Transcript Ten Pitfalls for Early-Stage and Growing Companies

Ten Pitfalls For
Early-Stage and Growing Companies
and How To Avoid Them
Pete Higgins
Partner
Second Avenue Partners
#1: “Radio is Stuck on Talk”
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CEO/Company must be bi-modal
Be optimistic but introspective and paranoid
CEO as voice of customer
LISTEN
Customer feedback loop is most important
process in company
#2: Falling in Love with First Plan
• Product is “done”; it’s just a sales/market
problem
• “Great technology”
– Customers don’t care; problem doesn’t exist
– Too complicated
– Who’s the customer?
• Recognize it is an iterative process
#3: Stuff Just Takes Longer
• Product development
• Sales learning curve
• It’s more important to you than the
customer
• You have to plan for realistic scenarios
#4: Getting Ahead of Yourself
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Do not confuse activity with revenue
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Brother in law sales
Great meetings
Pipeline Value
Jerry Maguire
Invest FOLLOWING growth
#5: Paying Lip Service to Being Cheap
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Good intentions…but it is a slippery slope
It isn’t supposed to be comfortable
It is okay to be small for awhile
What do you really need?
Minimum now vs. cash crunch
What culture do you want to establish?
#6: Don’t Treat Board Like IRS
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Arms length relationship leads to wariness
Communication is frequent and informal
Good news and bad news
If frequent, they can be trained to handle
Do the worrying for them
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Thinking about right goals and problems?
Right process? People?
Right solution?
Can I be helpful?
#7: Failure to Manage the
Company, Even When It is Small
• Don’t assume everyone knows
• Communicate goals and objectives
– Share successes and failures
– Enroll people; Encourage debate
• Communicate often; clearly; think about it
– Think about cultural icons
#8: Hire in Context
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Right person, wrong time
Right kind of skills and experience
Strategist vs. scrappy
Big company vs. little company
Personality or Culture Fit
#9/10: Knowing What You are Good At
Or, Why “Founder” Becomes a Dirty Word
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Fixated on first vision
Personal agenda—it’s not your company
Over-rating your own capabilities
Failure to delegate and micromanage
Statistically, you’re eventually the wrong
person
• You don’t know if you even want the job
#9/10: Knowing What You are Good At
Or, Why “Founder” Becomes a Dirty Word
• Focus on your strengths
• Aggressively complement yourself
• Focus outward--make everyone else
successful
• Ongoing conversation about yourself