10-Step Playbook for Startup Success in Turbulent Times
We may not have met but we share something special. If you are reading this then you also believe that the future will be better than today. You are passionate and inspired to build something new. And if you are a startup founder or aspire to be one, then you have the courage to take action towards the future you envision.
Building is always an act of hope. Only the brave can sustain the hope needed for the journey of entrepreneurship.
Dr. Chris Waters and I founded Aha! in early 2013 at the height of the most recent venture capital boom. There was a flood of cheap money. Deals were happening at a scale and feverish pace that felt dangerously similar to the dot-com days. Navigating the slush was not easy, but we chose to bootstrap our business without any salespeople, working entirely remote, and operating with a lean team. Last year Aha! passed $100 million in annual recurring revenue without a penny of outside funding.
Now the startup world is shifting again. The fallout from years of a growth-at-all-costs narrative is here — valuation mark-downs, vanishing capital, lots of layoffs, and overall uncertainty. Last year no significant venture-backed tech startups went public, IPO deal proceeds tanked (from $155.8 billion to $8.6 billion, according to Earnst & Young), and fledgling founders struggled to raise funds. The rest of 2023 promises more of the same.
Booms inevitably go bust. But I think that now is actually the ideal time to embark on your own startup adventure.
Our current environment is a proving ground for new companies and products — only those who focus relentlessly on delivering value, being profitable, and avoiding waste will endure. There is also a surfeit of talent looking to make an impact. Consider that many incredibly successful and lasting companies were founded during economic downturns. Microsoft, famously, during the U.S. oil crisis of the 1970s. Several startups that are now name-brand businesses emerged from the Great Recession of the late 2000s — including Slack, Airbnb, Uber, WhatsApp, and Square.
There is no such thing as a “recession-proof” business but you can build one that is “recession-resilient.” Founders merely need courage and a playbook for how to operate in these conditions. Every organization will be unique. But from my experience there are 10 critical areas that will guide you well in the years ahead. This playbook is deceptively simple, yet challenging to follow:
1. Know your purpose
Define a clear vision that resonates with customers and teammates. That clarity will be a touchstone for everyone. No murkiness about what you are working towards and why.
2. Act with integrity
Document and embody the values that will allow you to reach your goals without compromising yourself or others. Once you cross that line, it is very difficult to go back. Customers and teammates will be drawn to your principles and reward with loyalty.
3. Confront uncertainty
Accept that you will frequently have to make decisions without knowing what is exactly right. All you can do is formulate the best possible plan given the information you have at the time. Get comfortable with the duality of conviction and ambiguity.
4. Set long-term goals
Look past the immediate needs (hard to do in the early days) and cast your aim farther out. Be confident and bold enough to envision where you would like your company to be in the next five or 10 years. Then work back to what you will need to do incrementally to get there.
5. Dare to deliver
Have the discipline to achieve. Give exceptional effort and ruthless focus to achieving the objectives you set forth. Motivate and empower those who join your adventure to excel in their contribution to and pursuit of company goals.
6. Operate within your means
Avoid spending or hiring unless you truly cannot afford not to and have the funds to do so. Frugality is a strength. Ingraining that mindset in your company will benefit you far past the startup stage.
7. Love your customers
Cultivate empathy for the people you serve. These are the folks who enable you to realize your aspirations. Respect that relationship.
8. Keep your commitments
Create big promises and then fulfill those promises. Seek out feedback from colleagues and customers and implement what aligns with your vision and goals.
9. Learn every day
Stay open to new information and criticism. Develop self-awareness and upskill in areas where you know you can improve. Internalize lessons that will help you develop a thriving company culture.
10. Grow at a sustainable pace
There is no substitute for organic profitable growth. Expanding aggressively to show an appearance of growth will eventually do more harm than good.
You do not need a fat wad of VC cash to have a good time building a meaningful company. You simply need to have vision and courage.
It is true that the startup adventure is not for everyone. There will be long hours and a few twinges of doubt. I can also tell you that there will be many happy and exhilarating moments — it is some of the most rewarding and validating work I have done in my life.