Sefilmclub Business Blog

6 Reasons Why Startups Should Skip the Big-Bang Launch

2017-04-14T03:26:00.000-07:00

Big-bang hard launches make sense for large enterprises like Apple or Microsoft, who are building on existing revenue streams and have the resources for lavish events, Superbowl ads and large inventory buildups. But for startups with limited resources and experience, I always recommend a soft launch or toe-in-the-water approach in a local market -- and scale up later.

In fact, for startups, it usually makes sense to announce your solution on social media and blogs even before you have built the first one. Think of it as an inexpensive way to do some real market research -- which big companies can’t do, for fear of getting an antitrust violation for announcing vaporware to impede the market. Smart startups are already doing it on crowdfunding platforms.

Then it’s time to evaluate response and feedback, make the necessary plan pivots, and try it again. Iterating this process, until you see some real traction, is far less risky and expensive than the big-bang rollout. Let me summarize the advantages of this to your startup:

1. Immediate real customer feedback

Startups which insist on operating in stealth mode in fear of competitor response miss the more important customer response. In addition, with today’s fast moving market, the whole environment can change in the year or more you are hiding out to get the solution and your total infrastructure built.

2. Small real revenue today is better than large later projections.

All investors want to see real evidence that the dogs will eat the dogfood before they give any credibility to your hockey-stick projection curves. Funding to support a rollout is much harder to procure than funding to support a scale up, after an initial hint of success.

3. Maximum agility for required pivots

It’s amazing to most entrepreneurs how fast their little startup can become a battleship, hard to turn in a storm. Executing multiple iterations while very small is critical for anyone with a limited budget and runway. Startups need the agility to test various business models and positioning messages.

4. Partners and distribution channels will take you seriously.

In many business arenas, brand-name partners and distribution are a prerequisite to scaling the business. A validated early customer following will get their attention, and allow you to negotiate the support you need in time for the real business surge.

5. Build your audience and the product at the same time.

With social media and inexpensive website tools, you can build momentum in the marketplace without the need to spend money on a big-bang rollout. With these tools, it’s easier to measure impact and progress and make required changes than trying to measure big-bang results.

6. Time to train and prepare staff to deal with customers.

A soft launch is less stressful to the team and lets them more gradually re-acclimate from a development environment to a delivery environment. It takes time to learn how to do customer service, interviews and demonstrations. A few missteps can totally destroy your big-bank launch.

But an iterative rollout or soft launch should never be used as an excuse for poor planning or an untested solution. Especially with a minimum viable product (MVP), every feature included must be high-quality, documented well and properly marketed. Free give-away products and beta tests are not the same as rollouts -- you get no validation of the business model.

In any launch, it’s important to have the right training and controls in place to prevent a visible marketing or delivery disaster. Customers have long memories, and they can spread the word very fast with social media, so negative reviews can easily be non-recoverable. It is much smarter to make a few people very happy than to leave many people or even a few unimpressed.

Most of the superstar companies we know like Facebook and Google have never had a big-bang rollout. They started slowly, in limited areas such as one university or city, and then expanded slowly, based on customer demand and resources available. Even big brands like McDonald's and Walmart entered the scene one store at a time.

Yet some entrepreneurs find it hard to resist the urge to get their product or service into the hands of a large number of people at one time. They are so certain that customers are poised and waiting that they forget the costs of a hard launch -- and the risks of a highly visible failure. It’s one of the few times in a startup when it actually pays to be less aggressive.

4 Founding Essentials for Creating a Culture of Resilience

2017-04-02T03:22:00.000-07:00

The jury is out. According to research, CEOs, founders, and senior executives all face similar challenges no matter what industry they’re in: building talent, scaling the business, and reacting quickly enough to change.

