1 Partly Cloudy | Experience is what you get …

Experience is what you get …

… when you didn’t get what you wanted.

In that vein, check out this pithy posting from James Geshwiler for Xconomy Boston listing some of the ways that companies can flame out. What may seem like an invitation to schadenfreude is in reality a useful exercise, especially for those who work in resource-constrained environments like startups.

Right at the top of his list are problems with scaling up too agressively:

Only about 1 in 100 companies that pursue venture capital money get it. Probably the worst thing you can do right after the financing is then to blow this precious resource. Yet, there is tremendous pressure to scale the company for a large market quickly.

It’s easy to underestimate the pressures that building an unproven sales model add to the pressures of building an unproven technology. That constraint gives every problem a short fuse. People unused to the necessary pace of problem resolution in a startup can get blind-sided by this very quickly.

To Geshwiler’s nice list, I’ll add this general observation, which is applicable to companies of any size: constant and effective internal communications of the company mission, strategies, and tactics is critical to success because no business leader can be everywhere all at once to guide the actions of all team members.

Indeed, the days of the business leader as central decision maker and authority ended with bell bottoms and wide lapels. Your teammates will face decisions with make or break impact on the health of the company. If they haven’t been a part of the mission and strategy discussion, they may make crippling mistakes.

I have seen companies where no two people can give the same product description, or name the top accounts, or credibly compare the features of the product to that of the competition, or even articulate the company’s core values.

Agility without direction is just schizophrenia.

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