The One Mistake Almost Every Founder Makesadmin
What is the first thing you should do when you decide to launch a business? Incorporate? Raise money? Create a great website? Buy an awesome logo?
I had a “meet and greet” with a prospective law firm client a couple weeks ago. The company sells audio fixtures and equipment for music shows and festivals. Its work is apparently top notch, its reputation and brand are growing, and the company has more work than its three founders can handle. After telling me all that great news, one of the founders, somewhat sheepishly, confessed that they hadn’t spent much time getting their legal or financial house in order. He was obviously somewhat ashamed that they hadn’t done anything along these lines – they had not formed an entity, opened a business bank account, nothing really. The founders looked at me, waiting for me to tell them that we needed to get right on these things. But, I had nothing but praise for them.
It is refreshing to see founders with their hearts and minds rightly focused – on sales, landing customers, wowing those customers. So many entrepreneurs spend far too much time behind closed doors, tweaking pro forma models, sprucing up pitch decks, writing wonderful form customer contracts, etc. All these things have value, but they are a distant second to getting out and finding a customer. In my book, that’s priority number one – get a customer, make a dollar.
I can hear you now – “But, Brett, if I don’t form a corporation or limited liability company to house the business, I’m personally liable if something goes wrong.” Yep, you might be. But you are also going to be personally liable for a business failure if you spend all your time focusing on back office stuff and don’t get out there and bring in some income. Besides, a company with no customers and no operations runs very little risk of getting sued.
The Lean Startup Method gets a lot of attention these days. What I love about it is the focus on action. Do stuff, try stuff, figure out what works, iterate. Put products and services out there, sign up customers, gather feedback. Don’t spend two years behind closed doors making your product perfect, particularly if you are creating a new product or service that the market hasn’t seen before. Guess what? “Perfect” is perfect in the eye of the beholder. The market may flat out not want what you are building, at least not in the form in which you are planning to roll it out. So make something and get it out there. Keep some of your powder (money) dry to make changes based on market feedback.
In the business classic, In Search of Excellence, Tom Peters and Robert Waterman, Jr. identified a common attribute of hugely successful companies – they have a bias for action. They try stuff, they learn from it, they tweak things, they try again. They aren’t afraid to fail, and a lot of the failure should occur in the marketplace, with real customers. When I launched a mortgage company in 2001, my first startup where the buck stopped with me, I initially spent too much time behind closed doors when I should have been out selling. I was fresh off a stint with one of the largest corporate law firms in the world. In the world of high-end law, you spend a lot of time making things perfect, dotting your i’s and crossing your t’s. That is what our clients wanted us to do and they were willing to pay us well for the time and effort. Every deal was overstaffed, at least as measured against today’s standard. Documents got revised again and again, fixing punctuation, making everything beyond perfect. That mindset is in sharp contrast to the “get it done” mindset most companies should have when they launch. I brought that bias-for-perfection mindset into my new venture and it cost my company the strong start it needed. Plus, there was that part of me that didn’t want to get my hands super dirty, wrangle with customers, etc. I wanted to build something pretty and let others do the heavy lifting. I wanted to play puppeteer and direct others from on high. Customer service? Sales? Ugh. Can’t someone else do it?
Think you need your website just right to get out there? Afraid to show up without your business cards, which are still at the printer? Think your logo needs a little work and don’t want to launch without it being finished? Get over it. No one really cares about your logo. Your logo isn’t going to make the difference in whether or not you close your first sale. “But, Brett, what will I say when they ask for my business card?” How about, “I ran out.” Or, “I’m having more printed.” Don’t feel comfortable with those responses? How about, “Business cards? We’re not using those anymore. We’re getting ahead of the curve. They’ll be extinct within three years.” Say anything. Or nothing. My point is, don’t use any of these things as excuses for not getting out there and landing customer number one.
I learned my lesson in the mortgage company. We burned through our capital quickly and our perfect logo, ideal form independent contract agreement, and meticulously organized company files weren’t recognized as currency by our vendors. Those were some lean days for me. If you have more money than Google, you may never have to get your hands dirty. But if you don’t have a bottomless coffer, you need to have a sense of urgency about getting out there and bringing in customers (and, if you’re the leader, you better be out there showing your team how it’s done and learning what matters to your customers). We got it turned around eventually. Along the way, I happened to learn a thing or two about what our customers wanted. Imagine that: a company president who understood what it was like to be on the front lines.
Yes, I learned eventually. But I am hoping that you don’t have to struggle for a couple of years while learning the hard way like I did. Tweak your pro forma, spruce up your pitch deck, get the messaging on your website just right, but get out there yesterday and land a customer. Bring in the first dollar. Yes, you. Get hungry, get dirty. Interact. Try. Learn. Tweak your offerings. Sell more. Get it done. Everything else can wait.