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Management, 5 MIN READ

Are You Ready
to Lead a Startup?

September 9, 2019
ALEX SLOBOZHAN
Startup development is only as successful as its leader.

If you are considering a switch from your stable nine-to-five job to a full-on entrepreneurial adventure, stop for a minute.

Let me ask you four questions. They are harsh, and they are provocative. But honest answers will help you decide once and for all if now is the time to start your company.

Some answers might not be what you've expected, but that doesn't mean your idea will never turn into a unicorn. It means you have some more preparations to complete before you start a business.

1. Can You Take a Wage Cut?

According to a 2018 report by KPMG, 7 out of 10 startup founders earn less than in their previous jobs. Only 11% of the survey responders manage to make more. Most founders are unsatisfied with their earnings but understand it is a short-term necessity to get the company off the ground. Investors can also affect the founder's salary and balance it against the financial needs of startup development.

According to Erik Larson, creating a viable business can take five times longer than expected, which makes the financial question the most important one. Larson launched Cloverpop after leaving his position as a senior director at Adobe Systems. He had to rely on his wife's support and successful career to take a chance at startup leadership.

As we've already discussed, personal finances and loans from family members and friends are the sources of seed capital for the majority of startups. You have to be ready to invest your resources before you look for funding. Even after the company makes a profit, it will take a long time for your earnings to return to the 6-digit level you have become used to in your corporate position.

If you are willing to be patient for the ultimate satisfaction of making a fortune with your business, let's move on to the next question.

2. Are You Ready to Work All Hours?

Survey shows that 9 out of 10 startup founders work over 40 hours per week, with an average workweek being 64 hours long. The majority take devices to bed and continue to work at night.

Moreover, 40% of the responders haven't had a single day off in three months, and 23% haven't had three days off in a row in over a year. These numbers might be a little better than those of Silicon Valley executives, but they still pose a risk to work-life balance.

Startup leaders are ready to work long hours, but they realize it's not a sustainable approach. Only a reliable personal network helps them keep going. For instance, Amy Chang left a job as the Head of Analytics at Google to become a co-founder of Accompany. According to Chang, she only found the courage to leave her position with Google because of her husband's support.

Let's say you are ready to work day and night for less money, but can you find the right people to help you on your startup development journey?

3. Can You Hire the Right Talent?

The inability to hire the right people is the top barrier to success, according to 66% of startup founders. At the same time, finding the talent is the top assist on the way to success, according to 70% of entrepreneurs. This applies both to co-founders and employees.
Many startup development leaders try to find their clones to fill in senior management positions in the company.
However, this is not a sustainable strategy. Instead of boosting one set of skills across all members of the team, Culture Index experts recommend you seek talent with experience and skills that complement your own. Think of your weaknesses and find the person that can balance them out. Don't try to model employees in your image; let them do what they do best. Making most of a variety of talents will make your startup unstoppable.

Julia Hartz, the founder of Eventbrite, suggests meritocracy for people who are learning how to start a business from scratch and run it successfully. Instead of rewarding overtime and bold promises, focus on performance and measurable results. This will save your company from dead weight and ensure the people who produce the best results want to stay on and succeed in your company.

4. Are You Willing to Give up the Power?

Inability to close sales and the lack of marketing capabilities are also among the top barriers for early startup success. Considering you can't take care of all business processes on your own, team management, the ability to delegate tasks and empower individual members of the team are crucial.

According to Peter Drucker, who is considered the father of management, delegating the power to control projects and make decisions motivates employees. They feel more confident and valued by the company. As a result, they are less likely to leave your startup in a pinch and move for greener pastures.

Disney is the perfect example of a giant corporation that knows how to split responsibilities and decision-making power between its new acquisitions. Pixar, Marvel Studios, and Fox all save partial artistic independence that allows them to perform best and create disruptive products in their niches.

Julia Hartz of Eventbrite also knows the power of entrusting more responsibilities to her team. She claims empowered employees work extra hard, and careful delegation frees up time on her schedule for large-scale management tasks.

As the CEO of WOBB, Derek Toh feels it is essential to pay attention to your star players, not just runner-ups. According to Toh, when founders focus their attention on the weakest team players, high performers can often feel unrecognized and underappreciated. He recommends celebrating every achievement and showing appreciation for star players to keep their motivation and performance high.
Startup leader

Takeaway

There's much to startup development and being a leader. You must have a laundry list of skills and talents, but first, you need to ask yourself important questions. DO NOT leave your day job to start a company, if you

  • Don't have a sufficient sum to support investment in your business and a drop in your income.
  • Aren't willing to give up your family time and work round the clock at least during the first months.
  • Can't find the people to complement your skill set and produce measurable results instead of busywork.
  • Aren't ready to delegate most tasks and empower your team to find solutions and make decisions.
How did you answer my questions? Do you agree with my take on the main challenges startup leaders face?

Please, share your experience, thoughts, and ideas in the comment section.

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