3 Signs Your Startup May Be Slipping

Originally posted by Emily Barnes, The Creative Destruction Lab The Rotman School of Management, University of Toronto

Businesses large and small can find it tough to spare a few moments to step back and look at the big picture. But immersed in the little details surrounding new product features and releases, you can easily miss a few telltale signs your startup is starting to spiral.

Luckily, Fred Dawkins has done the legwork for you. Partner of the Creative Destruction Lab, serial entrepreneur and founder of The Old Hide House, Dawkins has turned his past experiences into a series of books about entrepreneurship, the first of which is Everyday Entrepreneur. He recently hosted a number of workshops in partnership with the Lab, touching on everything from the misconceptions of entrepreneurship, to the day-to-day trials and tribulations of an entrepreneur, to the increasingly important role of small business in the global economy and all that’s in between.

If you can’t spare the few minutes to check in on that big picture, Dawkins asks that you at least watch for these three signs that your startup is on the out.

YOUR STARTUP BECOMES YOUR LIFE.

Undoubtedly, there’ll be an imbalance. There’s no denying that you’ll have to work long hours – especially in the startup phase and when you run into times of hardship.  Your social life will at times suffer, as will your relationships. But this anguish shouldn’t be a constant.

This may seem erroneous if you’re in the early stage of running a business. Timing is everything, and if you launch too late – especially in tech – it can make or break your success. It’s a bit of a catch-22. But unless you’re an anomaly, if you’re working an innumerous amount of hours, you’re doing something wrong. It’s symptomatic, and signals a discord elsewhere in your business. How strong is your team? Are you delegating?

Despite much popular literature that speaks to the contrary, you truly can maintain work-life balance as an entrepreneur.  Recharging your batteries is critical. Have your hobbies and have your venture. Sometimes the two will overlap. Even then, you must create that separation. When you lose sight of work-life balance, you also risk impairing your business’ vision. It’s important to step away from your company, if only for a few hours.

CASH FLOW – IT NEVER LIES!

If you’re going to be successful, you’ll first need to know and understand your numbers. Metrics aside, look to cash flow. It’s right on your doorstep. Omnipresent, it serves as the perfect warning mechanism. If you’re running low on cash, you’re doing something wrong.

Too often, startups seem to bolt at the first sign of cash flow struggles, looking to investment for relief. Granted, it’s a quick and relatively easy fix (provided you can offer up a good pitch), but too many run into the open arms of deals that offer marginal amounts of cash for large chunks of equity.  It’s easy enough to relinquish control of your business because you have to – to bring in a partner or some easy money. But don’t make rash decisions without properly considering the long-term consequences. Do the math. Beware of commitments that’ll eat up your profits. Brick and mortar businesses tackle high overhead, hardware startups combat production costs, and SAAS businesses at first operate virtually cost-free. Remind yourself of this. In a startup press bubble that’s dominated by one funding announcement after another, it’s all too easy to start asking for money. Don’t forget about sales, the good ol’ fashioned revenue stream.

There’s a lot to be said for natural growth and learning to manage within your means. Bootstrapping isn’t a requirement so much as an opt-in measure of control.

YOU, THE FOUNDER, ARE THE BEST PERSON ON YOUR TEAM.

Things are different when you transition from project to business. Parameters change, and your skillsets need to adapt along with them. But few people have the knowledge or experience necessary to carry an idea through to company, then onto global success. Don’t be afraid to hire people who know more than you do in specific areas.

You’ll be tempted to keep a short leash on success, and find it difficult to relinquish control of even the most minor of tasks. Don’t impede success for the sake of ego. Sometimes you’ll need to let go of responsibility, and sometimes that also means you’ll need to cut off a slice of the equity pie. Your ego will take a hit, and your percentage of future earnings will too, but you’ll mend and the pie may just get bigger.

Recognize your deficiencies. You can’t always keep pace with your company, or grow at the same rate it does – not everyone is that malleable. Hire those whose skillsets can compensate for the holes in your own. You are not your company and at some point your interests may diverge, so have an end game.

