“When you innovate, you’ve got to be prepared for people telling you that you are nuts.” — Larry Ellison, Oracle
Every startup makes hundreds, even thousands, of small decisions every day. But, there comes a time when every startup has to make some really big decisions that will dictate their overall success. I believe there are three big decisions that every startup will make throughout their lifecycle. Without rolling the dice to make these big bets, most companies will hit the “mediocre pool.” This is where startups go when they plateau. They don’t die or grow exponentially. They just flatline and become mediocre.
1. What to Build? Most startups (99%) fail in this stage because they build the wrong product for the wrong market. Are you building something of value that people will use and care about? Are you building the right product for the right market? A lot is written about what to build and how to reach “product/market fit” as fast as possible. This is covered within the lean startup methodology, customer development, etc so I won’t dive into too much detail and reiterate.
2. Who to Hire? After you build something of value, the next major decision to make is on who to hire and what they’ll be doing. The number one cause of death for a startup in this stage is not scaling properly (prematurely) and hiring the wrong people to work on the wrong things. It’s an extremely tricky thing to balance as you’ll be hiring people before your company becomes sustainable (if you have VC funding).
Most startups fall apart here because they don’t have a solid foundation where communication, collaboration, and teamwork are stable and integrated into the company culture. This is where vision, recruiting, process, and holding your team accountable to each other are extremely important. At this stage, you start building the machine that builds the company.
3. Where to Innovate? This is the biggest and hardest decision you’ll ever have to make as a startup. If you look throughout history, most companies become irrelevant because they aren’t innovating properly. Apple and Facebook have done a great job but companies like Yahoo, AOL, Myspace (I would even argue Google) have not innovated successfully to stay relevant in society.
In this stage, most startups fall into the trap of one-upping their competitors. If one of their competitors releases a key feature, they will copy that feature and make it 1% slightly better. This is a sure-fire guaranteed way to hit the “mediocre pool”. However, if you’re “thinking about the idea that you want to see in the world” (Jack Dorsey quote) then you’ll be leading your company to innovate (even when people are telling you that you are nuts). As a startup, you should understand the major decision points that will dictate whether you will be truly successful or not.
At Skillshare, we have a very clear vision of how education should exist in the world. It’s a vision of education that has never been done before and there’ll come one day where we’ll risk everything to realize that vision. It’ll be a huge decision and if the bases are loaded, we’ll definitely swing for the fences.