5 Surefire Ways to Kill a Startup

There are a lot of posts floating around about how to help a startup succeed, but I wanted to look at the other side to that coin: startup killers. More of us are at risk of killing a perfectly good startup than we’d like to believe. Word to the wise: here are ten situations to avoid.

1. Launching before you’re ready

Sure, you’re antsy to get your startup up and running, but launching too soon can make your brand look shoddy, and can invite all manner of customer service issues, especially if you’re in software. Instead, aim for a soft launch to a limited number of people who can test your platform and find bugs that you can then work out before the larger public sees them and writes you off.

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Should You Join an Incubator?

The problem with startups is that they have such a short trajectory. As soon as they launch, it’s a race to either getting funding, getting acquired or failing miserably. Startup founders need every resource they can get their hands on to make sure they succeed. Incubators have started popping up all over the country, since Y Combinator launched in 2005. And while startup incubators can provide a much-needed injection of cash, as well as mentorship and contacts, is it really what your business needs?

Drawbacks to Incubators

1. If you work full-time, you’ll find it hard to keep up with the work. The Founder Institute requires at least 15 hours of work on the incubator each week. That’s a 3.5 hour weekly session, as well as oodles of homework. If you’re working a job (either your startup or another 9-to-5), you’ll find it difficult to balance both (we won’t even throw in family time to that equation).

2. Incubators take some of your revenue. This is pretty standard, but if you’re not prepared to share on average 6% with your incubator, it might not be for you.

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When Does a Startup Stop Being a Startup?

Startups are like baby chicks. One day they won’t be baby chicks anymore. They’ll look different and act different. But when does that actually happen for startups?

I like Steve Blank’s take: a startup is an organization formed to search for a repeatable and scalable business model.

Green Question Mark

Taking from this, you can say once the startup has found that repeatable and scalable business model, it’s no longer the same organism. It’s now something else. Three events can change the course of a startup:

  1. It gets acquired.
  2. It gets customers that grow revenues (as opposed to just a handful of customers that barely pay the light bill).
  3. It receives sizeable funding (more than seed money).

At that point, while it’s subjective, I’d say the startup becomes something else. Maybe it’s now a division of a larger corporation (like when Yahoo! Music bought MusicMatch), or on its way to becoming its own corporation (like Skype).

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Is Risk Required for Entrepreneurs?

I’ve been thinking a lot about entrepreneurs and risk. Is it a given that all startup founders and entrepreneurs are automatically more open to taking risks than other people? Are there levels of risk they take? How can they mitigate their risk?

Naturally, questions like these are never cut and dry, but here’s my take on the topic.

Advanced Military Free Fall Training

Riskier Than Everyone Else? Maybe.

It takes guts to start a business from nothing. It takes even more to hang on until that business is successful (if it ever is). So yes, there is a lot of risk there. Riskier than others? Depends who you’re comparing yourself to. Right now, it seems to be risky simply to assume you have a job to report to tomorrow in the corporate world. The unemployment rate is skyrocketing. People are getting laid off or fired at an alarming rate. Suddenly, starting a business doesn’t sound so crazy.

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Top Five Industries to Start a Business In Today

While we see an ebb and flow of businesses in certain industries (the tech bubble comes to mind), it can be hard to know what the next hot thing will be. But studies and economic factors show that these fields leave plenty of playing room for startups early to the game.

1. Anything Green

Eco Friendly Product Sticker

Photo: Flickr user Vectorportal. Creative Commons 2.0.

Organic. Eco. LEED Certified. If it’s got a green label on it, it’s hot. And since we live in pretty much an un-green world, the market is still wide open. From environmental consulting to eco-friendly versions of cars, toys and office furniture, if it can be made more earth-friendly, there’s a market for it.

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Why You Should be Picky as a Startup Seeking Funding

Not so long ago, startups were happy to get funding from anywhere, regardless of the VC’s interest or connections in the industry. These days, startups are more picky about who they get capital from.

