Not time in the abstract.

Time between identifying an opportunity and realizing the revenue.

Time between strategy and execution.

Time between decision and outcome.

Every day a critical initiative sits unresolved, a product launch is delayed, a sales process stalls, or an operational bottleneck remains unaddressed, growth is deferred.

And deferred growth has a cost.

This is why some of the highest-performing companies in the world obsess over speed—not reckless speed, but disciplined execution.

They understand a simple truth:

Growth delayed is often growth denied.

The Hidden Cost of Constraints

Many founders assume their biggest challenge is a lack of capital.

Others believe it’s marketing, sales, or hiring.

In reality, most businesses are constrained by one or two hidden bottlenecks that quietly limit performance.

These constraints can exist anywhere:

• Sales execution

• Lead generation

• Pricing strategy

• Customer retention

• Operational efficiency

• Capacity planning

• Leadership effectiveness

• Technology adoption

• Strategic focus

The challenge is not that these constraints exist.

The challenge is that most businesses don’t know where they are.

As a result, they spend time and resources solving the wrong problems.

Benchmarking Creates Clarity

Before private equity firms invest in a company, they rarely start with solutions.

They start with diagnostics.

They benchmark performance.

They assess systems.

They identify strengths, weaknesses, and operational gaps.

Why?

Because the fastest way to improve performance is to understand what is actually limiting performance.

Benchmarking provides context.

It helps answer questions such as:

• How do our sales conversion rates compare to best-in-class performers?

• Are our margins aligned with industry benchmarks?

• Is customer acquisition efficient?

• Are operational processes creating unnecessary delays?

• Where are we losing time, money, and opportunity?

Without benchmarks, growth becomes guesswork.

With benchmarks, growth becomes intentional.

Diagnostics Reveal the Constraint

Every business has growth levers.

But not every lever matters equally.

The highest-performing organizations focus on the few factors most likely to drive meaningful results.

This requires diagnostics.

Diagnostics move beyond symptoms and identify root causes.

For example:

A company may believe it has a revenue problem.

Diagnostics may reveal a sales process problem.

A founder may think they need more customers.

Diagnostics may reveal a retention problem.

A leadership team may want to launch a new product.

Diagnostics may reveal operational inefficiencies that need to be addressed first.

The goal is not to do more.

The goal is to identify the constraint that matters most.

The Power of Operator-Led Engagement

Identifying constraints is only the beginning.

The next challenge is execution.

This is where many advisory models fall short.

Advice alone rarely creates transformation.

Execution does.

The most effective growth models pair diagnostics with experienced operators—leaders who have built, scaled, acquired, integrated, and transformed businesses.

Operators bring practical experience.

They have encountered similar challenges before.

They understand how to prioritize actions, allocate resources, and navigate complexity.

Most importantly, they help founders move from insight to implementation.

Because knowing the problem and solving the problem are two very different things.

A Better Approach to Scale

At LEAP and through the broader Cumbre model, we apply a private equity-inspired approach to business growth.

We start with benchmarking.

We conduct diagnostics.

We identify constraints.

We uncover growth levers.

And then we engage experienced operators to help founders execute against the opportunities with the highest potential impact.

The objective is not to overwhelm entrepreneurs with more initiatives.

It’s to help them focus on the right initiatives.

The ones most likely to accelerate growth, increase enterprise value, and create sustainable outcomes.

The Path Forward

Every business wants to scale.

The question is not whether growth is possible.

The question is whether you understand what is currently preventing it.

The companies that scale most effectively are rarely the ones doing the most.

They are the ones with the clearest understanding of their constraints and the discipline to focus on the growth levers that matter most.

Because growth is not created by activity alone.

Growth is created by clarity, execution, and the ability to solve the right problem at the right time.

The post Growth Delayed Is Growth Denied: Using Diagnostics, Benchmarking, and Operator-Led Execution to Accelerate Scale appeared first on Hollines Startup Growth Strategy & Transactions.

TTM is a critical metric that shows the time required to develop a product or service and commercially launch to the market. The shorter the TTM, the faster you can book and realize revenue. TTM is an indicator for efficiencies or problems with internal development, manufacturing,  and other operational processes. That’s why the most efficient companies in the world master the TTM process.

