In previous columns, I've talked about two reasons why startups don't succeed: they either fail to share a common vision or they hire the wrong people. In this final instalment, let's focus on another reason why businesses fail: poor execution.
The inability to perform can be particularly frustrating for startups who may feel that everything else in the business is on track. For example, a startup have the right team, have the right product and the timing may be ideal to release the product into the marketplace based on the competitive landscape. They may even have the proper amount of capitalization. But if the market shirts abruptly, or a new competitor enters the fray with a product that resonates more strongly with consumers, then everything falls apart if the team cannot execute properly.
In simple terms, execution is when a business makes the right strategic and tactical decisions to capitalize on the opportunities in front of it. In many ways, it can be the most difficult hurdle for a startup because there are so many variables out of its control. In these situations, a startup may stumble because it's unable to react or adjust to maintain its momentum. And despite their best efforts, the management team can't or doesn't make the right moves at the right time.
But an ability to react quickly and adapt accordingly doesn't mean micro-pivots are the answer. Constantly changing tactics to find the perfect 'recipe' for success can make it more challenging for a startup to create a long-run strategic plan. To execute properly, a startup must have a strong grasp of their value propositions and target audiences so their products can succeed.
Another problem for startups is executing on the wrong things at the wrong time. I worked at a startup that devoted a significant amount of time and money to developing technology and building infrastructure. While this not a wrong decision, in and of itself, I believed it was more important to focus on marketing and sales to drive awareness and revenue. At the end of the day, the startup may have had strong infrastructure, but not enough customers knew about it.
For all the talk about Canada's improving capital markets for startups, a major consideration will be their ability to execute on their potential. Startups may have the money, but their success hinges on what they do with it.
Special to The Globe and Mail
Mark Evans is the principal with ME Consulting, which helps startup and entrepreneurs jump-start their marketing activities. Mark has worked with fourstartups–Blanketware, b5Media,PlanetEyeandSysomos. He was a technology reporter for more than a decade with The Globe and Mail,BloombergNews and the Financial Post. Mark is also one of the co-organizers of the mesh and the meshmarketingconferences.
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