By Ernst Gemassmer
As an entrepreneur, you know the world changes constantly, and you know the value of being able to adapt quickly. But changes to your startup need to be done for cause, well thought out, and communicated effectively to all impacted parties. Don’t lose your focus, or allow your operation to descend into chaos.
Here are a few principles that I recommend to guide you in the change process, and keep you on track and focused:
- Customers and competition must be the driving force. Too many founders make costly changes to their product and operation based on random comments from friends, family, and potential investors. Stay focused on solving a specific customer problem, and don’t get whiplashed by the whims of informal advisors.
- Listen to the team, but drive the vision yourself. Your challenge is to be able to separate the ideas that hone your vision from those that redirect it. Of course, all ideas need to be evaluated for relevance to the plan, cost to implement, and impact on the overall potential. There is a big difference between a plan adjustment and a new vision.
- Carefully evaluate and measure impact before adopting changes. Use data to evaluate alternatives whenever possible, rather than gut-level decisions, emotions, and personal agendas. Good questions you should ask yourself would include:
1) What amount of time, money and human resources are needed to implement the additions/modifications?
2) Are the changes essential from a competitive point of view?
3) What is the financial effect of not carrying out these additions/modifications?
4) What is the overall benefit if the additions/modifications are made?
- Change is not always about product and features. The primary issues are often not building the right product, but getting the attention of the right customers. Focus is critical here. By focusing on the needs of a small subset of the potential market and specific customers, change decisions become much easier.
- If investors funded your plan, include them in change discussions. All outside investors need to be included in plan change discussions. Remember that they funded a specific plan, with specific financial projections, and specific milestones. Changes to these without consultation will jeopardize your relationship and future funding.
- Obtain Board approval before implementing changes. Do your assessment of alternatives, but don’t act without approval by the Board of Directors. In addition, you should ensure that the entire senior management team is fully supporting your recommendations. This may seem like a burden, but it’s really a good reality check.
- Closely monitor plan execution. You and funding partners have a vested interest in the success of your startup. In most cases, the financial commitment is not allocated in a single amount, but rather in tranches based on meeting specific quantifiable milestones. For your own decision making, and to maintain an open and constructive relationship with funding partners, there should be no surprises.
Too many startups try to enter the market with an end-to-end product, which is the large company approach, and obviously ideal from some customers perspective. But startups should focus on innovation and breakthrough offerings, not end-to-end solutions. After some initial traction, you can always add features. Change should not mean adding more, but tuning the entry product and the entry process, with the full support of your team and your investors. Keep your eye on the target.
Today’s article is presented by one of the founders of our Startup Professionals team, Ernst H. Gemassmer. He resides on the West Coast, and has long helped entrepreneurs there, as well as providing turn-around assistance as interim CEO, and International coaching. You can contact him directly at email@example.com .