Ten Pitfalls For Early-Stage and Growing Companies and How To

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					          Ten Pitfalls For
Early-Stage and Growing Companies
     and How To Avoid Them



             Pete Higgins
                Partner
         Second Avenue Partners
    #1: “Radio is Stuck on Talk”
•    CEO/Company must be bi-modal
•    Be optimistic but introspective and paranoid
•    CEO as voice of customer
•    LISTEN
•    Customer feedback loop is most important
     process in company
#2: Falling in Love with First Plan

• Product is ―done‖; it’s just a sales/market
  problem
• ―Great technology‖
   – Customers don’t care; problem doesn’t exist
   – Too complicated
   – Who’s the customer?
• Recognize it is an iterative process
   #3: Stuff Just Takes Longer

• Product development
• Sales learning curve
• It’s more important to you than the
  customer
• You have to plan for realistic scenarios
    #4: Getting Ahead of Yourself

•    Do not confuse activity with revenue
    –   Brother in law sales
    –   Great meetings
    –   Pipeline Value
•    Jerry Maguire
•    Invest FOLLOWING growth
#5: Paying Lip Service to Being Cheap

 •   Good intentions…but it is a slippery slope
 •   It isn’t supposed to be comfortable
 •   It is okay to be small for awhile
 •   What do you really need?
 •   Minimum now vs. cash crunch
 •   What culture do you want to establish?
    #6: Don’t Treat Board Like IRS
•   Arms length relationship leads to wariness
•   Communication is frequent and informal
•   Good news and bad news
•   If frequent, they can be trained to handle
•   Do the worrying for them
        –   Thinking about right goals and problems?
        –   Right process? People?
        –   Right solution?
        –   Can I be helpful?
   #7: Failure to Manage the
 Company, Even When It is Small
• Don’t assume everyone knows
• Communicate goals and objectives
  – Share successes and failures
  – Enroll people; Encourage debate
• Communicate often; clearly; think about it
  – Think about cultural icons
         #8: Hire in Context

•   Right person, wrong time
•   Right kind of skills and experience
•   Strategist vs. scrappy
•   Big company vs. little company
•   Personality or Culture Fit
#9/10: Knowing What You are Good At
    Or, Why “Founder” Becomes a Dirty Word

• Fixated on first vision
• Personal agenda—it’s not your company
• Over-rating your own capabilities
• Failure to delegate and micromanage
• Statistically, you’re eventually the wrong
  person
• You don’t know if you even want the job
#9/10: Knowing What You are Good At
  Or, Why “Founder” Becomes a Dirty Word

• Focus on your strengths
• Aggressively complement yourself
• Focus outward--make everyone else
  successful
• Ongoing conversation about yourself

				
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posted:10/17/2008
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