Where Famous Business Leaders Have Failed
My Experience: 4 Mistakes I Made While Launching a Start-Up
Psychology in Sales- The Law of Reciprocity
Too many people are afraid to be wrong, afraid to make mistakes, and afraid to talk about it. Especially when it comes to launching a start-up.
There are two ways to look at it:
You wasted time, made the wrong decision, feel regretful, or even embarrassed.
You think of it as an opportunity. You were gifted the chance to learn what works for you and what doesn’t.
Where Famous Business Leaders Failed
Nick Woodman is the founder of GoPro. Today, GoPro does over a billion in sales and is a publicly traded company. But, Nick’s first endeavor was a website called EmpowerAll.com. He attempted to sell electronic goods with a $2 markup. His second time around he started Funbun, a gaming platform that gave users a chance to win cash prizes. Both never fully made it off the ground.
Jeff Bezos- Do you remember the Fire Phone? The Dash Button? These failures cost hundreds of millions, but Jeff Bezos fails fast. He learned what didn’t work, saw the data on consumer behavior, and simply added a subscription button in the app instead of a physical button.
Steve Jobs was involved in the purchase of Pixar. He believed it could be a great hardware company. Luckily, he ended up supporting the co-founder that created Toy Story, and the rest is history. Also, don’t forget he was originally fired from Apple in the 80’s before he came back in 1997 to lead them to historical growth.
In general, when start-ups fail, our mind takes us to information that is easier to find, such as the product, the market size, go-to-market plan, etc. These are all vital to a business, but before this matters, you have to nail the foundation. The “small” things - your story, defined roles, internal communication, internal feedback loops, task prioritization, tight meeting agendas, etc.
Being great at these foundational pieces will compound. For example, if your founding team isn’t great at telling your story (check out Andy Raskin on strategic narrative) or communicating internally, what do you think will happen when the business grows and you start hiring? People want to feel a part of something. It’s human nature. That starts with your foundation and goes right into your sales & marketing plans. If these aren’t tight, the habits, good or bad, will compound.
Looking back, here are 4 areas I could have improved. In a future article, I’ll lay out my plan on how to nail the foundation of a company in 2021. Anyways, here they are:
1. Accumulate data. Stop hesitating
There’s no one-size-fits-all playbook for a start-up. Especially when you’re trying to build something that has never been done before. In our case at Playeasy , we’re building a marketplace that connects sporting event organizers (people that run tournaments, camps, leagues, etc.) with hosts (gyms, rinks, fields, etc.) for their events. Because we’re creating something that’s never been done before, we made assumptions early on. Assumptions aren’t bad. But, having a framework around these assumptions is what matters. This is what I should’ve done:
Create the assumption to test out: Based on my experiences (interviews, the market, shift in human behavior, etc.).
Write it down: Present why this assumption is important to test. What I’m trying to measure. Then, whether it’s a success or failure, demonstrate why this is important to test out now. What will the findings tell us?
Create a deadline: Set a hard date. That way the team knows what the goal is and as you map out the plan, you can reverse engineer what you need to get done by that date.
Resources: What will I need to execute this?
Process: How will I measure this? What are my KPI's (Key Performance Indicators)?
Report findings: How will I deliver results to the team? This doesn’t have to be a meeting. This could be measured in a CRM or another shared space. Determine whether this is daily, weekly, monthly.
Data & Reflect: At the deadline, you now have some data to work with. Create a quick memo that reflects on the assumption. What worked? What went wrong? How did we do comparative to the KPI’s?
The goal is to move fast and learn. Even if it fails, you are accumulating data to get a feel for what’s working, what the market is saying, and allows you to quickly move off, slightly adjust, or double down.
2. Communicating the why Internally
I can’t stress how important this is in a start-up. Everyone is in sales. Marketing, engineers, customer success, everyone. Everyone has an opinion on what will work/won’t work. What the website messaging should be, what a good cold email looks like, what a good demo looks like, etc.
There aren’t any answers, so not only are you selling your product/service to drive revenue, but internally, you have to sell your colleagues on why you’re doing what you’re doing. How will it help the company? Why do you think this is top priority right now? Based on what? Sell the why. This builds trust.
Whether everyone agrees or not, you’re on the same team. Pick a direction and go together.
3. Purpose Behind Meetings
Some meetings are needed. Most are not (imo). I feel that 90% of meetings are a complete waste of time. There is rarely an agenda, there is rarely anything great that comes from them, and the only reason I think businesses/start-ups have them is because we’re conditioned to have meetings. We think we need them but we don’t. They’re like a show & tell, but after the meeting if you asked someone “what did Sabrina talk about?”, you couldn’t even answer because you weren’t engaged. They’re boring.
Instead, what if your meeting had actual intent behind it? If everyone had a creative role the meeting. Meetings should be proactive, not reactive.
4. Focus. Focus. Focus.
There’s always something to do when you’re launching a business. Whether you launch it by yourself or with other founders, everyone is wearing multiple hats. The hard part is defining what the MOST important thing to do at THAT specific time is. It’s easy to get distracted and start working on multiple things when you should really be prioritizing based on the companies needs and the goals that are set. You don’t have the bandwidth to do it all.
“what do I need to focus on right now to move the needle towards our next milestone?”
For example, in the beginning stages of building Playeasy, these are the questions I asked myself before I created a priority list of tasks to complete or product features I thought could move the needle.
I asked myself, does this:
Psychology in Sales
The Law of Reciprocity
From Robert Cialdini’s book Influence, the law of reciprocity refers to the principle that when someone gives us something, we feel compelled to give them something back in return.
In software, you see this with companies having a “free” plan. As a user, you try it out, love the experience, and feel compelled to move to a paid plan because you felt the company provided you value.
Another example is coupons. How much do your parents love coupons? It ALWAYS got my dad to go to that store. And he became 10x more loyal the more coupons they gave him. It’s crazy.
For sales, this is great for emails. As an example, if I ran a coaching business that helped students make the transition from college to the business world, I would send a step by step guide on how to prepare and ace an interview. Not only does it help the student, but it positions myself as an expert in the field.
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