The 7 ‘C’ Traits of Successful Start-ups

My first start-up sales job was in 1989. I was employee #10 in a boot strapped software company that sold an HR application to F1000 companies across a diverse set of industries. I won’t bore you with the details other than to say we built the company and revenues and it culminated in a successful IPO after 6 years. Why does everyone think this is so hard?” I naively thought to myself as I was batting 100 percent at that point in my career.  Well, I came to learn that launching and building a successful start-up is really hard and few are successful at it.

Over the last 23 years, I’ve learned a lot about what makes a start-up successful and what causes failure.  Let me begin with a simple premise that holds true, every start-up fundamentally believes that they have the disruptive technology or solution that will change the world and that they will become the next google, facebook, ebay, etc. And they don’t.  So it becomes primarily an execution issue around which start-ups fare well and those that don’t. I’ve been involved with scores of diverse start-ups as a founder, co-founder, VP of Sales, Strategic Advisor or as a Consultant and have found some common characteristics in the people that drive success.  These are the seven ‘C’ traits (we can all thank Stephen Covey for that magical number sevenJ) that I have observed drives start-up success:

Conviction- The workload at Start-ups is daunting and success seems elusive, if not impossible at times.  Many people simply lack the necessary conviction to drive through those low periods when it seems like all is lost. I’m not referring to the start-up ‘drinking the cool aid’ to the point where you’re not able to be realistic or make rational decisions, rather I’m talking about the intestinal fortitude required to successfully navigate through choppy waters when everyone else would turn around or quit.  An firm belief that you have no option other than succeeding.

Courage- Start-ups are risky. The failure rates are high and it’s not for the faint of heart.  People are drawn by the lure of stock options and the millionaire or billionaire status one can achieve if successful. Successful start-ups take risks; they are calculated, but risks nonetheless. Which means that you have to be willing to fail in order to succeed. Unfortunately, many people that work for start-ups are afraid of taking the necessary risks to succeed. They are too concerned about failing, rather than focusing on what is really necessary to succeed.

Commitment- I’ve always said that Sales is about making and meeting commitments. Well in the start-up world, that applies to every employee and every functional area. Engineering and product development has to build the products, with capabilities that customers want in the timeframe that they are supposed to.  Marketing and Sales needs to bring those products to market and generate the revenue and cash flow to support the growth of the company. Professional services and Customer support has to ensure the success of the implementations and customer satisfaction leading to customer referrals and add-on sales. The execs need to ensure that the finances are managed well and that the company is continually executing against plan and planning well for future growth. All of this is to say that start-ups simply have to have people that are willing to make and meet commitments and be held accountable. From the top to the bottom of the organization.

Cowardice- Conversely to the courage trait, successful start-ups weed out cowardice quickly.  People that are always basing their decisions on making themselves look good or protecting themselves, stick out like sore thumbs in smart start-ups. These are the people that get defensively immediately rather than embracing constructive feedback or original thought. They are afraid of failing more than they are committed to succeeding and that is a recipe for disaster for any start-up. Cowards also spend most of their time playing the political game rather than delivering real value add work. They complain about everything that is broken or isn’t working (welcome to start-ups), yet never proactively offer solutions. Rid yourself of cowardice as fast as you can, really successful start-ups inherently have a self-policing capability because the culture you build and embody will weed them out quickly.

Cognizance- Being aware or self-aware is very important for start-ups. You need to be able to have honest conversations about what isn’t working well without people getting defensive or acting in denial. The advantage that a start-up supposedly has is agility, the ability to react faster to market changes, competitive threats, customer demands, etc. You can only realize that advantage if you are ‘aware’ or cognizant of the dynamic changes in the marketplace and can respond faster than others. Having said that, I would add a dimension of discernment to cognizance.  In other words, the ability to sort through the noise and find the things that are truly important for you to know and make decisions based on.

Conscientious- Successful start-ups have a culture of passion or genuinely caring about everything they do. They want all customers to be satisfied and they want all interactions to be of a high quality nature. They want their communications and perception in the marketplace to be one of high integrity. This builds trust and makes it easier for customers and employees to work with a start-up.  What can be quite refreshing about successful start-ups is that they will actually tell you what their product/solution can’t do. They’ll say ‘no’ sometime, albeit nicely and appropriately, but they won’t ‘yes’ you to death because they think that is what you want to hear. Why? Because there is a company culture imbued with integrity and being conscientious and it makes a difference. People do care and notice.

Compelling- Don’t be overly dramatic but start-ups do need to make a compelling case for why an early adopter customer should take the risk with them when they are not proven. Successful start-ups recognize the latent fear/concern of large companies being an early adopter and address it proactively. The fact is that if you can’t overcome that typical objection as a start-up, you will fail.

Let me bring this all home with a real world story.  Referring back to my first start-up sales job in the late 1980’s and early 1990’s, we were involved in a number of head to head competitive deals with seminal brand name accounts like Microsoft.  Our primary competitor was well funded silicon valley start-up that had sexy technology; they were always touting their patent pending artificial intelligence (AI) technology as part of their marketing and selling. And it worked.  There was a crossroads in our existence where we had 5 key customer POCs on the west coast all at the same time.  The CEO and I were on the west coast selling to those accounts.

We got word over the two week period that we lost all 5 deals and the reason was that the competitor had a vastly superior product.  We were drowning our sorrows with a few ales at SeaTac airport after the deflating news from Microsoft (who was our customer that we lost to the competition) and the CEO said to me that if I stuck with him/the company, he would build a better product than our competitors based on what we had learned from our losses.  I committed in return that if he built a better product, I would come back and win Microsoft back as a marquis customer account.

It ended up taking the better part of a year (18 months) before we had that product and for the first and only time in my sales career, I earned less money than the year before.  It was painful because as a sales rep, you had to swallow your pride and qualify the opportunity on those that were cost sensitive because we could win on price alone.  Again, the only time in my career where I didn’t sell the highest priced solution because I’m a firm believer that value is what large companies buy, not on price.

There were people at my start-up that left the company during this 18 month period, but I never doubted that we would build a better product and that we would be successful in the long run.  Then the challenge was convincing the market that had a perception of us based on the old product, that the new product was in fact superior to our competitors and slow down their tremendous momentum.

When the product was in beta, we embarked on an aggressive sales & marketing campaign. We essentially challenged the competitor to a head to head bake off at the largest accounts.  Over an 18 month period, my sales team won 17 out of 18 enterprise deals across the country. Included in our enterprise wins were companies such as Bank of America, Intel, Oracle, HP, Bank One, Abbott Labs, and yes, Microsoft.  We had come full circle and we won Microsoft back in a multi-million dollar deal for us.  It was incredibly gratifying.

Our competitor was in the process of filing for an initial public offering (IPO) and were forced to withdraw because of their failing revenues and losses. We were buoyed by our wins and the associated revenues and profitability. We did this as a boot strapped company and went on to a successful IPO. This simply would not have been possible without the foundation team at my start-up that possessed those 7 ‘C’s” as our core traits. Good selling in the start-up world!!!

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