1. You’re Buying into Experience, Not Just Money

Sure, you need funds to operate and grow, but more than that, startups need connections and mentors. If you’re looking at venture capitalists, choose ones that have helped others in your field, as they’ll be more likely to be able to make the introductions you need to get your foot in the door. It’s better to get funding and knowledge than to spend your funds on learning what the right VC could teach you.

2. You Want a Cheerleader with Deep Pockets

As a startup founder, you want someone who will be honest with you about your ideas and strategies, but overall, you want someone who’s as passionate about your business as you are. Don’t find a VC who just wants his hand in your industry as an idle pasttime; find someone who wants to take apart your business to see how it works, and who can contribute positively to its growth.

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Why You Should Attend Industry Conferences

If you’re not attending conferences and events in your industry, you’re missing out on valuable opportunities to learn and connect with potential business partners. I’m always amazed at how many great contacts I meet at events, and while I don’t go to them every month, I make an effort to attend as many as I can each year.

Who You’ll Meet

Even if you go to a conference not expecting to meet a potential client, you’ll often be surprised at who you do meet. But the key is to talk! It’s hard to meet people if you don’t put yourself out there. At breaks, meals and mixers, introduce yourself to the people around you. Ask questions. Engage. In sessions, ask questions. Make yourself known. Get as many business cards as you can, and take notes on them with a few keywords to remind you what you spoke to this person about.

It’s not typical that you’ll walk into a conference and immediately make a sale. The important thing is to make connections and build them after the event. But sales aren’t the only thing you should focus on at events. You may also meet:

  • A potential business to partner with
  • Someone who knows a key player in a company you’ve been trying to connect with
  • Someone you can help

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How to Have a Successful Startup

I think many entrepreneurs and startup founders stumble into their businesses. They have a great idea, and before long, they’re developing it and trying to find funding. But how many of us go into a startup knowing what to expect, or how to succeed? Here are some tips to help you not be taken by surprise along the way.

Outline Expectations Up Front

Think for a moment about what you know about startups. The media tends to glamourize them and makes it seem like all are shooting stars destined to be gobbled up by Google. That’s not the case for most. Many founders work long hours for years before they get any traction. Make a list of things you expect with your startup. How quickly do you expect to get funding? How much do you realistically think you can get? What sort of exit plan do you want?

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Online Resources for Startups and Entrepreneurs

If you’re a blog reader (and the fact that you’re reading this tells me you are), you probably have a handful of websites that you read religiously for all things startup, entrepreneur, small business, marketing, and social media. Am I right? Of course I am. Well, here is my list of fantastic sites and blogs that can always give you more great knowledge on these topics.

Bloomberg BusinessWeek

This site’s got great articles on starting a business, news on small businesses, and company profiles.

Why I like it: The site design is clean and easy to navigate (you’d be surprised how many aren’t), and I always find great fodder for my posts.



Long a favorite for their magazine, Entrepreneur’s website is also a great resource. In addition to op-eds and how-tos, the site offers resources for small businesses, including its Tax Center, Resource Center, and Coaches Corner

Why I like it: Entrepreneur gets bonus points for its downloadable forms and other tools every entrepreneur needs. I’m all about the DIY.

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Full-Time Job by Day, Startup by Night

It’s amazing how much someone can get done in 7 days. 168 hours. 10,080 minutes. Take my husband. Until recently, he was working as a project management consultant for a well-known firm…and building a startup empire. He boasted that many people he’s met at conferences had no idea that the company he co-founded was run by two men with families and day jobs. It was a challenge for him and all of us, his working both jobs, but now that he’s running his business full time, we can appreciate how much he got done before.

He’s not alone, running a startup alongside working a full time job. In fact, I’d venture to say that most startups begin that way. After all, until you know you have a viable idea, unless you’re independently wealthy, who wants to give up a sure thing for a shaky startup? And leaving that full time job means losing:

  • Health and employee benefits
  • Guaranteed income
  • Connections for future work

Some can’t stomach losing those. But trust me, once you get over the hump, learn to pay for your own insurance, and have a nest egg squirreled away in case of utter failure, it’s freeing.

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