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It's super easy to discount people who have these habits but I think we should also look at why these habits develop. Part of what makes a start-up hard is the

by Dwolb 10y ago

It's super easy to discount people who have these habits but I think we should also look at why these habits develop. Part of what makes a start-up hard is there aren't any processes in place nor a true north for what the company should do nor how they should do it. Coupled with people who might be new to start-ups and lack the ability to optimize which tasks they work on, I'd bet some of these bad habits develop. Another time when these bad habits may develop is when people are fighting fires all day. They don't always have the time to reasses how and when to fix what's broken to set up the company for future success. The rule of thumb I try to think about is "what activities have high leverage" and "will talking about or doing this change what we do or how we do it?". These two checks often help me figure out if the activity is worth doing or if it's "bullshit".

ak39 10y ago
Agreed about identifying the real reasons why, habit wise, startup owners do things the way they do. I am talking psychologically, blind spots. Many of us can only introspect effectively when we're afforded sufficient space to think clearly. I've been through almost all 7 items that Alex Turnbull lists in the article. In the end we had to lay off our single employee (prematurely hired), close office (prematurely leased) and put in storage most of our furniture. We were forced to reconsider all we did through the new lens of this criteria: is there a paying client? It was a bitter and, memory wise, a cringe-worthy part of my recent history. I'm in my 40s (started our startup when I was 39 - three years ago) and only really had partial experience doing independent consulting. My experience and practical references have only ever been informed from the perspective of an employee and through the paradigm of that working ethic. This, the employee thinking, was the weakest heritage I took into the startup world. As a technical software developer I am sufficiently competent, but only ever lived in an employee (sheltered) worldview. This was a fatal disposition to take into the world of startup. I learnt a few things in the months after we restarted (circa 2015 Jan): 1. Startup owners run scared 24/7 2. Fear drives most, if not all, decisions 3. The single most import source of fear is the quitting of a secure job 4. Fear affects your technical abilities 5. Hope is the ointment for the fear 6. Subconscious drive to drown out the fear usually means propping up hope, which is usually accomplished by spending, hiring and "growing" - and by spending time with people or groups considered "safe" (out of your field to give you objective feedback!) 7. Rejection feeds fear and affects momentum of progress. So opportunities are avoided because rejection is more likely than success is. It takes courage and an endocrine balance that favours decisions made without influence of fear. This can only happen when you lose your blind spots.
- HillRat 10y ago
  Balance sheets and cash flow statements are, if not the antidote to fear, at least a control measure. I think that cost accounting is the Achilles' heel of most startups, particularly those dealing with client work. The key is to always think about employee loaded costs and client pursuit costs. Every time you add a cost -- office space, furniture, laptops, administrative and sales staff, kegs of craft beer, Slack accounts -- you need to make sure that you're allocating those to the loaded costs of your billing employees (in the same way that the military tracks its "tooth to tail" ratio), in addition to salary, holidays/sick days, and benefit costs. Otherwise it's easy to "lose" expenditures and not realize that your margins are slipping. Likewise with pursuit costs; even if you treat sales salaries as "tail," direct costs and commission can eat away at project value pretty quickly.

by Dwolb 10y ago

ak39 10y ago

Agreed about identifying the real reasons why, habit wise, startup owners do things the way they do. I am talking psychologically, blind spots. Many of us can only introspect effectively when we're afforded sufficient space to think clearly. I've been through almost all 7 items that Alex Turnbull lists in the article. In the end we had to lay off our single employee (prematurely hired), close office (prematurely leased) and put in storage most of our furniture. We were forced to reconsider all we did through the new lens of this criteria: is there a paying client? It was a bitter and, memory wise, a cringe-worthy part of my recent history. I'm in my 40s (started our startup when I was 39 - three years ago) and only really had partial experience doing independent consulting. My experience and practical references have only ever been informed from the perspective of an employee and through the paradigm of that working ethic. This, the employee thinking, was the weakest heritage I took into the startup world. As a technical software developer I am sufficiently competent, but only ever lived in an employee (sheltered) worldview. This was a fatal disposition to take into the world of startup. I learnt a few things in the months after we restarted (circa 2015 Jan): 1. Startup owners run scared 24/7 2. Fear drives most, if not all, decisions 3. The single most import source of fear is the quitting of a secure job 4. Fear affects your technical abilities 5. Hope is the ointment for the fear 6. Subconscious drive to drown out the fear usually means propping up hope, which is usually accomplished by spending, hiring and "growing" - and by spending time with people or groups considered "safe" (out of your field to give you objective feedback!) 7. Rejection feeds fear and affects momentum of progress. So opportunities are avoided because rejection is more likely than success is. It takes courage and an endocrine balance that favours decisions made without influence of fear. This can only happen when you lose your blind spots.

HillRat 10y ago
Balance sheets and cash flow statements are, if not the antidote to fear, at least a control measure. I think that cost accounting is the Achilles' heel of most startups, particularly those dealing with client work. The key is to always think about employee loaded costs and client pursuit costs. Every time you add a cost -- office space, furniture, laptops, administrative and sales staff, kegs of craft beer, Slack accounts -- you need to make sure that you're allocating those to the loaded costs of your billing employees (in the same way that the military tracks its "tooth to tail" ratio), in addition to salary, holidays/sick days, and benefit costs. Otherwise it's easy to "lose" expenditures and not realize that your margins are slipping. Likewise with pursuit costs; even if you treat sales salaries as "tail," direct costs and commission can eat away at project value pretty quickly.