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  • What Readers are saying about Family Entrepreneur book 2 in The Entrepreneurial Edge series

    family-entrepreneur“Fred Dawkins sure can tell a story. I really enjoyed his previous one: Everyday Entrepreneur. Again with Family Entrepreneur, he gives us a great story and a pleasant read. He provides wisdom, comfort and learning about entrepreneurship from a family enterprise point of view. I kept thinking of those I know in that situation that would have benefited from reading it earlier in their life. If you are part of a family enterprise, here’s a chance to learn from Fred, an accomplished family entrepreneur, and make your life much more effective and rewarding.”

    Brendan Calder Entrepreneur in Residence and Adjunct Professor GettingItDone
    Rotman School of Management U of Toronto.

    After reading Family Entrepreneur: “In the age of Twitter, it warms the heart that ‘smallbizpreneurs’ still rule the roost and family business remains the proven formula”

    Peter C. Newman – Legendary Canadian journalist and author

    Author Fred Dawkins has penned another winner with Family Entrepreneur. The third party narrative style of storytelling allows for a variety of opinions to be put forward while maintaining an entertaining read. Chalked full of real life scenarios and challenges that face every business, the Family Entrepreneur will engage all entrepreneurs from every generation, whether in a family business or not.

    David Wojcik Host and Executive Producer BiZ TV Canada

    “Working in the Financial Services industry for fifty plus years, twenty seven as an Independent Financial advisor, I dealt with high net worth clients & many successful family businesses. The first book in this series was very good but I believe that this second one ought to become the bible for every entrepreneur & budding entrepreneur as it is full of very valuable, helpful & vital advice & is very cleverly written. It is a book that should be read over & over & dipped into whenever there is a query or problem”

    Frank Weisinger – Past National President of the Life Insurance Association (UK)

    “Recently I was in the process of selling my historically significant commercial building. During the negotiations with realtors and prospective buyers, poring over lists, namely needs, wants, and conditions, I was overwhelmed and sought a diversion. In Fred Dawkins book, “Everyday Entrepreneur” I quickly became immersed in the text. His counsel on the key elements in negotiations in Chapter 18, Planning and Control, awakened in me an appreciation for what was most important for me as well as for the buyer, and the need for flexibility to reach an agreement. I accepted that it truly was a process that had to evolve, and because of his advice I felt empowered and confident to negotiate the sale.”

    Elaine Tucker, Independent Business Owner

    Fred’s book is thought provoking, highly entertaining while being truly insightful. Readers are challenged on their own beliefs and characteristics regarding entrepreneurship, mentors, career, and family. At times, I was laughing and other times intrigued by the business concepts subtlety being offered. It is full of rich ideas on how to develop and maintain an entrepreneurial mindset and how to build a business the right way, avoiding the issues that have caused others to stumble. As a serial entrepreneur and business coach I highly recommend Fred’s “Family Entrepreneur” for those in business or thinking about starting one.

    Bill Simmel CEO& Founder Phoenix ONE Sales, Marketing, Management + Communications Inc.

    In his second book Family Entrepreneur Fred Dawkins uses the same intimate discussion format that made his first book, Everyday Entrepreneur so informative and such a great text for seminars. Fred’s experiences as a successful family entrepreneur form the bases of real life discussion for concepts such as funding through leadership and the pitfalls and opportunities of personal issues, entitlement, rewards and succession that have special significance in a family setting. Best expressed in his own words “Entrepreneurship is a life philosophy grounded in opportunity, fueled by determination and focused on results.” Whether a beginner, well into an entrepreneurial venture, or a professor of business, this book is a must. It’s great stuff.

    Dr. Freeman McEwen Dean Emeritus, University of Guelph

    Reading Fred Dawkins book ‘Family Entrepreneur, Easier Said than Done’ is like having an experienced business coach who’s already walked down the same road you’re traveling, right there with you. While reading this book you’re bound to sigh with relief as he examines all the mildly crazy things we do as family entrepreneurs (we are not alone!). You’ll raise your eyebrows, smack yourself on the forehead and underline text reflecting his simple solutions and powerful observations and you’ll feel a surge of motivation as you put them into play immediately. So accurate are his examples of family business dynamics that you’ll feel such a familiarity with Dawkins’ writing you’ll swear he’s been reading your email. Written in a storybook format that’s enjoyably easy to read, you’ll want to take this book along with you on your next vacation. I have a hunch it’s going to be a book I return to and recommend on a very regular basis.

    Sherri J Griffin 20 Year Training & Development Professional

    “This book is an exceptional read that paints the bigger picture of entrepreneurship through easy but important dialogue. I recommend anyone interested in starting a business or entrepreneurship in general read this and take notes.”