When you start a business the only thing you’re worried about is keeping your head above water -- paying the bills, generating revenue, and not eating another ramen noodles dinner. That’s it. However, as your company grows more and more successful and demand increases (ideally), the need to scale organizational competencies grows with it. While the need to scale is natural (a fifty person company works differently than a 500 or 5,000 person company), the behaviors that garner success are not. If you haven’t established the right norms, that’s when you look back and go, “Uh oh. We need to change how we do things around here.”

Don’t let it get to that point. Starting a company is one thing; starting it right is another. Just as a house requires a strong foundation to support its infrastructure and withstand unexpected catastrophes, startups are no different. To start off on the right track apply the below practices beginning day one of your new venture:

1. Share your toys.

Being transparent about decision-making and the criteria used to arrive at those conclusions serves three things.

First, it helps others understand your thought process so they can learn and adopt (or not) for themselves. Second, if Joe knows how Sally two levels above him arrives at a decision, then it empowers Joe to feed Sally the right information she needs and ignore the impertinent, thus saving time.

Finally, it doesn’t take a rocket surgeon (that’s a joke) to know that honesty builds trust. State Treasurer of Ohio Josh Mandel instituted the Transparency Project, an online database that allows residents to view state expenditures down to the actual check used. If the government can do it then, well, let’s just say anything is possible.

2. Communicate consistently.

There’s a saying I share with my coaching clients: You can over-communicate, or under-deliver, but the choice is yours.

By over communication I’m referring to touch points through the day and calendar year that are as reliable as a hangover after a night of mixing red wine and tequila shots (true story). When employees are consistently provided feedback on their performance, roles, responsibilities and expectations, there’s no ambiguity about where they stand; they can focus with laser-like precision on any paint points that exist without stressing about the unknown.

Remember, though, that there’s a difference between micro-managing and overly communicating. Micro-managing is about control; over communication is about awareness. Don’t be the micro-manager everybody loves to hate.

3. Hire for fit.

Hire for character, train for competence, coach for performance. The people you associate with and with whom they associate all fuse together to create the culture and brand that others will either pursue or purposefully avoid -- much like walking on the other side of the office hallway to avoid (yet another) awful conversation with Johnny.

4. Define winning.

Along the lines of transparency comes a shared definition of winning. Everybody, across all business units, needs to know how the CEO defines success so they can map their efforts toward it. Unclear language or an absence of clear metrics create unwanted ripple effects that put large burdens upon frontline employees trying to navigate uncertainty.

Just as people need personal development every day, so too do organizations require daily cultivation to sustain a culture of excellence. Start today, but continue every day.

How to Weather the Storms of a Startup

2017-03-10T03:18:00.000-08:00

Running a startup is not all sunny days and clear skies. In fact, first-time founders and serial entrepreneurs alike will tell you, there are weeks and months of struggles, minimal hard-won successes, daunting lessons, crushing pressure, and financial instability involved in running a company. That’s why it takes a certain kind of person to believe in themselves and weather the sturm und drang that may wash over them. For an idea of the unwieldy weather to come, read on.
A Rain on Your Parade: The passion is out of balance.

In the earlier phases of a startup, hiring time is always a phase of mixed emotions and excitement. You should be happy that you’re turning this partnership or solo project into a team, and you’re excited to see your progress. On the other hand, you may not really have the funds to hire the best talent you can find -- often you may even have to outsource your biggest responsibilities, or offer the new hire equity and experience (which doesn’t look as impressive as a biweekly paycheck). This turn of events can cause a slight disparity in passion: You see your startup as your reason for living, and this person may see your startup as another job. You’re on that grind every waking minute, and they’re part-time players.

But don’t let that get you down. If you can win over your employees with an awesome product and your sheer ambition and energy, then you can surely win market share.

Ain’t No Sunshine When She’s Gone: You haven’t found the right cofounder yet.

Nothing quite highlights the loneliness of quitting your day job to be a full-time entrepreneur like riding solo, without a cofounder. A cofounder in the operation you’re trying to run is more than just a friend, more than just a “business partner.” Your cofounder helps balance your skillset, open you up to a new network of important people, flesh out your ideas, and even help you get funded, since investors often look for a more secure team dynamic. It's important to remain patient and not rush into finding just any partner. Flying solo lets you expand your skills while you look for the Bonnie to your Clyde. You may even find that you can handle the operations all on your own.

