3 Actions Smart Entrepreneurs Never Take (and 5 They Do)
Complexity is often the enemy of execution. Are you making rookie founder mistakes or are you prioritizing important items essential for running an effective startup that can scale?
Far too many entrepreneurs confuse strategy with actions. And when founders use the wrong actions, it can lead to the wrong types of shortcuts. Not all actions support the strategy needed to take your business to the next level. As the business guru Michael Porter famously said, “The essence of strategy is choosing what not to do.”
Working as investment bankers at Goldman Sachs, starting and selling our own company, and now running a venture capital firm with a portfolio of over 130 companies, we have seen it all.
We want to shortcut your startup by giving you a fair warning on the three actions that you never want to use, and five you should start doing today.
3 Actions to Avoid:
1. Saying yes to everything
Beware the temptation of saying yes to everything that crosses your path; the result will be a muddled mess of you running around doing a lot but accomplishing little. Make sure you spend your time wisely on achieving key results that will link up to larger goals, rather than lots of dispersed activities.
To make disciplined decisions, rather than chasing every shiny new thing, here are some questions to ask yourself and/or your team.
- Can it wait?
- Who from the team will this require?
- Is the timing right?
- What’s the complexity of the partnership? Are the people on the other end of the deal capable of doing their part?
- Who would make it happen? Who will pick up the slack if that person focuses on this?
- What are we willing to let go of to do this?
- What is it realistically going to take in terms of time and resources? (Then multiply whatever amount you come up with by three!)
When you make the effort to answer these questions — and any others that occur to you regarding the specifics of the situation — you create the rigor that results in well-thought-out additions and changes to your action plans.
2. Burning the candle at both ends
Pushing past your limits doesn’t work well. We once read that when you’re overtired and try to make a good decision, you increase the time it takes up to 500 percent. New research by the International Game Developers Association has found that productivity goes down the longer you work. If you work eight sixty-hour weeks, you’ve done the same amount of work you could have done in eight forty-hour weeks. A study done at Stanford University says that fifty hours per week is ideal.
Everything is either an investment or a return on investment, so manage your energy, not just your time. That means taking action to take care of yourself — eating and drinking healthfully, exercising, getting enough sleep. Stay in fighting condition! In return, you receive the stamina you need. If your tactic is to run as fast and as hard as you can, you will burn the candle at both ends and you will soon run out of wick. Staying healthy is crucial when you are an entrepreneur.
3. Thinking you can do it all yourself
When founders act like stubborn individualists, they set themselves up for potentially huge startup mistakes.
Opportunity cost is a crucial factor that many founders fail to fully take into account when they say, “I need to do it all by myself.” It’s defined as the loss of potential gain from other alternatives when one alternative is chosen. In other words, when you spend your time and money on one thing, by definition you can’t spend it on something else, so you’re losing the potential value of the other choice.
Opportunity costs can be monetary, but they can also include lost time, output, attention, or any other benefit to your company that you could have had if you’d made a different choice. Time and attention are finite, so when you choose to do one thing, you’re always forgoing the value you could have created by doing something else.
Now that you know the top three tactics to avoid, we want to share the five tactics to start doing now.
1. Constant prioritization
Be strategic about when you work on your priorities. Dad always told us it’s best to do the big, important things first thing in the day when your brain is at its maximum strength from resting and eating. So before you tackle all the smaller things that must be attended to, such as responding to texts and emails, get something big done from your list.
If you use up your brainpower on minor activities, you won’t have enough to tackle your big thinking tasks.
If you are not constantly prioritizing, you’ll get to the end of the day, the week, or the month and realize you’ve been in firefighting mode the whole time. As a founder, you can’t afford to be putting out fires all day; you need to be working toward that next milestone.
Courtney just installed a whiteboard in his house on which he lists his top five business priorities and top five personal priorities. They stay at the top of his mind in every decision he makes about how to spend his time.
2. Divide (and conquer) your day.
We love venture capitalist Paul Graham’s notion of “Maker’s Schedule, Manager’s Schedule” regarding efficiency and time management.
