Many new startups fail in their first year. Some startups become even more successful than very big companies. Here you can learn what is the main difference between failed and successful startups:
Clarity of strategy and the product vision is very, very underestimated.
Everyone in the company (including board members and key vendors) should:
- Have a deep understanding of the product
- Know the product strategy for the next 18 month
- Know the company strategy in the next 18 months.
Strategy needs to be really, really clear and everyone needs to understand it.
The strategy does not need to completely baked, and it can change often, but the key thing is that everyone in the company needs to be on the same page as to what the current company strategy is. If the strategy changes (and that happens a lot in startups), everyone needs to buy into that change, understand it, and (of course) be aware of it.
If strategy is not clear, micro-management by the CEO (or a few core executives) is necessary. If only a few people really understand the company, they must manage everything. You see this playing out a lot in startups that spend a lot of time hiring amazing people and then proceed to micromanage them because of a lack of clarity of strategy. This is a waste of really talented people.
An even worse case scenario is what happens at some larger companies: when many of the top execs (and, by extension, the employees) have differing views of the strategic direction and the product strategy. This can be really bad because sometimes you will see the same company pursuing two opposing strategies.