Lost and Founder summary

What gives companies like Airbnb and Uber the cutting edge in their markets? Two words: Market research. If you want to succeed, you need to offer something that addresses customer needs better than your rivals.

Take Airbnb. It saw a gap in the market. Lots of people wanted to book vacation home rentals online, but there wasn’t a simple, user-friendly service out there. Consumers were forced to rely on websites like Craigslist which lacked all sorts of useful features. It was the perfect niche for a rental specialist to move into.

Okay, so you’ve got a fantastic idea for a startup. Now all you need to do is raise some capital to get it off the ground, right? Well, not quite. As the old saying goes, there’s no such thing as a free lunch. You might want silent partners with deep pockets, but you can be sure your investors won’t see it quite like that...

Raising money limits your freedom. Once you’ve got investors on board, you’ll be tying your performance to their expectations. And that means you’ll be under pressure to hit targets and maintain constant growth. They want to see a return on their investment. If your accounts start looking shaky, they won’t hesitate to take action. That could be anything from having you removed from your position as CEO to pushing for high-risk strategies that might end up killing your company.

Running a startup is tough. So what should you do when problems arise? Lots of founders are tempted to hide the truth in an attempt to protect their team and customers, but that’s often a risky call. A lack of openness doesn’t just put your relationships in jeopardy, it can also undermine your company’s growth and revenue.

That means it’s important to confront problems head-on. If a member of your team isn’t performing well, try to find a solution like additional mentoring rather than ignoring the issue.

Does your mood affect your work? If yes, ask yourself another question: How much would it affect your performance as a CEO of a startup completely reliant on its leadership? Perhaps you’ve answered no. It’s still a valuable exercise since it’s these kinds of questions that give you a true sense of your strengths and weaknesses. And that makes running your company smoothly much easier.

When you’re aware of problems, it’s much easier to start fixing them. Knowing that your company isn’t particularly strong on networking, for instance, means you’ll know that you need to concentrate on that area to boost your chances of hiring the right people. That’s vital because knowledge gaps are an incalculable obstacle to growth. After all, how can you get the best possible product out there if you don’t have the know-how to make it? So here’s the solution: surround yourself with people who have expertise in the areas in which you need to get things done.

One of the most important factors in determining performance is a team’s dynamic. So what exactly is that? Well, it’s basically how well you and your team members get on with one another. The best workplace dynamics are close-knit and complementary. Put simply, everyone values his colleagues – the people he ultimately spends most of his day-to-day life with!

But a great team dynamic isn’t down to chance; it can be encouraged and cultivated. One of the best ways of doing that is to assemble a diverse team. Having employees on board with different backgrounds and skills provides a greater range of expert opinions and insights.

Every company wants to grow. So what could be better than a growth hack? Not so fast. Growth hacks – marketing strategies for rapid experimentation and product development – often do more harm than good. While they might bring in more customers and revenue in the short term, they’re often a bad move for solving long-term issues.

That’s because growth hacks are all about quick gains. Selling more now, however, can get in the way of sustainably improving your products to leave you well positioned to meet future challenges. After all, if the balance sheet looks healthy enough today, why bother investing and planning for tomorrow? More importantly, hacks can also undermine your company over time. A promotional strategy that boosts sales by slashing prices, for example, might put your customers off paying the full price for your product later on.

Growth can become an obsession. It’s all too easy to become overly focused on that next round of funding that’ll give your company its next growth spurt. That’s understandable, of course, but it can get in the way of other priorities like taking care of your existing customers and products.

After all, if you’re growing in one area while shrinking in another, you’re not really growing at all. Customer retention is the foundation of your company. If you spend all your time and energy in acquiring new customers, you risk losing the ones you already have. The result is a vicious cycle. As you lose your existing base, you devote ever more energy into attracting new customers, who you may eventually lose.