As the CEO of Imaginovation, I am always thinking. Every second of the day from the moment I wake up until the end of the day when I fall asleep. Startups require us to stay on the ball, out in front of issues and pushing forward with innovation. That kind of vigilance is exhausting, rewarding and ultimately simply necessary for survival.
Some things in business are more important than others and it’s incredibly easy to get off track and to focus on the wrong things. The ABTs (Always be thinking) of business for tech startups can help leaders to focus on what’s important and to prevent issues that could be potentially damaging or devastating. These are the topics that everything else revolves around. With a solid focus in these areas, you’ll have a better chance at success.
Nightmares and Dreamscapes
Most any leader of a technology startup will tell you that they dream about their company. Not in a negative way, but in a way that’s fueled by a passion to create success and sustainability. While the workday may be over, the investment of time and energy and brainspace isn’t.
From my experience in the technology sector (15 years – Developer -> IT Infrastructure -> Support -> Business Owner) here are the things that keep me up at night, the ABTs of business.
Great customer service can make or break any company, no matter how wonderful the product or incredible the marketing might be. Technology startups are even more vulnerable than many other kinds of companies because of the steep level of competition.
Customer service is driven by company culture, which will form on its own whether you intentionally create it or not. Leaders need to always be thinking about customer service because the experience of the customer is what keeps them coming back and spreading the good word about your business. Negative word of mouth spreads quickly online and once it’s out there it’s nearly impossible to erase. A few unhappy customers can lead to a large loss in sales and a long term problem that you’re going to have to deal with, keeping you up at night. Poor customer responses can sink a small company and pose a serious threat to large ones too. On the other side, satisfied and invested customers lead to bigger and better opportunities.
People want to be treated fairly and with integrity. I know that I do, and that drives me to want to offer my customers the same level of positive experience that I would like to have. As a company you have opportunities, but without a consistent and rewarding customer service experience you’ll find that those opportunities dry up.
You probably don’t need to be reminded to always be thinking about cash flow. Money keeps us all up at night, because whether or not anything else is working, it’s the amount of cash in and out that keeps businesses afloat or sinks them. That concern isn’t unjustified, as more than three quarters of businesses fail due to poor cash management skills. Your business doesn’t have to be one of them.
Aim high, but treat your cash flow like you’re achieving lower. It’s terrible to think about, but there will be times when people do not pay you for your services. You’re going to go out and do some great work, investing your resources and talent only to have a percentage of your clients run off without paying. Many startups fail to factor that reality into their cash management, a miscalculation that can lead you to shutting your doors.
The most important lesson that you can learn about cash flow is not to fear it. Be honest with yourself about where you are and what your growth curve is likely to look like. Be honest about your expenses and don’t neglect to track them and evaluate them consistently. This is no time for rose colored glasses, or to shy away from thinking about your cash flow because it makes you uncomfortable.
It’s impossible to overstate the importance of contracts for startups. Having good contracts in place will allow you to get some more sleep at night, or at least to stay up fleshing out exciting new ideas rather than fretting over issues. You need to have some form of written contract with every vendor, every supplier, every freelancer, every client that you work with. Without a contract you have almost no recourse if something goes wrong.
As I mentioned before, clients will skip out on you without paying. That itself is a compelling reason to have solid contracts with your clients. It’s not just having a contract that’s important, you need for it to be a smart one. Think about the structure of your contracts. Setting milestones for projects with payments spread out over the course of the project will keep you from getting in too deep in the case of a loss.
It’s also important to have contracts with the people who work for you and to build in lead time within those contracts so that you stay well ahead of client deadlines in case there’s an issue.
Every area of your business needs to have a backup plan, because nothing is 100%. Whether it’s a contingency plan for protecting your electronic information from loss or an emergency plan for what your company does in the event of a snowstorm, thinking about what’s going to happen when the unexpected pops up it critical to your success. You also need to be ready to get things done in the event that personnel within your company can’t complete their duties due to life events, illness or incompetence. Even the highest performing members of your team will fail at times. Often it’s going to be you who picks up the slack, and that’s ok as long as it’s a reasonable amount to be picked up.
Startups rarely have the resources to have extensive backup systems in place, so often the solution has to be a creative one. Companies are successful because they’re consistent and that takes preparing for a wide variety of potential problems and disruptions.
“The Plan” is essential to have, a great place to get started, but without backup plans you’re running the risk of losing your business. Always be thinking about what your next step is if something falls through, and you’ll be ready for anything.
Always be thinking
Each and every small decision you make can be destructive to your business. On the flip side, good decisions can result in huge rewards. That’s why you need to be thinking all of the time – simply phoning it in is not going to cut it. You’re where the buck stops and the success begins.
I’ll leave you with this gem from the classic Glengarry Glen Ross starring Alec Baldwin. Technology startups that survive and thrive are always thinking, always closing. Always be ahead. Always be vigilant. Always be closing. Always be thinking.