As a former C-level executive in business and legal positions, it always baffled me that lawyers, whether in-house or outside counsel, were not held to the same TTM KPI as their business and operational counterparts.

Anytime I held a dual business and legal role, I would apply the TTM KPI concept to both departments. To make it more applicable to lawyers, I referred to it as Time-to-Completion, or TTC, KPI. We implemented, a multi-step process to shorten the drafting and negotiation timeline to positively impact and improve TTC. By doing so, contracts were completed faster, products and services launched more quickly, and we shortened the path to revenue.

The TTC Playbook

While the process will be slightly different for your company, you can follow a formula to optimize TTC in your own organization. I developed a 10-point checklist to successfully implement this framework at various companies.

Leveraging this TTC process ties lawyer KPIs directly to your business performance. Measure how to optimize operational success with this important metric.

There are additional benefits to this process outside of revenue and efficiency. TTC positively changes the perception of the lawyer and legal department. By treating the legal side similar to the business departments, the lawyer and legal department are viewed as more of a business partner instead of a scary place that holds up deal progress.

Drop me an email at harry@hollinesgroup.com and I will send you a FREE copy of the 10-point checklist.

The post Time-to-Market (TTM) is a crucial key business indicator (KPI) for your success.  appeared first on Hollines Startup Growth Strategy & Transactions.

One key for every CEO to clearly define her / his responsibilities and outline the gaps and what else needs to happen to effectively manage and grow the business. The CEO must manage hiring executive leadership team members to do these tasks and fill the gaps the CEO has identified through smart delegation and holding each leader accountable for growing a team under them.

It is just as important that the CEO ensure that each leader is an effective manager and / or can be trained to be an effective manager. Otherwise, the company is doomed and failure is around the corner.

For each new leader, to build and manage a dynamic team, it is imperative she / he avoid the “Smartest Person in the Room Syndrome” and that starts with these 5 leadership Don’ts:

1. Do not walk in the door thinking everyone before you failed – respect those before you as they likely accomplished a lot.

2. Do not think your new ideas are new – most often they are not new and they have been discussed, presented and / or evaluated before you arrived.

3. Do not walk in the door with an agenda – be humble and listen and learn before arriving at any conclusions.

4. Do not prejudge, as hard as that is – even if you have outside perspectives beforehand, leave those outside, walk in the door and start with a clean slate – then arrive at your own conclusions.

5. Do not walk in the door trying to move mountains – move a few pebbles while you learn, build credibility then develop a strategy to move mountains.

I would love to hear about your experiences with the “Smartest Person in the Room.” Give me a shout at harry@hollinesgroup.com or visit my blog and comment at https://hollinesgroup.com/blog/.

Remember, the key to leadership is Humility!!!

The post The Top 5 Startup Don’ts of Effective Leadership that Derail Startup Growth appeared first on Hollines Startup Growth Strategy & Transactions.

Unfortunately, in the haste of starting a company, many people overlook the less glamorous side of building a business. It’s easy to make painful and costly mistakes as you focus on building, growing and scaling an early stage company.

Learn how you can avoid these common roadblocks with a trusted business advisor.

1.     Co-founding clarity

Your cofounder might be your best friend or even a family member, but that doesn’t mean you can operate a business on a handshake. Too often companies are split apart by feuding cofounders.

The best thing you can do for yourself and your cofounders is to draw up a formal agreement with a seasoned business lawyer. Your lawyer will write a legal document outlining who owns what percentage of the company, vesting schedules, job responsibilities, how to operate if a co-founder wants to leave and a vision for the business.

2.     Business filing

No matter the size of your company, you need to form a legal entity if you want to scale in the future. Filing as a legal entity protects your personal finances from liability in case the company is sued.

You can file as a sole proprietorship, partnership, C corp, S corp, or an LLC. The right entity depends on your goals for the future, so don’t be afraid to think big. Filing incorrectly now will give you headaches down the road.

Of course, will your taxes and operations may get more complex so consult with a legal and business experts to make sure your company selects the optimal business structure.

3.     Contracts

Early stage companies don’t always create proper contracts when they should. When you’re in the business of growing your company, a contract protects your business.

