Startup CEO: The GOOD, BAD & UGLY

Being the CEO sometimes really sucks! It really does…

I’m a newbie CEO. In fact most startup founders are first timers. When I started I did not know exactly what was expected of me. Afterall, it’s not the typical job title and description. I looked around and found some marginally useful corporate descriptions. But what I’ve recently found is much more helpful!

The job of a startup CEO is:

“A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.”, Fred Wilson

These key responsibilities were reiterated by Jason Goldberg and Jason Baptiste, so there is a solid basis. However, what they don’t tell you is what an enormous challenge it is building and running a startup as CEO.

In my experience over the last three years of being a startup CEO and meeting other startup CEO’s, it isn’t as glamorous as glorified by the press. It’s a job that sometimes really sucks!!

The BAD

Responsibility... What could be worse – everything is the CEO’s fault. Yes, everything! It’s the only way to get a company moving forward. Someone has to make the final decisions. Unfortunately these decisions are often ‘between a rock or a hard place’. And one wrong turn and the startup is toast. To make matters worse the CEO often doesn’t have all the information needed to make informed decisions. There is also too many things to do, in too little time in a startup. It’s all a heavy weight to bear.

Founder CEO’s are not perfect and mistakes will happen. Of course, no one is perfect, including the people who work for the CEO. If the CEO has done their job well, they’ve found ‘grade A’ employees. But employees do not have the undying love a founder has for his/her startup. A founder will often want to keep re-writing, re-designing or re-developing something until its perfect.

However, there’s not luxury of time in startup and employees are not always willing to repeatedly go over and over the same thing. So, the CEO has to let somethings slide. There is no other way. They cannot grow on their own as a one/two-man business. Businesses are about people. People are about trust and creating a culture. And culture is about the founder letting go. So let go!

The UGLY

CEO ego... When things are going well the CEO starts to believe in his or her own words a little too much. They think they know everything! It becomes poison to the company. They start saying everything is down to them. They made this company. The founding CEO worked damn hard and now its time to bask in their own glory.

Wrong!

Yes, their passion and determination was needed to start the idea but in reality their narcissism becomes their cage. And a prison for the company. A business is built upon people, and not just the CEO. It’s all about the people.

The GOOD

Creativity… By now you’re probably thinking it’s all bad to be a startup CEO. There are huge upsides that make the responsiblity and challenges so worthwhile:

1. Opportunity – As an old friend said to me a startup is an MBA for life. Startup’s brings the opportunity to learn so much about: yourself, your friends and customers, your market, your competition, and more. It is a learning fest! CEO’s are in a position to help everyone around them stretch their capabilities and learn.
2. To create – A startup brings the opportunity and perfect platform to make something new. We humans are made to pass on knowledge (learn from each other) and to create. A CEO steers the company strategy and executes a vision to create something new.
3. Love –  We all want to feel appreciated, be in a caring environment and have fun.  As founder and CEO they start and set the tone for the culture of the organisation. However, remember that “as an effective leader you can’t aspire to be loved by everybody”

With such Bad and Ugly things surrounding the CEO it is so easy to see why CEO’s give up and startups fail. Paul Graham said, one of underlying causes for startup failures is usually people getting demoralized. Ben Horowitz puts so well:

“As CEO, there will be many times when you feel like quitting.. Great CEOs face the pain. They deal with the sleepless nights, the cold sweat. The great CEOs tend to be remarkably consistent in their answers. They all say: “I didn’t quit.”

Ultimately a startup is not about the CEO, it’s about the people! And the CEO needs to bring hope. Startups are damn hard for everyone. It is the CEO’s role to create faith and willingness to believe there is a chance that things will come good, against all the odds. And help everyone to keep going!

Loving the Underdog! PART3 – Why we Love ’em

This is the final part to my Loving the Underdog blog series, with previous posts: PART1: The 800lb gorilla and PART2 – City of creation.

