ambiguous definition. I believe a startup is a business enterprise involved with the research and development of either solving a problem or researching a new business model or to capitalize on an unexploited market (not an established market). Startups don’t have to deal with technology, but they create a new type of business or new product that does not already exist. Startups are meant to grow quickly and are not permanent. Either they fail, grow into a larger, permanent company or are acquired by an established company.
Nonetheless, it occurred to me that any new business venture brings with it a share of chaos and uncertainty, especially where management is concerned. Here are some of my experiences with starting new companies (not necessarily startups) and launching new products:
I recall both the thrill and sheer terror of once starting my own company; living, eating and breathing work from the instant I woke in the mornings until the instant I would lay my head down early the next morning, too exhausted to move.
I was young and sometimes brash. I thought I knew much more than I actually did at the time. But people would listen to me. I could really get their attention. No one questioned me, they would simply follow blindly. I was like some sort of media evangelist.
Our customers were happy when we delivered our product. I gulped down the compliments as if they were life’s very sustenance, but you really can’t live on customer satisfaction. In fact, I became very skinny at the time for two reasons: 1) I barely had any time to eat. 2) I didn’t dare spend much on food; I needed every cent to put back into the business.
During this time I interviewed an extremely talented up-and-coming artist in his home. Although I saw him as a rising star, he told me that he never had the courage I had. I didn’t understand, but he said that he could never put himself out there with so much to lose. “So much to lose?” I thought. No, I was desperate to succeed. There was no choice.
Being young, determined and full of myself, I received a variety of reactions from the business community. Some established business owners would give me patronizing smiles while others looked at me with outward scorn. After a few years of sweating to establish my company, I came across another young hotshot who started a marketing company and also publicized his political ambitions as well. His fly-by-night products and services were cutting into my business. I found him most threatening and distasteful. He promoted himself as an advertising “hired gun.” We decided to promote ourselves as the “top guns.”
Flash forward about 8 years: I remember one unusually warm California evening watching the sunset and standing in the street with my boss, right next to the car he just purchased for me as part of my working agreement. We both sensed the energy as we casually discussed the company he started a year earlier. We were living in a world filled with promise and possibilities. There was a definite feeling of electricity as we contemplated the company future success and basked in the glow of our product’s popularity.
During that time, members of my staff and I would go home late at night or early in the morning following a long workday and each of us would find it hard to sleep because we were still wound up from the day’s activities. We would return the next morning to find that each of us, separately, had developed the same routine: scrounge food for supper, experience trouble sleeping, watch the very same late night TV shows, eventually fall asleep on a couch or easy chair — TV still blaring. It was strangely comforting to know we were so tuned into one another as a team that we experienced the same insomnia symptoms. Not healthy, but oddly exciting.
Hero worship is big
I also remember a few occasions when I witnessed my boss surrounded by a host of new employees — usually sales people — vying for his attention, smothering him with compliments and showcasing their witty banter. These adoration sessions would last for more than an hour sometimes. The boss ate it up as the newbies jostled for position, ecstatic to be part of a rising brand.
No one would listen
Much later, having these experiences under my belt, I joined a team at a large company to launch a new product in a big way. Our cavernous workroom had pillars about every 30 feet, and reminded me of those extinct dot-com startups of 10 years earlier.
I was among a small group hired to get the thing off the ground while still recruiting the rest of our employees. It was rush a job because the execs wanted to sneak up on their competitors. We had sufficient money, but the rush to launch meant the employee recruitment process did not guarantee the best selection. We paid for that in the long run. Although the launch was exciting and it offered our young staff a chance to really make a name for themselves, most of them panicked because they had never done anything like that before. When asked for their creative thoughts, most clammed up and asked for more guidance. I was startled. Here we were, offering them a very rare chance to help guide the direction of the company they worked for, and instead they begged to be told what to do.
I offered my advice to the bigwigs. I told them that my staff would provide all the content we would need for this very hyperlocal product. Instead, they insisted on signing what was rumored to be a multi-year, $200,000 contract with a news agency for national and international news. I said my staff could fill the void, and that international and national news was not our niche. I had experience in such things, but they would not listen. I also said we should wait a little longer to decide on hiring the rest of the managers; I wasn’t satisfied with the candidates up to that point. We needed to get just the right fit to lead these new employees. That advice was ignored as well. Again, I tried to tell them that I had done this kind of thing before, but they waved me off.
