10 Ways to Damage Your Startup

Marc Andreessen just posted a great piece about the top 10 ways to damage your fast-growing tech startup. I can frankly say that I have personally been involved in at least a few of them.

Here’s my take on Marc’s list:

#1 Focusing only on hiring — rather than also training/motivating/incentivizing your team  — and not focusing enough on firing. Startups change quickly, and for that very reason people who may joined with a specific vision in mind may no longer be suitable. Having talked this through with many experienced leaders and investors, it makes to think about re-evaluating every member of your team on at least a 6 or 12 month cycle (especially when things are changing a lot).

#2 Selling too much of your own personal stock too quickly, which alienates employees and leads people to question your long-term commitment as a founder. On a related note, letting private stock sales by employees get out of hand creates a “hit-and-run culture” — and forces your company to take on the burdens of being public before actually going public.

#3 Maximizing absolute valuation of each growth round, which not only makes later rounds harder and harder to achieve but can trigger a disastrous down round.

#4 Assuming more cash is always available at higher and higher valuations, forever. This one will actually kill your company outright.

#10 Refusing to take HR seriously! This issue isn’t specific to just tech-heavy environments; it’s prevalent in any highly creative, highly skilled workplace. At a certain company size, you need both the ability to manage people and an effective HR person. (Even though it is absolutely worth training company leadership in good HR practices, most managers are dangerously amateur at doing actual HR). Without smart, effective HR, terrible internal managerial and employee behaviour leads to a toxic culture that can catalyze into a catastrophic ethical — and legal — crisis.

Read the other reasons here