Tagga is over a year old now – actually it is now 1.5 years old. Boy…they do grow up fast. Since we have past the one-year mark, I thought I would share 5 important lessons that I learnt in my first year of creating and running Tagga.
Five things you need to know in a startup
1. A “Strategy Guy” should not be hired in a startup. The reality is that things change so much in the first year that your strategy is shaped by the data you gather from your market, customers, and team. You begin with a hypothesis “my product will solve this problem” and then you test it in the market. The only way to acquire that data is by rolling up your sleeves and getting involved in those very important grass roots dialogues. Everyone on your team should be willing to get “his or her hands dirty”. The “strategy guy”, as I call them, often want to be hired with the pitch that they can shape the strategy of your business. These people often feel very senior, not interested in writing lines of code or cold calling and believe their offering is of value because they somehow have a deeper knowledge about your market and business than you or your team do. These so-called “business kick-starters” will inevitably be a waste of your time and will likely only disappoint you. If you want someone to help test ideas and gather feedback, use your Board or Board of Advisors. We all have the strategic prowess to run multi-billion dollar businesses in our heads.
2. Hire those with the best attitude and a willingness to learn over those with experience. Often investors and peers will get excited at the opportunity to recruit an experienced “rock star” to your team. The trouble with that is that these types of individuals are often not as eager as they ought to be and that can be poisonous to your company environment. If you have anyone on your team that isn’t willing to wear more than one hat: fire them. Everyone needs to be flexible and used to working on tasks above and beneath their skill or desire.
3. Build your product to solve a customer’s problem. Do not build something because your competitors don’t have it. At Tagga, we entered a very noisy market. That is not unlike most new media companies. While it is critical to differentiate yourself from your competitors, your mandate is to build out a product or service that solves a problem from your target audience. This should be your single guide. Often companies will focus on building a product based on what their competitors don’t have, without establishing if there is a clear pain point for the target market.
4. Stay Focused. Stay Focused. Stay Focused. As you shape your company’s path, you will learn new things about the market and as a result new opportunities will emerge. Often many companies will fail because they start to chase every opportunity that comes their way. When you start a company you have a very short timeline (often governed by cash) in which you need to prove out your business model or acquire customers. This requires focus. At the same time, you need to know when to quit and shift directions. The best way to do this is to treat each milestone in your business as a project: objectives, critical path forward, key metrics to achieve. If you fail on achieving your key metrics, that’s probably a signal to reassess your direction. Remember, it is critical that if you are going to fail, you need to fail quickly and move on.
5. Attract the best and pay them what they are worth (or the best you can). Your only asset is your team. If you can build an excellent team then you exponentially increase your chances of achieving excellence. Good people need to be paid well. It’s understood that you have limited finance options in a startup, however spend wisely and compensating your staff well is a good investment. (note: expensive staff do not always = good). You can always be cheap on rent, desks, phones etc. Always reward those that perform and get rid of those that don’t.
I think I could go on, but I will stop here and maybe add a part deux to this article. Not surprisingly, a key theme here is building a great team. They really are your best assets and if you can cultivate a positive and efficient company culture, then, I believe you can navigate most hurdles in a startup. Be patient though – an amazing team does not get built overnight. Like anything in a startup, you have to remember to crawl before you walk, and that it truly does take time to build something great.
Amielle Lake
CEO, Tagga Media Inc. (www.tagga.com)
Author of The Elephant Hunters
We take you mobile. Tagga Media delivers relevant and effective mobile marketing tools to professional marketers across North America. The... [more]
This is a great synopsis and I think the first one is imperative. There are literally thousands of folks out there with a shingle called "Business Consultant" or "Business Guru". Most of them are worthless. What they are looking for is a way to make a lot of money on the least amount of effort possible-NOT providing value or committing to your dream. I went through several before I found my great team. If I had known this to my soul from the beginning, I would have saved a LOT of money. Keep on target and measure goals daily from the beginning. When things are on more of an even keel, you can go to weekly or even monthly, but DAILY is required at the beginning to assess the value and work of your employees or consultants. Don't listen to what they say, listen to what they DO.
