Think you have a killer idea for an ecommerce business? Whether you are a product manufacturer or a reseller, it’s pretty difficult to come up with a truly unique business idea. In most cases, you’ll find someone who has done it, already doing it, or planning it. You will likely be able to find ways to differentiate your offering. But at the end of the day, you will compete for dollars with the others because you are likely solving the same problem.
How do you differentiate yourself? Execution. Building a better business model is key, but even when you’ve devised a better value proposition, a more efficient infrastructure, and have a better channel strategy, you still need people to execute those strategies. This article focuses on many of the challenges in building the right team for where you are in the lifecycle of your business. It continues my series of articles addressing the managerial, operational and financial side of running an ecommerce business. To date, the series includes the following installments.
- Who Needs an Ecommerce Strategy, Anyway?
- What's the Value Proposition of Your Ecommerce Company?
- Choosing Sales Channels to Reach Target Consumers
- 7 Key Ecommerce-Infrastructure Decisions
Just Getting Started?
I’m experiencing the challenges of starting a new business right now. I'm working with two different teams on new startup concepts, and building a team is a challenge. Even when you have co-founders with the same vision, you will face awkward conversations in the first days about ownership, roles, responsibilities, and compensation. That’s before you even start building anything.
The key is to find co-founders you trust and can be completely open with. It’s very much like a marriage — with even nastier legal agreements to sort through. Having different skills and temperaments is common, but not necessary. What is necessary is to clearly define who is doing what and how you will bring differences of opinion forward and resolve them, because you will have plenty of them.
Early Stage Startups
Generally, the co-founders develop the vision and strategies for the company. When the workload is too much for the co-founders, you’ll bring on new people. Before you do that, be sure to be clear on what your organization is going to look like and what your want your culture and values to be like. A culture will develop, an you really do have the opportunity to influence it. If you don’t decide what you would like it to be, you may not like what you get.
Spend some time deciding if you are going to be a "top down" or "bottom up" management style — or somewhere in between. Will employees be offered incentives for performance or equity positions? Will you be team oriented in your approach or operate in more traditional functional silos? ￼ Are you going to focus on integrity and transparency with your employees and customers? Will you promote eco-friendly initiatives? Do you want to change the world?
As you recruit, look for people who have been successful in an organizational structure like the one you envision. Tell them what your values and culture are and see how they react. If you see sneers or blank faces when you talk about the values that are important, you have a pretty good indicator that the fit may not be right for your company.
Some of these may sound silly, but if you are not clear about what your values and culture are, you may end up hiring people that end up focusing on the wrong things in your business or simply mismatched with the culture or organization you put in place. As an example, if you have a culture where the customer is always right, you may not want to hire an argumentative and overbearing customer service manager.
If you are past the "barely functioning" stage and are in a growth spurt, you’ll likely need more help. You may face decisions about hiring temporary workers or adding part time positions. You may not have a human resources department to do recruiting, so you may need to decide whether screening ads for five new hires from Craigslist or Jobs.com is really a good use of a senior manager's time.
Evaluate outsourcing your recruiting or even outsourcing employees to an agency. Some of these decisions will go back to your organizational goals and values. Hiring outside workers on a temporary basis may give you flexibility and accelerate hiring, but your quality control and customer service may suffer. There are many tradeoffs you will face during a high growth period.
Another thing that happens during high growth is that co-founders and managers suddenly find themselves spending more time on training and development, and less on strategy. They may also feel detached from information, as they were heavily involved in an activity that is now the responsibility of someone else. I remember when I stopped doing incoming customer service when we were about 18 months into our ecommerce business. At that time, I really understood customer issues and felt connected to trends and what was going on in the market. When we hired a customer support manager to field all those inquiries, I realized that it was going to be difficult to understand the market as well as I once did.
As companies grow, they eventually mature into real companies rather than just entrepreneurial businesses. I view companies as being “mature” when the co-founders or senior managers can leave the building for an extended period of time and everything still functions just fine. This is a period where you have managers in place to deal with customer, supplier, personnel and operational issues. It probably means you have solid business processes as well.
This stage can be awkward for the owners and founders. Suddenly, you may not be critical to the success of your business. For some, that’s the day they dreamed of. For others, you may feel lost. It’s important to recognize where you are. It may afford you the time to do strategic planning for more growth. Or, if you prefer, you may have time to do more leisurely endeavors.
Regardless of how you use your time, you have new people challenges. Make sure that the senior managers you have are happy in their roles. See if they are looking for further growth. In many cases, entrepreneurs become disenchanted in the leadership role of a mature company. They get itchy and start looking for new things to create. I can relate to that one. It’s a large reason I recently sold my business.
All of the things in this article are dynamic. No matter the culture and organizational structure you aspire too, at some point it will be influenced by the people you hire and the market that you operate in. Listen, be adaptive, and don’t be afraid to make changes. Be open and transparent. It almost always works better than holding things in or being deceptive.
Finally, recognize that your business success is hugely dependent on the people you employ. Execution of your business model is crucial. That’s what makes great companies truly great, not your original idea. Execution is done by people, so make sure that hiring the right ones and developing their skills is a top priority.