The Biggest And Most Common Mistake You Can Make in Your Startup

The Biggest And Most Common Mistake You Can Make in Your Startup

I can remember when I was starting my tech consulting business, Station Five. For the first three years I repeatedly received advice that I thought was golden: “No matter what the client says they want, say yes, and figure it out later.”

80 to 85 percent of entrepreneurs told me to do this.

On the surface it makes sense to get the customer first, and then figure out a way to deliver what they want.

But in reality, it can severely hinder your business.

What occurs is you take on work that doesn’t align with your business’ offering, and that you’re not the perfect fit for.

You then dilute your startup’s specialty to your customers, staff, and even yourself. This creates a mixed message to new companies, as your offering becomes unclear. Sure, your business generates revenue, perhaps even at times when you really needed it, but it can wreak havoc on your roadmap and cost much more than the immediate benefit it seems to create.

So what do you tell these people who want to engage you for something you’re not the perfect fit for?

Be totally honest with them.

You either:

  1. Recommend another provider who IS the perfect fit, or
  2. Provide another means of achieving the same outcome in a way that aligns with your own offering.

In any case, it is important to tell the prospect first that what they’re asking for you cannot offer. When you do this, the trust it will build will make them want to work with you in other ways!

The biggest problem is when startups say “yes”, as if they do this consistently, then struggle to deliver for their clients. The outcome is that you struggle to deliver an outcome, and can’t be honest with the fact that you were dishonest in taking the work. It’s a disaster.

I spoke to Ian Altman on my podcast recently (link). Ian has been a CEO for two decades, founding and growing his own business services and technology companies from zero to over $1 billion in value.

Ian’s specialty is what he calls “Same Side Selling”, which is where you align yourself and the potential client on the same team. The intent is to work harmoniously to solve their problems. If you can’t, well, you can’t, but the honesty goes extremely far.

Ian told me the story of a large conference team who contacted him as a guest speaker. He realised he wasn’t the perfect fit, and knew someone who was. Now, he didn’t say no to business, what he ultimately did was serve the customer.

A few months later, the company called back with an even BIGGER conference that he was the perfect fit for! They didn’t forget Ian’s desire to help them, regardless of whether or not it had an immediate kickback for Ian.

When To Break The Rule: Ideal Customer Service

Ian accompanied one of his sales reps, Steve, to a meeting selling his company’s software. In that meeting, Steve would nod encouragingly every time the customer asked “can you software do…”. On the contrary, Ian was constantly thinking to himself:

“This isn’t the right software for what they want.”

Ian then interrupted the meeting: Steve’s right, the software can do these things. But based on what I’m hearing, I don’t think it’s the right software for what you’re trying to do, because we can tailor to do all these things, but we’re kind of making it do things that it’s not designed to do.”

Ian then asked the potential client for more information about the problem and told them that whilst they’d built “similar” products, they’d never done anything just like they needed.

Ian learned from the client that none of the previous vendors were honest about not building this before. That gave Ian and Steve the upper hand.

“Trust is invaluable”, Ian shared with me, and he was completely right.

You, like many potential vendors, will sit down with prospects who come in just like you. They have no established trust, and human instinct makes us tell the prospect you can do everything they want. The best way to separate yourself is to be honest about what you can NOT do, as this separates you from those vendors telling you they can do everything.

To conclude the story, Ian went on to tell the prospect that his company didn’t have the solution, but could build it. He mentioned it would cost $1 million to build, and an additional $1 million to maintain it each year.

Ian then ended up doing over $15 million worth of business with them.

The lesson is clear: When you know someone else can do it better, pass it onto them. But if no one else can do it, be honest about the challenges and present an alternative that you can offer that fits within the realm of your existing service offering.

This approach creates a superior customer service and the perfect framework in which you want people to view you and your startup.

It will also save you a lot of pain carrying out work you’re not suited for.

All the best!