Sure enough, we had employee problems as soon as the new managers came aboard. No one was getting along and the underlings were complaining about their managers. Personnel conflicts arose.
The purse strings were tightened a couple of years later. One manager burst out with the comment, “We’re no longer the golden child!” When cutbacks occurred, the execs couldn’t get out of that big contract with the news agency, adding to our financial woes. It didn’t help our morale when the bigwigs started showing up with real estate agents and possible buyers to look at our building.
Debunking the myths
A recent career advice column described lessons that the author learned while working at a startup. Among these were “new ideas can be frustrating.” Yes, this is true because not all ideas are good ideas. They may not work. It’s also frustrating if the ideas that are being used are not your ideas.
Another lesson was “be ready for anything.” Yes, change is certain. You must develop an ability to cope and thrive in a changing environment, and adjust to surprises.
Another lesson was “you’ll make friends.” Yes, you’ll make friends just about anywhere you work, but keep in mind making friends is not your goal. I’ve been involved in several work situations in which employees placed more importance on their work friendships and cliques than their work. It’s a manager’s nightmare. Keep in mind that you are working to make a living, and also trying to keep your career goals on track. Don’t let the social aspect get in the way.
The final lesson was that “you’ll drink a lot.” This might be true in many cases, but it should come with a warning. Alcohol consumption with fellow employees is not uncommon, but it should be done with great self-control. A culture of heavy drinking in any company can send the company’s focus into a tailspin. Your people need to be sharp. Late nights on the job should be followed by rest and nourishment, not alcohol consumption. Keep yourself and your team healthy. My advice: save the drinking until the weekend. Be careful to leave the party before you get inebriated and too uninhibited. Also, don’t set up a company-sponsored drinking event to be held on the work premises. I’m mentioning this because there was a case in San Diego in which a drunk employee got into a fight with his boss and killed him at the end of a work-related party. Awful things can happen.
Anyone who has worked with me knows that I’m a shoot from the hip, unconventional guy, but I still live within reality. Every business needs to be run within a professional business mode.
Here is my advice for those working for fledgling companies, especially those with inexperienced bosses, and those that have not yet developed an experienced human resources department:
1. Your employees work for money; they can’t be expected to adopt you as a friend. Your employees deserve to be treated within the legal guidelines, or soon your focus will be on dealing with work-related lawsuits. Additionally, you and your managers need to be respected by your employees. They don’t need to idolize you or even like you — and you shouldn’t have an irresistible need for them to be your friend.
2. You are in business to ultimately make money, not to show how clever you are or to practice your hobby or socialize. Stay focused on the task; don’t get carried away with the social aspect, no matter how fun and cool your fellow employees are.
3. Starting a business, especially one with a clever concept, is very exciting — and it takes complete focus. It would be very hard to work at a startup if you are married and don’t have an understanding spouse. It’s nearly impossible if you have children. Unless you have the ability to be in several places at once, or you don’t care about spending time with your family, I don’t recommend it.
4. It’s not going to be perfect. There will be plenty of problems, especially with a newly-created company. For one thing, there will be a lot of trial and error, both in creating the product and in developing operating procedures. Another factor to consider is that a newly-started company probably does not have a highly-developed human resources department, if it has one at all. Most of the effort by the company’s creators will be on hiring the best wiz-kid employees, not in managing that staff once it's in place. So, expect weaknesses in the communication of policies. Furthermore, the leadership, guidance and communication might be a little weak.
5. It’s not necessarily going to be glamorous. Free bagels and lattes only go so far. A young company requires your total focus and dedication. This means long hours, sacrifice, and lots of gritty determination to see your project through to completion. It helps to have lots of discipline. It’s always been my concern that some really brilliant people who are chained to their desks have never been involved in a team environment, nor a situation in which they learned collaboration and dedication, nor a situation requiring a never-give-up attitude. Expect a gritty struggle with lots of uncertainty.
6. The seed-money will eventually run out. The investors have their limits. Eventually, all products, as well as their companies, have to start generating revenue. This means sales and marketing. No matter how big e-commerce gets, at some point there has to be some form of human contact to provide a business deal somewhere in the process.
7. True startups are pretty much a one-project event, but most businesses involve a never-ending series of projects.
The long run: Starting a company is the exciting, fun part and — believe it or not — it’s the easy part. There will usually be a brief honeymoon period with your customers with any good company. But the real challenge is sustaining your company for the long run and managing its continued success.
Success doesn’t take care of itself. Like I always say, “We can conquer, but can we rule?”