Things That Don’t Matter In Startup

Two years ago, a few partners and I developed a new idea of a business.  We needed strategic and capital partnership, so we raised a small round of initial funding.  Over the past two years, we raised two additional rounds of funding, ran a very tight ship financially, and finally guided the business into profitability after just 12 months of post-launch operations. 

During this time period, we faced the inevitable struggles and challenges that every startup faces.  After two years of startup, though, our team has learned a thing or two about what really matters in startup.  The greatest truth is that most things don’t matter in startup.  Let’s break it down.

The Dream

Every new business starts because someone has a dream.  It’s easy for this dream to be so very real, that it seems it will be easy!  Everyone in the world will be rushing to knock down your door and buy your new gadget or gizmo!

My partners and I like to call this dreamy phase of the early startup “being spellbound.”  When you’re spellbound, you can’t see anything but the business working out.  So, you end up spending lots of time on things that don’t matter.  Before we list out a lengthy list of what doesn’t matter, let’s talk about what does matter—revenue!

In today’s world of revenue-losing billion dollar companies [enter:  Facebook], it’s easy to think that your company will survive because of its inherently awesome nature.  But that’s just not the case.  The reality is that business and entrepreneurship is quite simple:  a business must make more money in a given period of time (typically measured in months, quarters, and years) than it loses in the same period of time.  If a business loses more than it makes, it eventually will go bankrupt, and the dream will become a nightmare!

If this is what business boils down to, then it should go without saying that all that matters in startup are tasks and objectives that directly, not indirectly, result in generating revenue.  This may sound horribly capitalistic, but it’s true.  A company can have the greatest “save the world campaign” ever, but if revenue isn’t there, and expenses grow, but the business will soon be facing threat of shutdown.  So, moral of the story—focus on generating revenue.

Things That Generate Revenue

• Product/Service Development
• Sales efforts
• Marketing efforts

Things That Don’t Generate Revenue

• Spending endless time arguing over ownership
• Spending endless time choosing a business name or logo
• Writing out a 40 page business plan with 5 year projections
• Chic office space in a hot part of town
• Comfortable office furniture
• Paintings on the wall

Hopefully the point is clear.  Business is as simple as developing a product or service and selling that product or service to someone.  If everything around startup is centered around those ideas, then the probability of finding business success will be much higher.  Let everything else fall into place and commit minimal time to them until the color black is covering your monthly income statement on a consistent basis.