How important is the structure in a startup
How to Startup [Part 4]: Structure, sales and the first employees
In the fourth (and last) part of our How to Startup series, our founding experts explain how things will proceed once the business model is in place, the right type of company has been selected, the founding team has been put together and the first financing steps have been taken: The task now is to boost sales, Build up internal structures and maybe even hire your first employees.
I know about 20 US companies where the names of the best salespeople from several decades can be seen engraved in brass in the entrance hall. Do you know a single German company that does it that way?
This quote comes from Max Grundig, the founder of Grundig AG. And it describes in clear words what many German start-ups are often lacking, especially when compared to their counterparts from the USA.
Typically German, the products are developed to perfection instead of letting the market decide at an early stage what will arrive (and what will not). We asked our two experts and EXIST founder coach Bartosz Kajdas from the HIGHEST innovation and start-up center at the TU Darmstadt and Karin Kricheldorff from the Center for Entrepreneurship at the TU Berlin, among other things, how founders in sales can quickly get the PS on the road.
- Background: The EXIST start-up grant supports university founders who want to realize their start-up idea and implement it in a business plan. The focus is on innovative, technology-oriented or knowledge-based projects with significant unique selling points and good economic prospects for success. The start-up projects are supported with coaching and further training as well as up to 30,000 euros for a period of one year.
How to Startup Step # 9: Get the sales horsepower on the road
For “How to Startup” steps # 1 and # 2, steps # 3 to # 5, and steps # 6 to # 8
Founders should not only start their sales activities when their own product has been developed to perfection. Karin Kricheldorff from the Center for Entrepreneurship at TU Berlin, where the majority of start-ups develop innovative products and services for B2B customers, actually sees the start of sales from day one, even if there is only a first prototype:
Many founders shy away from it and want to perfect their product first before speaking to their customers. But that's best done together with the customer. This is why pilot projects in which the product is (further) developed together with the customer are ideal for start-ups.
If possible, one should work more with SMEs than with large corporations. Because in large companies with more complicated structures, it is often difficult for start-ups to find the right contact person and decision-making processes are very tedious.
In Kricheldorff's opinion, small and medium-sized trade fairs are also a good way of addressing customers: "Even if you are not yet participating as an exhibitor, this is an effective way of addressing customers."
Bartosz Kajdas from TU Darmstadt also thinks it is important and sensible to get a former manager on board who can actively contribute with his contacts and experiences:
I very often experience the case that former management consultants want to try “something new” and are looking for positions in the start-up area. Finding someone like that is a stroke of luck, but you should definitely try it. My tip: get someone with experience on the team.
How to Startup Step # 10: Build Structures
When the company has started and sales have started, you should definitely be prepared for the first growth phase. And that includes functioning corporate structures and processes in order to cope with day-to-day business.
Bartosz Kajdas advises founders to build a good and solid corporate culture:
In a solid corporate culture, it is clear who is responsible for what and what is the overarching goal towards which the company is heading.
The corporate culture also determines which structures are needed and when to provide the service for the customer and to earn money. So advises Kajdas:
Be aware of your behavior and actions in the company. Because in the growth phases you need a lot of employees very quickly. They have to identify with the corporate culture.
The easier you make it for new employees, the faster they will integrate into your company. This means that you are prepared for new challenges with excellent employees. Kajdas advises: “Schedule regular times when you can reflect on your actions and adjust them if necessary. Especially in the case of success, it is a great challenge not to get bogged down in day-to-day business, and advisors are excellent for reflection.
Karin Kricheldorff also points out that founders should not underestimate the challenges that await them after they have mastered the first large financing round:
With a million or two in their pockets, they suddenly have to hire people and build professional corporate structures. You have to think about leadership style and corporate culture and day-to-day business continues.
That is why Kricheldorff recommends start-ups to deal with these issues as early as possible. This is often difficult, especially for start-ups in the seed phase with their not inconsiderable workload, the expert advises:
However, I can only recommend that you regularly take your time and plan together not only the next day and the day after that, but also the future of the company.
For this purpose, a special management seminar was developed at the Center for Entrepreneurship, for example, in which young start-ups can communicate three times a year for two days with professional support on the subject of corporate management with all its facets. Alumni companies that already have scaling experience and are happy to pass this on to young founding teams are also of great help there.
How to Startup Step # 11: The First Employee
Bartosz Kajdas already indicated in step # 10 on setting up functioning structures that many employees are often needed quickly, especially in the growth phase, and that corporate processes should also map this. He told us that when hiring these employees, founders should above all ensure that the new employees are properly and properly “onboarded”. Because the founding team usually knows each other very well and has already gone through "thick and thin". New employees have not yet experienced these phases and are mostly employed on a job-related basis. Kajda's experience shows:
If the new employees are not properly trained and picked up, dissatisfaction increases because they do not know the overall context of their activities.
Therefore, in his opinion, it is best to explain to the new employees all the activities that arise in the start-up. This helps the new employees to get an overview and the founders to see their processes in the start-up again. In conclusion, Kajdas advises:
Regular meetings with the new employees help to acclimatise to the start-up faster.
That was How to Startup
Our How to Startup series ends here. We wish you every success on your way to self-employment and thank Karin Kricheldorff and Bartosz Kajdas once again for the exciting input.
You missed one of our previous parts 1 - 3 of “How to Startup”? Here you can find all parts at a glance:
Learn more about EXIST
Tags:ExistBusiness IdeaStarter ScholarshipHow to StartupTU BerlinTU Darmstadt
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