This article is an excerpt from the Shortform book guide to "Build" by Tony Fadell. Shortform has the world's best summaries and analyses of books you should be reading.
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How long does it take to find the right investors? How do you maintain personal well-being when leading a business? Why should you memorialize business catastrophes?
No matter how well your launches go, you’ll likely face challenges in your business. Serial entrepreneur Tony Fadell recommends strategies for three common business problems: a lack of funds, a lack of work-life balance, and catastrophes.
Continue reading to learn how to navigate these challenges and come through as a stronger leader with a stronger business.
Problem #1: Lack of Funds
If you lack funds for your business, you’ll need to find investors. To do so, Fadell first recommends that you have a clear plan regarding how much money you desire and what specifically you’ll use it for. However, you should have enough money to last for a few months since that’s how long finding the right investors will take. Second, Fadell suggests that you vet your investors carefully since you can’t fire an investor even if they’re bad. Pay attention to how well they treat you when you’re pitching them. If they’re disrespectful, want too much (more than 22%), or have a poor reputation among other startups, look for someone else.
(Shortform note: The authors of Blitzscaling recommend looking for more money than you think you need and acting as if you have half of the funding you have access to, as you’re likely to assume a best-case scenario when raising money and underestimate the number of difficulties you’ll face. Additionally, keep in mind that no matter how well you vet a venture capitalist, how well they treat you when you’re pitching them, and how good their reputation is, their goal is not the same as yours. VCs need outsized returns on a few companies to make up most of the returns of their entire portfolio—so they don’t necessarily care if you fail, as long as one of their companies is a blockbuster.)
Problem #2: Lack of Work-Life Balance
Another problem you may face when building a startup is a lack of work-life balance. Fadell asserts that if you’re starting a business, you’ll likely spend most of your time at work; however, it’s essential that you carve out some time for yourself so that you’re able to lead effectively. Get adequate sleep, nutrition, and exercise. Devote a few weekly blocks in your schedule for reflection so that you can give your brain an occasional break from work. If you’re overwhelmed with administrative tasks, hire an assistant so that you can focus on leading your team effectively. Finally, once the business is up and running, take vacations—and train yourself to let other people on your team handle the business.
(Shortform note: In Clockwork, Mike Michalowicz warns against Fadell’s approach, arguing that entrepreneurs who involve themselves in their company’s daily operations are prone to burnout. This isn’t because they’re neglecting their health and rest or are overwhelmed by administrative tasks. Rather, they don’t have time to improve the company framework (like its daily operations), so small issues grow into crises, and the entrepreneurs burn out while trying to manage these crises. Michalowicz advocates developing a hands-off approach to your business that allows you to focus on more visionary work—and then taking a four-week vacation to force your employees to learn how to operate without you.)
Problem #3: Catastrophes
Another problem you may face when building a startup is some form of “crisis” or catastrophe. When you encounter a catastrophe, your first priority is to fix the problem. As a leader, you should dive into the everyday work your team does so that you can figure out with them how to fix it. You must also communicate effectively with your customers, apologizing if necessary. Only once you fix the problem should you examine why it happened and adjust your processes to ensure that something similar doesn’t occur again.
(Shortform note: Other experts support Fadell’s recommendations for dealing with a crisis. In Good to Great, Jim Collins argues that subpar leaders try to shift the blame or hide bad news when something goes wrong; in contrast, the most effective executives focus on figuring out and fixing the problem so that the same mistake doesn’t happen twice. And the authors of Rework agree with Fadell that you should communicate your mistakes to your customers immediately to avoid unwanted media attention. If an apology is necessary, say “I’m sorry,” which sounds sincere, instead of “I apologize,” which sounds distant and standoffish.)
Then, Fadell recommends that you memorialize what happened. The narrative of how you successfully faced and fought through a catastrophe is important to your company; in the future, it will remind your employees that you can fight through another catastrophe because you’ve done it before. (Shortform note: In The Hard Thing About Hard Things, Horowitz writes that you should talk about problems openly not because it motivates future employees, but because doing so sends the message that it’s OK to talk about problems—if an employee sees a problem, they’ll feel they can communicate it without fear of repercussion.)
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Here's what you'll find in our full Build summary:
- Entrepreneur Tony Fadell's memoir, from the iPhone to Nest
- Advice for succeeding in every stage of your career, from beginners to CEOs
- Tips for building a product-based business and a great team