Minimize liability by drawing up contracts for vendors, clients, and employees. A lawyer can help you draft a standard, templated contract that will help you minimize your liability.

However, you do not want the legal process to slow down your business growth. To avoid this outcome, you must streamline the contract process and develop a playbook of common negotiation issues that can be addressed upfront.

You must minimize and shorten the negotiation phase so you can focus on delivering your products and services. Consult with a business advisory firm like The Hollines Group to minimize this cycle and implement a process for the fastest path to revenue.

4.     Intellectual property

It’s likely that your company has built something the world has never seen before. Early stage companies live and breathe by their innovative products and processes.

How would you feel if another business got wind of your idea, copied it, and made millions? Unless you’re guarding your intellectual property through the legal system, you have little recourse for dealing with copycats or thieves.

File patents, copyrights, and trademarks to protect your valuable ideas. Patents protect physical products while copyrights cover authorship or art. A trademark is essential to guard your business name or tagline.

You must also implement Non-Disclosure Agreements (NDAs) to cover yourself. This gives you legal recourse if someone shares your proprietary information.

Additionally, one of the critical components to building a repeatable and scalable business is implementing a licensing scheme and framework that aligns with the goals and objectives of the business. This is critical if you want to create a recurring revenue business and garner the highest valuation multiples.

5.     Taxes

Business taxes are very different from paying taxes as an individual. When you’re in the thick of starting a new company, the tax implications can be overwhelming and even paralyzing.

This is why it’s so critical to choose the right entity for your business. You’ll have different requirements for taxes on the federal and local level. Sales tax, payroll taxes, tax credits, and deductions play a role in your company’s success.

Partner with a stellar lawyer and sharp accountant to do the heavy lifting. You want your company to stay compliant as you scale, or risk toppling your hard work.

6.     Employment

Hiring employees is a monumental step in your journey to growth as an early stage company. But many startups fumble the employment process.

So many companies fail to properly classify employees. They don’t require identification, forms, or contracts when they hire and onboard new employees.

The most common legal employment issue for startups is incorrectly classifying workers. Many startups want to avoid the cost of full-time employees, so they hire “contractors.” However, the law is very clear about the difference between an employee and a contractor.

This is a recipe for legal and tax problems down the road. Don’t get in hot water because you aren’t following employment guidelines.

7.     Naming

You probably already have a name for your startup. However, naming can be a legal minefield, and it should be taken seriously.

Just as you protect your business legally, other business entities do the same. It can be difficult to know if your name is legally free and clear. If you don’t do your due diligence, you can get into hot water for violating trademarks.

The worst part is that I’ve seen startups decide on a name and then realize it’s taken. They’ve already spent thousands on materials and a website, only to receive a cease and desist letter.

Hire a business advisory service to start on the right foot and engage a lawyer to do professional background research on potential names to avoid legal problems.

The bottom line

Startups are no strangers to bootstrapping, especially when it comes to hiring outside resources. It’s tempting to hire a friend of a friend for free advice. However, not all advisors, mentors or coaches are equal. Select an advisor that has decades of experience dealing with these issues and working inside startup and early stage companies.

Choose someone who specializes in the competitive startup environment. The Hollines Group offers end-to-end assistance with your early stage company. Start right and give us a call now.

The post 7 Painful and Costly Startup Mistakes appeared first on Hollines Startup Growth Strategy & Transactions.

You could speak with dozens of investors before one agrees to partner with you. But are they really the right fit for your business?

As a startup founder, you have to learn how to sift through investors to find the right match. Go beyond capital investments and find someone who has a stake in your development.

How to find better investors

Early stage companies don’t always need more money. If anything, you need the right investor at your side to make the best use of your existing resources and guide you around common pitfalls.

Here’s how startups can connect with better investors.

1.   Define your ideal investor

It’s easier to find your ideal investor if you know what qualities to look for. Make a list of criteria for your investor. What background, experience, or personality do you want? This will help you determine which investors you shouldn’t pursue so you can focus your time on the best potential investors for your company.

After developing a list of criteria, the real work starts. Research and identify a list of investors who fit these criteria. Go after reputable and well-known investors in your industry. To start building your list, speak with other startups, consult local news, or use sites like AngelList.

