Tuesday, January 29, 2008

The start-up – doing the right things well

I don’t understand why people make startups so complicated. Successful startups do the right things well. This means there are only two things to do: (one) figure out the right things; and (two) do them well. All the other stuff doesn’t matter. A startup is about delivering a differentiated value proposition to a target market. The right things are always about developing the differentiated value proposition and delivering it. You have to articulate the right things clearly and be able to count them on one hand.

The luxury of a startup is having a small group of talented people maniacally focused on a small number of right things. In most other business situations you have competing objectives that pull the company in different directions. Established companies have to consider existing customers and existing products. Just think of the budgeting cycle at a company of any size. Managers compete internally for funds to satisfy different objectives –new product development, sustaining engineering, marketing programs, and channel support: departments battle other departments; new initiatives battle against existing business processes.

In a startup the compromises are only around the optimal way to do one thing – doing the right things well. The luxury is everyone pulling in the same direction within the business constraints of the startup (money, staff, technology, market acceptance). You have to be able to tolerate some loose ends and chaos. Because dealing with them would mean expending energy on things that are not part of “the right thing”. In a startup you need people that can handle, in fact can thrive on, there being a little “broken glass”.

I love startups: they are not very complicated and the fun is in the chaos.

1 comment:

Isaac said...

I could not agree more. Lots of people want to make their startups a kind of "let's start a business" club, and focus on naming, lawyers, titles, offices, and all the trappings of an established company, without doing the things you mention.

Unfortunately, lots of people find a convenient distraction in those details that help them avoid doing what you say: delivering a unique value to a targeted market.