I’m continually amazed by the support and help my startup gets from other startup founders and company employees. They seem to go out of their way to help and support us without expecting anything in return. I’ve previously called this support Startup Karma in my ‘5 shocking things founding a startup’ post. This help is core to our economic innovation and creativity. Without startup karma we would be ruled by the same corporations forever!

Getting by with a little help from my friends
Nottingham Young Entrepreneurs Event

Startup Karma surprises and shocks you when it happens. Other founders survived to tell their tale and know exactly how hard it really is. Employees have recognised or have seen what a challenge a startup is. These people introduce you to others, give you valuable advice or become your early customers. They give you assistance when you really need it. They even sometimes put themselves into a difficult position to help. The catch is, startup Karma can’t be forced. You can’t ask for it. It just happens.

The reality is few people really want to work for a faceless corporation or company – see my post “Running a start-up is like being punched in the face repeatedly… but working for a large company is like being waterboarded.”. In our hearts we want to feel free to choose the things we want work on. The things that motivate us. In a big process driven organisation you are often told exactly what to do. Your creativity and entrepreneurial spirit is gradually worn away.

We see the potential, the creative spirit in younger companies and sometimes we’re in a position to help them along the way. We believe in hope. ‘They just might beat the big guys..’ This little v’s big scenario is played out time and time again in business and in stories. Think:  Apple v’s IBM in the 80’s; Virgin Atlantic v’s British Airways; and Dyson v’s Hoover. Over and over again the cycle continues.

So why do we love and want to help the underdog so much..?

1. Passion – It is easy to become enthused by the passion and determination of the underdog. They believe, have faith and are willing to sacrifice much.
2. Control – Individuals, especially in the West don’t like the idea of being dominated by large companies or organisations. We have a long history of fighting for independence and freedom. Underdog’s help keep freedom.
3. Making a difference – We all want to make a positive difference to the future. By helping the underdog we can influence the future. And we know helping the big companies will have little effect.
4. Influence – By helping the underdog you can have much more say into how the product or service works.
5. Innovation – The underdog is far more likely to innovate. They have no choice. A differentiated product/service has to be produced. This is good for everyone, especially those that have helped them on the way.

Of course, every dog eventually has its day. When a successful underdog inevitably becomes the dominant player the tables are turned and the whole cycle of little startup v’s big company then starts over again. It’s the great virtuous circle of our evolutionary economic system.

Me, I love being the underdog! It gives you something to fight for.

Success isn’t about the money…

In my continued theme of having a rewarding life without money-making you happy, here are three fantastic videos of entrepreneurs to illustrate the point.

The first is a TED video from entrepreneur Richard St. John, who focused too much on the money and lost everything. The 2nd is from Morton Lund.

Morton invested in many, many tech startups, made a pile of cash and then lost it all on a newspaper. Morton is a very charismatic, colourful and entertaining character.

The final video is a video diary from Mitch who’s just lost everything and is starting over again.

Richard St. John: “Success is a continuous journey”:

https://ted.com/talks/view/id/572

Morton Lund on ‘focus’:

Mitch lost everything and is starting again:

 

Here’s a great quote to finish on: “Success isn’t measured by money or power or social rank. Success is measured by your discipline and inner peace.”, Mike Ditka (American Football Player, b.1939)

“Startups are damn hard”, but rewarding..

I read Jazzy Chad’s emotional and brutal ‘Startups are hard post‘ and wanted to add my own comments. I don’t know Chad but in my opinion he’s being very hard on himself. His lack of reaching his goals and achievements seems to be tearing him apart and making him frustrated and bitter. Yes I agree startups are damn hard, but they are also rewarding, fun and fulfilling. Let us not forget this.

I’ve drawn out and condensed some of Chad’s text and added my comments. I thank Chad for his passion, honesty and putting this in the open.

Startups are hard. No, startups are damn hard.

“Startups that die rarely talk about it publicly because it is frustrating, embarrassing, and most of the time the people involved want to forget the whole mess and move on rather than sit around talking about the fact that they failed.

Most people don’t want to admit that startups are hard, either, because to admit something is hard is to admit that you don’t know everything there is to know about a certain topic and to display weakness.”

