An Entrepreneur’s Decision-Making Process and Next Best Alternatives
Arguably, time is the most important commodity in a start-up, and not Funds. You cannot raise more time. As an entrepreneur, you will need to make lots and lots of decisions. Better to include others around when you are not sure, but do make the decisions and let your sensibility drive them. You should acknowledge a few things around decision making,
– You will not get all of them right, at best getting most right is quite an achievement.
– It’s important to make decisions and progress; admit mistakes and make necessary corrections when required. Repeating similar mistake is a sin though.
– Do evaluate the risks of any decisions not working out right. As long as you can foresee potential downsides (more or less), and you make a judgement call, its fine. Over time you will rely on your intuition to help you make better decisions.
– Some decisions would be made to achieve a purpose, and there would be no necessarily right or wrong option there. An important concept is that you always have a next best alternative. It may be that you do not make a decision at all, or it maybe you let someone else make the decision, or you change the factor and decision criteria itself.
I want to take some examples to really put these into context:
– Firstly you will most likely go through a decision process of which start-up idea to work on. It’s possible you have multiple ideas in the background and all of them have potential. Plus your next best alternative maybe to continue with your current career path, job, studies etc. I personally took 1 year before I had the main idea for starting my company uTrade Solutions, and when I actually got on the ground with the founding team and initiated the operations. I think it’s a very tough and important decision, worth taking good time and feedback from others in deciding this. You may be stuck with your start-up for a number of years to come, through more bad days than good days, so be very vigilant in making this decision.
– You may have a choice to go alone or chose co-founders, partners and investors. It’s a very crucial discussion as you will be choosing people you will need to get on with for a long period of time and the terms need to be carefully decided so they are fair as well as allowing for future break-ups. You will never have perfect match for these partners but you need to see with whom you can get on with and what are you trying to achieve with them.
– When you are going through the hiring process, you will come across some skilled and experienced people who are very expensive, or some generalists with good attitude and willing to work in a start-up, you will have to think about your next best alternative and maybe try to hire both as you don’t know if both will eventually join and perform or not.
– You may have a non-performing team member who is not up to the mark. You can chose to let him go or evaluate your next best alternative and if that’s not good enough, you may be better off by having a non-perfect team member. You must understand this, you cannot and will never have a team with all super-stars. You will have great people, and good people, and potentially average people. Though in an ideal situation, your motto for team members should be, “good enough is not good enough”.
– Firing somebody in your team is a tough but sometimes a necessary decision. You need to take balanced rational decision around this and never let emotions become part of it. Unfortunately I have had to do it more often than I wanted to, but I learnt and improved in this process and in turn improved our hiring process more so as to avoid such firing decisions.
– If your company does well over a period of time, you may get choice to sell your company, or do an IPO. These are mostly the dream exits for start-ups. Next best alternative may be to continue holding the company in private hands.
It is possible you may find it tough to sell of your company, and let go of your involvement into it. But it is sometimes the right decision. It is like having your kids grow up and then let them go away from you for their studies, work career and independent lives. It is the expected natural course of events.
The key point is to make decisions as well as you can, engage others where you feel you need help and inputs, ensure that your decision making process improves with every decision you make, you are transparent around the decisions where you can be, keep the decisions fair for others and above all, do make decisions (even if they are tough) rather than letting them linger on as not making timely decisions can be more damaging.