The Ultimate Steps To Startup Success Exposed

10 Steps

Looking back at my successful companies and those that failed miserably, I discovered a pattern of starting that ensures success and a series of early mistakes that make it impossible to move forward. They are as follows:

1. Everyone pays

When forming a corporation, shares can be purchased with cash or through other means such as source code, domain names, etc. The way to ensure total commitment is to make everyone buy their shares with real money. Furthermore, each founding team member should sign a legal agreement that dictates the level of partnership, when stock can be issued and sold, and so on. Your attorney will have a document that outlines everything. In short, before anyone is a co-founder, they must sign and pay.

2. It's not fun

If working for a startup is fun, then you are doing the wrong work. Product guys love playing with technology, sales guys like meetings, and business people enjoy spreadsheets. However, just doing those activities will not move the revenue needle. Instead, the entire team must be in panic mode—anxious to deliver an MVP, terrified of not generating revenue, and scared of not meeting the team goal. Each day should be uncomfortable because it involves doing new things that must succeed.

3. You're not a celebrity

You are a small business owner at best until you sell a company for a billion dollars. Even though offers to speak, present, and pitch will be given, ignore them or politely decline. This goes for everyone on the team. Nothing that is not direct sales will move the company forward until a brand is firmly established.

4. Money isn't free

The money you raise from investors is not free. It comes with a heavy price and should only be sought when necessary. At a time when hosting is free for startups, all that is required to start a company is legal fees and a domain name. Everything else is unnecessary. However, once you can scale, then raising funds makes sense. Just do not do it as a way to pay yourself or the other founders.

5. A scout is frugal

Everyone on the team must agree that egos will not be fed. Instead, cut costs everywhere. Microsoft, Google, and others provide numerous free or very low-cost software packages. The same applies to phone service, internet hosting, and the like. You do not need a fancy office either. Even many coworking offices provide free or heavily discounted space when you ask. There is no need to spend money on anything but activities that directly generate revenue. For example, boosting social media posts is not a revenue-generation activity. It is an ego-boosting activity.

6. Protect yourself

A good accountant, attorney, and assistant are paramount. Doing things wrong with legal agreements and tax forms can seriously halt a company. Having an assistant frees co-founders for direct revenue generation. Outstanding tax and accounting advice is often provided at steep discounts for startups. Ask your network for referrals.

7. Set goals

Set goals for 30 days, 90 days, and six months as a team. This should be done while you wait for formation documents to return from the state. Once you are three to four months in, create goals for one year and two years. Things change so rapidly for a new company that setting long-term goals is a waste of time. However, the act of setting and achieving short-term goals as a team strengthens the bond between members.

8. Designate a leader

Many co-founders argue over who is the leader. Management meetings for young companies are often full of competing priorities and egos, which is a recipe for disaster. Early on, determine who will be the leader. You can vote, base it on equity buy-in, or some other metric, but lock in the person who will drive the vision. Everyone else should happily work to fulfill that vision.

9. Build culture

Culture is the seed for the brand. You set it with each non-negotiable created within the first year of operations. For example, in my 1998 startup, we had a sales culture. Everyone from the executive assistant to the engineers was expected to drop everything when needed to close a deal. Fast-forward to 2019, and a startup I co-founded began with a design culture. The entire team worked to deliver magic for the customer.

10. Admit fault

There is no such thing as failure in building something from nothing. This is because each mistake is a learning opportunity. When pain is your teacher, you will learn quickly and deeply. However, you must admit when you mess up. Take responsibility for the failures so that you have a better story for success.

Conclusion

I stayed at a Holiday Inn that was falling apart to meet with an investor. We had an office with no windows for one company. There was a time when the live stream failed with hundreds of potential buyers and a moment when a significant tech company stole our intellectual property. Then, there were disastrous team calls where we talked over each other, gave conflicting answers, and looked anything but cohesive. Guess which of these examples concluded with a nice exit?

Hope this helps,

Todd Moses (CEO)

Let me know your thoughts: [email protected]