2.   Do your research

Once you compile an Excel sheet of potential investors, do your research. Determine their specialty, education, similar investments they’ve made in the past, their track record and success, and contact information.

Once you’ve done your research, it’s time to pitch. To best manage your pitches, consider using a customer relationship management (CRM) platform.

Store all information about investor outreach in one place so you monitor and track outreach efforts. This streamlines the search for investors and keeps your co-founders in the loop about who’s been contacted already.

3.   Network

Some of the best investors are right under your nose. Go local and ask your network to find the best investor for your business.

Attend university mixers, casual parties, professional get-togethers, and conferences. These are your chance to build a relationship with fellow attendees.

Remember, networking is about fostering a relationship. You can let people know about your company and that you’re pursuing funding, but don’t go in and ask for financing at first blush.

Be patient. It might take months to build the right relationships, but it will have a big payoff for your business.

4.   Join an accelerator

Accelerators offer programs that train you as a founder to get your business off on the right foot. It’s a great option if you’re looking for mentorship, community, and support as you grow your business.

Depending on the accelerator, they may set you up with meetings where you can connect with investors. Accelerators give you a big network not just of investors but also of potential mentors and fellow founders. I would with several Accelerators in the area and I can attest to the benefits of engaging that community.

5.   Ask for referrals

Investors are sometimes wary of working with people they don’t know. You can build trust quickly with an investor by requesting a referral from your network. Warm referrals vouch for you and help you build a relationship with the investor.

Even if an investor isn’t the right fit for you, they may know someone who is. Don’t be afraid to ask for referrals and connections; they’ll take you far.

6.   Trust your gut

Investments are a financial decision but you’re also giving a portion of your company to the investor. They’re going to have a seat at the board room and this isn’t a step you should take lightly.

It’s important for early stage companies to establish a positive working relationship with investors. You’ll be working with this investor intensively to get your project off the ground. You need to share common values, interests, and vision to pull the project off without a hitch.

Even if all the numbers line up, it doesn’t mean the investor is right for you. If they make you uneasy for any reason, don’t follow through with the deal. The right investor is out there for you, and choosing the wrong one could be disastrous for your business.

The bottom line

The right investor helps you avoid the mistakes that come with creating a new business. It’s never too early to start looking for funding for your startup. The right investor will not only boost your business with their capital investment but also the guidance and resources to help you grow. Put your head together with an investor and partner who’s been there before.

You don’t have to go alone to find the right investor. Partner with The Hollines Group to seek out the best investor to grow your business for many years to come.

The post 6 Essential Steps for Startups and Early Stage Tech Companies to Find Better Investors appeared first on Hollines Startup Growth Strategy & Transactions.

However, I know from working inside companies for decades and trying to build my own company that saying ‘No’ is essential to success.

The companies I worked at that had a clear and thought out strategy would say ‘No’ to many engagements to stay focused on executing the core strategy. On the other hand, companies I’ve worked at that did not succeed or failed to reach their potential always said ‘Yes’ and chased every opportunity that knocked on the front door.

That inability or reluctance to say ‘No’ is one of the reasons startups and early stage companies fail . . . I refer to it as the ‘I can’t say no’ pitfall.

On this point, I remember Berkshire Hathaway CEO Warrant Buffet once said, “The difference between successful people and really successful people is that really successful people say no to almost everything.”

From my perspective, here is what saying “No” represents and why it is so critical to success:

1. ‘No’ means you clearly defined what is in the “Yes’ bucket otherwise you are not comfortable responding ‘No.’
2. ‘No’ means you believe in your go-to-market strategy and business model and this should be applauded.
3. ‘No’ represents discipline and that is a key attribute of success.
4. ‘No’ means neither you or your employees will waste valuable time chasing deals that do not make business sense and instead laser focus on executing the core strategy and scaling the business.
5. ‘No” requires confidence and all the great leaders at successful companies have at least one thing in common . . . they are confident – if not conceited – in what they are building and how they are building it.

In reminding myself of the context in which Buffett made his statement, I came across the following article in which successful leaders and advisors were asked if they agree with Buffett.

What about you? Do you agree with Buffett? Can you recall a situation where you walked away from a deal? Do you remember continually changing ‘Who’ and ‘What’ your business stood for in an attempt to win any deal?