    Douglas Lusted CEO Linkett, The Next 36, First Cohort The Creative Destruction Lab at the Rotman School of Management, University of Toronto, Velocity Venture Fund Winner University of Waterloo

    Utilizing his exemplary storytelling skills, Fred Dawkins has written an excellent book about entrepreneurship in a family setting environment and the the many challenges that it places on the entrepreneur and the family, as well. As indicated in his subtitle, it is easier said than done. The book clearly articulates a number of the issues involved in running a business so that the primary owner can prosper yet not conflict with family values, expectations, including physical, as well as financial and emotional needs. He cleverly exposes how frequently family members butt heads during the running of a family business and how difficult it can be to resolve differences among family members. If you’re a small business or entrepreneur working with your family in your business, I would highly recommend that you read Family Entrepreneur. It will provide you with valuable insights on how you might be better able to deal with the challenges in running a “family” business.

    Jeff Sheehan- author of HIRED! Paths to Employment in the Social Media Era

    Family Entrepreneur: Easier Said than Done by serial entrepreneur Fred Dawkins tells real-life stories that reveal the good, the bad and the ho-hum of family businesses. In an engaging, easy-to-read format, Dawkins shows you how to find your own solutions to questions about business controls, succession, dispute resolution, gender stereotypes, or decision-making.

    Traditional family businesses are being disrupted as baby boomers retire. What are the new models to keep a business competitive and family ties strong? In Family Entrepreneur, memorable maxims guide the conversation and bring the reader into the conversation. A sister who functions as the COO of her brothers’ company but doesn’t get the credit or financial rewards. A brother who runs a business but can’t make critical decisions because their father left one-half of his company to each sibling. A brother who started his own very successful business and is being pressured by his parents to take his brother and sister into his own business. A mother who started her own fashion company and is now being overrun by her daughters.

    Dawkins speaks to all entrepreneurs and ‘want-to-be’ entrepreneurs – those who start a business to provide for their families, to fulfill their dreams, to profit from their innovations, to be their own boss. Hear how they make their decisions – should they stay in the company? sell it? start a new business? In my own field of veterinary medicine, these situations are a recurring theme.

    Focusing on family business and family dynamics, the Family Entrepreneur will give you the courage to tackle your own situation. Family relationships are complicated in the best of circumstances and running a company means constantly adapting to changing environments. Dawkins provides sage advice for anyone in a family business, emphasizing how important it is to face the issues head on as rationally as you can and not to allow emotion to dominate the conversation.

    Dawkins celebrates the family business as the original business incubator and encourages would-be entrepreneurs to take the leap (after careful looking at all the options!). The valuable insights will guide you no matter where you are on the entrepreneurial timetable.

    Dr. Elizabeth A. Stone | Dean, Ontario Veterinary College (OVC) | University of Guelph

    In the fast paced age of corporations and global multi-billion dollar industries – Family Entrepreneur is a riveting road map for all readers, regardless of their desire to become an entrepreneur, or to simply learn key tools which will drive creativity, leadership and success in business and life.
    Who said you can’t teach entrepreneurship? Effective and cleverly narrated through the eyes of a young female entrepreneur, Family Entrepreneur showcases the challenges, rewards and opportunities within life and family business from varying timelines. It’s easy to find one’s self and relate to the characters throughout the book. It reads like a novel, but is a sneaky and fun way of teaching the tools of the trade of family entrepreneurship – or for that matter – entrepreneurship in general.
    Maryam Latifpoor-Keparoutis, Senior Development Manager, College of Physical & Engineering Science (CPES), University of Guelph

  • Here’s a quiz that everyone needs to take.

    1. Are you concerned about funding your retirement?
    2. Does the trend to precarious employment disturb you?
    3. Do you consider globalization to be a threat to you, your children and/or grandchildren?
    4. Are you having trouble getting your career underway?
    5. Do you have to extend your career?
    6. Are you struggling to find a succession plan for your business?
    7. Are you worse off financially than you were ten years ago?
    8. Do you have fewer opportunities than you expected at this stage of your life?
    9. Would you like more control over your financial future?
    10. Are your best years behind you?

