We’ve all heard the statistics that 90% of new startups fail. Those that do succeed often face financial problems with only 40% of startups turning a profit. So, what makes the difference between the startups that thrive and turn into success stories and those that fall behind? One major factor that can make or break a startup is leadership.
While it’s essential to have a great team and to have a marketable product and rock the fundraising, the day by day task of steering the startup ship clear of the rocks comes down to leadership.
As your startup grows and makes it over hurdles, the stakes keep getting higher. If you don’t grow with your startup, you’re setting limits not only for yourself but for the business you’ve invested so much of your time, commitment and sweat in.
Here are some key areas for startup founders and cofounders to focus on to scale up their leadership skills.
Know how to motivate your employees - As your startup grows, you need to scale what you offer to employees who have put in the time to make that success happen. Recognition is an important motivator. Sitting down with your team members individually and congratulating them on the specific areas where they shined means a lot. Offering well-constructed feedback and guidance means employees feel seen and that you’re invested in their development. Having a recognition ceremony where team members are rewarded for their contributions can also bond the team and improve morale. Consider offering other perks such as a paid vacation, a flexible work schedule, or other reward that shows you appreciate their hard work. Continually invest in training programs to improve skills which will improve productivity and spark creativity.
Never stop fundraising – This is a skill you’re probably all too familiar with. But remember that it never stops. The day you stop fundraising is the day you can close your doors. With 82% of businesses failing because of cash flow problems, the drive to fundraise has to become a top priority if you want to succeed. If fundraising is a relentless task, then you need to toughen up your response to it. Fear of rejection, anxiety about going back to the same source to ask for more funding, freezing when sitting down to make cold calls and stuttering through elevator pitches are all experiences that successful entrepreneurs have to develop a tough hide in order to weather. Tackle your fears head-on when dealing with fundraising anxiety. Develop a bulletproof elevator pitch. Prepare airtight answers to investor questions so that any meetings or cold calls will go smoothly. Proactively chase down leads by asking your network, board members and other investors to introduce you to potentially interested investors. Remind yourself daily why you started this business and why its worth investing in so that when you reach out to investors, your passion and commitment shine through. Hire a coach if you need one to boost your confidence and skills. Remember, your team is counting on you. You got this.
Take care of yourself – This could just as easily be called “don’t burn out.” The constant demands of running a startup make burnout an occupational hazard. It may feel like you have to be working 24/7, but the truth is that nobody will benefit if you hit a wall and lose your motivation and focus. Define work life balance and strive to create a company culture that values it by setting the example yourself. Joel Gascoigne, CEO and cofounder of Buffer describes his experience of burnout: “I lost motivation. I just didn’t care. I knew I cared deeply, but I had nothing left. I couldn’t get up in the morning. I felt very sensitive and emotional. It was like anything could set me off, and make me well up. I cried a lot, by myself and with people close to me.” An important aspect of leadership is knowing how and to whom to delegate tasks. If you’ve built a great team, trust them and let them take on some of the work. Hire an assistant if you need one. Make sure that you take advantage of the resources you have to achieve balance in your work schedule. Martin Berry, an investor and Founding Partner and CEO of DTribe Capital is a veteran entrepreneur who has witnessed founder burnout up close. A key problem he spotted was that “they’re not good at delegating, trusting and empowering their teams around them to do the heavy lifting with them.” Remember, you’re a startup founder, not Superman. Delegate, take time off, eat well and sleep well. That way, you’ll have the stamina you need to see a successful startup through the long haul.
Get a mentor - You probably already have one or several mentors. But are they able to guide you through this new phase of your startup? Do they have the experience that’s relevant to where your startup’s at today? If not, look for a new mentor who is familiar with the terrain you’re dealing with now. Cofounder of Rebel Chocolate, Neil Robson looked for a mentor “when I felt ready to move up another level in what I was offering my clients.” A mentor often plays a key role in keeping their eye on the big picture and helping you avoid pitfalls. If you need a new mentor but don’t have one in mind, reach out to investors and board members and ask if they know of someone- these are the people who are most up-to-date on the current status of your startup and may know someone who can make a positive contribution. Otherwise you could try putting out a message on LinkedIn or signing up on a mentor matching platform.
Meet with your legal team – If you’ve managed to weather things this far without running into legal trouble, congratulations. But be aware that the more money you make and the bigger your team and the wider your scope, the more chance there is for legal lines to be unwittingly crossed. As your startup grows, keep regular meetings with your legal team to make sure you’re aware of all laws pertaining to your processes and set up strategies to deal with any legal roadblocks ahead of you. The last thing you want to do when things are building momentum is spend time in court.
As your startup scales up, that means stepping up your leadership skills too. Becoming a motivational administrator for your team, improving your fundraising skills, finding ways to avoid burnout and practice self-care, acquiring a mentor appropriate for this stage of your startup’s growth and being tutored in all things legal will help you sail through this stage onto even greater growth and success.
3rd September 2020