Michael Gale

Startups need to hook a ladder

I am loathe to be one of those people who writes “The 10 things every Start-Up Must Get Right” or “The Five Things Every Entrepreneur must do”, with apologies to anyone who has actually used those titles. But I do get the problem. If you have a lot of experience with startups like I do then people ask a lot of questions and of course everyone is looking for that one magic bullet of advice, the hack, the shortcut to success.

The problem is of course that there are an awful lot of competing elements to get right in a startup including a USP, stakeholder alignment, funding, personnel, business model, market strategy, pricing and partnerships. And most of its all very subjective and requires a complex balancing act as there are always insufficient resources to do everything.

So what is the successful approach? Based on my own learning and development of my pattern recognition around startups, which is based on a large number of failures (you don’t ever learn much from successes so those don’t count as we only properly analyze our failures).

I basically have a dual track approach. On one hand I use a very prescribed format to build out a business strategy along with capital, exit and go to market plans. On the other hand I shoot from the hip at opportunistic targets.

The way I think of it is in terms of the ancient Indian board game “Snakes & Ladders” (and commercial adaptions like “Chutes and Ladders”) – what we need to do is find a way to start playing the game of building the startup and then immediately try and hook onto the bottom rung of a ladder, particularly a big one, while avoiding any snakes or chutes.

So how do we spot a ladder amidst all the busy noise of a startup? Sometimes its obvious but often its not because its a multi step process. Nearly all ladders though have one thing in common. They are created by a third party. This maybe a larger company with channel who you solve a problem for so they take you to market, maybe a customer whose special requirements will lead you to a transformative product, maybe a financier who has a great network, maybe a client who has global reach in their application, maybe a key and amazing hire. But it nearly always comes from an entity or person outside the startup.

Therefore the most important thing to do in finding a ladder is keep networking and going on sales calls and talking to anyone who will listen about your startup. Even if you think you have all the insights you need and the team in place and plenty of launch customers keep networking and look at every new contact as a potential ladder.

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