Balancing Macro and Micro Elements

Successfully leading a startup involves paying attention to both the macro trends that define your field of play as well as the micro-actions required to successfully overcome the challenges before you. To succeed, startup leaders must be able to zoom in and out adroitly to keep both the big, out-of-your-control factors in mind, while focusing on those micro elements and systems you can build and control to get the job done.

Building a startup, in many ways, resembles a battle or a sports game. The goals matter a great deal. The framework of rules matters a great deal. The weather can have a significant influence. All these field-of-play “macro” elements define the systematic challenges you and your startup face.

In addition, the actions of the individuals determine the outcome of the game or battle. The bravery with which they take the field. The passion with which they execute their plan.The excellence with which they play their roles and adapt to changes. The people make a difference as individuals and as a collective group.

When thinking about founding and building a startup, it is critical to focus simultaneously on the macro elements of the field of play as well as the micro elements of the individual people who will develop and execute the plan and be critical stakeholders.

Macro “Field of Play” Elements for Startups

The macro elements facing startups are always of interest to potential investors – as well as founders. The macro elements describe both the field of play and the large-scale headwinds and tailwinds the startup will face. I define macro elements by whether the startup has control over them. They are macro elements if the startup must deal with them but does not control them. Examples of macro elements include:

• Legal requirements that all companies must meet such as filing tax returns, Corporate Transparency Act Beneficial Ownership reports, and abiding by the laws.
  
  
• Regulatory requirements such as those that define product approval requirements, mandated performance reporting that drive customer behavior or shape go-to-market requirements
  
  
• Customer industry structure such as selling to the government or other large-scale monopolies versus selling to individual consumers or many small businesses or local government units.
  
  
• International structures and events such as supranational political alliances/treaties (e.g., the European Union, NATO, Transpacific Partnership, etc.), wars, and political systems.
  
  
• Political leadership changes both in the U.S. and in other countries that potentially result in policy shifts and new priorities.

Because such macro elements can create tailwinds that help drive demand for innovation and new products and erect competitive moats, it can be an advantage for a startup to demonstrate a grasp on the environment they are entering – and is a reason why investors like entrepreneurs who have past industry and technology experience as that increases the likelihood that the team is aware of many of these factors. These macro elements can also represent headwinds, and that result in lots of investor questions to explain how emerging headwinds will be derisked or overcome.

Because building a startup is usually a multi-year journey, it is essential to keep your eyes up and scanning the horizon for new changes – and be able to take advantage of opportunities or overcome emerging threats in your field of play. In addition, it is essential for all startups to build professional systems that enable the startup to with the rules under which you are playing the game.

Micro “Individual People” Elements for Startups

While leaders must keep their eyes up on the broader environment that a startup is operating in, they also must focus at the micro level. Execution happens at the level of individual people who will do the planning, coaching, blocking, and tackling of building and selling products and services, managing financial matters, and handling all the other elements of creating a thriving company.

The critical point I want to make here is that individual people live in their own microcosms, surrounded by their own environment, driven by their own motivations, and trying to solve their own problems. As a leader and manager, it is essential to be able to define and recruit people with the necessary skills and temperament to do the work that needs to be done and blend together multiple individuals into an effective and complementary team. Managing small startups means getting to know people and their motivations at the individual level and then scaling the organization so that someone is always continuing to cultivate and guide those relationships. Startups involve steep learning curves, and the team’s effectiveness will depend on helping each person figure out how to define and execute their role.

This micro-level also applies to critical stakeholders outside of the startup itself:

• Customers: Even if the startup’s customer is a large company, the buying decisions are made by individual people. Those individual people have jobs they are trying to do, goals they are trying to achieve, and problems they are trying to solve. While there may be patterns across different potential customer organizations, each customer will likely have some nuances that must be addressed, especially at the earliest stages of launching an innovative new product. Cultivating relationships with those individual people who will become your champions within their organizations is a critical success factor. It is likely the difference between someone taking a chance on something new or going with something perceived as safe instead.
  
  
• Suppliers/Partners: Suppliers and partners also have their own goals that will shape their needs and priorities. Understanding these micro-level elements is essential to figuring out how to forge win-win relationships that deliver value and alignment for both sides of the relationship. Often, figuring out how to create these customized relationships is a major lever to create value and scale more quickly.

Micro-level elements of startup building focus on knowing individual people and their needs and then creatively blending those together with others to accomplish goals. This work demands insight, empathy, and vision. It is also the guts of the core work that needs to be done and is within the control of the startup team. Demonstrating how effectively the startup leaders can do this work is critical to inspiring others (like investors and prospects) to support the venture.

Balancing the macro environmental factors with the micro-level work is essential. Too much focus on one level can result in mistakes and challenges on the other level so try to consciously switch between the two levels – both scanning and executing. Also, be prepared for conversations with investors to test both levels because sophisticated investors realize that multidimensional excellence and insight are required to win.