” The grass is greener on other side “, very truly said. Being in a startup ecosystem for so long and observing a common trend of failure, I am very sure the reason I am going mention, may not be openly discussed but are one of the major disaster responsible for startups failure. From my own experience of operating a startup and getting failed, I can tell you money,culture and relationships are some of the major distraction which derail the startups.
Firstly the ambition of a startup owners to have a unique culture resembling best of the practises being followed in successful companies like google, Microsoft etc. Many first generation entrepreneur want to establish an office culture where every employee is happy, employee feel free in the office and giving employee complete liberty. But unfortunately what they forget is the reason behind the culture and the context in which certain culture are being adopted. This was one of the huge mistake that I made at my office when I started my startup. Being first generation entrepreneur, with no experience of business and having vision of building amazing office culture I got deviated from my vision behind the company and the reason why I entered this ecosystem. As a result I started giving proper attention to my every employee, provided them complete liberty without any accountability and not restricted them from taking holiday whenever they required. This made them feel totally relaxed and as a result they stopped performing and our sales went down drastically. Knowing every single thing I never held them accountable as I was being naive in thinking that as a part of good culture, I should not say them anything or put any boundation. But as things got worse and I started draining my sales, I finally decided to make very one accountable including myself for all these. So starting from myself, as I was the reason that they got so much liberty without any accountability, I took the complete responsibility and from then onwards every employee was given liberty but under certain limits and every one was assigned proper responsibility and were accountable for all there actions. So never get carried away in taking care of your employee and being concerned so much about culture at office that you forget the reason for your existence and every one should be accountable including owner for their roles and responsibilities.
Second most important reason for the startup failure is money. As many first generation entrepreneur are so much enthusiast about the startup that they don’t value money as it must be valued. As these entrepreneur are too much focussed on the sales and other important aspects of business like software development, services or marketing that they forget to have proper accountability of money. Once you get involved in the business as an owner and don’t take responsibility in knowing where money is coming and where it is flowing out, things get imbalanced. Some time getting too much involved in business emotionally lead to money leakage, which later on hamper the business. Proper planning need to be done, at the same time, it is essential to ensure cash flow for daily operations. Don’t rely too much on account receivables ( Money that is yet to be received ), even though they are an asset to a company, but still this is the money which you would be receiving in near future. It is very important to ensure that proper cash is flowing to run your business. As a startup, generally company can’t afford to hire an in-house accountant to keep track of every transaction, but still as an owner it’s your responsibility to ensure proper mechanism is set up to take care of a cash flow till the time you are ready to hire an accountant for this purpose. Another important lesson I learnt from my startup was ” As a owner always work on the business, not too much in the business “, as when you are seeing the situation from outside the frame, then you can clearly see the problems and observe the situation in contrast to a situation when you are involved in a business and you are unable to look at the problems.
Thirdly relationships play a very important role in make up or breakup of a business with its owner. Observing a lot of startups getting ruined because of distraction caused due to family or the relation of an entrepreneur. As running a startup is more than a full-time job where you need to be mentally and physically present 24 X 7. If you don’t have family support, it quite probable that you would be getting distracted as you won’t be able to give your best in the business due to shift of your emotional focus somewhere towards family. On contrary if family is supporting you in your venture emotionally, it give a motivation and boost to perform and let you stay focussed. Lot of young entrepreneurs who are single get distracted due to their ongoing relationship. As every relationship demands time and attention, at the same time every new venture demands your complete time and dedication. Sometime this dilemma lead o shift of focus to either of side, which somewhere down the line create imbalance and hamper the venture. I was very lucky as my relationships were very supportive and motivated me along my way to move forward. These people trusted me and my instinct.
Therefore every entrepreneur must keep in mind these 3 important things, which may look very small but create a large impact as they move us emotionally.
Mark O Genious 