Elsewhere in these pages is an article that refers to Peter Drucker's instantly classic, The Five Deadly Business Sins. Without at all holding myself out to be a Drucker, here are what I believe to be the five deadly sins of a start-up business:
- Excessive Ego. One classic manifestation is the technologist who demands to be CEO. The company, technology, and products are his--less frequently, her--babies. Teaming is difficult for someone in the Ego Trap.
- Excessive Greed. The CEO and/or Board of Directors insists that the value of the company is $x Millions. Not a million less. By the time the dust settled, the money went away. The company closed its doors.
- Vision Rather Than Market Driven. When committing this sin, the sinner fails to ask potential or actual customers what they really need. The startup assumes because the founders resonate with a particular vision of how the world must be in 18 months or 36 months, the world will resonate as well. And it has to turn out that way because the vision says so. Everyone will want to use widgetoptitron software. It's the next Big Thing. Not infrequently, the product is significantly over-engineered--too many features. Or under-engineered with not enough of the really valuable features implemented. Both God and the Devil are in the details on this one.
- Technology Rather Than Market Driven. This sin is similar to the Vision problem, except it's technology driven. Our flabergastic overdrive chip will change the way in which all networks operate because it's 10x better than anything available today. Not necessarily. Again, this naive faith in technology leads to what might have been an avoidable failure.
- A Business Ecosystem of 1. Start-ups assume that if they find potential customers and get their supplier costs and quality right, all will be well. Maybe. But in most verticals, its a collection of cooperating companies that succeed by competing successfully against one or more other collections of companies. Startups need alliances and partnerships much more than large established companies. Startups are vulnerable. Big time.