Tell me about your experiences and always feel free to drop me an email at: harry@hollinesgroup.com. Also, download our free eBook at www.hollines.com on how to avoid common growth roadblocks .

The post Why Saying “No” is Critical to Success appeared first on Hollines Startup Growth Strategy & Transactions.

I’m not sure why, but I immediately thought about my role. At the time, I was VP of Business Development at an emerging technology company.

I was struggling to figure out how I could develop a scalable partnership distribution model.

The company had an outstanding suite of products and services. Our direct-to-consumer business was exploding.

But the indirect partnership business was sputtering along. It was easily getting lapped by the direct-to-consumer business.

I spent endless hours working with a talented group of business, marketing, and product experts to identify what would resonate with a partner. After each meeting, we listed a broader and more expansive list of partner value drivers.

We felt really good but, for reasons we couldn’t explain, partner adoption and growth was still slow.

As I left the movie, I couldn’t get Denzel’s line out of my head. Then the light bulb went off. I turned the phrase around to say, “It’s not what I think; it’s what I can prove to my partner.”

I realized that we were talking to partners about what we thought we knew or believed to be true but we did not, or could not, point to anything tangible as proof.

With this knowledge, I went back to my product and marketing colleagues. Together we revisited the list of value drivers. We even added to the list until we had a comprehensive record of every possible benefit we provide to customers.

Then, in excruciating detail, we discussed each benefit and whether we could prove it to be true. And, if so, how?

When we were done, there were only two benefits that we could prove with hard data to back it up: (1) that customers increased profits by installing our platform with (2) less than a 12-month payback.

So, if we could prove this, shouldn’t that positioning and messaging form the crux of our partnership pitch?

Yes, but for some reason, we hadn’t been using this data. Instead, we wasted time talking about how our solution would elevate the partner as a technology leader.

That is a hard data point to prove. It’s even harder to take to a CEO or CFO for approval— it’s what I refer to as a “soft value driver.”

And, better yet, even if true, it was not clear what that meant for the partner’s business. In other words, what meaningful metric did we give to the customer, if at all?

This is a critical question. A CEO or CFO will listen closely if you tell them, “I have a partner that can increase your profits. With a small investment, you can recoup your costs within 12 months.”

Who wouldn’t listen to that?

Compare that to the soft value driver I mentioned earlier: “our solution will elevate the partner as a technology leader.”

How do you prove that? What does it mean to your partner? What metric does that impact?

I’ve written about the importance of value drivers before.

Value drivers matter because it’s easy to build a list of customer benefits. But it’s another thing entirely to create a list that demonstrates real value to the customer, not drivers that make you feel good.

In reality, you often only need 1 – 2 compelling and verifiable reasons why a customer should purchase from you.

That is easier said than done, though. This requires an honest discussion about what value drivers you can truly affect for your customers. It means looking at what tangible data you have that will support that conclusion.

We often add unnecessary complexity, thinking it puts the company in a better light. In reality, complexity is both confusing and unsupportable.

The bottom line

Focus on what you can prove, even if it’s a single benefit.

Market and promote that benefit to build compelling data points around that benefit.

Do this before you start promoting a laundry list of benefits you think might be true. Remember, it’s not what you know; it’s what you can prove.

I know firsthand the implications of nailing the customer value proposition and the impacts of getting it wrong.

Get in touch with me now for a quick consultation. I’ll help you identify and tailor your pitch so you can highlight compelling value drivers that resonate with customers and partners.

Want more information? Download our free eBook at www.hollines.com now to avoid common growth roadblocks through a successful business development strategy.

The post It’s not what you know; it’s what you can prove!!! appeared first on Hollines Startup Growth Strategy & Transactions.

As an early stage company, your pricing can make or break you. Even if you’re competing against giant companies in your niche, business cost optimization can give your business an edge.

Cost optimization helps you streamline processes and increase your profitability. Unfortunately, many early stage companies neglect to optimize costs while they’re small. As businesses scale, the costs grow unchecked, increasing the likelihood of financial problems.

Don’t create problems for yourself down the road. Do cost optimization with a trusted advisor while your company grows. You can cut your operating costs as much as 20% and improve your business in the process.

