Eight things I learned running a startup

It has been exactly three years since I abruptly left the startup that I co-founded. Now I look back and analyze what life would have been like had I decided to stay and asked others to leave. Yes, things would have been totally different and perhaps it does happen that way in a parallel universe. I do not have any regrets or hard feelings about it as I have done bigger and better things since I left. I’ve become a better person.

I have written another blog why I left the company but that’s now an old story. I know talking about it time and again kind of doesn’t feel right, but this thing came up while I was talking to few design folks the other day and I think it would be a good idea to do a retrospect and give some pointers to people setting out to launch their own startups.

I hope my experience could be your learning. Here we go:

It’s hard to survive in an incompatible startup culture

Every company has its corporate culture. Some are very strict about how employees work and behave while others are more open. I draw stark contrast among various tech companies in Nepal. A lot of the companies try and embrace the Silicon Valley culture where you can sheepishly walk into your office in shorts and slippers. That’s okay actually. As long as work gets done, any culture is a good culture. What matters is whether you fit into that culture or not. Are you comfortable with it or not. That’s what counts. If you’re not one of the people who love free beers and gaming console at work, then you don’t deserve to be there. My wife works in a Wall Street-based company, and they’ve inherited a similar culture even in their offices here in Kathmandu. She fits in perfectly, she’s happy about it. That’s what matters the most — if the culture isn’t compatible, it will eventually fall apart somewhere down the line and it won’t matter anymore. Before you join, try to understand where a company is coming from, and where it’s heading towards.

Hiring the right set of people is important

Culture is also determined by the type of people you bring in. A bunch of MBA’s will have a certain way of doing things while Engineers will have their own approach to work. It’s important that the people you bring in are not just smart and talented, but they also complement one another. Too many redundant skillsets will create a load imbalance as some people with unique skillset will always be working harder than the rest. It doesn’t look right when few people are working their asses off while the others chill in the sun, listening to music sipping coffee. So as a manager, you need to be aware that you’re filling the right job pockets of talent and everyone’s skills and talents work cohesively.

You need a middle layer of talent

It also matters what level of talents you hire. One big problem we ran into our startup is that a lot of the people we hired were very young people, full of energy and full of optimism. They loved what they did. Unfortunately, they were quite young. What we severely lacked is a middle layer of people with intermediate experience who could work as a balancing force between the principals with 10+ years experience and new hires with <1 years of professional experience. As a result, delegating work became very difficult. There was a huge drop in quality and efficiency, and it always showed in the work. Always make sure you have people in various experience levels too. That way the steepness can be somewhat leveled and the quality of work could remain consistent. Yes, the freshers would eventually learn and become better, but we’re talking about the times when they’re still learning and not yet market ready. I really feel bad that we threw them into the market without training them adequately.

Finance and accounting can make or break a startup

A penny saved is a penny earned. If you’d ask me eight years ago what I would do with the money I had, I would say I’d probably buy cool stuff, travel to places I want to go and eat what I want to eat. Today, I have an entirely different perspective in life and what I do with my money. As a company, it is important to know that the company too, just like a person, needs to save for the future. If you do not have adequate money in your reserve, you will suffer. Just because a client sent you a hefty cheque doesn’t mean you should spend all of it. If you get $1000, maybe you could spend $600 in capital and another $150 in recreation, but you need to learn to save the remaining $250 for rough days. It really helps. We had a terrible culture of buying extremely expensive (and mostly unimportant) things so the reserve was always depleting. It hurt the finances and sometimes we did not have money for things like utilities and rent when it was due.

Some clients needs to be fired

Weak finances mean that you need more work. More work comes from onboarding more clients. This was often the case where we ended up working with some clients I believe were not fit for the type of services we provided. We had a lot of walk-ins or referred clients we couldn’t directly say no to. So we would take up projects for dirt cheap. However, this came with a price — cheap projects are often the ones that demand the most amount of work. That was something I was not happy about. But they had to be onboarded because whatever they paid would be used to pay the bills. So we had some client base from Nepal as well as overseas I did not think were a good fit for us. When working on a project, a good manager must always try to minimize the risk and make sure things are in order. But once in a while comes a tipping point where it just isn’t worth it anymore. At such times, you need to tell the clients we don’t want to do this anymore because it’s costing us more in terms of effort and time and it’s not worth it. Learn to take your stance and always try your best to damage control.

A portfolio needs to be realistic

There is a term known as “Kauwa Biryani” from a Bollywood movie. It means that you claim to serve chicken biryani but in reality you’re serving your customers biryani made out of crow meat. We had done some pretty terrific work in our early days and before establishing the company. We used big client names and incredible visuals (all of which were true and unfabricated) as the cornerstone of a solid portfolio we sent out to prospective clients. Some of them were impressed and were quickly onboarded. However, as they went deeper into the projects, things started falling apart because our delivery of quality wasn’t in line with the results they anticipated. Why? Because we lacked middle layer. Even after I left my active duty, a handful of clients whom we had worked with earlier came back to me for last-minute crisis management because they were unhappy about the quality of work they received. I helped out two of their clients after I had left because they were unwilling to use the designs they had received from the company.

There should be less(er) dependency among people

When you’re a freelancer, you’re the institution. You’re your own temple. It doesn’t matter. Every decision you make is yours and every action you take is yours. But when you’re an organization, like I mentioned earlier, every piece needs to work like a cog wheel thus running the machine called company. If your company is too dependent in one person, quality of work and speed of delivery is affected. If you’re away for five days, nothing gets done because everyone needs to wait for you to make the decision. This is dangerous. You need to have smaller, autonomous decision-making entities that can continue to keep the mill grinding even when you’re gone. There will be days where you will just not feel like working, and that’s fine. But why make everyone wait if you need an afternoon nap? Best thing to do is to reduce dependencies and try to become as much redundant as possible.

“My client, your client” is a bad thing

When you’re a team, you’re a team. Every project you do, every cheque you earn, every decision you make is a combined responsibility and a combined achievement. You must learn to celebrate the power of working as one. Unfortunately, there will be times when you favor the client you brought more than the rest. Once the client is in, now they’re the client of the company and not yours alone. When you have a client, no matter whether you brought or another person in the company brought, treat them the same way. Give them the same love and attention they deserve. Yes, it’s okay for you to become the primary point of contact because of course, you know them better — but don’t give them preferential treatment over another client you did not bring. This was one thing we were constantly running into trouble with, and after a time, I stopped bringing my old contacts from my freelancing days into the company because it just didn’t seem to work.

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So that’s about it. I learned a few things down the road and I believe some of you might end up in the exact same spot I was in a couple of years ago.

I often repeat time and again that starting out a business is not enough. I mean starting is the easiest thing to do. What really matters is how you drive and in which direction. In the road of entrepreneurship, I gave up because some of the things were not fixable. Neither could I establish a culture neither I liked micro-managing finances, so I deemed the best option would be to step down and that’s exactly what I did. I hope this provides some insight to entrepreneurs starting out on their own ventures. I hope my experience can help even in the tiniest way to build a better company. Good luck, and cheers!