Tuesday, August 16, 2022

5 times startup founders should say no

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Shreya Christinahttps://cafe-madrid.com
Shreya has been with cafe-madrid.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider cafe-madrid.com team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

CEO and co-founder of Hexacton a mission to empower businesses of all sizes with AI-powered sidekicks working in the cloud.

Throughout my career as a serial entrepreneur, I’ve had many failed experiments and startups. When asked what the critical factor for a successful startup is, I always answer: “The ability to say ‘No'”. This is an integral part of any founder’s job description. Getting caught up in time-consuming tasks that don’t yield results or turn for cash flow in the short term are terrible mistakes I made because I wasn’t bold enough to just say no. In this article I explain how and why saying no in certain situations is crucial to your success.

1. When an employee is not the right person

The recruitment process at a startup is always hectic. You try to recruit the best and brightest, but you have to be able to judge in an instant if you are suitable. Sometimes that can lead to hire people who don’t work in the end. At some point, you have to feel comfortable saying, “No, this doesn’t fit anymore.”

This is an understandable, if inconvenient, problem. But if you wait too long to fix it, the ripple effects can affect your company’s performance for years to come. The key in this situation is accessing your needs quickly and saying goodbye to the employee amicably.

2. When you consider investors

Throughout my career, I’ve learned that closing a deal with a venture capital finance or investor is a lot like getting married. There will be ups and downs, but as long as you’re on the same page, you should be able to move forward and grow. However, it can be difficult to say no to financing, even if you’re not sure whether a particular investor can add a lot of value to your business. Don’t be guided by the numbers. Consider which investors will support your business goals and mission.

3. When you and your partners disagree

The relationship with the co-founder is a very unique beast. On the one hand you know each other very well, maybe you are even friends. On the other hand, running a business requires difficult decisions that are not influenced by interpersonal relationships. Choosing a strategy, process, or other key operational factor just to save face for your partners, rather than choosing the best option for growing your business can quickly become a problem. I’ve seen how too many chefs in the kitchen can bring down successful startups.

When setting up the company, you should have an open and honest discussion with your partners about who has the final say, especially if you disagree. Don’t be afraid to refer to that agreement regularly as you build your business and when it’s time to say no to the idea of ​​a partner. While it is important that everyone is heard, it is essential to know who is giving the final approval.

4. When a new product is not a good idea

Most successful startups spin many times before reaching big. This means that developing new solutions is necessary for success. However, it must be the right decision to shift your team’s focus to a new product. You need to make sure it aligns with your startup’s goals.

This is where problem-first strategy comes into play. Before you commit, have a mental checklist of elements that every potential product must have if it is going to help solve the problem your company wants to tackle. If a new product can bring you closer to solving that problem, give it the green light. If not, get rid of it at the ideation stage so you don’t waste precious resources.

5. When you can’t take on a new customer

This is probably the hardest “No” you will encounter as a founder. The old adage, “The customer is always right,” isn’t quite relevant in the confrontational environment of 21st century startups. If your strategy is to grow at scale, that means any process that doesn’t scale is a no-go. This may mean passing on larger clients.

I’ve had to turn down a significant increase in sales because serving that customer would require a change of focus within my business. It would have required the commitment of resources in a way that was just out of strategy for me. Although we lost cash flow in the short term due to this decision, we were eventually able to use our resources to scale up other parts of the business, enabling exponential growth.

The word “no” is every successful founder’s secret weapon. You might make some enemies along the way, but that’s business. The sooner you realize it’s okay to leave situations that don’t serve you, the sooner you can focus on what really matters: growing your business.

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