What is business cost optimization?

Business cost optimization is the key to profitability for your company. It’s a process that cuts business costs without affecting your company’s performance or quality.

Essentially, cost optimization is about making smarter money choices for your business. This isn’t a frilly process, either.

In fact, many investors will expect you to have a cost optimization plan in place. If you’re trying to appeal to investors, you need a cost optimization plan.

Aside from attracting quality investors, cost optimization helps your business earn more money for less work.

How to optimize costs for early stage companies

Although you can DIY some cost optimization, it’s best left up to a neutral third-party, like a cost optimization advisor.

Here are five ways an advisor can implement cost optimization for your business.

1.   Renegotiate contracts

You likely have a few contracts in place with vendors and clients. Unfortunately, without an advisor, many early stage companies sign contracts that are unfavorable for their business.

Look over your contract terms and costs. Can you save on your manufacturer’s contract? Are there discounts available for software you use? Can you buying more units to qualify for a lower price?

Cost savings in this arena mean increased profits for you. You’ll never know how much you can save unless you ask.

2.   Standardize

Custom orders are great for customers, but they’re taxing on your business’s efficiency and costs. You can’t do custom everything in a scalable business; it just won’t work.

Instead, standardize your process. You can still offer some facets of customization, but overall, your product needs to be as standardized as possible.

For example, you can let customers white label a software platform (customization), which is created through a standardized process on your end.

3.   Outsource

When you’re founding a startup, time is literally money. How much money and time are you wasting on meaningless tasks?

You can’t check email for two hours a day and expect your business to grow efficiently. Sometimes tasks like email are a lost opportunity; in this case, your time is more valuable chasing leads or making deals.

Consider outsourcing tedious or time-consuming tasks to put your time to its best use. 

4.   It’s all about your culture

Company culture is important to your early stage company’s success. You need two components to have a culture for cost optimization.

First, frugality is important. It’s okay to give your employees and co-founders some perks, but they can’t go wild with the company credit card.

Create systems so people stay accountable. Outline what is and isn’t a valid business expense so people can be good stewards of company funds.

As a founder, you need to follow this system to a tee. Create the culture you want to see by shopping for the lowest prices and cutting out unnecessary expenses.

Second, you need a culture of improvement. You want open-minded, critical thinkers on your time. As a startup, you probably already have this, but it can be easy to succumb to burnout as you scale.

Build a culture of improvement and growth from the get-go. This mindset helps your team constantly seek out efficiencies to improve your business.

5.   Digitize manual work

Your employees’ time is so valuable. Don’t waste their salary on manual tasks. Create a process and flow for digitizing manual work.

Project management tools like Asana can lead your employees through a process so they drop fewer tasks.

If you’re savvy with code, consider AI solutions for automation. For example, you can use chatbot technology to give customers a great experience without hiring 50 sales reps. AI can also conduct data analysis and scan for anomalies.

Let the robots do the heavy lifting for you. These solutions are often cheaper and faster when a robot is at the helm.

The bottom line

Use funds wisely as you scale your early stage company. The key to growing a business is to optimize your costs as you grow. But don’t go it alone; sometimes it’s hard to optimize what’s right in front of you.

Instead, partner with a trusted, impartial advisor. The Hollines Group specializes in business cost optimization for your early stage company.

The post Bootstrapping and bucks: Business cost optimization for startup and early stage technology companies appeared first on Hollines Startup Growth Strategy & Transactions.

However, as a startup or early stage tech company, you still share some commonalities with other businesses in your arena.

In fact, as you develop your startup strategy and  prepare to scale your business, there’s no harm in looking to the tech giants for inspiration. One of the best ways to scale efficiently is to learn from those who came before you.

America’s hottest technology companies

Even in today’s rapidly changing market, there’s still much we can learn from the greatest technology companies of our time.

Amazon

eCommerce titan Amazon is one of the most diverse, innovative tech companies on the market today. They rose to fame thanks to their two-day Prime shipping, but have also excelled through innovation.

Thanks to mergers with companies like Whole Foods and their research into drone delivery, Amazon is quickly becoming the go-to company for all things convenience.

