Admit it. Startup founders are scared out of their minds. Whether it's uncertainty about finance, business partners, or failure around the corner. Most aspects of starting up and running your own business are keeping you up at night. Don't worry, you're not alone. With Halloween around the corner we thought that it would be a good time to ask our coworking startup community, what really scared them most of all, and here’s what we’ve summed up:
Invisible Co-Founders: Yes this makes it to the top of our list. When you’re betting your life on if they will contribute what they say they will and what will you do about it if they don’t, it’s easy to get caught up in the blame game. But if you feel that your co-founder isn't pulling their weight and disappearing when you need them the most, it’s time to cut that dead weight off. If not it will disrupt your business environment. Most of the disputes we’ve observed could be avoided between founders if they’d just been more cautious about who they started a company with. So it is mostly not about to the situation but more about the person they signed aboard to begin with.
Tip: Before signing up a co-founder, give their past business contacts a call. Talk to their professional circles that like them and don't like them to understand them at their best and worst.
It doesn't kill a startup when a co-founder leaves, as plenty of successful startups have had that happen in the early stages. Fortunately for you, it's usually the least committed one who leaves which is good riddance. The right people are the most vital ingredients in a startup, don't compromise on hiring them.
Software bugs: Big glitches in software have lost whole spacecraft or even sent tourists diving into the sea, but most software today arrives filled with small bugs.
In a startup’s case a software bug is a problem causing your website/app to crash or produce invalid output, thus stalling your business. It is an error or defect which may cause deviation from expected results, or failure.
Tip: Most bugs are due to human errors, in design or its source code. Hire the right talent to fix it if it seems like an ongoing problem. If it is an occasional popup you can consult with a freelancer with a background IT relevant to the issue.
Plenty startups and ecommerce businesses were killed by bad programmers back in the 90’s. A programmer was hired to implement a businessman's idea. The problem with that is that most businessmen wouldn't be able to tell which are the good programmers or wouldn't even get one that was comfortable with a job implementing the vision of a businessman.
The ideal win in this situation is to find a co-founder with an IT background who is well invested in the technical side of making your startup work.
Investors who raise you up: Undercapitalization and cash flow keeps most founders up at night. You should ensure that you’ve only got as much money as you need and not more, with too many investors vested in your business.
Tip: Remember only to take enough to get to the next step or goal. You should retain control over both how much you spend and what your next step is. Initially it's best practice to set both low, spend nothing, and make it your goal to build a solid prototype or MVP.
Most startup founders who go on to seek VC money take the first reasonable deal they get, which is a good practice to stick by. If reputable firms approaches you with an offer that has no unusual strings attached, you should strongly consider taking it and get to work on building the company in the most efficient way. Bargain-hunting among different investors is a huge time sink, potentially more work than the startup itself so don't spend all your time pitching to investors while your competitors focus on building their offerings.
This leads to one of the single most important aspects of your VC/startup relationship: Make sure the goals for your company line up with your VC's goals for his or her investment. You can now apply to TURN8’s round 9 of funding HERE.
Becoming a Zombie Startup: Silicon Valley Dictionary defines a Zombie Startup as “a VC funded company that doesn't close their doors after funding runs out, but also does not grow significantly. They typically generate enough revenues to continue the business, but the VC is unable to divest. As a result, the company tends to shed all of its brainpower and continues to operate as a brainless zombie for many years. By this point all of the engineering talents has left the company and what is left is a zombie startup that should continue to operate, but nobody's ever going to make any money there.”
Tip: The first thing you need to do is acknowledge the reality of your situation. From there, figuring out what to do next is a lot harder. Most founders choose to fail fast and go out with a bang and a few will choose to fail slowly and eventually meet its end.
Examples of being in a zombie startup:
- You’re working on the same concept or idea after 12+ months and still don't see a launch date in sight.
- You're in your 3rd year of operation and you're still not getting paid.
- You keep postponing sending out newsletters or e-mail updates to your investors and clients, in the hopes of having something more exciting to say next month.
Employees who suck your resources: You can’t pick a bad apple from the bunch. Every company at some point comes across slackers or negative employees. They’re not always easy to recognise, but if they stay around long enough they can damage overall morale.
Tip: Boost morale on a yearly or quarterly basis by encouraging your employees with perks and benefits for a job well done. Keep the team spirit enthusiastic and up from the day they first signed up to a few years into the future. Encourage your employees to attend conferences and training on behalf of the startup so that they feel valued and keep doing a good job.
In conclusion, if you’ve been considering starting a business, take a deep breath and jump right in! Set a deadline for yourself and do something every day that will force you into action. With every action you take, you’ll gain confidence and momentum. And who knows where this exciting entrepreneurial path will take you by next Halloween!
It’s perfectly normal to be afraid. But focus on the things that are within your control. Entrepreneurship isn’t for the fearless. It’s for the individuals who are prepared enough and strong enough to learn from their fears and work past them. Starting up is scary, it can be paralysing to think of all the things that can go wrong. But people do it anyway! Come meet our community of startups at #TheCribb pushing their limits and hustling every day to keep their business running and yet loving every minute of it.
On behalf of the entire team here at The Cribb, we wish you a very Happy Halloween!