Build Revenue in Your Startup Before You Build up Cost
Episode 376 of "My Worst Investment Ever" Podcast featuring Andrew Pek
Full Episode: Listen Here
Worst investment ever
When Andrew started his business, DXD Partners, a big design thinking and innovation consultancy, he decided to hire some of the most intelligent and most interesting people. He went for people he had a good affiliation with. Andrew believed that these people would take his business to the highest heights.
“Fail fast so that you can keep on winning.”
A payroll larger than he expected
While his hires were great, they also came with high expectations in terms of salary. Andrew invested a ton of money bringing them on board.
A bloated payroll combined with the market crash in 2008 created the perfect storm for Andrew. He couldn’t keep up with the payroll and had to go through the painful process of letting everyone go except for his administrative person. It was brutal.
Being more strategic when hiring people
Looking back, Andrew admits that he should have been more strategic with the people that he hired. He should have made sure they were the right fit in terms of experience, skills, and even salary expectations.
Starting a business from scratch requires you to be smart and strategic
When starting a business from scratch, understand what your customers want, have the right business model, and then develop the proper profitable structure.
A successful idea is desirable, doable, and viable
For your product or business idea to be successful, it should be desirable, doable, and viable. Besides understanding what your customers want, you should also have the proper organizational structure to support your business model. The wrong setup will affect the viability of your business.
6 top mistakes startups make
Bad hiring decisions
Poor management of time and people
Ineffective teamwork and collaboration
Waiting too long to start selling
Weak accounting and finance
Low product quality
Invest your time in understanding who your customer is, then come up with a minimum viable solution.
“Always stay present, dream big and make each day count.” -Andrew Pek