    If you answered yes to any of these questions than you should read my series of three books The Entrepreneurial Edge. These books are The Wealthy Barber for anyone dealing with these issues and looking to embrace self-determination in a world conspiring against individual success

    Book 1: Everyday Entrepreneur – making it happen

    Book 2: Family Entrepreneur – easier said than done

    Book 3: Ageless Entrepreneur – never too early – never too late

    Don’t let the word entrepreneur scare you off. You don’t have to run a business to think like an entrepreneur and take charge of your life. Think entrepreneurially. Be resilient. Be adaptable. Make things happen. Embrace self-determination. Trade stability for agility!

    The most important skill to learn in the 21st century is the ability to create and manage your career!

    Each of us must be his or her own brand making good strategic decisions about life and career.

    Fred Dawkins

    Author

    fred@fcdawkins.com

    fcdawkins.com

    Everyday Entrepreneur dundurn.com/authors/fred_dawkins

    Follow me on twitter @dawkinsfred

    Follow My Blog The Entrepreneurial Edge https://fcdawkins.com/blog/

     

  • Entrepreneurs: Lessons from ‘Own the Podium’

    With the Vancouver Olympics on the horizon the Canadian Olympic Committee supported by the Government recognized a need to change the status quo – a need to disrupt the traditional methods and find a way to achieve the winning performances expected from the host country. The situation demanded an entrepreneurial approach based on opportunity and determination. The opportunity was hosting the games – the determination to win existed with the athletes but the momentum to surpass previous achievement came from the Own the Podium program that created an ecosystem promoting pride, confidence and results. It worked – in Vancouver the Canadian team set a record for the most gold medals won at a winter Olympics and collected more total medals than they had ever won in a single Olympics. The key was creating a culture that nurtured success and established that success as a new normal, an expectation. In the simplest terms a philosophy or mindset focused on making things happen- the essence of being entrepreneurial.

    On an individual basis this program is a great example of breaking free of prison thinking and letting your determination take you through to success. But Own the Podium is far more significant than that. It is a great example of the collective creating the support system that produces individual success to the benefit of the entire country. We must do the same in the business world. Did you know that over 350,000 Canadians live and work in Silicon Valley? Why? Because the Valley offers the most highly developed tech ecosystem the world has ever seen. Do you also know that there is a worldwide competition for talent going on? Governments around the world are building programs to attract entrepreneurs to their countries. Canada has already introduced a fast track system to provide visas and a path to citizenship for entrepreneurs/innovators who can attract venture capital investment from Canadians. However if we can just keep our best and most brilliant home we can do well in this talent war and improve our prospects and results. We need to Own the Podium in tech development and in entrepreneurship.

    We have a good start with programs like MaRS , Communitech and The Creative Destruction Lab at the Rotman School but we need the collective will and the support of government to build an ecosystem that is second to none and that brings out the very best from the natural ability that exists here. If one per cent of our total population representing a much higher percentage of our intellectual capital are living in California than we have the tools here but we are both losing them and underutilizing them. More or less like our Olympic performance prior to Vancouver. If we can do it in sport we can do it in business.

     

  • Ten Things These Books Will Do For You

    June-October 2014 including Family E 235Series: The Entrepreneurial Edge
    Book one: Everyday Entrepreneur – making it happen
    Book two: Family Entrepreneur – easier said than done
    Book three: Ageless Entrepreneur – never too early, never too late

    Ten Things These Books Will Do For You

    1. Get you out of a mental rut and into new opportunities
    2. Show you a path to self-determination
    3. Increase your earning power
    4. Enable you start a business, manage your career or accomplish your bucket list
    5. Make you a problem solver
    6. Enable you to build teamwork in your business and at home
    7. Explain the dynamic of the fast paced global economy we live and work in
    8. Prepare you for all of the fundamental issues you will face in a business
    9. Provide common sense solutions you can accomplish
    10. Inspire you to strike out, create your own brand and control your career

    “Fred Dawkins has written a wonderful book about entrepreneurship unlike any other on the market. He brilliantly uses his storytelling skills to illuminate his subject in a way that makes the book a joy to read. You’re so wrapped up in the story that you may not realize how much you’re learning until you’ve turned that last page.”
    — TERRY FALLIS, AWARD-WINNING AUTHOR OF THE BEST LAID PLANS AND UP AND DOWN.

