Start-ups fail – that’s (unfortunately) part of the game. 20% don’t survive the first year, 50% give up in the first five years – and only a few land the big success.
In the event of a plan deviation, here are the priorities based on our experience:
Prio 1: Cash is king – always!
Tackle all cost blocks at an early stage: Personnel, OPEX, CAPEX
Personnel:
Typically the largest cost block and where true leadership comes into play: keep motivation high, but remain consistent.
🔹 Lack of resources sharpens focus and efficiency
🔹 Take action: Recruitment freeze → Staffing freeze → Downsizing
🔹 Better to cut deep once than several times
OPEX:
Start-ups can also put on fat; plus maverick buying & fear of budget cuts
🔹 Every little dollar counts: Coffee costs, software, rent – it’s the masses that matter!
🔹 10-20% savings are usually possible without major service losses
CAPEX:
Does R&D really need the third microscope and production the expensive robot?
🔹 It’s not the brand, but the specification that counts!
🔹 Professional purchasing department & processes work wonders
Prio 2: Sales, Sales, Sales
Unfortunately, many start-ups fail to recognise that the focus is on the customer and not on technology. Sales cycles are usually longer than expected!
🔹 Sales = traction = chance of a bridge/funding
🔹 Prepayment? Why not!
Prio 3: Root cause analysis
Despite the pressure to act, take the time to thoroughly understand the root cause and do so in a structured way (weekend ideal)
🔹 Understand root causes in a structured way – don’t just treat symptoms!
🔹 Transparency creates trust and takes the team with you.
🔹 No sacred cows: critically reflect on business model & USP!
Leadership: Responsible for everything!
It gets lonely at the top of the hierarchy; despite all the tough topics, you have to keep spirits high and become a master communicator:
🔹Communication professional: empathetic, tough, emotional – the whole gamut
🔹Take people with you for the extra mile and the marathon!
🔹Taking investors with you (ego, story, plan, confidence)
And do not forget: Liquidity shortages are symptoms, not root causes
