How mindset determines your startup success when starting out

**In entrepreneur Jamie Pride’s book, Unicorn Tears, he states that the failure rate of startups is 92% – alarmingly high, but there are things that founders can do to improve these odds.**

Based on my own experiences in founding and leading software companies, I discovered a way to steward SMEs.

I call this way ‘succession thinking’, which provides a way to steward a business to be more resilient by establishing habits and practices to support the development of the founder’s mindset.

Building role clarity

The founder of a business has the great challenge of a broad range of tasks that require a broad range of capabilities. For start-ups, seeking role clarify from day 1 will improve your effectiveness.

Imagine that on day 1, regardless of the number of people in your business, you created three teams.

Owner-Director, Organisation Leader and Operations.

You build this structure because each has a different set of roles that require different acumen. You will do all the work associated with vision and capital on the owner-director team. You will form and implement all strategy on the leadership team.

You will execute all your technician roles (sell, deliver, nurture for example) on the operations team. These will evolve into other teams in the future.

Very few founders invest enough in the acumen associated with being an owner. It is often the decisions associated with this role that contribute to failure of the business.

Developing owner acumen

As an owner of a business, you have decision rights for the formation of the business manifesto. Let’s call this the owner’s vision.

This gets to the core of your motivation for starting the business, clarity of the destination and the guard rails to assist decision making. Putting the effort into crafting this will assist with communication with all subsequent stakeholders involved in your business.

The biggest of these is clarity of what type of capital you will seek and from whom. For instance, are the investors investing in your vision or do they want to change it?

It is my discovery that few founder/owner-leaders have the natural acumen to craft this owner’s vision and need support to get to the core truth. However, if done well this can be a powerful way to support subsequent decision making.

Another important consideration is where there are multiple founders. Having a process to develop and integrate the owner’s vision can mitigate risks down the line. If one owner is a short-term thinker and the other is in it for the long haul, strategy formation will be difficult.

Finally, building acumen to understand the relationship between capital and vision is important. I think a Return on Vision mindset is vastly different a short-term Return on Investment mindset. Knowing which you are is important to what type of stewardship/governance system you will build in your business.

Aligning behaviour to vision

This is a very big topic and requires more than a paragraph. However, it is my discovery that the elaborated vision and the behaviours of the founder are rarely well aligned. I discovered this for myself many times.

A recurring theme is not to delude yourself. I would often find myself acting on inferences and assumptions and not validated data.

I was introduced to the Inference Ladder which was a significant discovery. I still fell off the horse, but I became more disciplined about trying to get to the core observations and measurements.

In Prides book he elaborates 10 reasons why startups fail.

The first 5 are: