Friday, February 26, 2010

Signs Your Start-up is Dead

Focusing my career on Canadian Web and technology start-ups has been both boon and burden. Statistically any start-up junkie will likely see more companies fail than succeed. Fortunately, the process of failure is very educational. Here are some of the signs of the 'end' as I've experienced them:

The Beginning of the End - Death begins early in the company's lifespan, usually rooted in a bad staffing or technology decision. Signs of a problem executive team can surface as tension in meetings, backstabbing and second-guessing peers.

Cognitive dissonance amongst executives (the process by which people convince themselves a decision is correct to the extent of making all other options falsely unfavorable) is another sign. One startup used a technology for a complex Web site because it worked at a different company. A year passed before the executive team made changes to fix the costly problems it caused, but it was too late.

The Danger Zone - The original business plan isn't working, and it's time to adapt and turn failure into success. Most of the mistakes made creating the business have manifested and must be dealt with. Executives plan and reposition.

Staff must align to a single potentially successful goal, and thus the company-wide meeting to 'get everyone on the same page' is held. Attending staff are usually in two camps: Those who are ignorant and start to question why changes are necessary, and those who are aware and have their own opinion on strategy. These meetings tend to divide rather than unify.

Other signs include: Switching corporate health plans, removal of snack machines and other creature comforts, excessive scrutinizing of minor expenses, bizarre staffing prioritizations (such as hiring 'miracle workers'), hyper sensitivity to office hours (including smoke breaks and lunches), and a light first round of layoffs (usually of people who are extraneous) with decent packages.

Get Out, Get Out, Get Out - This is a desperate stage where big changes are made to buy time for product/sales to bear fruit. Signs include mass layoffs with minimal packages, closed door meetings with occasional heated arguments and weekend crunch time. Employee morale hits rock bottom, and people wonder whether they will be paid on time. The CEO desperately scrambles for funding. Bad product changes are viewed as coffin nails. Tier one staff take jobs elsewhere. Key staff are promoted with titles to keep them.

It's Over - At this stage the company is running with a skeleton staff. Assets are inventoried yet begin to go missing. Paychecks are no longer electronically deposited. Arriving at work and being able to access the office is seen as a positive. Each remaining staff member fulfills multiple roles. Each meeting is potentially 'the' meeting. Lunches are long, and nobody cares.

© Jeremy Buehler and Rogue Tendencies ( 2010.

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