Smart Entrepreneurs Fail

Ok, that is counterintuitive. Isn’t it?

In my last article, I tried to convince you that regardless of the economy, the election results or the country’s political landscape, you were going to do better than your competitors if you knew how to play the cards you were dealt. That is, being smarter than others.

This time I will try to convince you that the fact you’re probably smarter than the average educated person will make you fail, unless you take some important precautions. Even more so, if you’re not really smarter but only think so, when in fact you’re just a fellow entrepreneur with illusory superiority (80% of the population describe their performance as above the median).

How do startups grow at the beginning? Most times, startups grow as the result of either having smart founders, extreme hard work, a very good idea/opportunity that arises, or a combination of all those things.

This is true at the beginning, but not for long. Trust me; this alone won’t take you very far.

Why will my startup get stuck?

Your startup will definitely get stuck because you’re either really good at your job or you think you are. Either way, you are in risk of getting stuck.

My company (BairesDev), was once a startup. At the beginning, my business partners and I were coding, recruiting, selling, doing taxes, taking care of payroll and, in essence, doing every single thing you could think of.

There were absolutely no processes or documented procedures because, well, we were good (or so we thought) at doing what we were doing and things were going great. More clients started to work with us and we even signed some of our first Fortune 100 clients. But then…all of a sudden, we stopped growing. Bad news, really bad news, but was time to do some retrospective thinking and learn…

Time to assume you can’t be everywhere

Most companies don’t make it big. That is a fact. Only around 1 in 10,000 will reach $50M in annual revenue. This might be due to a number of factors. Maybe your product is not in the right market at the right time, maybe the founders’ goals are not aligned, maybe you have enough money to retire and you really, really want to move to Bora Bora and live in an overwater bungalow, or maybe there are other situations that don’t seem to have a way out.

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Let’s assume for a moment, you’re not in any of the categories above and you simply want to grow but you can’t, while your competitors are doing well.

If that’s the case, then please start assuming you can’t be everywhere!

Regardless of how good I thought I was at asking technical questions to the hundreds (now thousands) of software engineers applying to BairesDev every month, I realized that I couldn’t keep doing it if I wanted my company to grow.

Are you really smarter than the average person?

Let’s suppose for a moment that you are actually smarter than the average person or at least that you’re really good at specific task. Let’s use Mark Zuckerberg as an example and let’s assume he’s a fantastic coder (I know some will have their doubts, but let’s focus on the point) who is much better than the average coder. Let’s say Mark can produce 3 times more code and 4 times less bugs than an average software engineer.

Should Mark keep coding? Should he focus on his product and how to reach more users?

Delegate or die (as a business, don’t panic)

Most entrepreneurs (including myself) are afraid of delegating their tasks. This happens for many reasons, but after talking with hundreds of business owners, one of the main reasons seems to be the fear of having someone do it worse than them.

This is a very valid fear, and here’s the worst part…it can sometimes come true!

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However, you’re doomed to failure if you don’t delegate. I suppose Mark’s example above explains my point, but I will give you some guides about how to do it (I asked for Mark’s advice but he couldn’t answer himself because he’s delegated the PR function):

  • Think about what things make a difference in your company and what things do not.
  • Think about what you’re really good at and where YOU make a difference.
  • Train the people that will receive the delegated tasks.
  • Figure out a process for delegating and controlling effectively.
  • Focus on what’s important and makes a difference for your clients/customers.
  • Replicate / clone yourself indefinitely. This is a continuous process that should never end.

Regardless of how good you can be at something, you have no option but to delegate tasks. Even the most brilliant task executor cannot generate the results of a well-structured organization.

Finally, stop thinking that you’re smarter and start thinking how your company can become smarter.

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