I whole heartily agree (admit) that startups are damn hard. I’ve always said this 5 ‘Shocking’ things founding a startup, Startup vs Home Life, Entrepreneurs: Beating the employee out of you.. You have to admit something to truly embrace it. We failed when we started.

My co-founder and I spent seven months and a pile of cash building something that went nowhere. It took us time to get over it but we did. There were lessons to be learnt from this experience, they just take time before you see all the dots join.

You’re Nobody Till Somebody Loves You

“In the Valley, you are a Nobody until you are a Somebody. Trying to launch a new product as a Nobody is hard. Trying to get press as a Nobody is very hard because nobody knows who you are and so they don’t care about your product.

Raising money as a Nobody isn’t just hard, it is nearly impossible. There are a few major factors that investors look at when making an investment decision. Two big factors are Traction and Revenue.”

We’re not in the valley, so I can’t comment on this location, but I know nobody is listening to us where we are! In my mind the only people that real love comes from is your customers. We prefer to focus on them.

“Jealousy… is a mental cancer.” -B.C. Forbes

“Am I jealous of other companies’ success? I would be lying if I said no. I am slightly jealous when I wake up and read another story about some company raising a million dollars for some idea that makes absolutely no sense to me, or seeing an acquisition of a company for a product I did not feel was particularly well executed.”

I do also suffer from this sometimes. My ego gets in the way. But then I remember the reality: it’s not easy and that mostly everyone will have been through many, many challenges to become a success!

Sacrifice

“Startups demand sacrifice… Has it all been worth it? If you are expecting me to say “Yes, of course!” you would be wrong. The truth is, it hasn’t been worth it at all… yet.

Financially speaking, we are much worse off now than when I took the plunge. Of course the goal is for it to be worth it someday, but it is unclear how long it will ultimately take. In other aspects of my life, it may have been worth it so far, but it is hard to quantify those things.”

Yes, startups demand sacrifice! Has it been worth it for me, hell yeah. I’ve said this before: “You have to let it all go…fear…doubt & disbelief…Free your mind! and Life, death & startups. Why’s it been worth it – because startups aren’t just about the money.

They’re about life. More specifically life experiences with people around you.. Don’t get me wrong money is vital. It’s the lubricant for our companies. But money is not the heart and soul of an organisation, a company. It’s in the people: co-founders, colleagues, friends (including your customers).

Startup Depression

“…The ultimate reality, though, is that we failed utterly at fundraising. We ended up wasting a lot of time. We had dozens and dozens of intros which led to about 40 or so meetings. After spending 3 months and hearing “No” 39 times we decided to just give up raising money. We looked around and felt like everyone around us was raising insane rounds with no problem. The net effect was that it killed our morale dead.”

After hearing, “UR DOING IT WRONG!” so many times, it’s hard to think that you’re doing anything right. At that point it’s very hard to soldier on. We had made a terrible mistake; we had given control to the investors, and they weren’t even giving us money!…

The lesson here is, if you are having trouble putting together a round in the first few weeks of actual investor meetings, just say, “screw it,” and get back to working ASAP.”

Every time I go into a conversation with an investor or investment adviser, all I hear is demand after demand.. This has happened right from the beginning of our startup. They want a solid product, more revenues, more customers, longer term contract, etc.. On and on it goes.

On the other hand you have customers. They are different. Yes, there are demands but they are willing to pay if you’re of value. Don’t get me wrong investors are vital but customers come first and I think Chad is getting that wrong way round.

Going Forward

“Which leads us to: so what now? Paul and I are not ready to quit. I personally don’t really know how to quit. When I make a commitment, there is very little that will stop me from following through, even in the face of adversity. I believe you have to adapt to play the cards you are dealt. We are willing to see this through to the bitter end if necessary. If this means changing course and trying something new, then sobeit, but while there is money in the bank we will continue on. We have some ideas and are investigating them further.”

