What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

Founders: Are You Stuck Before You Start?

It’s exciting to be in the mix at the 2014 Mass Challenge Mentor matching process http://masschallenge.org/accelerator.  
As a mentoring service to the hard-working finalists in the nation’s largest Accelerator, I’m republishing this post.
This post was originally published in 2012; nothing has changed. Enjoy and comment! 

Where Start-ups Get Stuck – and How to Avoid Going There

Between us, my long-time friend (and fellow blogger) Andy Palmer and I have started a lot of companies. We also advise many other companies and look at even more pitches from start-ups.  A shared observation is that while a few start-ups shine (or at least glimmer) and go on to some success, other start-ups seem stuck before they start.  Why?

Here are our observations on where start-up founders get stuck and our advice on how to prevent Stuck situations, presented Q&A style. This post also appears on Andy’s blog.

Q.  Andy, where are the most common places you see founders getting stuck, and why?

Andy Palmer, Start-Up Specialist

I see a lot of founders get stuck at the very earliest stages – by being distracted by fundraising.  I’ve said before – over and over again – founders should focus on developing their business first and not worry about fundraising nearly as much as they would probably like.  It’s natural to be nervous when you don’t have any money in the bank.  But it’s a healthy discipline to figure out how you are going to create value for customers who will pay you instead of spending time thinking about how to extract money from venture capitalists or seed investors.  As an angel investor, I’m always looking for people who are mission-driven and focused on their customers, as Jim says below, instead of worrying about what potential investors might think.

 Q.  So how can entrepreneurs avoid getting distracted by fundraising?

Just focus on your business and your customers.  Wake up every morning thinking about how you are going to create value for your customers. Go to sleep at night considering which of your customers you helped that day and how.  Be maniacally focused on your customers’ needs.  It sounds simple – and it is – but executing this when you are starting from scratch – with no product, no credibility, and no people –  is really hard. It requires all your energy and your concentration.

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What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

From Bored to Ballistic: The Bell Curve of Board Behaviors

The constant, meddling actions of a controlling, outside investor/board member in the day-to-day affairs of a company can have a direct, negative impact on the organization’s performance.

A while back I was retained to help develop a new strategic plan for the management team and the Board of Directors of an angel-backed technology company.

Soon after I started the project, the CEO told me that a significant angel investor/board member (Moneyman) called either she or the CFO every day at 4:45 for an update on the company. Every day, not kidding…

Was Moneyman, “Just checkin’ in…?”

Was he simply showing enthusiasm, expressing interest, acting curious, proffering sage advice, coaching the senior team and being ‘hands on’?

He wasn’t calling to coach or offer operating advice. Moneyman was meddling.

Meddling can cause a company to be Stuck in a Ditch.

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What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

The March Hare CEO

 

Have you attended a “Mad Tea Party” Board of Directors or management meeting and listened to the CEO’s unrealistic expectations about future performance?  Did you leave the meeting scratching your head about what you heard?

Lewis Carroll introduced us to the strange Mad Hatter and the March Hare in his 1865 book Alice’s Adventures in Wonderland.  The Mad Hatter hosted the Mad Tea Party; during this raucous event there was one revealing exchange with Alice:

 ‘Have some wine,’ the March Hare said in an encouraging tone.

 Alice looked all around the table, but there was nothing on it but tea.

 ‘I don’t see any wine,’ she remarked.

 ‘There isn’t any,’ said the March Hare.

How many times has a corporate leader told you there was plenty of wine about, but in fact, there was only tea at best?  Your gut is screaming… “There is no way this company can hit those targets”.  But your hope and the March Hare CEO’s enthusiasm get the better of you.  I have seen this scenario repeated many times at stuck companies; there can be over optimism and not enough effort focused on analyzing the brutal facts and confronting reality.

What’s wrong with being optimistic and aiming high?

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What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

Call the Handyman: These Garage Doors are Broken

 

Does the 9Stucks diagnostic tool apply to companies of all sizes?

Does 9Stucks work in determining if large, established public companies, like Hewlett Packard are stuck?

HP is a perfect example of a long-term, dysfunctional, stuck company. It wasn’t stuck in the garage…

Over many years at HP there has been conflict within the Board, conflict at the CEO and C-suite level, conflict in the rank and file, an unclear business model and many other conditions noted below that have caused it to be perpetually stuck.  A once great company has plummeted down; today the big question is whether Meg Whitman can lead a comeback.

Fortune Magazine writers James Bandler and Doris Burke are the authors of a recently published and well-written article that documents “How Hewlett-Packard Lost Its Way” (May 21 issue).  I have extracted content from their article (all the italicized quotes below) that relate to the six of my 9Stucks that I think apply to HP (Ditch, Moment, Slow Lane, Another World, Fog, Maze, Rough).

Stuck in the Ditch:  there is a significant, persistent problem within the organization’s leadership ranks. Ditch is caused by one or more of these six conditions -

  1. Weak, uninspiring leadership
  2. The CEO does not command the respect of the organization.
  3. The CEO’s behavior causes constant anxiety throughout the organization
  4. Corporate governance is broken
  5. Meddling by the Board
  6. No hands on the wheel (i.e. formal governance)

HP has or has had 5 of the 6.

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