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The Successful Startup: Transforming Your Vision into Reality

Night sky with dish

The successful launch and growth of your startup depends on the skillful integration of great vision and ideas with execution and commercial know-how. Finding your business or technical complement on day one will help to insure that this becomes reality.

By:  Andrew Johnson, Ph.D.

Gazing at the night sky can be an inspirational experience.  For some, there is more to this than just naming and tracking the celestial objects in the sky.  Some of the most interesting and bizarre objects in space are invisible to the naked eye (even to the naked eye aided with the most powerful telescope).  The discovery in the 1960’s of the existence of Neutron stars and Black Holes (not visible to the eye) were not only important discoveries in and of themselves but they allowed for some of the most powerful confirmation of Einstein’s General Theory of Relativity by allowing the actual measurement of things like the bending of light by gravity among other bizarre predictions from the theory.

What has this got to do with my startup?
The stories that are told about these discoveries take on an almost mythical narrative.  Think Einstein in his patent office in Berne, independently and brilliantly coming up with his radical new ideas about physics by himself in a sudden flash of insight (not entirely true).  The key here is that these ideas would remain obscure theoretical conjectures without the hard work and ingenuity of the experimental scientists that built the instruments and conducted the experiments that not only confirmed the validity of Einstein’s work but have even allowed them to be applied in ways that make our modern technologies work (GPS would not function properly without accounting for the dilation of time due to the stronger gravitational field at the earth’s surface relative to the global positioning satellites, as predicted by the General Theory of Relativity.  If this was not compensated for in your GPS, you would be off course by 10 meters in 1 minute).

Why the ‘Odd Couple’ has a better chance of launching your next product
So as we can see from this example, the successful transformation of a great idea into a practical and valuable product (your GPS) requires the expertise of complimentary but different professionals.  Theorists and Experimentalists are as different from one another as scientific founders are from their business counterparts.  However, it takes the ingenuity, passion and drive of each to make the alchemy work of transmuting a great discovery and idea from the lab bench into a successful product on store shelves (or e-commerce sites).

Getting theory and practice together
It is the rare individual that has all of the qualities that are essential to making a technology based startup a success by themselves (I would posit that this person really does not exist).  It may seem very early to think about the commercial side of your business when you are still working on its technical feasibility.  However, if your vision and dream is to someday create a company to commercialize your discovery, you need to find your business or technical counterpart as soon as possible.

Most Life Science companies are founded by scientists with exciting discoveries from their lab.  These companies often languish for lack of adequate capital to take them to the next step.   A quick look at the companies that are successful in getting the money they need to make this work reveals that, more often than not, they have a strong ‘Odd Couple’ founding team.  Speak with any investor and they will tell you up front that they would much rather invest in an ‘A-Team’ with a ‘B-idea’ than the other way around.  What is an A-Team?  This is a powerful team composed of both technical and business excellence.  This type of founding team insures that the science is backed by a compelling business model (and plan).   Potential investors find these companies especially attractive since the science and business hypothesis are equally strong.  This also insures that the requisite expertise is in place to actually achieve the milestones that have been presented (thereby de-risking the investment some).

Take Home Points:

  • Look for your counterpart on Day 1:  The day you decide that you would like to start a company to commercialize some great new technology, start looking for your business or technical counterpart.  They should share your passion, be innovative and also compliment your own talents.  For example, if you are an introvert, consider finding an extrovert.  If you are a visionary thinker, team up with a detail oriented achiever.
  • Remember it’s the A-Team that gets the cash:  A well balanced technical and business team with great connections has the best chance of beating the odds in the rat-race to win the funding you need to get things off the ground.
  • Keep your eye on the prize:  The many challenges that startups face along with the issues that can arise when working with team members that differ from you can seem overwhelming.  Remembering that everyone on the team (make sure that they do) wants this to be a huge success can help you make the compromises, delegate authority and responsibility and cultivate the flexibility that are essential elements of a powerful A-Team member.

Further Reading:

Picture Credit:  “Satellite Dish Under Starry Night” by twobee, FreeDigitalPhotos.net

Don’t Miss the ‘Good to Great’ Way to Startup Success

By Andrew Johnson, Ph.D.

Rocket blast off

Achieving breakout success for your startup is all dependent on what you do before anyone has even heard of you. Do this right and there is no stopping the heights you will attain and the success you will enjoy.

There are no shortages of stories of great ideas and entrepreneurs that, for one reason or another, failed to achieve commercial success.  Is there some secret to getting this right that is being tightly held by the winners in this Darwinian race to startup glory?

Jim Collins investigated this phenomenon in his book, ‘Good to Great:  Why Some Companies Make the Leap and Other’s Don’t’ more than a decade ago.  He selected 11 publicly traded US companies from the ‘Fortune 500’ that consistently out-performed the market by 30% for at least 15 years after an initially lackluster performance of 15 years.  He compared these ‘breakout’ companies to their industry matched (same size, market, revenues in the previous 15 year period) counterparts to see what was behind these company’s’ incredible success.   Mr. Collins and his team used publically traded US companies since there was a wealth of publically available data for him and his team to use to figure this puzzle out.

