We recently touched on Entrepreneurial Loneliness in an earlier blog post this week that was posted on CFPro Ventures’ blog. But what happens when that self-reliant, isolated force to drive and deliver a business idea turns into a destructive, harmful toxin that risks killing your entire organisation?
We look at 7 ways that Founders are killing their businesses through their own self-destruction.
Ego, Ego, Ego
We could write an entire feature article just on the art of killing a business through a founder’s ego. And unfortunately, it’s something that we’ve seen so often – history repeats itself and one by one, budding, potential-filled businesses never see their next year, simply because they have a founder, or leadership team, who are simply unwilling to learn. An ego doesn’t recognise how much you need to learn. An ego lets you believe that you are better than you seem. An ego restricts you from seeing the true picture – but most importantly, an ego restricts your ability to ask for help. Thinking that you have what it takes to sail forward on your own, without opening yourself up to any other support, or insight, is sailing through seriously dangerous territory. Not only will your business risk failure, but you’ll very quickly develop a company culture that follows suit, is resistant to change, does not listen to true value and most importantly – believe they know better than the customer. At some point, in order to succeed, you will need to recognise that not everything will revolve around you. Not every decision has to involve you. Not every process has to be created by you.
Burn-out, Anxiety & Emptiness
Where founders who believe success is purely down to themselves, they place an unhealthy amount of stress on their own ability to perform and outlast the rest. Although we recognise a steadfast approach to a particular business belief is a winning recipe, business founders who demonstrate an imbalance between being able to delegate and an inability to ask for help when they need it, creates an unhealthy amount of pressure that leads to burn-out. We’ve probably all, at some point in our lives, uttered the phrase, “If you want something done properly, just do it yourself,” but when it comes to business, nothing could be further from the truth. Your strength lies in building a support network around you – whether through your own team, or an external team, that carry you, add into your central focus, and deliver what your vision requires – without all the responsibiity lying purely at your feet.
Lack of Clarity & Vision
Starting up a business is a lot of fun. You have an idea, you have a vision and you have a pretty good feel on how things could progress, if all goes according to plan. But for many founders who have moved through the Startup phase of a business, there’s one true take-home – and that’s Change. It is often hard for a founder of any business to envision what their business looks like in 5, 10 or even 15 years from now. For many, it’s even shorter than that. And if it’s difficult to envision, then how are you supposed to build a plan that will deliver for something you cannot see? We’re not saying you need to know exactly where you’re going. What we are saying is that, as a founder, you need to have the willingness to keep engaging with your network in order to develop clarity, vision and a long-term strategy.
Micro-Management and Culture development
At some point in time, you’re going to have to let go. And while micro-managing in any context is a no-no, founders who micro-manage their fledgeling startups can do more harm than good. When you started your venture, you were doing anything and everything you can to keep your venture afloat. For most people, it was only you in the business. So, you got used to doing everything yourself, according to your process, in a way that you liked. But as you’ve grown, and you’ve specifically recruited talent to add value to your business, you may have overlooked one little thing – you’ve hired talent because of their skill – now let them get on and do what you’ve hired them to do. Learning when to relinquish some of the tasks you’ve been used to doing yourself, is a sign of growth. You earn respect from those you entrust your business to, and you start to develop a broader understanding of opportunity within your business. Very often, this starts with the Marketing department. Micro-management has serious ramifications on the morale and company culture within your business. You risk stifling creative that is lying within your team, you risk stumping any opportunity for turnover and you uproot any budding seedlings that are trying to grow – simply because you cannot let go.
Raising too little, or too much capital
Failure to fund sufficiently, and well in advance, is consistently the single biggest threat to success. But failure to raise the right amount, that mirrors a solid, sound business growth strategy, is just as harmful. With too little or too much money, you’re not investing where you need to, in order to grow. You risk steering your business off course completely. Statistics show that most businesses are likely to spend whatever they have raised within 12 – 18 months of their business’ lifecycle – regardless the amount they raise. Remember, that with investment comes a whole new level of responsibility. Your investors and shareholders are going to want to know that their investment is secured, protected and set for growth – and you are going to have to demonstrate that, and deliver.
Keeping your sleeves clean
This may appear to be contradictory to our piece on the harmful effects of micro-management. But it’s not. Because just as harmful is the founder that believes he is above the need to help, support, get stuck in – as the founder who wants to do it all themselves, and dictates exactly how that needs to be done. You started your business because you recognised a potential to solve a problem. That potential didn’t stop the day that you hired your first employee – in fact, that potential grew – and will continue to grow – as your team around you becomes attuned to your vision and your strategy. A hands-off approach means that they are left without a leader, a visionary and will be forced to come up with a solution on their own – one that you may not like.
Poor Investor Management
Your long-term growth is dependent on every step you take within that process. Your second opportunity to raise capital depends on how your first opportunity went, and how well you spent the money, and how much growth that investment delivered. You have 1 chance to make the right impression and getting it right doesn’t only spell success for capital raised, but heralds in long-term credibility as a business leader through various growth cycles. Not understanding, and therefore not managing, your investors properly means that you risk uprooting any future potential capital funding exercises, simply because you didn’t make the time to manage your investors and all your other stakeholders, properly. If you’re reading this, and think you’ve done a good enough job – but you have that nagging feeling that reminds you there may be something you’re missing, then it’s time to speak to people who are capable, and knowledgeable, that can help you deliver the right investor management, and long-term success – keeping you compliant, and ready for growth, always.
If you recognise that it’s time for a reality check – and you are ready to have an honest conversation that sets your business up for long-term success, then you’re ready to speak to us. We have worked with many founders, at various points of their business life-cycles, and have helped many to be compliant, able, growth-ready and, most of all, focussed on their business growth – and we’d love to work with you.