Start Me Up
I am often flummoxed when trying to fathom why businesses succeed or fail. Recently a new café, Ritual Coffee Roasters opened up near my house in San Francisco. It offers a sleek clean decor, good strong coffee from Portland’s Stumptown Coffee, free and reliable wireless access. And it instantly had a line out the door. It seems so simple and effortless. So why have so many cafes and restaurants in my neighborhood failed to catch on?
Although he focused more on venture capital then coffee, The Business Shrink Peter Morris shined some light on that question during his discussion on today’s show, His guest was Joel Kurtzman, author of Startups that Work: The 10 Critical Factors that will Make or Break a New Company. Kurtzman and a research team from PricewaterhouseCoopers spent four years studying 350 companies during the “darkest days of the internet bust” and interviewed hundreds of business people to understand startups from the inside out.
The Business Shrink asked Kurtzman to talk about some of the main obstacles to success.
KURTZMAN: “Well, first of all…too much money often is a real obstacle to companies succeeding. Companies should be hungry at the outset when they’re in the start up phase, and they should conserve their cash, and hoard it if they can. And I have seen, and we’ve observed in our studies, companies that were given lots of capital to begin with often have squandered that capital and failed as a result.
MORRIS: And of course that would seem all too logical, but I’m sure like many things, people don’t always do what’s best and always see clearly
KURTZMAN: Yes, and another really critical negative factor is when the team at the top disagrees as to the strategy going forward. Nothing is worse than when you have the top people who are in a shouting match or war about what the company should do, and who it’s customer’s should be, and how it should reach those customers. That’s lethal. It’s been lethal in the histories of business that I’ve studied; it’s lethal in the 350 companies that we studied. So, strategy really has to be aligned, and everyone in the company has to know it. They have to know what the company is doing, and they have to know where it’s going. That’s very critical, and without it, companies fail.”
Although he focused more on venture capital then coffee, The Business Shrink Peter Morris shined some light on that question during his discussion on today’s show, His guest was Joel Kurtzman, author of Startups that Work: The 10 Critical Factors that will Make or Break a New Company. Kurtzman and a research team from PricewaterhouseCoopers spent four years studying 350 companies during the “darkest days of the internet bust” and interviewed hundreds of business people to understand startups from the inside out.
The Business Shrink asked Kurtzman to talk about some of the main obstacles to success.
KURTZMAN: “Well, first of all…too much money often is a real obstacle to companies succeeding. Companies should be hungry at the outset when they’re in the start up phase, and they should conserve their cash, and hoard it if they can. And I have seen, and we’ve observed in our studies, companies that were given lots of capital to begin with often have squandered that capital and failed as a result.
MORRIS: And of course that would seem all too logical, but I’m sure like many things, people don’t always do what’s best and always see clearly
KURTZMAN: Yes, and another really critical negative factor is when the team at the top disagrees as to the strategy going forward. Nothing is worse than when you have the top people who are in a shouting match or war about what the company should do, and who it’s customer’s should be, and how it should reach those customers. That’s lethal. It’s been lethal in the histories of business that I’ve studied; it’s lethal in the 350 companies that we studied. So, strategy really has to be aligned, and everyone in the company has to know it. They have to know what the company is doing, and they have to know where it’s going. That’s very critical, and without it, companies fail.”
posted by Business Shrink Blog at 12:43 PM
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