As much as 55% of all startups fail after 5 years & 70% after 10 years
If you are a regular reader o Linked In’s “Pulse” online magazine, you have probably read an article or three on Startups, what to expect, how so and so made their 1st Billon $ , blah blah, blah. This article is not for those who care to insulate themselves with a candy coated version of reality or another rehash of what to expect if you plan to launch a startup. No. Rather, in this article I will focus on what was not expected with hopes for words of wisdom and support from the online community as I continue the exhausting trek to pursue what I love.
You have to work an 80-hour week to make a startup successful? Wrong. You have to get the opportunity to work an 80-hour week.
You would think that with 25 years of combined corporate leadership and consulting experience and even a successful startup in the 90’s, that I would have grounded assumptions. But I guess my optimistic nature will never change. Here is my list of “Invalid Assumptions for Launching a Consulting Startup”:
-All of my friends, family and business associates will at least “lift a finger” to network and make connections for me
Wrong. I remember speaking with many, many friends about my startup concept. They were all supportive & positive: “Let me know when you are up and running and I will be your first customer” or “Let’s follow up when you take this to the street”. And when I did, what did I get from the majority? Cricket, Cricket. Those were hard days. While you are trying to build your confidence that you have what it takes to run a successful startup, the very friends that supported you in the concept phase, won’t return your calls in the execution phase. It’s not exactly a confidence builder to go through that, but it will make you stronger. Furthermore, you find out who your true friends are – make sure you take care of them.
-The startup will move quickly – hell it has to right? You’re a startup!
Ha! The problem with that assumption is the notion that “all men are an island, unto themselves”.
Sorry, it doesn’t work that way. Do you want to leverage alliances, partnerships, or joint ventures as part of your strategy and especially with larger corporations? Then strap yourself in because you are in for a longer ride than what you assumed. I remember at one point we were working with a global firm and convinced them to join us in a partnership. We expected contract language in a week and it took four (while a looming deadline with a client was quickly approaching). Sure, we were able to turn the contract around in a day on our side, but being that our partner’s legal team had to get involved… well, you get the picture. Just because you can move fast doesn’t translate into all elements of your strategy moving fast. Prepare to learn why patience is a virtue. Again.
-I will be working 80-100 hour weeks for the indefinite future doing what I love doing
Ok- yes I have worked some long weeks. But it is not always doing what you love. In the beginning months of startup, I was able to invent “Project Behavioral Coaching” ™, our patent pending technique that uses behavioral science to help project managers and team members break down behavioral barriers that block good projects.
From moving forward using a simple technique that can be paired up with any project methodology to make it even better. I spent countless days that blended together working on the software and mobile app design that enables the technique and scales it across the enterprise and hours and hours running the patent pending process with the attorneys, raising capital and on and on and on. But there is a point where reality sets in and that is the point where you still have to do the things you hate – like budgets, contracts, marketing, selling etc. The point is, its not all unicorns and tinker belles running around in this fairytale world called the startup. You will be working long weeks doing what you love AND what you hate… if you’re smart.
-Once I get that one “big break” for our startup we will be on Easy Street
There’s no such thing as easy street. When we got our big break with a major bank in the US I began to wonder if, for the first time in my career I was afraid of success. Success sounds great doesn’t it? But often times for a startup, success is the point at which you begin to realize that you, your company, your service offerings and products – they are all hanging from a thread. And that has nothing to do with a lack of confidence or whether or not your product is superior (hell the legal owner of the Coca-Cola recipe sold the bottling business for a song). But it has everything to do with the stars aligning and making the right decisions for the right reasons. Factors that will and can impact the success of your business abound and much like running the rapids in a canoe, that “big break” is simply a boulder in the river you plummeted past with a million more boulders ahead.
Remember that more than 50% of startups fail at year 5 and more than 70% fail at year 10 (ref: http://www.statisticbrain.com/ startup-failure-by-industry/). That one big break is a great time to celebrate, but keep your eyes on the channel because the river is moving fast, deadly fast & a little fear of success is a good thing.
-A $2M Management Consulting Engagement in Year One Will Be a Cinch Considering our Differentiation and Position in the Staffing Industry
Just because you have the cure to cancer doesn’t mean anyone will buy it. We certainly don’t claim to have the cure to cancer but I did assume it would be easier to sell our services and expertise than it has been. I may have overestimated that:
- Our 45 year history in staffing with over 24 offices across the southeast would be a big credibility boost for our startup management consultancy
- That having partnerships with Dell Computer, Red Hat Software and others that believe in our technique “Project Behavioral Coaching” ™ would further build credibility in our client’s eyes and drive sales
- Staffing the best and brightest consultants on our client engagements would immediately translate into great word of mouth and open new accounts at other companies
So I had a few unrealistic assumptions…don’t we all? I’m pleased to share that we are only just getting started! We are only 6 months into launching our startup and we already have paying clients with new ones on the way. New partners are expressing interest in what we are doing with Project Behavioral Coaching ™ and the word is getting out there. The biggest invalid assumption I made? It’s probably this one, that a $2M Management Consulting Engagement Year One Will Be a Cinch. You know why? I believe $2M was underestimated. Let’s go for it. Let’s go for $3M!