In my years of mentoring and working with startups, I’ve seen and read about some amazing disruptions, as well as recoveries, and I’m sure each of you could add your own. For example, you probably didn’t realize that both Facebook and YouTube started out intending to be dating sites, but implemented a Plan B when they found dating had become an over-saturated market.
While thinking about the most common surprises that I have seen with startups, and contemplating how to best prepare for them, I found some good guidance in a recent book, “Think Agile,” by successful entrepreneur and startup advisor Taffy Williams. I will key off his list of situations requiring dramatic plan changes, as well as the best ways to plan for these changes:
Indispensable people jump ship at the worst possible time. The
surprise departure of a key staff member is inevitable, no matter how strong the
financial and passion incentive. Every entrepreneur needs a succession plan
early on the top three people, with a reshuffle and replacement strategy. Get to
know your headhunter or freelancer.
Your rollout timetable suffers a big setback. You can’t predict big
quality problems, funding shortfalls, and viral events that don’t work. You can
and should create realistic time ranges around deadlines, and work up “what if”
scenarios around your milestones. Don’t succumb to blind optimism, or pressure
from investors to go for broke.
A new market opportunity emerges which you can’t ignore. It’s not just
undesirable circumstances that require big plan changes. Natural disasters or
economic conditions can create new markets, or an offer to partner or merge may
materialize suddenly. The agile way to respond is to research for flaws in the
opportunity, and test the waters first.
Your biggest or only customer dumps you. This can happen through no
fault of your own, or rapid market erosion you didn’t foresee. Your Plan B
should always include a diversification plan you can implement quickly, as well
as an emergency “right-sizing” plan to weather the gap to some new customers or
- Another disruptive technology trumps yours. What seemed like a winning technology, like RIM with its Blackberry, can quickly be superseded by a new entrant, such as the iPhone from Apple. Every startup needs to build and monitor their list of top competitive risks, and size the cost of a quick direction shift if the worst case happens.
One of the best ways to increase agility is to focus on specific problems and drive them to resolution, rather than instinctively flailing through several problems at the same time at a high level, hoping that one of your many actions will stick. Scientists have shown that the best creative problem-solving consists of these five-steps:
- Learn as much as possible personally about the problem.
- Engage a qualified and diverse team, staff, and advisors.
- Document the ultimate goal, so people can work backward as well as forward.
- Ramp up communication to bring in outliers and spark fresh thinking.
- Step back for a while to let the creative juices flow before making a decision.