1. Failure to evolve.
Markets change over time. People’s needs change over time. One of the biggest problems that I see with entrepreneurs and small businesses is that they start the business based on a single solution, or set of solutions, products or services, that satisfy one particular need or pain point in a market, and they may be doing it very well at that point in time.
But over time, markets evolve, needs evolve, pain points evolve and everything changes. All too often, the people who are providing solutions for those markets don’t continue to evolve with the markets and are left with a bigger and bigger gap between the need and the pain point of the market and the product, service or solution that they’re providing. Add a drastic change in the bigger economy and the speed at which these gaps open grows exponentially, as does the width and depth of the gaps.
The answer here is to keep your finger very much on the pulse of where the pain points currently are in the market and how they’ve changed from when you started your business. Create regular check-in mechanisms to see whether your current solutions are driven more by ego or the desire not to endure the anxiety of change or a continuing need in the market. Then use that information to change the nature of the solutions that you’re providing, if needed, to keep them as relevant and powerful as humanly possible.
2. Perceiving R&D and marketing as separate functions.
Very often people start a business by creating some sort of product, service or solution and then turning around and asking the question, “How do I market this?” Truth is – product creation and marketing are two points along the same continuum. The more remarkable, the more powerful, the more effective you can make your solution, the less you then have to turn around and say “What do I have to do to market this?”
Because, when you get those down, people can’t shut up about how what you’ve created is blowing their minds on a daily basis. Thing is, these elements are cultivated at the moment of creation, not as some afterthought for the product. Focus your energies on how to make something remarkable and delight potential purchasers at the moment of creation and it will make your marketing much, much easier. In fact, it may even turn it into an afterthought.
3. Failure to understand the importance of culture.
A lot of companies roll along thinking, “If I create a solution which completely kicks ass, which solves a problem in the market, that’s really all I need to do.” If your solution is capable of being provided just through one person or completely commoditized and made as an online, downloadable business, that may in fact, be true.
But if you plan on growing a business – a company with people – the interrelationships between you and those people and between them, becomes paramount. You’ve got to focus on what type of culture you want to build within your organization. Same way Tony Hsieh focused on culture as a driving force in building Zappos. The culture becomes a core driver of your business’ success and if its not built right – failure.
4. Over-working and under-thinking.
Very often there’s an ethic in business that says you’ve got to put in a ton of hours to get the job done. In fact, working hard is pretty much an important part of any major business accomplishment, especially in the very early days around launch time and the first couple of years.
But a lot of times the biggest solutions, the greatest breakthroughs, the most relevant and impactful innovation comes not when you’re working, but when you work hard and then step away and allow time for contemplation, and for breakthroughs. When you’re building a business, rather than focusing on how many hours you can put in, step back and really encourage – not only in the way you behave but in the way your employees carry themselves – time for pure thought, time for contemplation, time to remove yourself from the setting and the nature of the work and allow for the greatest revelations to simply bubble up.
5. Going it on sheer will for too long.
Very often a company starts based on the sheer willpower and the sheer drive and energy of one particular person or a small team of people. As long as all of the tasks that need be accomplished can be handled by that person or team, the company continues to move forward. But inevitably, as you scale, you reach a point where those people can’t humanly work anymore.
And if the company will continue to grow in the way that its capable of growing, it will need to be based on a bigger, more systematic set of guidelines that other people can then be exposed to, adopt, and then tap, in order to grow the business more systematically. Once you reach that critical tipping-point where sheer willpower will no longer drive the business, it becomes massively important to have well thought-out systems to build your business from that point forward.
6. Playing prevent offense.
One of the biggest things that tends to happen in business is that they start out led in a sort of visionary, aggressive outreach, innovation manner and then once business starts coming in, the mindset shifts to thinking about how to preserve the wins or the gains that have already been accomplished, rather than focusing on constantly innovating and delighting existing and new clients on the level that they never expected.
This is called “playing the game with a prevent offense.” Instead of trying to consistently win and delight, you’re consistently trying not to give up what you’ve already gained. And, in the world of business and entrepreneurship, it’s pretty much the fast track to failure.
Entrepreneurial businesses can’t survive with a focus largely on keeping what you’ve got. The focus has got to be consistently on continuing to delight and surprise the clients that you’ve already retained while also aggressively moving forward, innovating and pushing to take that level of service to the next level and continue to lead the market. Sometimes that means it’s an uncomfortable place to be in, but it’s a far better place to be in than sitting back and just hoping and praying that you don’t lose a client.
7. Hoarding control.
This one hits close to home for me because I am admittedly a bit of a control freak. As an entrepreneur, and most entrepreneurs I know are control freaks, we have a lot of trouble giving away control and power. But, when you hoard control you not only limit your business’ ability to scale, you inadvertently demean the people that you’ve brought into your organization because even if its not overt, what you’re telling them is “I brought you in here, I told you I trust you. I told you I’m going to hold you accountable to my vision and my growth goals, but I do not trust you to think, to create, to innovate, and to execute.”
