If Not Capital, What Hinders Startups From Growing Into An Enterprise?
Seeing a new startup emerge every year is no longer an unusual thing. However, what needs greater attention is the fact that nearly 50% of these, fail to sustain beyond four years. While a blatant cause for the failure, despite a significant upscaling in the first two years, turns out either a lost market need or a cash crunch, you’ll be surprised to know there are other underlying reasons which these entrepreneurs and business owners may still overlook. To understand them, we talked to 15 startup founders as well as their employees. These were spread across different parts of the world entails a good mix of industry verticals and genders.
In doing that, we first looked at the challenges and constraints these startups faced daily in their crusade to survival, if not an upscaling. These included:
If you look through closely, you would identify a common theme – lack of leadership skills and vision. Well, all startups have a vision initially. However, they are soon mired by pressures that come their way and the vision begins to deplete.
From bad governance to a lost focus, the entire company may show up with a dearth of attention at the well-defined cultural values. These values must flow from the top and for that, a vision, coupled with focus and self-awareness, is inevitable.
At the bottom of each of the challenges, you’d find one common deciding factor – the mindset. A successful startup differentiates from a failed one through a mindset of growth and not complacency. When you are growth-oriented, you can see challenges and momentary failures as opportunities to grow to the next level. Opposed to this, a fixed mindset may add a lens of self-reflection in the form of inabilities, confusion, frustration, and assumptions. This is a risky state of being. Your mind works overtime by collecting facts that soon begin to turn your assumptions into reality. The derailment sets in slowly then.
The Art of Mindset Shift for Averting Failures
Mindsets form and propel through you innate emotions, thought-processes, experiences, and response to any situations at a given point in time. In each situation, your intelligence is at play. It exists and operates in several forms while being majorly driven by your interpersonal and intrapersonal capabilities. These two together constitute your Emotional Intelligence.
Emotional Intelligence is all about being truly aware of yourself — your thoughts, emotions, actions, and further knowing how do these collectively impact your behavior. The outcomes you receive as a result of this behavior become your reference points for understanding the situation of others. This self-awareness drives your behaviour in a socially acceptable way — empowering you further to form trusted relationships.
For Startups to Succeed, Emotional Intelligence Can Be a Key Differentiator
Leaders or entrepreneurs must learn to manage relationships – both external and internal. An essential element of the entrepreneurial Journey is client management and retention. Client relations are key to grow any business, thus higher emotional intelligence quotients can bring tremendous business benefits to entrepreneurs.
The failure of Roadstar.ai, and autonomous vehicle product startup, caused due to conflict between the co-founders despite a fundraising of $128M in the initial year, and that of DaWanda – due to lacking innovation and risk management – something the CEO admitted too – speak volumes of how well the failures could have been averted had the management spent additional attention to mental resilience and emotional intelligence.
In Roadster’s case, possibly, the company’s auto-pilot mechanism buried beneath the conflicts between the management teams. Had one of them have paid attention to this fact, the downfall could have been averted.
The constant stress to keep up business pipeline also calls for Startup founders and their immediate officer bearers to invest their energies in improving their interpersonal skills. Successful utilization of the skills pertaining to EI gives rise to the growth mindset.
So, how do you begin with the plugging of loose ends? Evaluating your interpersonal skills can be an effective start.
Leaders with Poor Interpersonal Skills Show up with Problems of:
1. Discrimination among employees
2. Inability to set good examples for teams
3. Lack of focus – among too many things to manage
4. Excessive attention on tasks and Least empathy for performers
5. Lacking direction in requirements
6. Inability to taking responsibility for failure
7. Zero attention to explaining the “why” of things
8. Minimal commitment to their own vision
So, how do you raise your EQ skills for a Growth Mindset?
You may not be able to learn things overnight or by reading a book on EQ. To permanently change your behavior, you will have to learn how to strike a balance between your emotional and rational parts of the brain that remain active and accessible even in times of stress. You have to learn the skills on a deeper, emotional level— experiencing and practicing them in your everyday life. The chronology is such that you first become consciously aware of your default tendencies, strengths, and weaknesses and then, taking actions to improve your situation – rather than choosing to avoid conversations or situations.
Disharmony in teams and their dwindled management turns out the top reason, after fund crunch or ceased market need, for most startups to fail – going by what research firms such as CBinsights state.
Unlike several co-founders might perceive, the vitality of improving self-awareness, emotional intelligence quotient, and growth mindsets, are steps that must reflect in their priority list right from the inception of the businesses.
We are hoping that this write up provides a solution for your perplexities. If you have any questions, ideas or comments to add, we would like to hear from you here.
Your mindset is your ladder to success in life. With a “fixed mindset” you may become skilled in certain areas, but with a growth mindset you become a leader who “shows his team how to do” instead of telling them “what to do”. #Mindset #EmotionalIntelligence pic.twitter.com/kFl9vOEvmH
— White Ray Coaching (@WhiterayC) September 6, 2019
If you are looking for more details to learn about the magnanimous co-relation between startups, sustenance, and emotional intelligence coaching, this is an area we can help you with. Learn more or start your journey now. Connect with us: firstname.lastname@example.org
Reference: National Association of Small Business’s 2017 Economic Report.