Rain Check: You hired the wrong programmers.

Developers and engineers can be notoriously hard to find, especially if you’re operating on a tight budget and are based outside of Silicon Valley and Boston. Yet, there’s little you can do without these angels. You may try to snatch some budding engineers out of university, but it’s still a gamble. If you can afford an A-level programmer, you may not be able to afford many others. When it comes to hiring developers, you might not need top-level experience, but you should make sure they’re obsessive about their work ethic, willing to learn, and excited about your startup. After all, a newbie can be supported and grow to A-level status.

Rain for 40 Days and 40 Nights: Your product is running behind.

Most startups, as much as the movies would have you believe, don’t run like clockwork. Products don’t get built in a garage in an uplifting montage and immediately wow influential members of industry. Especially now that everyone pictures themselves as an entrepreneur. Most of the time, the last thing to come through is the product itself. Often, a founder will make thenrounds at conferences and hear, again and again, “This sounds like a really great idea; please come back to me when you have a working prototype and we can talk money.”

On top of that, you have to consider when is the right time to ship to market, and calculate how much you’ll have to compromise financially. It is like waiting for the storms to end, and for the sun to come out -- only you don’t really know when that will be -- especially because the CTO you just hired right out of grad school in exchange for equity is shaping out to be a horrible meteorologist.

Isolated Showers: The market is smaller than you had anticipated it to be.

You’ve finally launched, and you’re ramping up your campaign to full force. However, for whatever reason, your numbers are falling flat. After the initial bump in early adopters, you haven’t been getting much hype, and your subscribers haven’t really turned into customers as you had predicted they would. Maybe you launched your product with a few bugs still left in it, or maybe you got it all together, pristine and exactly as you want it, but you arrived late to market on the heels of one of your closest competitors. Or maybe people who had thought it was a great idea when you talked to them think it’s just that: a great idea, but not a bankable business.

Whatever the reason, it’s important to have an open mind about this situation and go back to the drawing board. Think about potential features you can roll out, or get your marketing team together to craft a unique social media campaign. Timing is everything, so watch the market. These are the days you should be praying for a rainbow to appear.
“We Got Cows:” You’re scaling way too fast.

So while you were still mapping out your projected timelines (which are, inevitably, running behind), you decided, “Now is a great time to hire a marketing team.” There’s a blog for a product that doesn’t really exist yet, a growing number of early adopters who are waiting, like you, for the app to come out; you’re commissioning great content and paying out of pocket for it, and shopping around for an office space because your data is telling you that as soon as you get the product out, people will be positively chomping at the bit to get to it. Maybe you’ve just raised a million on Kickstarter, and you’re making up for lost time by hiring a few new employees.

At this point, it’s important to stop what you’re doing, take a step back, and maybe take a quick look at the hurricane that’s about to descend at your footsteps -- premature scaling is the number one definable cause of startup failure. Whether your company has too much of a good thing and is falling behind, or it isn't ready for such large changes, premature scaling is something to be aware of. Even if you’ve been blessed with a windfall of money and a bump in sales, you should still consider which of your efforts aren’t necessary and scale at a rate both you (and your business) can handle.
The Calm After the Storm: You’ve already failed.

No matter how rocky the last stretch was, know that you’re in good company. A startup failure -- something that happens to 90 percent of companies --- is only the first milestone towards success. Albert Einstein himself said, “I have not failed. I’ve just found 10,000 ways that won’t work.” You’ve just found another couple of ways that won’t work. Maybe you’re actually relieved that the struggle is over, that you’ve cut the cord and now you’re taking the time to go over all the storms you’ve weathered. Now you know more about yourself, know what to avoid in the future run, and, finally, you can see clearly now, the rain is gone.