    “Fred has pulled together a wealth of knowledge and advice crucial to the successful entrepreneur in a highly readable fashion. It is a must-read for aspiring and seasoned entrepreneurs who are facing today’s complex, volatile, and uncertain world. I especially appreciate the emphasis on thinking globally and adapting proactively. We have seen too many examples of yesterday’s winner relying on old models to their detriment. It isn’t easy … but it is exciting and gratifying to create your own business and work to see it flourish. The summary at the end of the book should be bookmarked on every entrepreneur’s computer.”
    — Dr. Sherry Cooper, former executive VP and chief economist for BMO
    and author of three books, including The New Retirement: How it Will Change Our Future

    Utilizing his exemplary storytelling skills, Fred Dawkins has written an excellent book about entrepreneurship in a family setting environment and the many challenges that it places on the entrepreneur and the family
    – Jeff Sheehan- author of HIRED! Paths to Employment in the Social Media Era

  • Entrepreneurship: Disruption in the face of the “Era of Big”

    We are entering an increasing – no pun intended- age where size is dominant. Big Business, Big Government, Big Unions, Big Data and most damning of all “Too Big To Fail”. We have sacrificed the principles of micro economics such as the optimum size of the firm and the law of diminishing returns to build dominant global enterprises- behemoths more closely related to their bureaucratic enemy, government, than they will ever admit. These entities lumber around the world chasing low costs and cheap labour in the name of maximizing profits. If they fail they plead their case in a public forum that they are too significant to let die. They are pyramids paying outrageous rewards to those that scale to the top.

    What are the implications for individualism. Job stability no longer exists. Big data is generating information far beyond are ability to comprehend. The rate of change is staggering. 24/7 hyper-connectivity has us all chasing our tails, Are we headed for Big Brother? Globalization is both an opportunity and a threat. Small business is vulnerable to competitors around the world but at a time when things are moving at lightening speed entrepreneurs are flexible and adaptable giving them the opportunity to find a niche and move into it before others. The most important skill to learn in this new era is the ability to create your own job. Without it the threat is the loss of upward mobility for many and perhaps economic independence for most. The divergence of wealth between the rich and the poor and the eroding middle class are forewarnings. Entrepreneurship is critical for the individual.

    But it is also critical for these huge entities. Without the impact of disruption based on challenges to the status quo , sometimes referred to as ‘intrapreneurship’, governments and huge businesses will never come close to producing optimum results and solutions. The current conundrum in Washington shows a government that is not only dysfunctional but is mired in a malaise of mediocrity. There are no disruptors coming forward to challenge the party lines and find compromise. Optimum decisions are a pipedream in this environment.

    Entrepreneurs make things happen. They are problem solvers. The greater the problem the greater the reward. Regardless we need them at all levels. It is a skill that some are born with but many can learn. We are headed for a tsunami of Big Data that can swamp us. Machines will literally know more than any individual. It’s a scenario that science fiction writers have been portraying for generations. Individual success will be tied to entrepreneurial skills and attitude. Entrepreneurship has never been more important. We live in interesting times.

  • Entrepreneurs Wanted

    Entrepreneurship rests firmly on opportunity. But in the face of a rapidly changing global economy there is an overwhelming increase in entrepreneurship of necessity. Seniors need to extend their careers. Youth are struggling to launch theirs. Women are looking for flexibility to meet a combination of career and family needs. Individuals around the world are seeking freedom of opportunity. At the same time Big Business is pursuing profits around the world undermining the stability of employment markets. There is widespread decline in loyalty between employers and employees. Structural unemployment is a demoralizing prospect. One need only look to Detroit to see the impact.

    The result? The most valued skill in the 21st Century may well be the ability to create your own job. Job creation rests clearly on individuals -first for themselves and then for others. It reflects the difference between Localization versus Globalization – small scale entrepreneurs find their opportunities locally creating jobs in areas that Big Business has abandoned for offshore savings. To compound this the fast paced rate of change driven by technology favours small flexible and adaptable businesses that adjust to changing circumstances. Large companies find their growth through acquisition not startups.

    Around the world governments are finally recognizing the importance of entrepreneurs. Fortunately there is a great deal of talent that is suppressed and can be unleashed, whether through culture, education, gender , race, funding or other limitations. It will be up to government to remove the shackles Entrepreneurship has been the driving force behind the economic dominance of the Western world. It is the economic resource that puts other resources to work. Our economic future is moving to the hands of those who are driven to make things happen.

     

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