For me knowing when to quit is the hardest question for any startup founder! Unfortunately startup founders often become obsessed by achievement at any cost. They become like sports people who over-train and leave little time for recovery. This leads to burn out or diminishing returns. A vicious circle of in frustration and bitterness is then formed. Sometimes you have to take a break to see the bigger picture or quit to succeed!! 

Loving the Underdog! PART2 – City of creation

This is my follow-up post to Loving the Underdog! PART1 – The 800lb gorilla

My startup, Aware Monitoring, was recently invited to a local business club event as an example of a innovative and entrepreneurial company. At the event I was blown away by the growth and leading market positions of the other companies presenting!!

It occurred to me that a strong local business and startup eco-system is absolutely vital to nurture young ‘underdog’ startup companies like ours. Success breeds success. We must all invest in our local eco-system and everyone in the city will reap the rewards.

In this Invest in Nottingham Club video I talk about my underdog
startup and the potential of Nottingham

My startup is based in the provincial city of Nottingham. Our city is the centre of business within our region. Nottingham is well known for its creativity, innovation and of course, Robin Hood. We have some big great companies here including Boots, Experian, Raleigh and Capital One. The city has a world leading biotech cluster and is a UK centre of gaming which hosts GameCity, an annual global videogames festival.

The city has a strong tech community, with social groups such as Nott Tuesday and Geekup bringing developers, designers, bloggers and online entrepreneurs together to share ideas. And we have some great tech companies including Esendex, Prime Principle and Outso.

However the City has a long way to go before becoming a leading cluster for web tech on the scale of BioCity, a Nottingham based biotech cluster. I’ve been extremely impressed by BioCity and the eco-system of companies and people working around it. Several of the companies at the event were based at BioCity. This type of light touch commercial eco-system with small and large niche companies working together seems to work incredibly well.

The ingredients which go to make a city of creativity that forms clusters such as BioCity, Silicon Valley or TechHub include:

1. Startup facilities – Low cost, industry specific incubators which are commercially supported and run.
2. Second generation founders – Industry specific founders who become investors and mentors in startups.
3. Universities – That attract and develop talent from across the nation who then settle locally.
   
4. Larger companies – Who’s staff leave the corporate world to branch out their own.
5. Institutional investors – These are needed to help continue to grow successful companies.

I was blown away and inspired by capability and growth of local companies presenting. This is both the companies that are part of BioCity and the ones who have done it own their own. These events show what can be done locally in a provincial city like Nottingham. The companies demonstrate the resourcefulness, commitment and innovation that founders are capabile of.

In some way its better to be a in city fighting to create something new. It brings people together to focus their efforts on creating something of meaning and value.

My next ‘Loving the Underdog’ post will be Loving the Underdog! PART3 – Why we Love ’em

My Startup lessons learnt

After three years, burning through a pile of cash and God knows how many work hours, here is my startup story from:  (1) Finding an idea and sticking to it, (2) Getting a commercial product out the door (3) And  then iterate/pivot to a product-market-fit (a must have product).

This video was recorded during a ‘Opportunity recognition’ lecture at Nottingham University and kindly filmed by my good friends at Skeleton Productions. These video’s are nicely divided into six easily digestible sections. If you only watch one, see PART3 – ‘Finding the perfect new business idea..’

PART 1 – About Nick Barker, Opportunity recognition and a quiz on famous tech startups that pivoted

PART 2 – Overview the three Opportunity recognition and development challenges. About Aware Monitoring

PART3 – Finding the perfect new business idea, lack of time and search for customer value proposition

PART4 – Building out a product, funding and pivoting the service

PART 5 – Competitor differentiation, lean startups and getting to product-market-fit

PART 6 – Continuous process of iterating and pivoting a product. Learn more about Nick Barker

Loving the Underdog! PART1: The 800lb gorilla

I recently helped organise a startup competition in our City. There were five startups pitching.  Several of them are attempting to take on much, much larger entrenched competitors. It seems like madness! They’re competitors are stronger, have more resources and many more customers. But, sooner or later, a startup has no choice. They have to fight the 800 pound gorilla!! Despite the odds, startups can and do beat their massive competitors.