A look at the stock market valuations of the ‘breakout’ companies compared to their market average counterparts shows that any two comparison companies tracked one another for at least 15 years and then the graph of the returns for the breakout company would just skyrocket up consistently for at least 15 years (some showed even more dramatic growth both in size and duration).  This is the type of financial performance and success that every startup team dreams of achieving as well.  However, this study was originally done with well-established companies whose revenues were high enough to rank them as the top earners in the US.  What, if any, of the findings here could be relevant to a startup?

The Secret Sauce
The answer:  Many of the ‘Good to Great’ findings are a perfect fit for startups as well.  Many of the principles that drove the success of the ‘breakout’ companies in Jim Collins’ study are applicable to startups today.  The following insights are inspired by the findings of the ‘Good to Great’ team but have been adapted for startup stage companies.

  • Selecting your leadership:  The ‘breakout companies’ were all lead by top performing CEO’s that many had not heard of before.  This is because they were not celebrity CEO’s that were interested in driving their own ego’s and compensation, but passionate ‘get-it-done’ leaders.  Startup CEO’s rarely have this issue.  The reason is that entrepreneurial leaders are passionate for transforming their startup into a successful company.  The only ‘watch-out’ here is that sometimes investors will insist on the placement of an experienced executive (well-known outsider) at the helm based on the misconception that this will boost the chances for success.  When this occurs, it is important to make sure that this leader shares the passion for driving the company’s success (rather than their own) first.  In other words, a leader that has an enviable track record of creating long-lasting successful companies rather than just a big name in the industry.
  • Building your team:  The ‘Good to Great’ findings showed that all breakout companies spent some time making sure that they had the right team in place before they worried about their strategy for transformation.  The startup is spared the need of ridding the team of ‘dead wood’ if it focuses on only hiring the very best from day one.  The reason that this effort precedes developing your strategy is that you need the input of a top performing team to come up with the best strategy here.  Another benefit of hiring the very best even before you fully know exactly what all of your needs are is that they will require much less care and handling and help to create a culture of excellence from day one.
  • Facing the music:  All great ‘breakout companies’ had some moments of truth were they discovered that they were in the wrong business or that the market had changed in such a way that they could no longer count on being number 1 or even 2.  Once the truth has been faced, the team can then rally to develop a strategy to redirect the company into a more successful and profitable direction.  Startups with a good leader and a solid team can face the realization that they might have a great technology that has no compelling market early on.  This team , working from these facts, is now in the best position to make the necessary pivots in the early days (before too much cash and time) is wasted to direct the company in a new and more promising direction.
  • Refining and sticking to your focus:  Jim Collins called this the ‘Hedgehog Concept’ (The Fox knows many things but it is the Hedgehog that knows the one most important thing).  This is all about focus and not being distracted by outside interests that do not serve your central strategy to succeed.  The ‘Good to Great’ team found that this central guiding concept (The Hedgehog Concept) was composed of 3 things that are roughly 1) identifying what you are best in the world at, 2) what you are most passionate about and 3)what business model will best transform this passion and world-class talent into financial success.  The startup concern will need to do the same reckoning and this is not always an easy thing to do.  Insight will come from both an honest assessment of the capabilities and talents of the team as well as a reasonably good estimate of how you can successfully commercialize this.  Focus is usually not an issue in the early days for the startup.  This becomes more of an issue after the company has enjoyed some commercial success.  The key here is to stick to this central focus of the company (The strategy for taking you to number 1 in the market) when exploring opportunities for growth from everything from product line expansions to strategic partnerships and acquisitions.  Anything that does not contribute to your core strategy should be ignored.
  • Nurturing a culture of discipline:  Remember that we recommended hiring only the best people for your team.  If you have done this well, you will already have built a culture of discipline.  Many of us have seen the gimmicks and marketing efforts that companies use to ‘motivate’ their employees to do more for the company.  If you have the right people in the company in the first place you won’t waste one minute or one dollar on this since everyone is already aligned with your goals for the company.  Essentially with a culture of discipline, you will not need to find ways to get your employees to get the job done as they will likely already be well on their way to completing this.  Make sure that you continue to follow the high standards you used in the early days as you continue to grow the team.  ‘Quality People’ over finding the cheapest person to do the job will always be more valuable in the end.
  • Turning the ‘Flywheel of Success’:  Success does not come overnight.  The ‘Good to Great’ team found that there was never one event or decision that lead to the company’s success.  It turns out that it was the accumulation of a thousand little things being done right that lead to breakout.  For a startup, this is about meeting challenges every day and working together to achieve that one central goal of first getting the company to market and then building its fortunes after a successful launch.  This last point is kind of a recap of all the others in that with the right leadership, the right team will be hired and with the right team and leadership the right path to success will be found and then the team will work hard together to achieve this goal step by step every day.  Judicious and frequent use of refining and following your central strategy will easily allow the team to determine if a given action or decision will be a push that increases the momentum of the ‘flywheel’ or not.

Putting it all together
It can often look like ‘breakout companies’ just popped up out of nowhere.  Whether they are the next Apple Computer or Genzyme, startup or well-established, this comes about more from the way that the popular press covers these companies than reality.  Jim Collins and his team found this to be true in his study and it is true for the budding startup as well.  The ultimate factors that best predicted for success turn out to be with those companies that are fortunate to have a passionate and capable leader, strong ‘results focused’ team and a single minded discipline and focus to do what is most important for the growth of the company.  The road to success may be long but following these great insights will insure that you stay on track.

Suggested Reading:

Picture Credit:  jurvetson via photopin cc