Most entrepreneurs are haunted by the statistic that 90% of businesses fail within their first 3 years. Type it into Google & you’ll break the internet. As I’ve built my company I’ve shared this inherent fear of failure, often driving me to wonder — what am I missing? Why is mine in the 10% that succeed?
As Shape History, our social change agency, reaches its 4th birthday, with a growing team of over 16 by the end of this month, it peaks a milestone which seemed so far off when I first secured SEIS investment in 2015. So what lessons have we learnt through small failures, so we didn’t fail completely?
1. Get the product right before you scale
We’ve always run our agency like a market stall. First and foremost we got the product right before scaling — as there’s no point building an empire of fruit and veg if all you’re selling is rotten apples. So many startups rush to scale quickly, when their product isn’t ready to launch, tested or even fit for purpose. Convincing people you’re investible with great communications is essential to being a successful startup CEO, however too often companies are built on the words of their founder alone — with little truth behind the storytelling craft.
Secondly, we’ve never spent what we don’t have and always retain enough reserves to ensure we can pay staff and contractors. Don’t run your company dry to the bone; build in cash flow models which are adaptable enough for you to understand how much runway you have. This isn’t something to take a risk on.
Lastly, we resourced effectively and frugally (at first) really taking the time to understand the true capacity of team members, their individual skill-sets and most importantly their interests.
2. Hire people who are better than you
A good leader isn’t afraid to acknowledge they aren’t the smartest person in the room — nor do they need to be.
CEOs must instil trust in their team but it’s how you do that which is important. A “need to lead” is often mistaken as needing to take a firmer hand than required, even when you don’t have the training or skill-set to do so. If you hire good people — they will see through it.
The trick to being a supportive and successful leader is knowing where you are best needed and knowing how you need to instil trust. Sometimes it’s by making the decisions, but often it’s allowing others, with far more knowledge and expertise than you, the time and space to make their own choices, within the framework you have created. It’s the framework that’s important. Then you can be selective with your time, and know where you are needed most within your organisation.
For me, I acknowledged fairly early on that I’m a pretty terrible people manager. I put on others the same very unrealistic expectations I put on myself and it tends to push talented people away. I’m also not the best at finance.
I’ve learnt I’m best placed within an organisation leading areas of innovation, new ideas, and creativity — so have hired an outstanding senior leadership team to fill the gaps in accounting, processes and people-management. I can now make smarter decisions together with these people, based on projections and reports, and work with a happy, fulfilled and passionate team of experts.
3. Focus on the mental health of your team
Shape History exists to pave a better way for the agency sector to benefit others and support good causes and this must extend to our own team. Going far beyond usual Human Resources has been both fundamental to our success as an example of responsible entrepreneurship but also to an employer of millennial talent.
In addition to 4 Team Days a year — focusing on wellbeing, mission, training, mental health and more — once a month each staff member gets an hour session with our Director of People. In these sessions they discuss what they are enjoying, what they feel they need more support with, and what changes the business can make to accommodate them.
The result has been an almost 100% drop in resignations in the last 9 months and a team which has progressed far quicker into senior positions of leadership than first expected.
These conversations are also pivotal at informing the direction of new business; helping shape which organisations & we then approach with pitches. This way we can ensure, as much as possible, the social impact that each team member gets the opportunity to work on, suits their individual aspirations and interests.
The content of these conversations is also completely confidential. Only business critical feedback is then shared at a senior level with the team members’ permission.
Too many young CEOs focus on keeping their clients happy — that is the job of your team. Your job as a leader is to focus on making sure your team are fulfilled and inspired and have the space to think, make decisions and implement kick-ass awesome work that is fit for purpose.
4. Have fun and enjoy the journey
The last lesson is to remember to have fun and find ways that help you remember to be grateful.
There is a huge part of setting up a new business, regardless of its model, that requires you to summit to the universe of serendipity. When you notice and are thankful for each opportunity that comes your way you will find the journey of running a company far more rewarding.
Success is a race you can never win — because it can never end. Don’t get caught up in trying to reach your level of success as quickly a possible — but rather do it in a way which suits your needs, desires and happiness.
I wrote about why every CEO should quit their job — if only for a month — to escape their fear of failure. If you burn out — the company stops innovating and then it becomes irrelevant.
Getting caught up in the day-to-day weeds of business management is so easy to do, so take all the time you need to invest in regular breaks, to both rest up, gain perspective, but also remember where you’ve come from and where you’re going.
5. Dont follow the rules 😉
Yes — I know I said 4 lessons, but another won’t hurt — in fact, it might be the most helpful. Don’t follow the rules, don’t compare yourself to others and don’t see your small failures as failures — but lessons to build a better business. Develop a culture that cultivates an atmosphere where failing small, within a safety net of processes and policies that protect your team from messing up big, inspires motivation, autonomy, and respect. After-all, remaining innovative keeps you current, relevant, and needed.