What are your values, the qualities you and your company hold as important?
Clarification of values is at the heart of a successful startup.
Startups often change their business model, the customers they sell to, and even the product they’re selling on their way to success. How then is a startup, after its second pivot (multiple failures), still the same company as when it started? What is the glue that keeps the team working together, focused on a goal that seems ever shifting, to finally achieve success? A large part of the answer lies in the values that the founders infect their team and, in turn, the world with.
Stephen Covey taught the world that the path to effective time management isn’t through the best electronic calendar but rather through gaining insight into one’s own values and making (as well as breaking) schedules accordingly. How can anything be effectively managed if the priorities upon which it is managed are not important and well understood? This holds true for all of the key areas of business.
1 Building Your Team
Identifying cofounders is like choosing a life partner – if your values aren’t aligned things can go sour very quickly. When I was starting my first company, my cofounder wanted to incorporate a non-profit .org. Good for her but I should have known that her values were at odds with mine. This difference in values was quickly borne out in our attempt to work together in a for-profit enterprise and we quickly went our separate ways. The same can be said for growing and, importantly, retaining a cohesive team. A company with clearly defined values will attract people with those same values, people who easily understand each other and who are fulfilled by working together to achieve the company’s goals.
2 Developing Your Product
Product development is all about trade-offs between features, resources, and quality. Steve Jobs never compromised on quality because his products had to be the most beautiful on the market. This came from his values that in turn were Apple’s values which its employees knew in no uncertain terms and which came to delight the company’s evangelical customers. That’s not to say you must hold quality as your most important value. If your most deeply held value is accessibility, you can still build a successful business. However, you would go about developing your product in a very different way, making sure that the resources used were minimal so that the price was low and within everyone’s reach.
3 Business Development
Creating strong partnerships through win/win deals is crucial to making the most from the resources available to a startup. How do you create a win if you don’t know or can’t clearly articulate what is most important to you and your company? What happens if those values are clearly violated? When do you walk away and say no deal? If you come to the negotiating table armed with clearly defined values, the answer to these questions is much simpler.
4 Financing Your Company
How much of your company should you give away? There are a ton of formulas on the web that provide best practices for the sale of equity at various stages of your startup but they’re worthless unless you know what’s most important to you. When I started my first company I was young and freedom was most important to me. If you value control over scale as I did, you may decide to bootstrap your venture over raising capital, especially in the early stages prior to gaining commercial traction. Later when impacting the world became more important to me, I did raise capital to fund my music technology company. I held scale as a critical value and decided that freedom could take a back seat (for a while).
5 Marketing & Sales
Perhaps the most obvious example of the importance of clear company values is in marketing and sales. It’s easy to tell the companies that understand their values by how clearly they communicate their value proposition. From the crowd of cut price airlines, only one stands out as fun. That’s because everything Southwest Airlines does communicates its differentiation. Every ad they run reinforces their values and employee understands that it’s their job to make the passengers’ travel experience enjoyable.
Steve Jobs – think different – think simple and beautiful – through many turbulent years the clarity of his values kept staff, investors, and customers on side until it finally led Steve Jobs and Apple to success.
What are your values? How do you use them to ensure success in your business?