With the help of CB Insights, a Manhattan-based research firm that tracks investment in high-growth private companies, we found 100 up-and-comers with serious growth potential. Seven of them shared their biggest mistakes, and how they dealt with them.
Chris Sugai
Chris Sugai, President of Niner Bikes, maker of high-end, 29-inch (wheel diameter) mountain bikes and bike accessories
I thought we could work off of the cash we had from my other business, but the unexpected triple digit growth outpaced my fundraising among friends and family before the company was two years old. Realizing I would have to find an outside investor was something that I understood in the back of my head, but became extremely clear when I had a container of product headed to port and I had to raise cash quickly. Moving from friends and family to our current $3 million round of investor funding has been a steep learning curve.
Thinking "I" And "The Company" Were The Same
Leah Brown, CEO of A10 Clinical, which runs clinical trials for new drugs and conducts health research
During the start-up phase, I had so much passion behind the business that I would measure my self-worth based on how well the company was doing. This is totally the wrong way to think. The entrepreneur is a human being. The business is an entity. I had to learn to separate the two; otherwise I found myself down in the dumps when things went wrong with the business. When things don’t go according to plan, this is the most crucial time for the entrepreneur to be inspiring, enterprising, fearless, and most importantly self-assuring to oneself and the team.
Underestimating Market Perception
Michael Garippa, CEO of Syncardia, maker of artificial hearts with portable power supplies
My biggest mistake here (I’ve only been the CEO since May 23, 2011) was in underestimating how hard it would be to dispel all the myths surrounding our Total Artificial Heart. It was first used 30 years ago, yet the company was so capacity-constrained that it never grew.
Thinking Too Small
Andrew Sherman, CEO of MesoCoat, maker of protective coating for metal bars and plates
Early in my career I made the mistake of limiting our activities to markets that we could reasonably address with internal resources. This resulted in a high probability of success, but also created markets for other companies who were not the originators/developers of the technology, but who had more resources and market knowledge to apply. Mesocoat's success has been a result of changing that paradigm, looking at the markets that could provide us with the greatest financial impact and then working to acquire the partners and resources needed to address the major market opportunity.
Being Overly Optimistic
Brad Antle, CEO of Salient Federal Solutions, an engineering and IT services firm
When I was leading a public company, I allowed myself to buy into revenue projections that were overly optimistic. Ensuing delays in getting production online and up to full capacity for a new program had significant impacts on our ability to meet revenue and profit projections. Compounding those headwinds, we were experiencing unanticipated delays in another new start. This required a detailed, painstaking, bottoms-up review of all revenue projections and a much more conservative view of these two programs. Words of wisdom given to me: Don’t miss guidance! If you do miss guidance, don’t do it twice!
Scaling Up To Fast
Stephen Spoonamore, CEO of ABS Materials, maker of reactive glass that separates pollutants from water and air
We blew it on our first production scale up. Our glass product, Osorb, repels water, making it ideal for water treatment. The warning signs of a problem actually existed within initial production runs. But we were in "race mode" and did not see the warning signs. We were focused on increasing our production capacity from 5 grams of Osorb a month to 20 kilograms a month. It turned out that about 60% of the product coming out of the reactor was either non-functional or suboptimal for project needs. We called two clients that had been waiting for production to increase, owned and diagnosed the problem, and ate the additional costs. Both clients were understanding and are repeat customers.
Hiring Our Own Sales Team
Steve Clark, CEO of Aquatherm, marketer of environmentally-friendly pipes made of polypropylene
When we started out, we tried to use our own sales team. This burned through a ton of cash, put us way in the red with minimal success. When then went to local sales reps in each state with far better success and much lower costs.