I stumbled onto this quirky little column a couple weeks ago, written by Jason Lemkin for CloudAve.com. Jason is the founder and CEO of EchoSign, a SaaS company that was eventually acquired by Adobe, so he understands the mind of a business owner that starts small with goals of going big. His column is about bootstrapping yourself to death (that is where the quirky comes in).
The opinion piece is focused toward those entrepreneurs who want to take a SaaS startup through to the big win, and in it, he talks about all the mistakes a business owner makes as he or she starts to gain traction with success, but then ultimately burns out. I saw a lot of similarities between these issues and those many IT business owners face, so I thought I would share.
Lemkin writes: The problem is going too long without capital when you really need it. You get exhausted.
- You have too many customers to follow up with, and lack the money to hire a real client success team.
- You’re doing all the core sales yourself. Great when you start; terrible after 24 months.
- You can’t really keep up with the customer-driven side of the roadmap. It’s great you have customers, but they have needs. Of course, you can’t do it all.
- You start to think small because you can’t afford to spend an extra nickel, so as the years roll on … you abandon the Big Vision, if not nominally, then at least deep inside your psyche.
Exhaustion sets in. And this is where the competition kills you.
Sound familiar? Lemkin calls it success that will kill you, and I agree. He is talking about the need to build your startup toward funding from a venture capitalist, but I see a more basic message. If you are heading into 2013 with these issues, you need to take a long hard look at your business. Are you CEO and head sales guy? Is your service to customers starting to decline because you are at the tipping point of too many customers and not quite enough staff? If this is you, stop now and think through a strategy.
We’ve heard a lot of talk about the channel shrinking and consolidating – that could be a good thing for you if you’re profitable and stable but just starting to stagnate. If not, it could be your death. Because as Lemkin says, your competition may have a plan; plus they may have a fresh perspective, fresh troops, and fresh capital. If that is true, you will ultimately lose.