Page 116 - 6 Secrets to Startup Success

The Pull of the Market 95

among passionate, true believers, often delays or obscures
critical learning, choices, and actions. In the interest of “stay-
ing positive,” founding teams allow the enterprise to sink
more deeply into a hole.

Here are a few guidelines for monitoring and reacting to
early sales news.

Don’ t:

9 Avoid looking at financial data (this is surprisingly
common, like leaving personal 401K statements
unopened during a market free-fall).

9 Shield key partners, investors, or co-founders from
disappointing news, as this only ensures they will not be
able to help.

9 Implement a knee-jerk response without understanding
what is causing low sales.

9 Wait for changes in some external circumstance over
which you have no control, such as economic recovery.

Do:

9 Look at sales information frequently and closely.

9 Take bad signs seriously, before they grow into crises.

9 Discuss any deviations from your game plan openly with
key partners and investors.

9 Investigate and analyze until you understand why sales
are low (see Appendix B for Eric Ries’s simple but
powerful process for finding and addressing root cause:
“The Five Whys”).

9 Take appropriate action.

When assessing causes, try to distinguish internal process issues
that can be corrected (such as product errors, communication gaps,
or distribution snags) from more fundamental issues that cannot be
summarily fixed (such as significant, unanticipated shifts in the mar-

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