7 Steps to Successfully Fail at a Startup

Ok, you have come up with a great business plan, have secured some reasonable level of funding, developed a couple of working prototypes and moved out of the seed stage garage. More investors are returning your calls and you have had to hire a couple of people just to work on the term sheets. It is clear skies sailing. One might think you couldn't fail, even if you tried.

In this article I am going to show you seven simple steps to fail. Of course, there are many other ways, but I am primarily talking about ways that you could fail with the complete illusion of success, rather than just advising you to set a match to the warehouse or some other such nonsense.

1. Your people are the key. You must staff up, you know that. Alas, the seasoned industry veterans won't leave their secure day jobs to join you, so you must hire less experienced but more energetic people. The key to failure is to hire anyone that talks a good talk and has a lot of energy. So go ahead and hire that 23 year old for your Senior Executive Chief Technology Officer. A more critical key is to max out the titles so that there's no room to squeeze in adult supervision at a later point.

If you do end up replacing anyone, you must make sure to replace them with someone much less competent to guarantee failure. Also by making changes at the leadership levels you will ensure that your teams will perpetually stay in a storming stage and the team members will be too busy pulling the proverbial ladder or rug from underneath one another to do anything useful.

Bestow upon your storming unmotivated employees lavish motivational parties. Location is important. It must be in the lobby of an upscale hotel where the employees can engage in further motivational activities that will provide fodder for the juicy office gossip about who ended up with who and how the village idiot ended up with the village bicycle, etc. Create a regular 90210 scene! With less time to do any productive work, as they are caught up in a whirlwind of texting, you are many steps closer to failure.

2. Stick to the plan and stick to what you know. Do on Monday what you had planned on Friday, no matter what happened over the weekend! Stick to your knitting, even if the global warming trends and the entire planet tells you that no one will ever buy your knitted sweaters.

It is important to note that “sticking to the plan” is not the same thing as planning. You must avoid planning completely.  Project planning process,  timelines, resource and effort estimation be damned: You give yourself six months to launch the product, period! After the launch date is inevitably missed, you tack on another six months, and then five and so on. Instill a sense of emergency such that there is never enough time to do it right and be launch-ready. If your product is a basketball, you’ll end up with an elliptical balloon with a thousand Band-Aids on it, thereby firmly ensuring that you won’t sell many, if any!

If you do make any strategic corrections, they must always be too little, too late and after the fact and certainly not until any benefit gained from the correction is nil to negative.

3. Communication. You must ensure that all but the most trivial information is safely guarded and NOT communicated through the ranks. This will maximize the amount of office rumors as employees will make up their own news if they don't hear them from you. Additionally, on the account of your 90210 culture, your boardroom is leakier than a sieve. Yet, you must not formally communicate anything. Secrets are empowering.

4. You have got to spend money to make money. So spend! You don't have time to do any ROI analyses or trade-off studies. If you're not spending the investors' money, you won't get anymore. So spend like it's 1999. This goes for your products' costs as well. Remember, your customers won't care about the product price, since it's so amazing, and there will be no competition.

5. Proper spending. You must operate in feast or famine mode. If you make budgets and control spending, you won't be able to execute on this strategy. As soon as the series x funding is deposited, feast! Order valet parking for the employees. Provide free meals and free on-site massages. Everyone travels first class. When the money dries up, stop ALL spending! Freeze those critical projects that need to get done. Stop payments to all the suppliers to ensure maximum damage to you supply base and credit rating. Wait for series y funding and repeat.

6. Empower your employees. But only your cronies and the yes men and women around you. Don't just empower, give them absolute powers to hire and fire such that there is no rhyme or reason to the way they operate. Let them set up their own little dictatorships and enjoy the privileges of being friends of you.

7. End with the beginning in mind. You can tell you are getting closer to a successful failure by the massive exodus of the worker bees. You’re trying to navigate this ship onto the rocks anywhere between chapter 7 and 11. So you must get rid of any nay sayers or competent employees who might be signaling that you might be heading into the ground . Fortunately you have a few ‘empowered’ cronies who will play the dirty end-game for you. Give the rest a taste of HR. Have that HR crony who has been helping you amass all these hiring failures run the show and fire people on the spot at his or her pleasure. Make sure your final days are the worse days in your company's history. The best way is to perform a massive layoff in a town-hall format, where everyone is expecting to hear  good news but is shown the door instead.

Now sit back and relax; you've done it!

2.0. Re-invent yourself. This process can be repeated by re-inventing yourself while in chapter 11. Ever seen the show Walking Dead, where the dead come back but this time running only on brain stem functionality? In business this happens when you venture into an area where you know nothing about.  Completely new fields and markets because it seems like a great business opportunity. This allows you to make completely new mistakes, yet in theory you’ll be able to follow through the same seven steps again. Albeit these steps will be called steps 8-15, rather than 1-7. If your first go around was code named A123, you can now call the second iteration B456 and the third could be C789 and so on. You get the picture.

On the investment side, in first loop you’ll need smart money; in the second go-around you’ll need gamblers and bottom feeders; in the third iteration you’ll have to find desperate money, and in the fourth loop, go after plane dumb money. Thank god for diversified portfolios.

Good luck!