There are points in every startup journey when things begin to look dire. Whether it’s the company running out of money, a key team member leaving, or the product losing market traction, emergencies are almost a part of the office furniture.
When it feels as if you’re in free fall, don’t be afraid to pull the ripcord. Here are some of things founders often fail to do in an emergency.
Acknowledge the problem
When there’s a serious threat to the long-term survival of your startup, don’t keep it to yourself. Jeff Jones, ex-president of PayPal and OpenTable, colourfully describes the slowing of a startup’s growth as an “‘Oh, shit!’ moment.” His advice, to be a “CEO who freaks out, setting off alarm bells that reverberate throughout the entire building,” might sound melodramatic, but it’s only by facing up to the enormity of the problem that you’ll have a chance of solving it.
A lone CEO trying to turn a company around without letting their colleagues see that there’s anything wrong just isn’t going to have much luck. It’s far better for staff to know there’s an issue than for them to end up with a vague sense of management panic.
Assemble a war room
Remember, startups are built around solving a problem. So get people from key areas in a room together and turn their natural problem solving instincts inward. Make sure they know that fixing the issue is their top priority.
Come at the problem from different angles. For example, if the problem is technical, don’t assume the best solution will be technical, too. Once you have a plan of attack, divide up the tasks and check back in with the war room regularly.
Change tactics or strategies
Depending on the scale of the emergency, you may have to slaughter some sacred cows to avoid it. Be prepared to change aspects of the business which you consider fundamental, from the target market to the product itself.
If the problem is better solved through smaller scale experimentation, be nimble. One of the greatest advantages a startup has over a more established company is its agility. Change tack in whatever direction you think is necessary, but don’t be bound by past decisions or existing processes.
Sometimes making a change may not be a realistic option. If a competitor starts gaining market share at your expense, you may be tempted to focus your efforts on a different market niche, or somehow reshape the playing field. Be careful not to end up playing Competitor Avoidance Twister – contorting your company too much to avoid direct competition will often end with you offering a product which no one wants.
Particularly when facing down a strong competitor, it’s worth remembering the advice of Ben Horowitz: “there are no silver bullets for this, only lead bullets.” In other words, sometimes simply knuckling down and making your product better than the competition is what’s needed.
If all else fails, the best strategy may be to look for a quick exit before your company’s crisis becomes as obvious to outsiders as it is to you. After all, even if a company like Lyft suddenly realised their business wasn’t going to be viable long-term, competitors like Uber, or other companies looking to acquire Lyft’s market position, tech, or talent would still be keen to buy it. A sale to a competitor is usually the quickest path to an exit in a situation like this.
There you have it. The next time you find yourself getting worried by a big, looming problem, remember not to just panic – panic with a plan.
Kit Kriewaldt is an entrepreneur and strategic communications specialist. He loves to talk James Bond, cocktails, and psychology – focusing particularly on decision making and consumer behaviour. He is also former Chief Marketing Officer of Liquid State. Image credit: Leeroy/StockSnap