‘Most startups fail. Here’s how to successfully grow your business’ — WIRED

From sourcing talent to finding customers, managing company culture to assembling a board, these are the best ways to grow your startup .

By James Silver

From sourcing talent to finding customers, managing company culture to assembling a board, the barrage of problems founders encounter can at times resemble an endless game of whack-a-mole, played while juggling the everyday stresses and strains of running a business without burning through cash. Over the past year, author James Silver interviewed some of the UK’s most successful entrepreneurs and investors for Upscale, a new book on how to scale a tech startup. Here are a few of their tips.

 

Try to be aware of your limitations

“Founders, along with other key people, can sometimes be a limiting factor in a company’s growth. People who are right for a certain phase may not be right for the next. It works in both directions – there have been plenty of cases where a startup has brought in a highly experienced person with a glittering CV, but they’ve failed to make an impact. But equally, you’re going to also have leaders who were brilliant early on, but at some point just don’t scale with the needs of the company.”

Balderton Capital partner Suranga Chandratillake on why some leaders need to step aside as a company scales.

 

Find out who makes the decisions

“Always find out who the decision-maker in a corporate is. There’s no point in taking meeting after meeting with people who can’t say yes. Aside from creating that sense of fomo about your product or service, find out where the sign-off will come from. Then work out how to get in a room with that individual. Too many people are just too nice and tread carefully. Ask up front about a corporate’s processes, and if the person you’re meeting isn’t the decision-maker, then quickly find out who is.”

lastminute.com co-founder Brent Hoberman on how to partner with – and sell to – major corporations as a startup.

 

Go for home-grown talent over experience

“When you’ve raised a lot of money, it’s very easy to go on a hiring spree. We made precisely this mistake; we were so excited to fill the [new] roles that we just started hiring people because they had experience. But before you decide you need someone with five years’ experience from a large corporate or tech platform, give your home-grown talent a chance. Our best hires have been our interns. When you watch people like that rise up, it gives everybody confidence because they know they’re in a meritocracy.”

Sarah Wood, co-founder and chair of Unruly, on hiring.

 

Don’t sell umbrellas to camels

“One of our team says: ‘Don’t sell umbrellas to camels’. What he means is make sure you understand who your ideal customer is and focus almost exclusively on them. They are far more likely to become referenceable customers, who can then provide air cover for your sales leads, [by giving your company] a great reference. If you’re an enterprise business, then referenceable customers are huge. So over-index on keeping them happy. It should get markedly easier the more of them that you have.”

Partnerize CEO Malcolm Cowley on why B2B startups should focus on ‘referenceable customers’

 

Don’t drink the Kool-Aid

“Founders have to pull off a near-impossible trick: they have to distort reality – because they are selling a vision of something that doesn’t yet exist – but not bullshit themselves. As the Americans say: ‘Don’t drink the Kool-Aid.’ As an investor, I look for entrepreneurs who can describe their strategy in level-headed terms and articulate the steps they need to take. I’m asking what their insight or unfair advantage is that makes me believe they are the ones that can achieve what they say they can.”

Wendy Tan White, co-founder and CEO of Moonfruit, and adviser to the British Growth Fund (BGF), on the dangers of hype.

 

Always be ready to get your hands dirty

“If you’ve done the operational processes yourself, it gives you credibility internally – and even if they can do it better than you, your team will respect the fact that you’ve had a good go at it. Throughout all my time as a CEO and four years as a public CEO, there were many occasions when, even though I was no longer doing those tasks, if someone told me something about any aspect of operations, I instinctively knew whether what they were saying was rubbish or not.”

David Buttress, co-founder and ex-CEO of Just Eat

 

Weed out the wrong investors

“Try to weed the ‘wrong’ investors out of the fundraising process as quickly as possible. Fundraising is like running a sales process: you need to work out fairly quickly who your runners and riders are, and not waste time on people who aren’t going to get to completion. In an ideal world, founders want to end up with no more than three or four term-sheets [investment offers]. That’s three or four VCs you’d be happy to work with. Then you’ve got something you can use to try and generate the best deal for yourself.”

Cherry Freeman, co-founder LoveCrafts, on fundraising.

 

This article was first published in WIRED on 5th November 2018