True tests — Evan Frank

Creating a successful company is a low probability endeavor. A series of small, low-likelihood-of-success activities over the course of several years compound to create a great result for those lucky (or foolish) enough to be part of the journey.

If I think back to the early days of onefinestay, it often felt like landing a particular hire, or a valuable customer — having a conversation go one way, or the other — could make the difference between success and failure. It felt like failure was always looming in the background. And what’s scary is that this feeling was probably accurate enough.

Most startups don’t succeed. But how does this play out on the ground? Its a customer or an investor saying no, inability to adapt to changing market conditions, the loss of a critical team member.

So with the obstacles that every new business faces, how to do you maximize probability of success? This comes down to ensuring all critical business activities are true tests.

The idea of a true test is simple — every time the business encounters a life-or-death strategic opportunity, it needs to pull out all of the stops to stack the outcomes in its favor. If you line everything up, do everything in your power, and fail, at least you know it was a true test. It wasn’t meant to be, and you can move on to the next challenge with heads held high.

If you don’t — how can you be sure success wasn’t a possibility?

Here are the questions I ask myself in order to determine whether we’re giving an initiative a true test:

Are our best (& best suited) people on it?
Have we allocated, and ring-fenced, the appropriate amount of financial resources for a successful outcome?
Have we lined up the organizational support required to succeed? If its a hire, or investment— are our expectations of terms reasonable?
Are our timelines sound, and can we continue to support this initiative if things don’t go exactly to plan (in my experience, new business initiatives take 6–12 months to ripen)

In the early days, many opportunities can have a huge impact on company success. As companies scale, the percentage of life-or-death situations tends to decrease, and this is how leadership teams create leverage and scale. However, its also at this time that leaders can lose sight of must-win activities, or under-resource strategic opportunities in favor of business-as-usual. This is often when the company starts losing.

Here are some examples of activities that require true tests, regardless of company stage:

Hiring a critical member of the leadership team
Launching a major new product, or expanding to a new market
Raising external capital
Investing in a new sales or marketing channel with strategic potential
Landing a huge new customer account

Organizations need to always put their best feet forward for the must-win activities. Only then is it possible to know whether the result was the best of all potential outcomes.