Does your startup need to go on a diet? - Mark MacLeod

November 3, 2022 - Mark MacLeod

Does your startup need to go on a diet?

When we think of startups, we don’t often think of bloat. After all, ‘lean startup’ is a thing… However, fat comes in many form and startups are not immune.

It is a given that over time your company will accumulate fat in the form of processes, programs, team members, features, etc that just don’t add value. And the faster you grow, the more likely this will happen. It is an unavoidable consequence of growth.

So, what are you to do?

A company is a collection of people and projects. Recurring systems are the glue that unite these people in order to deliver said projects. We are used to systems in the form of product development cycles, sales cycles, month-end closings, customer onboarding processes, etc, etc.

To systematically combat bloat in your company you need an ongoing, ever-present bloat elimination system.

CEO – Chief (fat) Elimination Officer

This starts at the top. All else being equal, getting to the same place faster tends to be more valuable in startup land. If your startup gets to $10M annual revenue in three years, it will be worth more than a company the same size that got there in five years.

As a result, I think one of the most powerful questions a CEO can ask is “How can we go faster”?

Now, this question is not designed to have people do more work. Rather, it is designed to force people to look inwards. To examine their projects, processes, team members, etc to find fat. To find things are not working or simply not needed.

I have encouraged many of the CEOs I work with to ask this question in literally every meeting they attend. Every product meeting, project review, you name it. What many of those CEOs have found is that staff now anticipate this question, resulting in two huge benefits:

The project proposals that the CEO sees are already leaner

They contain scenarios for cutting scope or other parameters in order to get to essentially the same place faster.

As Tobi Lutke, co-founder and CEO of Shopify always says: “Done is better then perfect”.

Now a CEO asking a question does not a system make. Every leader in the company has a role to play.

As mentioned, the CEO’s ever-present question of how can we go faster does get everyone thinking about this. But beyond that, here are some other suggestions:

Make data core to decision-making: What gets measured gets improved. A startup is full of smart, headstrong people, filled with passion and conviction. This is all good, but data is essential in streamlining decision making. As an example, you can debate whether a feature is valuable or just look at heat maps and/ or database logs and see if it is being used. One is opinion. One is fact.

Ideally, your data systems are set up so that you can directly attribute a program or spend back to a result that grows the value of your business.

Systematically review your people: Most startups don’t have factories making widgets. For most, everything comes down to people. I have written extensively about this before, but it is far from a given that your current staff can or will keep up with your company growth.

It is inevitable that you will have staff that are lagging behind. You need to identify them and either get them caught up or free them to find a new role that is better fit. After all, no one wants do poorly in a role. If someone is not crushing it in your company, they know it in their gut. You’re not happy. They’re not happy.

Focus, focus, focus: This again starts with the CEO but extends to the leadership team as a whole. Going back to the importance and value of speed: You can’t move fast if you are an inch thick and a mile wide trying to do everything for everyone. I see so many startups that have acquired 0.01% of their current addressable market starting to work on new markets. This is crazy (and is the cause of many startup deaths).

Your startup will be full of smart people with interesting ideas. But you can’t act on all of them. You need to be razor-focused on one singular vision. And the path to get there is always one segment, one ideal customer profile at a time.

If you are always asking how your company can move faster, have great measurement systems, regularly review and update your talent and are maniacally focused on a singular vision, you will be doing a great job of keeping your company fat free!

Questions to consider:

When was the last time we reviewed our company to identify areas of waste or non-value add?

What am I doing personally that is not adding value?

What am I tolerating in terms of people, meetings, processes, etc that I don’t think add value?

When was the last time I challenged my team to deliver a goal faster?

Are we making decisions based on opinion or data?

Which team members are not keeping up with our growth? What will we do with them? Do they have the potential to catch up?

Are we focused on a singular vision? Do we need to tighten our focus even more?

Photo by Thought Catalog on Unsplash

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