Being an entrepreneur is difficult enough without falling prey to easily avoidable problems, according to Jeff Busgang, whose career spans starting companies on his won to funding them as a venture capitalist at Flybridge Capital Partners. Here are the six common errors he identified, along with suggestions for avoiding them:
1. Fighting fires rather than scaling up
Great entrepreneurs have a tendency to focus on crises: product issues, customer issues, investor issues and, of course, running out of money. They forget a startup can’t possibly grow and succeed unless they spend the time to interview and hire great candidates.
What to do: Put aside at least two hours a week for recruiting and interviewing candidates, even if you’re not currently hiring. Ideally, you want a “stable” of potential hires whenever you need to hire somebody.
2. Doing rather than coaching.
For a startup to grow, everyone on the team must up-level every 12 months. That’s only possible if the owner helps them understand what new skills and behaviors they’ll need in order to grow themselves as the company grows.
What to do: Think of coaching as an investment in time management. Yes, it takes longer to coach somebody to do a task than to do it yourself. Once you’ve trained somebody, though, that task leaves your to-do list, creating time to do those things that only you can do.
3. Failing to plan for setbacks
Even the best-run companies encounter problems. If you’re not prepared to deal with them, even a small hiccup can derail your ambitious plans.
What to do: Work with your investors and “board of advisors” to create written contingency plans, in case there are product delays, slower-than-expected sales cycles, departures of key personnel, and so forth.
4. Focusing too much on setbacks.
This is the other side of the coin. While it’s essential to have contingency plans, if you focus too much on “what could go wrong,” you can demoralize your employees and (just as important) yourself.
What to do: Compartmentalize your planning so that it doesn’t affect enthusiasm. Once you’ve written down your plan, put the document on a shelf and forget about it. Let the fact that you’ve got a plan free you from having to worry about it.
5. Not enough relationship building
Entrepreneur often find themselves lurching from crisis to crisis, which leaves little time to concentrate the personal side of the journey, the building of the relationships that will matter long after the crises have passed.
What to do: Commit regularly to meeting with your investors, management team and employees to do something enjoyable that’s not related to work. These events can be as simple as get-togethers at a local restaurant or as elaborate as a week with Habitat for Humanity.
6. Neglecting your corporate culture
Companies that win “great place to work” awards and have high retention rates (and hence lower personnel costs) always have founders or CEOs who specifically set out to create an environment where people like to work.
What to do: Making working for your company more than just a way for employees to get rich. Give your engineers challenging problems. Give your marketers the best tools. Publically praise your salespeople. Generously heap credit wherever and wherever it’s due.