Sunday, February 18, 2007

Diagnosing Startup Problems

One of the classic issues that every startup is faced with is identifying causality in the face of uncertainty and noise. This is true for both positive and negative outcomes. For example:

  • A large bank just bought your software - great news! But can you isolate the specific reasons why they bought and make it repeatable? Or is it a special situation or relationship driven sale?
  • If sales are stalling, what's the issue? Is it the product, the market or sales execution? If the organization is heading towards dysfunction, this often leads to finger pointing and a revolving door among the executive team.
I recently came across one of the best posts I've ever read on the subject. Will Price of Hummer Winblad, has a post called "Isolating Causality: Bad Market or Bad Company." This should be required reading for entrepreneurs and employees in any early-stage startup.