Starting up … and then avoiding closing down

It has been a month since the closing ceremony of the Beijing Olympics but it is still interesting to think about what we witnessed. The Olympics are a start-up company - but one whose exit strategy is to close down in four years! The Chinese put together a massive operation … and it no longer has a job to do. Now, it is the turn of London to be ready by 2012.

Most start-ups are not like that  - they have to continue their operations, even after their exit as an IPO or trade sale. Let us consider some pitfalls that many entrepreneurs fall into during the start-up phase and how they can be avoided.

Overpromising and underdelivering

So many people approach me with fabulous tales of knocking off Microsoft (or Apple or Google or …). They try to sell stories of billion-dollar sales in three years and hundreds of millions of dollar in valuations. I always tell them: "underpromise, overdeliver". Be modest in your claims, exceed expectations and people will respect you more.

Failing to be a leader

Most start-ups are founded by a highly intelligent, highly motivated individual. This person has a vision of the company he wishes to create and must pursue that vision against impossible odds. But he must realise that to succeed, he cannot do everything himself. He must build a team and he must lead that team. Leading a team (and we could devote many columns to that subject) is all about inspiring people, getting them to follow where you wish to go.

Failing to work with peers

The founder figures out how to lead his team but now has a new problem. He must work with people at his own level - perhaps at his law company, accounting company or even senior people (with more experience than him) at his own company. Working with peers involves a different skill set than working with superiors or subordinates. Peers often do not want or need to be motivated or "led", they need to be trusted and respected.

Failing to innovate

An interesting point, this. One would think that a start-up's very nature is about innovation. But many people come up with that first idea, and then stick to it through thick and thin, failing to move beyond its origin.

The successful start-up comes up with a breakthrough idea and then continuously tinkers with it to make it better. Never assume your product or service is perfect - there is always room for improvement.

Those of you not in start-ups might also be able to benefit from these four thoughts. Just remember that, unlike the Olympics, you need to be able to be around for many, many years to come.