Hard decisions for the long-term success of your entrepreneurship.

As an entrepreneur and leader of a team that trusts you, you need to make decisions that will have long-term effects on your company. These are not the decisions that you want to make in the short term. In fact, they are probably decisions you don't want to make at all.?However, sometimes these decisions must be made if you want your entrepreneurship to succeed.

Starting and growing a company is a journey, not a destination. Therefore, you never stop learning. But it is also true that there are lessons that you learn and incorporate strongly, because they went well, and especially because of the ones that went wrong. In my journey co-constructing Flokzu cloud BPM, INTEGRADOC BPM and Workflow Suite, and Lithium Software, I have had to make many difficult decisions. In this article, I will share some of the most important learnings for making those decisions, with both eyes on the long-term success.?

Increase the probability of long-term success.?

Nothing and no one can ensure that the decisions you make today will be the right ones in the long run. Period. But it is your responsibility to make these decisions as professionally as possible to increase the probability that they will be the right ones in the long term.?

To increase the likelihood that they will be the right decisions, I suggest some concrete techniques and tools:

1. Ask yourself why you are making this decision. Is it really relevant for the future of the company? Once you have a clear answer to this question, then you can focus on making the best decision.?
2. Consult your team and experts. You are not alone. Obviously, the decision and responsibility are yours. But you can count on your team, their different perspectives, and their ideas. Remember, you have 2 years and only 1 mouth.?
3. Do Your Research. Try to avoid impulsive or instinctive decisions. Review different sources of data. Look for examples of how other leaders have dealt with similar situations. Read a lot.?
4. Complete a decision table. This table should have one row for each alternative (I mean, for each different decision you may make), and columns with the criteria and their weight.?This is important to reduce the chance of forgetting to consider the consequences and relevant aspects of the decision.?

1. Define complete and useful criteria for tangible consequences. We must include all the elements that are relevant in the long term, such as the income and profitability that each alternative will generate.
2. Also, define criteria for intangible consequences. We must also include soft elements, such as which alternative will generate more motivation and commitment in the team.?
3. Consider the long-term benefits and problems of your decisions. Since these are long-term decisions, there should be criteria such as the scalability of each alternative, how attractive the company will be for investors when taking each alternative, etc.?
4. Identify mandatory criteria. These are criteria that must be met. If an alternative does not meet one or more of the mandatory criteria, it will be discarded.
5. Deeply analyze, decide, and take action now!

Making decisions can be overwhelming. It is natural to feel hesitant and scared about the unknown. However, it is important to remember that decisions do not have to be perfect in order to be effective.

You need to follow a methodology to make sure that you make the best decision possible, with the information and resources that you have in this moment.

This will increase the probability of success in the long-term, given you took every relevant decision with this method.?

Typical long-term hard decisions?

Let's look at some concrete examples, which every entrepreneur must face at some point, and some important elements to consider in order to make the best long-term decision.?

Letting a customer go

Sooner rather than later, we will be faced with the decision to stop working with a client. This is especially difficult for bootstrapped companies, where getting a new client is very difficult.?It is even more difficult when there are good people on the client's side. However, there are clients who are very demanding in requirements that only apply to them, and do not let our venture grow.

This is very clear in product startups, where there are large, important customers who demand features that are only useful to them. Of course, they pay for them, and how much that money helps! But it also prevents the product from evolving to where we want it to be, and the team gets demotivated by always making specific features for one client, instead of looking at the needs of the whole community.

But this situation also occurs in service startups. For example, when your purchasing processes are so long and cumbersome that it becomes extremely costly to sell to you. Or when your payment terms generate serious cash flow complications. Or when the sequence of endless interviews before accepting a new team member causes the person to become demotivated and leave our startups.?

This situation can escalate to the point of evaluating to stop working with that client. And if we reach that point, the most important thing is to make the decision considering the decision table previously presented. Below is an example of criteria that should be considered when making the decision. The observant?reader will notice how clear the decision is when the table and criteria are well used.?

