Want to dramatically increase your chances of startup success? Ask for a specific type of advice


Mark is incredibly smart. He’s sharp. He is educated. He pattern matches like it’s nobody’s business. Show him a problem — any problem — and he can quickly solve it.

Yet for a long time he was, in his own words, a terrible entrepreneur.

What does he attribute to help him turn the startup corner? The day he stopped asking only people in his network for advice on growth strategies, raising funding, or brand positioning.

And started asking for advice on managing people.

Turns out his intuition is backed up by science. According to a recently published working paper from the National Bureau of Economic Research, entrepreneurs who received peer advice with an active approach to managing people — such as consistently setting goals and tracking performance, providing frequent feedback, and coordinating of people, teams, and tasks — 28 percent bigger and 10 percentage points less likely to fail.

Makes sense, especially at startups where the founder (and his or her employees) can bring a lot of product or service expertise to the table, but relatively little leadership experience or skill.

Or as the researchers write:

Many young startups are knowledge-intensive, with their employees as the main input, meaning that human capital management will have an excessive effect on performance.

A classic example is a tech startup; While you may be a great programmer with an excellent idea, that doesn’t mean you know how to manage the employees you inevitably need.

But the analogy is much broader. You may be a great carpenter, but that doesn’t mean you know how to run a construction site. You may be a great doctor, but that doesn’t mean you know how to run a practice.

If that sounds like you, how can you overcome your lack of leadership experience and increase your chances of entrepreneurial success?

Simple: get regular advice from what the researchers call an ‘active’ advisor.

One who, rather than taking a relatively hands-off approach to leadership, is the type of leader who “consistently sets goals, provides feedback, and coordinates individuals and teams across various tasks.”

In short, someone who may not score particularly high on the visionary scale… but who can certainly keep his (staff) trains on time.

And don’t worry that a lack of formal leadership training – classes, seminars, training, etc. – will hold you back.

As the researchers write:

(While) significant recent literature has focused on formal training as a mechanism for disseminating managerial knowledge, we provide causal evidence that less formal advice from peers can be just as crucial to business performance.

We further document that formal training can limit the effect of advice, for better or for worse. (My italics.)

The last point is interesting. Of course, a little formal education can help you separate the wheat from the chaff (encouraging remote employees to communicate less, not more) from the chaff (keeping everyone on track, having more meetings).

But at the same time, the thought that you already know the answer can lead you to ignore new information. As Jeff Bezos says, a sign of high intelligence is a willingness to change your mind.

So if you’re starting a business — or thinking about starting a business — by all means, ask smart people for advice. Ask about financing. Ask about the brand strategy. Ask how you can achieve a product-market fit.

And then make sure to ask for advice on managing and leading people.

Because the better you can do that, the greater the chance that your startup will succeed.

Or any company for that matter.

The opinions expressed here by Inc.com columnists are their own, not Inc.com’s.

This post Want to dramatically increase your chances of startup success? Ask for a specific type of advice was original published at “https://www.inc.com/jeff-haden/want-to-dramatically-increase-your-chances-for-startup-success-ask-for-a-specific-type-of-advice.html”


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