How Startups Adapt to Change:Advice from Founders on Partnerships, Outsourcing, and Pandemics
“Ignore the hype you see about other startups in the press. It’s usually a pack of lies, and half of them will be dead in a year. Focus on building your business so you can be the one left standing.” – Jules Pieri, Co-founder and CEO of The Grommet
When you’re starting a business from scratch and down in the trenches, then get little bits of wisdom from people who’ve been there and succeeded, it is akin to discovering gold nuggets while digging those trenches. And it makes you want to keep on digging…
Pick the Right Partners
“Many successful entrepreneurs won’t admit this secret. But I’ll let you in on it. There is no such thing as a solo entrepreneur. Nobody who’s ever scaled a business from the ground up did it alone. In fact, left to themselves, they wouldn’t have a business.” – Neil Patel, Co-founder of NP Digital and Subscribers
Warren Buffett spent years trying to convince his longtime friend, Charlie Munger, to be his business partner. He did everything he could to get him to work with him at Berkshire Hathaway. What’s really prescient, is that even after a friendship that’s lasted over half a century and working together for more than four decades, Buffett still says he can “always learn something” from Munger.
Though Munger only joined after Buffett had already established Berkshire Hathaway, it’s likely the company would not have become the incredible success story it now is without him. Selecting and building a team for any startup involves careful selection and strategy.
You need partners who are agile, people who can deal with problems as they arise quickly and effectively. Creative problem solving is an asset critical for any startup.
Building a team should be a priority, and 23% of startups who fail list it as a factor. Yet you don’t want to build your team just for a startup, but rather think for the longer term. As with any business, a startup needs people to fulfill certain functions, and you need leaders who have expertise in these functions.
When it comes to customers, however, you want everyone to work towards serving them. Customer service should be central to any business, never the responsibility of any one department. Consumers are what makes or breaks any commercial venture, as if you lose them there’s no business.
You also want diversity, as people from different backgrounds bring in a variety of perspectives. There’s more than one way to solve a problem, and even though you may have the initial idea behind an enterprise, that doesn’t mean you’ll have all the answers.
Businesses led by dictatorial leaders kill creativity. And startups need creativity to thrive. While you’ll need to sell your ideas to your team, the vision should be inclusive. Share with employees your vision. Sell it to them effectively and they’ll become acolytes for your enterprise.
Why Outsourcing Makes Sense For Startups
“The best advice is to not give yourself too much credit when times are good and too much blame when times are bad. Once you realize that luck plays a necessary role in success, it makes you both more humble and more self-confident at the same time.”
– Ethan Austin, Co-founder and President of Give Forward
It might seem counterintuitive for a startup to outsource. Lots of businesses only begin outsourcing once they’ve reached capacity, using it as a means to handle increased workloads, and there’s absolutely nothing wrong with that.
Smart businesses – including startups – use outsourcing to increase skills. When you outsource, you’re essentially giving the work to experts who focus on certain aspects of business.
Often, you can outsource whole functions. Just look at statistics regarding what companies outsource:
- 74% outsource IT
- 52% outsource HR
- 43% outsource procurement
- 39% outsource finance
If you’re at full capacity and need to focus on core functions within your business, spinning these things off to experts makes sense.
But as a startup maybe you just want to outsource smaller tasks like:
- social media management
- content creation
- email marketing
- admin and filing
- invoicing
You needn’t start outsourcing on a large scale. Perhaps start with hiring a freelancer to conduct market research or to write content. Try outsourcing a small production run to see how it works. Engage sales and marketing consultants who’ll only charge set fees, allowing you to grow into new markets without over-extending. If your outsourcing efforts are successful in one area, dedicate more to this area to increase your productivity and grow your company.
When you outsource these things to specialists, you not only focus on growing your business but can also save on project management costs. Sometimes, a-service provider can fill in for multiple functions, perhaps providing additional security to your systems, digital adaption by helping your company to transit into using eSign solutions and eContracting, workflow management, automate various business forms, and even help smooth the hiring process. When looking at increasing capacity, expanding what you offer, or adding skills to your company, outsourcing provides an affordable and easy means to do so.
The Pandemic Blues
“The best entrepreneurs don’t seek risk. They seek to mitigate risk.” – Rick Desai, Co-founder of Dashfire
COVID-19 has been a bane to many businesses, and created huge uncertainty among startups. The world once the pandemic ends will look different, causing many startups to review their business models and restructure their organizations.
The founders who emerge from this pandemic will be those who:
- anticipate the future needs of society.
- present strong internal values and create a sense of purpose within their organization.
- recognize that the pandemic will permanently change the business landscape.
- successfully organize, manage, and inspire their team through the crisis.
- work with investors and government to resolve difficulties.
Those who emerge from this disaster are set to become the leaders in their respective industries.
Here are some voices from founders within the startup community on surviving and flourishing during this global crisis:
“First of all, we make sure that all our employees are safe. We were one of the first companies in Denmark who sent all of our employees home. This quick response has resulted in only 2 out of my 45 people turning sick, which has ensured that my company has been running full speed this last month.” – Martin Thorborg, serial entrepreneur, CEO and Co-founder of Dinero
“Our top priorities have been to secure finances and to set up distance working for all co-workers, including daily syncs, VR meetings among others.” – Jakob Way, CEO at Gleechi
“Our customers are online grocery retailers that are experiencing high loads throughout their systems. For us it has been a priority to make sure that our supporting systems to them matching recipes to available inventory are working properly.” – Erik Wallin, CMO & Co-founder at Northfork
“Entrepreneurship at its core is about solving problems for customers. Find a way to get yourself in the center of what is helpful to them and you’ll succeed in any market situation.” – Doug Villhard, academic director for entrepreneurship at Olin Business School at Washington University in St. Louis
“From a product development perspective, we’ve had to prioritize different features to adjust for the changing lifestyles of our users.” – Josie, co-founder of Capture
“Our top priority has been to save the team, not just the company’s CVR number. Therefore we haven’t let anyone go.” – Alexander Kragh, CMO & Co-founder Statum
Look at what these business leaders say. Note how seriously they take this pandemic, and the importance of protecting people, especially their teams. It is those startups that put people first who will emerge from this crisis stronger than ever.
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