You’ve gotta Love the startup underdog’s sheer audaciousness and courage against the odds!

If a startup is lucky enough to find a gap in the market, they will attract copy-cats. Initially most of them will be other startups. Mostly there’s little point in startups competing with startups, as they both have nothing to loose. Startups are quick to change, nimble and have a low-cost base. It’s almost best to ignore other startups playing in the same field.

With traction and time other copy-cats will be big powerful competitors. With customers and revenue streams, larger companies have the luxury of time. They have power. Startups don’t! If startups persistently compete against big players they will either be acquired or squeezed out of the market. Of course, if funded, the VC’s love the ‘acquire now’ option.

Just today I see startup Slideshare is taking dominant Cisco and Citrix head in the on-line meetings market. At our startup competition the winner Go-Dine is competing against the very well established Opentable. And Annot8, one of the finalists,  is completing against Google!! My website performance monitoring startup is also increasing competing against our much larger competitors.

It seems like a no win situation!!

So how on earth can a startup win against the 800lb gorilla..?

1. Find their weak points – Often large dominate market leaders become bloated with the fat of large profits. They have not explored new channels or markets. This is when a nimble startup can attack!
2. Go niche – Much large competitors can be avoided by going deep into a niche market where the play is too small for a large company.
3. Attack their profits – There is probably a product or service where the 800lb gorilla is making their fattest profits. Attack this treasure chest and weaken their position.
4. Forget them – It’s easy to get obsessed by the competition. Focus on the customers and their needs, not what the competitors are doing.
5. Out innovate them – This is making the most of their weak points. Re-define the market! It’s a challenge without significant resources i.e. major funding but it can be done. And when it is, the profit are huge. VC’s love this approach.

Startups have little choice but to stand and flight using their limited resources.  The founders can’t just tuck tail and run when they they’re up against a large competitor. Startups can and do win against the 8o0lb gorilla’s. Just look at Mint v’s Intuit or Dyson v’s Hoover, the list goes on and on. This is the way of our evolutionary economics system. Startups change everything!!

Next post in ‘Loving the Underdog’ series: PART2 – City of creation

Here’s a few good posts on startups v’s bigger competitors:

• The big company vs a bootstrap – Bijan Sabet
• Startups play poker, big companies play chess – Don Dodge
• Understanding How The Innovator’s Dilemma Affects You – Mark Suste
• Telling the 800-lb Gorilla to Shove it up his Ass – Jason Cohen

 

You got the love for building businesses?

Watching Morten Lund at Geek’n’Rolla it occurred to me that our entrepreneurial future lies in our past. This video is a must see – he’s a very excitable and wacky character. Morten exudes life and Zen. He said ‘I’m an entrepreneur’holic’. He can’t stop building businesses!

I’ve not been doing it myself for 18 years. Looking back into my career, family background, I’ve been building businesses up for about the same time. Of course,  in my career this was for other people’s companies. However, I believe that we can still be entrepreneurial working for someone else.

Please bear with me as I use my past employments to demonstrate the point:

• NetCare (part of ComputerLand UK Plc) – I took on the job of turning this fledgling IT managed service into something big. At the time I was offered a much more stable alternative position with a higher salary. It seems strange to take a more difficult position for less money but I saw the potential and wanted to build something of value.
• Novell – I had always dreamt of working for a successful global software company and when Novell offered me the chance I was extremely excited.  At the time Novell had suffered some serious set backs. When Eric Schmidt   (now Charmian of Google) joined and the share price was on the up, I could see this could be a turnaround. It was the chance to help re-build Novell. Unfortunately I was proved wrong. Eric left and the company continued it’s slide downwards.
• NetMan – This was a niche boutique consultancy. They specialised in Novell and Intel LANDesk. Only eight people were employed when I started. At the time I was offered a job at a much, much larger  systems integrator but felt NetMan had more exciting potential. We did well. The business grow significantly and was acquired by ComputerLand UK Plc. We built something of value.
• Business Systems Group (BSG) – We made this company  into the fastest growing systems integrator in the UK at the time. I loved being a key part of that growth. I built up several product and service streams whilst at BSG. This included their software support business. At the time BSG had virtually no support services. They mainly sold PC hardware and software. I build their software support service into a healthy and profitable service. I also grow BSG’s Apple Mac business and helped build their software development services.
• WARNING PLUG = Today, I have my own startup, Aware Monitoring – We have a website, web app, e-commerce performance monitoring service. If it’s down, with error or slow – we let you know! We  started from scratch!  Building it has been intense. What an amazing feeling doing it for yourself!! It’s such an incredible feeling when a major company and new customer says they’re ‘delighted’ with the service. Very different from doing it for someone else..

