Big Company Disease is Most Often Fatal For Startup Companies
Posted by Robert Norton on
Definition: A startup is a company without any revenue and 50 or fewer people, which must deliver a product to the market shortly.
Easy access to capital and not adjusting to the new world after leaving a big company or another industry are some major reasons for "big company disease". This was very common in the bubble, when huge Series A and B venture capital rounds were easy to get without a real business plan or vision that showed how a company would make a profit. Many companies would have survived easily on so much capital if they did not contract this disease.
Unfortunately, it was common to see a large company CEO placed in startups and look like fish out of water. It was also common to see recent college grads acting as CEO. Some investors made quick money this way, flipping the "companies" to IPO that had no real or sustainable revenue stream before anyone realized there was no path to profitability. Some knew this and therefore were acting unethically, others got sucked in by all the hype.
Well, it is time to "get real" again - We are really just back to "normal" in many ways.
Early-stage companies need to generate 70% to 80% targeted solutions which cost a small fraction of "complete" solutions -- Never 100%, or perfect solutions (if there is such a thing). In the early days, everything is way too dynamic to invest in "ideal" products, documents, plans, or anything.
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Top 10 Signs Your Startup Has Big Company Disease
- You have a service to water your plants.
- You actually think someone's job is just management and anyone spends time not actually doing stuff.
- It takes more than 24 hours for a decision that might hold people up.
- You and everyone else do not perform at least 2-3 different job functions, as compared to a large company. (see Job Scope)
- Anyone has extra time on their hands or is trying to look busy.
- There are multiple layers of decision-making, instead of everyone in the same room.
- The CEO does NOT sign ALL checks (figuratively speaking, though literally is preferred).
- You have a COO, separate President (not the CEO) or a "Chief Strategy" Officer or any other "Chief" not involved in doing sales or product development)
- Your employees do not think of the customer as the number one priority and are more concerned with internal politics.
- Everyone does not know each other on a first-name basis or is afraid to talk to anyone, including the CEO.
- You have a service to water your plants.
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Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.
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