When you send that message to the people who work around you and with you, you kill their will and you create a culture of dislike and distrust. Therefore, it becomes really important to take a regular check and take some risks. Allow yourself to feel uncomfortable as a leader in a small business. Hire amazing people and give them control. Hold them accountable to a particular result, but give them the ability to take action, to execute, to create, and show you what they’re capable of.
8. Incentivizing innovation with a carrot and stick.
In Dan Pink’s recent book, Drive, he reveals some fascinating research which showed that for very simple, rogue, mechanical tasks, the traditional carrot and stick – meaning, if you do X, I’ll give you Y and if you do X even better I’ll give you even more Y – tended to work fairly well as a motivational system.
But as soon as you bring in tasks that are more complex, more creative, or innovation oriented, the traditional carrot and stick type of motivation not only doesn’t work, but it literally disincentivizes behavior that naturally would have been incentivized simply by the opportunity to do something very cool. So, when it comes time to figure out how to motivate those types of activities in your organization, take a step back and instead of offering money or particular tangible things as motivation, think about how you can facilitate mastery. How you can allow people the opportunity to move more aggressively toward mastery of something that they’re already intrinsically drawn to and that becomes about the most powerful motivating factor that you can have for people within your organization.
9. Focusing on hours over results.
One of the biggest gripes of a lot of people that I know who work for bosses, is a focus on what used to be called “face time.” You had to be in a place for a particular amount of time, you had to attend meetings because that’s just the way it was. You had to push a certain amount of documents, because that’s the way it was – these were the processes. Meanwhile, all these actions were being taken, meetings were being had, and clocks were being punched, but results weren’t being accomplished.
A much more effective way to grow an organization is to allow people a certain amount of freedom. Allow flex-time. Being at the office for a particular number of hours, being seen at an office, really isn’t relevant if the results aren’t coming. Focus on results. Task people with goals that are meaningful to them. Give them the resources needed to meet those goals and then, step back and like we talked about in #4 above, tell people “I trust you to get this done by this particular date. How and when you do it is up to you.”
Not only will people feel empowered by that level of freedom and trust, but you’ll find them working on it in different parts of the day in different ways that accommodate their lives much better. And they’ll become much happier employees because they have a work situation they can wrap more effectively around their lives and their lifestyles. In the end, we don’t really care if something is within particular hours. What we really care about is that it’s done well and on time.
10. Underestimating the delight margin.
People are creatures of habit. It takes a near seismic shift to make them change routine. Even if the routine they’re in or the solution they’re currently using is sub-par. Even if they gripe about it every time they use it. “Better the devil they know,” they figure. That means, if you hope to move someone from a competitor to you, your product, service or solution must not be 5% or 10% better, but 5 to 10 times better.
It takes that much energy, that much of a difference for you to move somebody to actually take action. Fact is, if they’ve already taken action and committed to a competitive solution, you probably need to ramp that 5 to 10 times up to somewhere between 20 and 30 times better to move them away from a long-term competitive solution.
11. Forgetting the fun.
Most small businesses are launched, at least in part, in a quest to discover then mine the sweet spot between a viable economic niche and some product, service, activity or solution that in some way engenders joy in the founder. So, people like Tony Hawk build a business empire around the joy of the activity they love. In the beginning, it’s fun. There’s an energy to launching that keeps everyone feeling up. But, all to often, over time, that sense of fun begins to evaporate and the focus turns to efficiency, production, systematization, scaling and growth.
These are all critical elements. But, a funny thing happens when instead of being “added to” a sense of fun, purpose and joy, they “replace” those things…the energy of the company begins to tank, mood crashes, productivity falls, morale craters and along with that goes growth and success.
Genuine joy in what you’re doing matters. It infuses and impacts every aspect of your business. Maybe it can’t be there every moment of every working hour. I didn’t particularly love cleaning the toilets in the early days of owning a yoga studio. But, it was a minor blip on a bigger, more joyous radar screen. Do what you can to preserve as much sense of joy and delight as possible for those who help build your business. When you do, not only will you have a better time, your employees will, too. And, that will spill over into every touchpoint with your customers as well.
12. Bailing on your body and mind. Even if you love what you do, starting and growing a business includes a whole lot of stress and uncertainty. There is no way to eliminate them. But, it is mission critical that you develop practices that allow you to move through them without losing your mind and watching your body decompose. That means, like it or not, some kind of daily movement or exercise and some form of attentional/mindset training are not only important in your quest to stay focused, fit and capable of enduring the stress of entrepreneurship, they’re mandatory.