Start-up Entrepreneurs' Blog

Why Entrepreneurs Should Sweat the Little Decisions

May 19, 2011

In a business, there are many small decisions that need to be made every week.  Advertisers and marketing professionals have found out time and again that a small, seemingly innocent change can dramatically alter results.  Is this true of other small decisions that affect a business? Should entrepreneurs pay more attention to these smaller details?

First time entrepreneurs often have the same approach to creating and building a company. They follow the same paths.  

Path #1, first develop the product, then simultaneously market and sell it, and try to attract investors at the same time.  The entrepreneur eventually realizes that marketing is not easy and investors aren’t impressed by a product alone. Investors point out that what they have is a product, not a company and this leaves entrepreneurs in a state of confusion.  After all, they’ve incorporated, they have a product, and they are trying to market it, what do investors mean that they aren’t a company?

Path #2, the entrepreneur starts by presenting the product idea to investors or partners, hoping to get funding or a contract, and realizes that investors and partners aren’t impressed by paper designs and non-existent, potential customers.

Next step is acceptance. The entrepreneur accepts that the product isn’t enough and more is needed. They need the everything else around the gizmo that makes a product a business (or the entrepreneur declares the non-believers to be idiots because the value and potential of their product should be blindingly obvious to everyone). They start delving into marketing, sales, distribution, pricing, finance and accounting, funding options, manufacturing, and every facet of a business. And while the general statement of needing marketing is good, the details and specifics become more than the entrepreneur can handle. 

The entrepreneur begins to feel overwhelmed with everything that needs to be addressed, the workload is mounting, and entrepreneur feels as though he/she is drowning and needs help.  

Here’s where the projects begins to fall apart, when the founders take on too much and no effort gets enough attention to be done effectively. What the entrepreneur needs is way to simplify what they need to focus on and in a way that is doable and manageable for them, not an army of staff.

The next step is to be a copycat, do what others are doing. I’m not talking about a “me too” product, but every other facet of a company. Somewhere along the line, the entrepreneur has done some amount of competitive analysis and the seemingly easiest approach to the everything else is to follow the competitors. This may alleviate the entrepreneur’s problem of being overwhelmed. What a big company like Microsoft can do, or a venture-backed company like Facebook can do, may not be what a bootstrapped, lightly or self-funded start-up can do. Just because another company is doing it, it doesn’t make it right for your start-up. 

While entrepreneurs may think outside the box when it comes to the product, they often put themselves inside the box when it comes to the business aspects.  These are the little decisions made every day. If ABC company can charge consumers for support than so can we. If XYZ company uses a freemium model than so should we.  More often than not, they never consider if this choice makes sense for their goals.

The reality is that there usually isn’t one big decision that creates a failed start-up. It’s often a series of small, bad choices that ultimately led to failure.  It also why investors often shut down a start-up and start a new one instead of redirecting the first one – if the team couldn’t make the right choices the first time around, they aren’t likely to make them the second time around either.

Filed under: Management

Tags: bad start-up business decisions, business decision making, entrepreneurs, start-up business strategy, start-up execution plans