Entrepreneurs quickly come to understand that every action a startup takes is an investment. Whether integrating software, conducting research, hiring people or, if they're successful enough, making third party acquisitions, every move made is either time or money spent with an aim to grow the company.
To thrive in the current startup marketplace, entrepreneurs need to understand the value in creating and innovating but also, consistently investing strategically in areas that complement their technology and accelerate their growth.
With every addition a startup makes, whether it be technology or talent or both, comes potential for exponential disruption to culture and operations of the company. If startups don't consider integrations carefully and truly understand what they're aspiring to, the wrong investment has the potential to sink the entire ship.
Watch the disruption. Disruption has no doubt become word-of-the-moment in the startup entrepreneur's lexicon. If a startup isn't disrupting, it isn't thriving and if it isn't thriving, it must be doomed to failure.
It's important to create a new technology or product that solves a pain point? Undoubtedly. Is it important to upset market incumbents and create fundamental shifts in an industry? Absolutely and this is what disruption means at its core.
What isn't so widely appreciated is that disruption within a startup can shift its foundations so dramatically that it halts progress altogether. Startups are commonly made up of small, tight knit teams which work together with a singular focus. The risks therefore associated with making any form of investment that would alter that balance, become far more amplified and extreme in that type of environment. If proper considerations aren't taken to thoroughly vet new hires, new investors or potential acquisitions, a startup can risk derailing just as it looks to prosper.
Strategic integration. Investing in people, products, or acquiring technology is pointless if it doesn't provide a direct, clear and considered benefit. 'He seemed like a real smart guy,' 'it seemed like a neat piece of software' or 'the company seemed to be going places' aren't sound enough reasons to make investments. Each needs to come with a level of clearly defined thinking around integration, not only with what currently exists, but also with the future aspirations of the company.
While no one can see into the future, integration of each of these types of elements have to be given careful consideration and not left to a little hope and prayer. Each requires clear direction, champions, and most importantly, a clearly defined purpose and benefit to the wider company picture.
Planning isn't a dirty word. Startups are renowned for flying by the seat of their pants. Having a defined and structured plan and the discipline to follow it through might seem to too rigid and conformist for entities which are assumed to be all about agility. It shouldn't.
Having discipline, a strategic plan and a laser-like focus on what problem a company is solving ultimately allows gaps to be far more obvious when they appear. In my experience, a startup cannot successfully recognize a need to pivot, a need to bolster specific resources, or a need to add to its technology pool when it is being purely reactionary. Without a considered focus, a sound strategy, and the discipline to reassess a plan regularly, investment decisions are solely based on the need to fix issues as they arise.
Investments are the lifeblood of any startup. Handled with foresight they can have an immeasurable impact on its success. The forced combination of mismatched ideals, technologies and disparate teams can, however, do the very opposite.
Cameron Chell is co-founder and CEO of Business Instincts Group, a venture creation firm in Calgary that finances and builds high-tech startups. To learn more about his work with sustainable startups visit www.CameronChell.com