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The Startup Experience: Daily Challenges, Surprises

In my first post in this series, The Startup Experience: Getting Off the Ground, I focused on the challenges of getting a startup off the ground, from financing to building a supply chain. Of course, once you're up and running, there's the small matter of actually running your business. Here I focus on the challenges of day-to-day operations.

When the Internet stops
Startups are typically lean organizations that focus on R&D or sales, leaving everything else to be figured out along the way. Alliance Memory was no exception. Everything from payroll to the phone system seemed like a major undertaking, and the challenges of any two days were never alike. One day the Internet stopped working, and I spent several hours on the phone to correct the problem, while at the same time trying to learn the process of registering a patent. Another day would be spent creating artwork for labels to place on our shipping cartons and at the same time installing access to our new inventory system on everyone's laptop.

On any given day I would wear several hats — office manager, human resources director, benefits coordinator, accountant, or anything else you can think of — and it didn't take long to figure out that I simply couldn't be an expert in all of them. Alliance Memory didn't need full-time employees for each of these functions, but we did need their expertise; and the trick to that was to outsource where needed. I learned that there are experts for everything, and they are willing to come in and work a few hours to advise, correct problems, and set up systems, and then disappear until we needed them again. And their fees are reasonable, when you consider there are no payroll taxes involved and no need to provide benefits.

Award Winner

Tom Gargan (left) from Future Electronics, our largest distributor, giving Alliance  Memory CEO David Bagby an award for the company's record sales growth in 2010.

Tom Gargan (left) from Future Electronics, our largest distributor, giving Alliance
Memory CEO David Bagby an award for the company's record sales growth in 2010.

When to delegate…
The challenge is in knowing where to outsource and where to control from within, a decision that boils down to your company's daily needs. Daily, Alliance Memory needed accounts payable and accounts receivable duties performed, and payroll had to be completed bi-weekly. This was an excellent function to outsource, as I found several services that would not only do this but file our quarterly taxes and keep up on the latest tax laws as well. IT is another function that can be easily outsourced, providing us with an expert for software upgrades, network troubleshooting, and other tasks that would lead us to pull our own hair out when attempting ourselves.

Of course, I wasn't the only one with one head and many hats. Startups rely on everyone to do almost everything, so it's important to hire carefully. You need staff that knows the ins and outs of your business and your products so that when a key sales person has to take a day off for a family emergency, there is someone else who can willingly and ably fill in on a scheduled meeting. While it can be challenging to fill in at the last minute for someone who is out for the day, it's also satisfying to know that boxes will still leave the warehouse, customers will still get their products, and no one will be the wiser as to how you scrambled to get it done.

Expect the unexpected
One last thing to keep in mind for day-to-day operations is that the unexpected happens. Customers will be difficult at times and you have to anticipate how to handle it. Shipments will get lost by very reputable carriers, and you will need to replace products for the customer in an instant. Power outages, weather delays, natural disasters — at some point will disrupt meetings, deliveries, and production schedules. To take the worry out of the unexpected, have adequate insurance with back-up plans for “just in case.” When you rely on very few resources — whether they be financial or staff — it's easy to overlook good contingency planning. It is time consuming and often a low priority until a problem occurs. Cross-training employees, maintaining financial reserves, keeping insurance policies up to date, and strategic business planning are all priorities in large organizations. It's essential that startups fit them into their daily workload as well.

Be sure to read my final post on this topic, where I discuss how this venture changed us individually and as a family.

17 comments on “The Startup Experience: Daily Challenges, Surprises

  1. SP
    May 17, 2013

    I enjoyed working with many startups. You have to be go-getter. Cannot or should not wait for orders or cannot say “but no one told me about it”. You got to work as if you own the company. Manytime top leadership in startups gets into pressure, many times financial and mistreats people. Although when they relax they know they could have done it better.

    But I would say every engineer or other profession also must work in one startup atleast in his/hers career. You will learn how to take things to completion. If something needs to be fixed get on and get it done. Working in startups is always a feather in your cap.

     

  2. kilamna
    May 17, 2013

    One can have the startup mentality in a large company; the OLD HP used to.

    Do what needs to be done.

    Do the right thing for the long term; not just this week-month-quarter-year.

