This past summer marked my two year start up anniversary. As I was reflecting back on what I often refer to as "years 3 and 4 of business school," I wanted to highlight three lessons learned.
Saying No is as Important as saying Yes
When I started as an eager-to-prove-myself generalist — with the handicap of a MBA in a highly technical organization — it felt like the correct answer to every idle thought about things that would be good for the team to do was "I'll do it." You're at a start up, you're supposed to work hard and wear lots of hats, so why not keep taking on more?
This approach, however, can lead to a level of good performance that does not allow you to be truly great. It can impede the development of a skillset that will allow you to specialize as a company scales. I've had to learn which responsibilities to take on and which to turn down. I've also figured out when to pass on something I've been doing to someone else, often hiring someone to backfill a role I'd been playing. Doing so has given me the space to focus in on the couple (okay, five) things I love doing and can be truly great at, while also helping the company grow.
Similarly, as a young company, it can feel uncomfortable to turn down any partnership opportunities when you're still struggling to build your customer base beyond the first few early adopters. Many cycles can be spent talking to big companies that are thinking about outsourcing innovation, qualifying leads who are asking for something completely different, or just trying to make that one deal work. There are cases where you make the commitment because the payoff is worth is — marquee customers or product-making deals. But there are also deals where you're better off saying no, not right now, and keeping the relationship warm.
You can't get an answer if you don't make the ask
Rejection is scary. Even scarier is the idea that it was something you did that directly led to rejection, especially in a sales or partnership role. I found that I was much better at making bold asks on my own behalf (e.g., intros during the job search) than on the behalf of my company, where I had responsibility for more than myself. It may also be consulting training, where having good "client hands" is seen as a mark of senior staff, and analysts often defer.
At first, the thought of rejection could hold me back from the smallest ask — product feedback from a potential partner who you want to make a good impression on — to big ones — could you sign by the end of the month? It took a lot of courage to send those first asks and to train myself to be more upfront about what I wanted or needed from partners. However, once I starting being more direct and bold in my requests, I saw how often they were granted. I also saw that even when they weren't, the outcome was still usually positive. My confidence grew, and my — and our — success did as well.
Jane Austen was wrong — it's okay to talk about money
It's a truth universally acknowledged that if you are a start up building a product, at some point you are going to have to ask someone to pay for it. There is an art to the pricing dance — too early and a potential client walks away with sticker shock, too late and you may wind up investing time in a partnership that your client can't afford. Still, it's okay to be upfront about your pricing model — or flexibility in developing one. When you've demonstrated a real value from your product, the pricing discussion should flow naturally.
It can be awkward at first, especially if you're new to identifying pockets of spend or understanding budget cycles. Still, it's important to make the ask, be clear in your approach and stand firm where needed. I've built some of my strongest relationships where both partners have financial skin in the game, and we've been able to drive value together.
What is on your list of start up lessons learned? What should I expect to learn in Year 3?