I was recently a guest on the Build Live Give podcast with the founder, Paul Higgins. I talked about my own career experiences over the past 23+ years, shared some startup pitching and funding advice, career tips, some of my favorite tech tools as an entrepreneur, and even a little about the age discrimination I’ve seen…Read More
I had the pleasure of talking with Mike Tschudy about his career path recently. Mike is the Head of Design for Mint.com. He shared a ton of good advice about intentionally planning your career, finding good sounding boards, and taking a step back occasionally to reevaluate your path. The full transcript of our discuss is below…Read More
It is easy to get caught up in the “next hot startup” frenzy as you read about the insane growth and valuations of “unicorns” like Uber, Airbnb, and Snapchat. But, not every business can be, or should be, a runaway tech startup. When you live in a tech-centric area like Silicon Valley you tend to…Read More
I read a very interesting article on TechCrunch today about why startups fail. They shared data from research that Blackbox conducted for their Startup Genome project, which is trying to uncover what makes Silicon Valley startups succeed vs. fail. You can gain access to the free full report here. I highly recommend that you take the time to read through it. Pretty fascinating data.
My biggest takeaway from all of this? Startups absolutely need great mentors. Surprisingly, hands-on help from their investors did not have a significantly positive effect on their performance. I believe that most startup founders assume that they are going to get the guidance they need to be successful once they have secured the backing of a solid VC firm. This certainly does not appear to be the case. As I look through the key findings from the report, these points of failure seem to quite avoidable if a startup had a strong, smart team of mentors that they could turn to for advice on these issues. In particular, the most common reason for startup failure was “premature scaling” along one or more key dimensions (i.e., Customer, Product, Team, Financials, and Business model). Knowing how and when to scale a startup appropriately along these dimensions is something that an experienced mentor understands (e.g., someone who has learned from his or her own scaling successes and failures).
15 Key findings from their report
- Founders that learn are more successful. Startups that have helpful mentors, track performance metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.
- Startups that pivot once or twice raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all. A pivot is when a startup decides to change a major part of its business.
- Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves. Startups can prematurely scale their team, their customer acquisition strategies or over build the product.