I love building businesses or product/service streams from very little. For me its the challenge of making something new that was not there before. I look back further into my family history and see a strong heritage of trading in great trading cities like York. Looking closer, my close family have had or still run their own businesses.

Having a startup and growing a business into something real is not for everyone. It’s not easy. It takes great persistence, sacrifice and belief. The more I think about it, the more I realise that building businesses has to be part of you. It’s part of your past and your future. I don’t think you wake up one day and say ‘I feel like starting a business today’. You have to be committed. Really committed – Like Morton! It has to be part of you!!

5 ‘Shocking’ things founding a startup

Its been a real eye opener starting-up a new company. We’ve been doing it now for over two years. After many life experiences I try to limit my expectations when going into something new. I believe having an open mind is the best way to enjoy a new experience. On our startup journey I’ve been surprised, and even shocked, by the sheer scale of the challenge and the help you do and don’t receive.

(image dedicated to the memory of Jeffery Walker and his great blog posts)

Startup experiences fall into to camps – the positive and the negative. This is typical of the roller coaster of a ride that a startup is. Lets get the negative out the way first:

1. Doubt – I still find it shocking how many people doubt your startup. Even when you’ve had some success they still doubt. The most shocking thing is the doubt can come from the closest people around you – family, friends, ex-coworkers, etc. To overcome this doubt I’ve relied on the positive people and startup friends.
2. Hard work – I’ve worked hard in my career. Startups take hard work to a new level. The shocking thing is there’s too much to do. You can’t possibly do it all. And do a good job at everything. The only answer is to prioritize and work damn hard!
3. Time – Everything takes much longer than you plan, want or need. In a bigger company, with a comfortable salary, you have much more time to make decisions and get things done. In a startup you have shockingly limited time and resources (money) to make something, sell it and survive.
4. Startup Karma – Other founders help you out expecting no return. Its surprise and shocks you when it happens. They’ve survived to tell their tale and know exactly how hard it really is e.g. point (1) & (2). They become your first customers or are customers who take you to the next level. It’s like an unwritten code – help other startups, when they really need it. The catch is, startup Karma can’t be forced. You can’t ask for it. It just happens.
5. Excitement – I’ve had a very exciting career having worked in London for several years, worked for a leading global software manufacturer and grown a outsource service internationally. Having a startup is an even more exciting experience. It’s all-consuming. It’s like being in a tornado – your pulled in every direction. It seems like chaos and changes often and could all come crashing down at any minute. Startups are certainly not for the fait-hearted!

I’ve heard this and repeated it before – startups are a roller-coaster of a ride. This is the biggest shock for me. One minute you feel like you can conquere the world when you win a key deal or a startup founder helps you out. The next minute someone close tells you to ‘get a real job’ or  you miss a vital product deadline. You’ve got to learn to keep a level head and deal with the way it is. Thumbs up 😉

Fun tech vid’s

If you’re bored and not seem them before – here’s a couple of fun tech video clips to be enjoyed over the Christmas break:

New Dork – a tech startup, entrepreneur parody of Jay-Z & Alicia Keys “Empire State of Mind”

Classic – Mac v’s PC face off!

I also found this very funny Newport (Welsh) version of “Empire State of Mind”:

Enjoy!!