On Starting a Product Company — Forget the Lessons You’ve Learned

Guest Post

Guest Post: Marcy Alstott is a managing director with On Tap Consulting and an operations and supply chain consultant with diverse product and technology expertise, multinational management credentials and extensive transformation know-how. She can be reached at marcy@ontap.consulting

“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.”

Henry Ford

Starting a company can feel like taking off against the wind. One day it might feel like skiing in a snowstorm, another like scraping gum off of your shoe. Some people say it’s akin to learning to ride a unicycle. Starting a company can be the most fun, and the most frustrating thing you can choose to do.

What most people don’t talk about is how starting a company will turn most of the lessons you’ve learned in your professional career on their head. Failure and pitfalls will be part of the process, no matter who you are and what type of company you’re forging. And then, of course there are all the things you never wanted to learn about, that you will just have to learn in order to successfully get your products into the hands of your customers.

The only absolute truth in starting a business is that it won’t be anything like what you imagine or like other people’s stories—you won’t be able to predict what will happen, and you will most certainly have your own unique experience. Knowing that you can’t know how it will go is the surest wisdom there is.

As someone who has worked with dozens of startups, I’ve come up with a few pieces of advice that ring true to those who have walked-the-walk.

Make new friends, don't keep the old

The partners you choose will make all the difference. They will be your advocates, your experts, your representatives. If you choose a 3PL that doesn’t align with your company, it might lead to poor carrier communication, slow delivery times, or packaging that doesn’t match your company branding. Your customers might pick up on these discrepancies which in turn might hurt your brand.

My advice: Pick partners that are start-up friendly, who will flex and adapt with you, not stand on “the way it is done”. Pick a CM and a 3PL that embrace information flow and rapid response. For example, one of DCL’s stated values is,Make it Happen – We approach each situation with a ‘do it now’ and ‘get it done’ attitude, an understanding that speed is a competitive advantage. Now, that is the kind of friend to have.

Patience is a questionable virtue

Larry Page did not tolerate debate at Google when the company was young. When discussion came up his typical response was “just do it.”  Your new company is your baby. Your highest priority is to produce the best product you can, and sometimes that means being demanding. When you send out requests to new sales channels, or quotes for freight support. You think, “Why aren’t they returning my emails yet?! Don’t they see the value in what I’m offering!?” You may have a voice in your head that tells you that waiting patiently and politely for a response is the only logical response. Is it? Because your product is likely one of many, competing for attention, it isn’t good enough to just be one in the crowd.

My advice: Connect personally with the right people and build strong relationships with all parts of your supply chain. Don’t be a pain-in-the-#@!* but don’t be too patient either. Use your network and your 3PL to get introductions to the stores and platforms that will serve your customer base the best. All of your relationships matter, treat them with respect but demand the same respect back. Persistence and impatience can sometimes pay off.

Be a control freak

The founders of Apple, Google, and Ford were control freaks. They wanted to know even the piddly little details and intricacies of their products. Steve Jobs fanatically cared about color and finish. Larry Page eliminated all project managers so that he could be closer to his teams of engineers. Henry Ford was hands-on in designing conveyor belt production lines to be able to see every step of a faster production process. While this doesn’t scale easily, it can be a big help to control every detail of production during a company’s launch phase.

My advice: Be a perfectionist and pay attention to the details. If you’re in the product business, you know that the moment you put out a product you’ve got to start working on the next. Make sure each iteration meets your high standards when it gets shipped out.  There’s no turning back in the product business.

Play the short game

Brian Chesky and Joe Gebbia needed some cash, so they rented out their loft during a busy conference week in San Francisco. Instead listing their rental on Craigslist they built a new rental-specific site, called it Airbnb, and made $240. When requests started rolling in for more, they launched the idea as a full company. They had an immediate need and made steps to fill it. Everything else just snowballed from there.

My advice: “One day at a time” should be your mantra. There are so many moving parts to building a business, and many of those parts (like shipping and logistics) probably aren’t your favorites to tackle. Dealing with what comes up today, in the best way you are able, is the key to the success of a company that is just starting out. Take shipping errors, for example. Those are imperative to solve, redirect, and adjust processes to eliminate the same errors in the future. By solving one problem at a time, your business will still be taking big strides; you will be able to look back and see how much has been accomplished.

Don't be so analytical

Uber never should have worked. In 2008 Travis Kalanick and Garrett Camp were trying to start a rideshare service, despite the fact that there were over 1000 taxi medallions issued in SF at the time. Sounds like too much competition if you look at the facts, but it wasn’t. It is impossible to have all of the data to predict the success of a product, when you are talking about a business that hasn’t launched, in a market that doesn’t yet exist.

My advice: Sometimes you have to estimate, extrapolate, or imagine the future state in order to plan. Never is this more true than with inventory calculations. You can accumulate years of P&L statements, and get close, but you will never actually hit the inventory counts exactly on the nose. And when you’re just starting out, with little historical data, you will be wrong. Acknowledge that fact, and stay light on your feet. As Dwight D. Eisenhower said, “Plans are nothing; planning is everything.” I once modeled a monthly P&L for 5 years in the future, knowing that our ability to predict the next month was shaky, and it calmed our investors so that we successfully secured a Series B round.


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