Here’s our translation: Some of what you need to do at work is managing projects and teams, which requires meetings, meetings, and more meetings. Other times, you act as a maker, working by yourself on a creative idea for your product, service, or business.
Graham’s point is that each of these requires a very different kind of schedule, and unless you optimize for the two, you won’t be as productive at either as you could be.
Makers need long periods of uninterrupted time in the creative zone to produce great results. Research shows that it takes as long as thirty minutes just to prepare for a new project mentally. Every time you are interrupted by a manager’s task, that creative flow is disturbed and it takes up to another thirty minutes to get back there. That’s why so many creatives prefer to work at night; there are fewer interruptions. Managers, on the other hand, live by the calendar, with meeting times slotted into specific increments of time.
As an entrepreneur, you need to do both, which means planning your schedule very carefully to give yourself enough time for both. You can’t block off thirty to sixty minutes for creative thinking in the middle of a day full of meetings and expect good results. It’s much better to understand when you need to be in the maker’s mode and schedule accordingly. This means:
- Blocking out uninterrupted time on your calendar — consider it a meeting with yourself
- Notifying those who work for and with you that you will be of offline
- Turning off any distractions, such as pings and email notifications
3. Stick to your systems 100 percent.
Pick an organizational system and stick to it 100 percent. Otherwise, it’s like dieting for a week, then complaining it doesn’t work. We like the David Allen “Getting Things Done” methodology, which includes categories such as “Next Actions” and “Waiting for Others.”
“Next Actions” we review daily for things we have to do.
The “Waiting for Others” category gets looked at weekly. If we haven’t heard back from people, we send a follow-up email. This way, we track each and every important email with a minimum of worry.
4. Maximize Every Minute
What important things are you not doing during the day? Every minute you do something not contributing towards your greater goal, you are spending a minute you could be using to do something crucial.
Because time is such a limited resource and speed matters so much, we’re obsessed with thinking through how we spend each and every minute. When it comes to time allocated for work, Carter calculates “return on invested time” — literally asking yourself, after every activity, what was the return on spending that particular stretch of time? Was it worth it? As a side note, Carter does not include personal care/family in this calculating process.
Take the concept of opportunity costs discussed earlier and drive it down to each hour of your day. Otherwise, it’s too easy to make the classic entrepreneurial error: “It’s better for me to do this [drive to the UPS store, manage your inbox, book your own travel, and so on] than to hire someone because it saves money.”
This isn’t smart thinking.
We’re really serious about this for ourselves. Carter has given up driving and exclusively uses Lyft so he can work while he’s in transit. He realized driving was costing him an hour and a half each day, which adds up to more than a month per year.
Switching to ride service means he gains a month per year over his commuting competitors. It’s also one of the reasons we invested in Lyft — we think being driven is the wave of the future, for greater productivity and efficiency.
5. Take advantage of productivity tools
There are literally thousands out there, and more are being added all the time. Here are a few of our current favorites for startups:
- Zapier enables more than 750 apps to work together to automate all kinds of tasks. IFTTT also connects apps together automatically by allowing you to set up a host of “If [this happens], then [do] that” commands.
- Evernote is a great way to track all your thoughts, plans, and assorted info in one place that you can access from all your devices. The best thing about it, from our point of view, is that you can use it to set up David Allen’s “Getting Things Done” methodology.
- Humin is an incredible resource for those out there making connections with potential partners and funders — it keeps track of your contacts for you, all the way down to where and how you met.
- WorkflowMax is an integrated job management platform that can help you with everything in a small business, from invoicing and costing to client and lead management. They claim they save their clients more than 628 hours per year! Trello, Asana, and Flow are all good, too.
There you have it!
Our insights on what actions to not do, and what to do.
There will always be shortcuts you can take with your startup, but you have to ensure that the shortcuts you choose will get you to your end goal faster, and will not get you off track.
Do you have any actions, tactics, hacks, or productivity tools that you would encourage others to avoid and/or try? Please share as comments.
Source – byrslf.co