Facebook

Although Facebook experienced the Cambridge Analytica scandal in 2018, they’re still one of the best tech companies of our time.

Bootstrapped in its early days by the resourceful Mark Zuckerberg, Facebook has been one of the most successful social networks on the web. Utilized by both businesses and consumers, Facebook earned nearly $56 billion in 2018 alone.

Alphabet

Google’s parent company, Alphabet, includes the search engine as well as other subsidiaries, like Google Fiber, Waymo, and Loon.

Famous because of its fanatical obsession with user experience, Alphabet aims to improve the world without “being evil.” The company is known for innovation and creativity, which is likely why Alphabet earned $136 billion in 2018.

A blueprint for your success

What do these tech giants all have in common? When we break down their history, it comes to five essential components.

1.   Talent

Amazon, Facebook, and Alphabet hire only the best. While these multi-billion dollar companies have the budget to bring in high-dollar talent, early stage companies can’t afford that luxury.

How do you attract and retain talent as a small, early stage and scaling business?

It’s about having a mission. Salary is important, but your tech company also needs to have a clarified mission with short and long term goals.

To achieve your mission, remember that you can’t do everything alone. There’s a time for bootstrapping, but if you want to scale your business, you must hire a reliable team.

Acknowledge your weaknesses as a founder. Emulate these famous technology companies by hiring people who complement your weaknesses.

2.   Product-market fit (PMF)

You can have a great corporate structure and product. But if no one is buying your product, your company can’t be successful.

That’s why product-market fit is so important. Companies like Amazon took the time to gather consumer data and understand their audience. Facebook and Alphabet do extensive testing to understand their audience before rolling out a product.

You need to do the same. Understand who you’re selling to before you even develop a product. Address audience pain points to make selling and scaling easier for your business. Lastly, validate why a consumer purchases your product or service.

3.   Industry knowledge

Some people, like Mark Zuckerberg, created a product without necessarily being inside the tech industry.

When it comes to industry knowledge, you can do one of two things: hire people with the experience to help you or take the riskier DIY approach.

When it comes to growing your early stage technology company, knowledge is power. But don’t worry . . . if you don’t have the experience yet, you can always bring someone on your team who has the knowledge.

Use their wisdom to your advantage. Know what your competitors are doing, understand user buying habits, and how your business can stand out.

4.   Funding

Funding is both the lifeblood and a persistent problem for early stage tech companies.

These giant technology companies are very successful in raising capital. Why? Because they didn’t just look for a simple cash cow.

Instead, they sought out investors who could be a business partner. They used investments as an opportunity to grow a brand and build connections. You need to do the same.

5.   Adaptability

Technology is a changing market. You can’t scrape by, hoping that what you’ve done in the past will continue to work. That’s why most people use Google instead of Yahoo! . . . one company adapted, while the other remained in the past.

Your business needs to adapt to the market and consumer behavior. Think strategically. Know where you need to pivot your business to scale efficiently.

The bottom line

Early stage technology companies have so much promise. You want to grow your business in a way that’s sustainable and successful.

You can learn through secondhand knowledge by emulating popular companies. However, this approach is rife with trial and error. When you’re growing a business and have employees on the payroll, you can’t afford errors.

Partner with someone who’s invested in your success. Choose an experienced advisor to grow your early stage startup. Partner with Hollines Group.

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Why do we accept failure as an inherent risk of founding a startup? Failure isn’t an option when you leave your life’s work on the chopping block. We don’t need any more early stage companies to taste defeat.

After 20 years in business development, corporate development and law in the technology industry, I’ve seen my fair share of failures. However, after advising and investing in many startups myself, I’ve come to realize the real reasons startups fail.

Pitfall #1: The 1,000 ping-pong ball strategy

Every startup wants growth, expansion, and scale. They have to determine how and where to sell more products and services at scale.

The problem? Most startups go too far. Instead of juggling a few ping-pong balls, they pick up hundreds more in an effort to be the best. I’ve seen that most startups will do whatever they can for their customer, supplier, or partner to make a sale happen.

This results in what I call market and sector “dabbling.” Because startups flex to make sales (any sales), they have a handful of customers spread across multiple sectors.

