Startups are efficient in their processes because they need to be; with a limitation in resources, personnel, and experience, efficiency is a means of survival spawned out of mere necessity. If a startup became inefficient, it would not be able to sustain its workload and therefore risk its capacity to function as a business.
So what happens when you’re a startup company and your back is against the wall? Well, you either push forward and succeed, stall and pivot until you find a more quintessential route, or fail.
But the fascinating part about embodying this “do or die” ideology when it comes to business is that it sometimes brings out the best in a team by persevering through adversity. In many ways, it’s very much like the psychological concept of “fight or flight” in human nature − and yet it usually starts with perspective.
80-20 Rule
How a startup mentality allows under-resourced teams to enter a zone in which their performance outweighs their bandwidth has everything to do with a change in process, because startups don’t have time to loosely make assumptions.
They also don’t have the budget to take risky bets that don’t have the probability of generating sufficient revenue. In other words, the ratio between an investment and a return on that investment has to be significant. This approach embodies the 80-20 Rule, where “80 percent of the results will come from just 20 percent of the action.”
In order to achieve an 80% threshold of output, the 20% input of work needs to be battle tested. Otherwise, the input can easily increase to 40% or more, resulting in an abridged ratio between investment and ROI.
Testing Everything
Testing everything will provide your team with the necessary workflow to make smart bets with low risk and high rewards. Companies that don’t embrace the startup mentality often find themselves making assumptions based on qualitative information, not quantitative data.
And while both have their limitations, more likely than not, qualitative information will mislead while quantitative data will misdirect. At least with misdirection there is forward momentum that can swiftly be stabilized following more testing.
That’s how startups think. They dot every “i” and cross every “t,” leaving no room for assumptions. Facts and figures only. Constant testing for definitive answers.
A/B Testing
A great mechanism for testing results is A/B testing, sometimes referred to as split testing. According to VWO, with this testing model you are basically comparing two variants (variant A and variant B) to the same testing group at the same time. The variant that ends up with a better conversion rate is the more dominant variant.
For example, let’s just say you run a temporary staffing agency and you want to find out if a new tactic is producing more leads compared to an old tactic. By testing everything, you can assess how many leads the old tactic is generating and measure that number against an old tactic. From there you can test the new tactic against a new process within that tactic, helping you A/B test your way to the best possible tactic for your company.
By A/B testing all facets of your business and workflow, you are essentially giving yourself the opportunity to make effective, data-driven decisions with no room for flawed interpretation.
Question Everything
Your team will evolve into a forward-leaning, data-driven team by embracing the one simple step of testing everything. But it can’t stop there. The second step to fully solidifying this approach is learning how to question everything − because sometimes data isn’t enough.
If your team has weekly meetings every Friday, you should encourage your team to look into helpful resources for entrepreneurs and see what various thought leaders in the space are doing with their teams.
Are most suggesting that Mondays are better because people in general tend to have a better grasp of their projects during the beginning of the week? If that’s what the qualitative insight is stating, then perhaps you should A/B test Monday meetings and Friday meetings and see which are quantitatively more productive for your team.
It’s about thinking smarter to help you make smarter decisions. And that’s only one example. There’s an infinite list of examples where your team can question everything about their team and business, until every aspect is foolproof.
This is your chance to spark creativity with your team and lead them into developing a startup mentality to prioritize growth. Incentivize them to test everything and question everything − if you do, everything is possible.