Saying no to a profitable deal

The decision to reject a business, which in the short term can be very profitable, is also very difficult in a startup, and even more so in a bootstrapped one. As in the previous case, the decision must be analyzed with all the appropriate criteria. The most important thing is to understand whether or not this specific business is aligned with the defined strategy.

Is this deal bringing us closer, diverting us, or distancing us from the objective we are pursuing??

It is good to understand that there are deals that can provide us with very good short-term income, but that are not aligned with our long-term strategy. If this is the case, what we will be doing is delaying the long-term objective. And we run the risk of getting too distracted, losing momentum, market share, positioning, and even part of our team.?

In technology companies, a recurring example is when an important client, whom we want to continue serving, asks us to develop a project with a different technology than the one we use. Do we have to divert part of the team to learn it and deliver the project? Will the team become demotivated? Will we have to provide subsequent maintenance and will we remain anchored to that technology for a long time??

Building the team we need, not the one we want

The budget in a startup is always limited. And this means that many times we will not be able to hire people with the experience and academic background we want. We simply cannot afford them. In these situations, it is preferable to hire people with attitude, willing to learn and develop, rather than those who already have the experience and knowledge.

As the great Pablo Brugnini says, "Attitude kills talent".?

Another common mistake is to leave an important role vacant because we spend the budget on more expensive people for other roles. The same concept applies here, if we have two roles to fill, it is better to fill them both with junior people who have the right attitude than to fill only one with a perfect person and leave the other empty.?

Clearly, this type of decision is difficult because the person who comes in will demand time, training, will make mistakes, etc. But again, looking at the long term, it will be much better to give the opportunity to that person, who will feel part of what you are building. And as time goes by, that person, who has the right aptitudes and attitudes, will reach the level we need. It is a long-term decision.?

Letting a great talent go, in peace.?

Naturally, we intend for the best to stay with us... forever. Those people who are great human beings and world-class technically are the ones who help build great ventures. It's impossible to do it without them. And it should be a central goal of the founder to find them, motivate them, hire them and retain them.?

But it is also true that these people have their own goals, their own ambitions and may not be aligned with ours forever. It is very difficult, but we must understand and accept it.?

It definitely doesn't make sense to invent positions or roles that we don't need to try to retain those talents. It would be a short-term decision, with doubtful effectiveness in the long term.?

Neither does it make sense to try to pay them something that is not fair to the rest of the team, or that the startup cannot afford and put its sustainability at risk. It would be unwise and very risky in the long run.?

Therefore, one of the most difficult but also important decisions is to let these great talents go, in peace, when the time comes. Thank them from the bottom of your heart for everything they did for the startup, plan an orderly exit, and leave the door open for the paths to cross again.?

Making important decisions, looking at a horizon of at least 1 year.

The time horizon is sometimes difficult to define. What is long-term in a dynamic startup, which lives intensely on a day-to-day basis? Is it 6 months? or 1 year? or 5 years? maybe 10??

Thinking about periods of more than 1 year in a startup has more to do with futurology and crystal balls than with science and method. The variables are many, the work dynamics are extremely agile, the teams rotate continuously, and the clients change.?

My recommendation is to consider a 1-year time horizon when making long-term decisions as a basis. Of course, those that have to do with strategy will be long-term (3 or 5 years), and some more tactical ones will be 6 months. But 1 year is a good starting point.

Conclusion

Making decisions for the long term can be difficult, but it is important to do so if you want your startup or established organization to succeed.

In this article, I presented a methodology based on decision tables and criteria that have been very useful to me while building several successful companies. In addition, I included several concrete examples of decisions that seem counter-intuitive but are the right ones in the long run.?

As I said at the beginning, nothing and no one will guarantee you success. But if you systematically make decisions in the most professional way possible, the chances of success increase significantly.?