Suddenly you have more ping-pong balls firing at you from multiple directions. You have a small sample size of clients and little credibility in the market. You can’t specialize in or understand a specific sector because you’re all over the place.

The solution

Unfortunately, most startups don’t have time on their side. You have to pick the right sector and market as soon as possible if you want to scale.

Ask yourself one important question: “What real, meaningful, and identifiable business impact do we give the customer?”

I’m not talking about soft business drivers, but hard, measurable impact. Demonstrate how you save customers time, money, or frustration in a meaningful way. This will keep you focused as you grow in the right areas.

Pitfall #2: The “It depends” business model

Has a customer or investor ever asked you, “What’s your business model?”

If your answer was, “It depends,” you have a major problem. This steals focus away from your startup, leading into Pitfall #1 and a cycle of failure. 

You can’t change your business model to suit a different customer every day.

Every company, no matter its size, needs a scalable and repeatable business model. This business model must align to the key business drivers for customers in your market. A solid business model is critical to growth in any market sector.

The solution

Determine what your business stands for. What kind of business are you building?

Whatever your model, stay true to it. Be willing to walk away from a deal if the opportunity doesn’t align with your model.

The sooner you recognize a bad customer-model fit, the sooner you can move on to the next opportunity.

Pitfall #3: “I can’t say no!”

This point links back to all the other Pitfalls, but it deserves a special mention.

Look back on your business dealings in the past year. Can you remember a situation where you walked away from a deal? Do you remember continually changing your business model or strategy to win an individual deal?

If this happened to you, you don’t know how to say “no.” When you morph to fit every opportunity that comes your way, it’s impossible to have a repeatable, scalable, or profitable business.

The solution

Pick a strategy and business model that works. Use this model as a yardstick for every new opportunity.

If the opportunity doesn’t match your model, simply say “no.” It’s that easy.

Pitfall #4: “All I know is they purchased it”

Do you know why customers buy from you?

No? Unfortunately, you aren’t alone. It’s astonishing how many startup and early stage companies don’t know why customers buy from them.

What’s more alarming is how few companies take time to understand their customers. The result is startups wasting resources on products that don’t address customer pain points, ultimately leading to failure.

The solution

Talk to your customers. Listen to your customers. Invest the time to reach out and understand why they buy from you. Verify that they’re actually using the product and not simply purchasing and abandoning it.

What problem does your product address? What more could it do for your customers?

Quantify the value of your product for customers, whether in time saved, tasks streamlined, or money saved. Use these as metrics to market and improve your product over time.

Pitfall #5. “I don’t know how to lead”

Let’s take a page from sports here.

A head football coach can’t defer blame to an assistant coach. No matter the circumstances or actions of their subordinates, failure falls to the leader.

In the case of a startup, failure always falls to the CEO, regardless of the actions of other executives or employees. It’s this failure to lead that causes so many companies to fail.

Leadership has nothing to do with capability, experience, or your IQ. Most CEOs are incredibly intelligent.

The problem is that most CEOs fail to define their role as CEO. A CEO needs to understand how he or she works in the business. This helps them hire capable folks to handle key business tasks outside the CEO’s skillset.

The solution

There are so many types of CEOs. They have varying backgrounds in finance, product, legal, marketing, sales, strategy, operations, and more.

The key is to understand your area of focus as the CEO. What is your experience? What are your daily duties as a CEO?

Once you’ve defined your responsibilities, outline what else needs to happen to run your business. Hire team members to do these tasks through smart delegation. Hold each leader accountable for growing a team under them.

This sounds simple enough, but delegation requires a lot of awareness, confidence and emotional intelligence.

Some CEOs naturally develop these skills in life, but many others need to work on self-awareness. Leverage counselors, mentors, and consultants to help you improve your leadership style.

The bottom line

These five pitfalls are responsible for the failure of many great startups. Don’t let your early stage technology company fall prey to these mistakes.

Scale intelligently to bring your solution to the world. Skate around these pitfalls with a trusted, experienced advisor like The Hollines Group.

Sign-up above our weekly newsletter and shoot me a quick email at harry@hollinesgroup.com to brainstorm and discuss your business strategy.

The post The Real Reasons Startup and Early Stage Companies Fail appeared first on Hollines Startup Growth Strategy & Transactions.