It's been a real privilege to have witnessed Tagga's birth and growth in the past year. A wonderful post from a woman who really knows her stuff. Do other startup CEOs or employees concur with her advice? What has been your experience?
Amielle, great to read your thoughts on this. :) @grace, as a serial CEO startup, here are my thoughts about Amielle's:
1. Absolutely - your customers (or potential customers) are your best 'business strategy consultants. Not 'Business Strategy Consultants'!
2. I've had mixed results here and these days I'm tending towards hiring experience - particularly when tapping into certain markets. At Tynt, we are working with many 'old world' publishers in New York. We specifically hunted for deep experience when hiring our New York rep as this industry is all about relationships.
3. I agree 100% with Amielle here. There are lots of 'cool' products out there that no one uses. You must solve a problem for your customer if you want to thrive.
4. Focus is key. I've seen many startups die because they can't do this. A VP of Sales at my last company once said "If you chase many rabbits you will starve, but if you chase 1, you might get to eat."
5. Yes - pay people what they are worth. Tough to do when you are limited by cash constraints, but this will help make your team work much better. And the team is your key to success.
Well put!
Another good point is figuring what to do next. With so many variables, focus on one thing at a time and then build off.
Great post, Amielle. Lots of good insights in here. I especailly agree with your first point. The business strategy has to come from the CEO and board - it can't be outsourced. Good follow up point by Mtnlady who said "Keep on target and measure goals daily from the beginning." Very few young companies appreciate the importance of tracking the key metrics daily.
Everyone involved in new ventures of any kind should print this out and highlight, underline, and circle in red point #1. I cannot stress this enough.
I've dealt with such "business accelerators" and "business consultants" before, and I've seen them in action as well in other ventures. They are beyond worthless. Not only do they add nothing to a startup, many of them are not trustworthy and will attempt to embed themselves and take an unfair share of the proceeds. They also tend to bring in more and more of their own kind, resulting in something that is often called in Silicon Valley slang the "bozo explosion."
Great summary Amielle, it very much mirrors my experience.
1. I agree 100% on this. I was given the advice from a business prof that in school you follow the process Learn - then Act, but in business, especially the startup it is Act - then Learn, then Act, then Learn... etc...
2 & 5: Hire attitude over experience: With or without experience I look for people who are willing to learn and do not need a lot of direction. I also pay close attention to what the industry average is for the position I'm hiring and try to match that and then add in other benefits. Not paying attention to getting the right people and paying them market will lead to high turn over and I have seen that really cripple some startups.
3. Not only do you only want to build products that solve problems, but build products that customers will pay for. Customers and potential customers will name off lots of features and things they would like, but to weed out the wish list from must haves simply ask them to pay for it. (I would list this as the most important).
4. It is way to easy to get distracted. Focusing on Sales, Cash and Profit is critical. I've seen way to many startups not pay attention to their own financial records or they complain about having to do them for investors.
Look forward to others comments on Amielle's summary
Good tips but i wonder about this on focusing..if opportunity for exponential growth occurred- grab it..
Strategy Guy: It's not necessary to hire a strategy guy who is not interested in cold calling or who feels senior to you or your other team members.
You can always have them on your board or as a consultant. That can really do wonders.
Ideally, strategy includes concepts of agility. In large services delivery situations, strategy can be vital to manage the spirit of development to keep the implications of change requests documented and considered. Probably this is something that you as the entrepreneur need to manage until the time when the company runs itself. This is so that your organization can react with agility through having one, or a small few, decision makers. Sometimes it helps to have a point of view that is not at the ground level to keep things objective in perspective. That said, this is not a full-time position and any professional who is not ready to roll up their sleeves and get down to adding value to an organization should be shown the door.
"We all have the strategic prowess to run multi-billion dollar businesses in our heads."
So true. So true.
Keep on kicking ass and taking names!
