The Three Basics For A Start-Up

The first rule of investing is to survive or put another way to avoid ruin. It’s the same for start-ups, one in five fail in their first year. Thankfully, we’re in year two at Macro Hive, so we’ve done well on this existential metric. When I think about what has allowed us to build a promising business it has to be sticking to the basics:

  1. We focus on what we are good at. For us, it is producing research that helps investors make money. Many start-ups use their flexibility to keep pivoting to the latest fad. It’s very easy for start-ups with their freedom to keep jumping on to the latest fad. We’re always hearing about some tech-oriented start-up supposedly ‘killing it’ and it’s tempting to mimic them. That might be good for them, but we remind ourselves that we need to stick to things which we can do better than others.
  2. We focus on clients. When launching Macro Hive, we made a conscious decision that we would not initially take outside money. This meant that our only sources of cash inflow would be customers paying for our research, rather than investors. This has given us an intense focus on clients – who they are, what they want, and what they will pay. Many start-ups rely on raising money from investors for their cash inflows – this distracts from the fundamentals of a business: getting revenue from clients.
  3. We focus on how we work as a team.  This means not hiring people who are not team players, or letting people go who turn out not to be team players. It also means constantly stepping back to understand how we are functioning as a team. Are there regular bouts of miscommunication? Are people clear on their tasks and what they are accountable for? Are meetings adding or subtracting value? Do people feel they can get help when needed?

Of course, there is a lot more than this, but sometimes it’s good to strip things down to the basics.

Hope this helps

Bilal

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The Three Basics For A Start-Up

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