How we make our choices and decisions in startups is going to determine if we fail or not (along with some luck)—this is the premise of this post.
Would you agree that all of these factors below, for startups failing, are just the symptoms of poor “decision-making”, and that we can safely say that the reason startups fail is because of the actual poor decision-making (plus some bad luck to boot) not the symptoms?
- Lack of Product-market Fit = Poor decision-making (Choice of product)
- Marketing Problems = Poor decision-making (Choice of how and who to market to)
- Team Problems = Poor decision-making (Choice of team and culture)
- Finance Problems = Poor decision-making (Choice of how to get funds)
- Tech Problems = Poor decision-making (Choice of type of tech used)
- Legal problems = Poor decision-making (Choice of IP and business structure)
- Operations Problems = Poor decision-making (Choice for how to execute)
According to Finfeed’s post Why experience is a crucial factor in becoming a successful entrepreneur, founders in their 40s and 50s are more likely to succeed than 30 year olds and under. This proves that we can make better decisions with more wisdom, experience, knowledge, and emotional intelligence.
Also, there are thousands of startup accelerators and incubators now that offer some seed funding and, most importantly, mentoring to founders in the hope of teaching them to have more informed decision-making.
If this premise is true, then we can’t do much about bad luck, but we can improve our team decision-making for all of these areas of running a startup.
Who could argue now that decision-making is not king when it comes to startups succeeding? And yet, this seems to be one area that investors and accelerators almost wholly neglect. If this premise is true, then making it a safe place within a team to have difficult discussions and disagreements during the decision-making process should be essential.
Some people refer to this as Psychological Safety. I refer to it as simply a (psychological) safety drill called Object123, and a backup (psychological) safety net called the Disputz Network.
Psychological Safety describes what the environment looks like, and Disputz describes HOW we can achieve it, I believe.
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