The last two months have seen us speak with the founders of many early-stage businesses who are seeking funding. There are common risk traits among the businesses and founders themselves, such as: valuations too high; lack of budgeting; no marketing strategy…the list goes on. But there was one trait in particular that caught our attention – company founders not knowing what they’re in the business of – a trait which I believe is born from a Lack of Self Awareness.
My interest peaked on this topic after several funding meetings, in which the company founders struggled to articulate exactly what they were in the business of and who their ideal customers were, noting that some of these businesses were on their 2nd or 3rd funding rounds and were attempting to launch into their chosen markets.
Being the curious guy I am, I entered the research rabbit hole and found some interesting pieces. According to (Eurich, 2019), there are Four Self-Awareness Archetypes:
Too often, we see the low external self-awareness archetypes running early stage ventures, and when I think about why startups fail, there is a clear alignment.
A great piece by (CB Insights Research, 2019) looked at the top 20 reasons of why startups fail, pictured below.
Looking at this list, it’s easy to see how many of the items could be addressed by an individual with strong self-awareness, who would do things such as seek external feedback, to ensure there is a market fit for their product or service, or challenge their own beliefs, which would ultimately ensure they don’t get out-competed.
Low self-awareness traits will find a way to bleed into every aspect of a company, from product to culture – and such traits typically lead to failure.
So, tying this back to ‘what are we in the business of’? Some questions a founder might ask themselves could be:
Knowing the answers to these questions, in my opinion, is absolutely crucial to a company’s success, because it allows the management team to lay a clear pathway for execution.
If we don’t truly know what we offer and to whom it’s applicable, how can we begin?
CB Insights Research. (2019). The Top 20 Reasons Startups Fail. [online] Available at: https://www.cbinsights.com/research/startup-failure-reasons-top/ [Accessed 29 Mar. 2019].
Eurich, T. (2019). What Self-Awareness Really Is (and How to Cultivate It). [online] Harvard Business Review. Available at: https://hbr.org/2018/01/what-self-awareness-really-is-and-how-to-cultivate-it [Accessed 20 Mar. 2019].
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