    Define what needs to be done; involve others if needed. Stay passionate, but flexible IN CASE the environment changes. 

    Dont do it like the OLD military: do it on time, you can always do it again.

    Be efficient in resource use … your own time, others' time, things and money.

    Dont get too hung up on your OWN ego; hold it at bay, for a while at least.

    Really, just the obvious things.

  3. _hm
    May 18, 2013

    This is a wonderful post. This is true experience. I may like to add following: In this organization you also work long hours more often, but when you return home you get perfect satisfaction of your job achievements. And when organization grows big, you get opportunity to be a part of senior management or like.

     

  4. elctrnx_lyf
    May 19, 2013

    Wow, this is written so well I could feel in your place easily. Wearing many hats, finding the right jobs to outsource, planning the alternatives or backup is definitely a major part of day to day operations for any company. And no wonder people learn so many things by starting their own companies and this will definitely change them in many better ways.

  5. _hm
    May 19, 2013

    In this situation, you also take help ( time and may be finance) from your spouse, parents and children. You make more friends and find out true friends. This makes you all rounded person and it is beautiful journey of life.

     

  6. mfbertozzi
    May 19, 2013

    Really nice editorial, it reports the real life and this is the attitude at startup stage; unfortunately, sometimes things change once the firm becomes larger and that attitude moves from real life to another that is trying to explain the what happend is not happened.

  7. Himanshugupta
    May 20, 2013

    Not many realize the hardship before taking the call to start something of our own but gauging the pro and cons can help in getting to the right state of mind before venturing out. A lot of startup fails because the founders loose sight of the long term goal or do not prepare themselves well for the adverseries. 

  8. Mr. Roques
    May 20, 2013

    Great insight! I've never worked at a startup before but I can imagine the craziness that it represents. Overall, I believe you start with good people – nah, great people and build from that. It's better to have 3 great overall employees than 3 really focused ones. What do you think?

  9. prabhakar_deosthali
    May 21, 2013

    As they say Some are born leaders and some are powerful followers.

    For a start-up company , a point comes when the initial excitement and enthusiasm of starting your own venture and managing it gets evaporated and the mundane daily routine of activities  starts looking boring.

    The people who migrate themselves from the start-up zing to a cool professionalism and will to delegate work can only sustain through the growth of the company and themselves . If they fail to recognize this transition point then either they get themselves thrown out of the loop or the company starts its downward journey.

  10. Himanshugupta
    May 21, 2013

    I strongly think that startup needs a bit of luck to be successful. That luck maybe to get the right employees (especially the first fews) or the right VCs or the right supplier or customer or favorable conditions. Without luck all the hardwork or plan can go off the shelf.

  11. Wale Bakare
    May 21, 2013

    I think it depends on where the Startup is. The main challenge for me is funding majority Startups facing in developing world, while developed region may be few you listed.

  12. Himanshugupta
    May 22, 2013

    Wale, i have not been involved in any startup setup so i donot have the feel of the real thing. But i agree with you that the challenges in a developing country can be more. Investors tend to fund companies in region with good governance and stability. I have seen this happening. 

  13. FLYINGSCOT
    May 22, 2013

    I would ask too personal question of anyone but I have heard that startups can play havoc on personal lives and families due to the extreme workload.  I know a few people who have led startups and they are all divorced now but maybe that is just coincidence?

  14. Wale Bakare
    May 22, 2013

    I agree with that. Good governance has been an important factor –  especially political instability in those regions. In developed world a different story, challenges still vary though. 

  15. Eldredge
    May 22, 2013

    it's easy to overlook good contingency planning. It is time consuming and often a low priority until a problem occurs.

    Sometimes it also helps to have good policies in place – one example would be to establish a goal to ship prodcut at the earliest possible delivery date for the customer – this often provides a little leeway in the delivery schedule, in case unexpected issues impact schedules.

  16. mfbertozzi
    May 23, 2013

    @WB: it is a gooid point, especially right now; due to financial crisis which is still impacting business abroad, funds are not easy to collect; hence, strong path for startups is ramping.

  17. Wale Bakare
    May 23, 2013

    While all the policies and strategies could materialised well if products/services offering by the startups have no strong competitors, especially from the growing-up to already established ones.

    That's the main challenge – competitors.

     

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