The Blue Hook Philosophy [5/10]

This post is part of an upcoming e-book which will be released in 2015.

“Does leadership consistently work toward a common goal of improving the product or service?”

– Question #5 from the Startup Quality Survey

In the prior chapter we concluded that the most important factors in determining business success or failure are difficult to measure. An interesting implication of this is that the commonly accepted goal of “maximizing shareholder value” may be misleading managers today. The problem is that we are talking about symptoms of success or failure – revenue growth, IPO price, industry recognition, etc. These things are all driven by leadership working toward improving the product or service.

Is there any room for quality in this fast paced and growth based world of tech startups, accelerators, and venture capital? Absolutely! If founders and VCs want returns, this renewed focus on quality can increase the top line through organic growth due to customer loyalty and word of mouth advertising. From an engineering perspective, waste and attrition can be reduced by systematically improving the process. Costly tech debt can be avoided, allowing the company to innovate and create new products.

It is very common for short-term priorities to take precedent over long-term goals in rapidly growing tech startups. This is natural, however if leadership is more focused on growing the business than keeping existing users happy, then it will almost certainly lead to failure. Allow cross-functional team members to work together and make decisions. If it comes down to a tradeoff between fixing a bug for existing users and a new feature for potential customers, they will have the best information with which to make a decision.

The right investors would prefer to have your business grow organically with loyal employees and customers rather than waste their cash burning through them! While some startups with high attrition and unhappy customers may make alluring exists when the market is hot, it isn’t a very wise approach. In the long run, improving your product or service might be only way.