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5 Ways to Achieve Organizational Resilience at Your Startup.  You can’t avoid bad luck. But you can plan to deal with it.

By Nick Baum | Inc Magazine | September 8, 2023

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Organizational resilience becomes especially important during times of market volatility. The questions founders spend time on start to shift away from growth and toward stability. Can you weather uncertainty, a couple of failures in a row, or a downturn in the market?   No one is immune to bad luck. However, in the author’s experience, there are five things founders can do to create a more resilient startup.

1. Raise money at a reasonable valuation.  Significant VC funding at an extremely high valuation tricks a lot of startups into prioritizing the wrong metrics. Head count is a great example. A lot of startups flush with VC money get too big too fast.  On a macro level, unreasonable valuations can influence leadership to prioritize decisions with short-term impact to prove growth, rather than to optimize for long-term success. Raising less money at a reasonable valuation — or better yet, being completely bootstrapped — forces you to survive on what you know you have in the bank now. Operating from a mindset of sustainable growth means maintaining an unflappable focus on securing more customers and generating more revenue. 
2. Run quarterly premortems.  Resilience essentially boils down to preparedness. Asking the leadership team to spend a few hours thinking seriously about what could kill the business is time very well spent.  A successful premortem could lead to a set of concrete plans for mitigating each risk in the following quarter. 
3. Focus on the right priorities.  The early days of launching a startup can be too exciting, to the point that you’re seduced into prioritizing distractions. That includes pursuing press, hobnobbing with investors, and networking. These pursuits derail real progress.    Instead, founders need to focus on: finding product-market fit, selling, and recruiting.  Any activities outside of this narrow scope are nice-to-haves, not need-to-haves. Maintaining a hypertargeted focus is also key for building a good product. 
4. Hire smart.  When you’re hiring for too many open seats at once, your standards inevitably erode. You need to have the right people, and you need to resist compromise. Ultimately, both poor and exceptional performance are contagious.  When subpar work is accepted, it demotivates those who are capable of much better. Conversely, when people see their teammates praised and promoted for great work, it propagates productivity and high morale all around.
5. Build a culture of ownership.  Don’t bear the existential weight of the company on your shoulders alone, or leave it as simply the concern of the leadership team. Foster a sense of ownership and true community across the whole company. There are a lot of ways to do this: A common example across startups is offering equity to all employees.  Another way we do it is by actively and regularly encouraging employees to buy into our collective mission. 

2 key takeaways from the article

1. Organizational resilience becomes especially important during times of market volatility. The questions founders spend time on start to shift away from growth and toward stability. Can you weather uncertainty, a couple of failures in a row, or a downturn in the market?   
2. No one is immune to bad luck. However, there are five things founders can do to create a more resilient startup: raise money at a reasonable valuation, run quarterly premortems, focus on the right priorities, hire smart, and build a culture of ownership.

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Topics:  Startups, Entrepreneurship, Resilience