Introduction

If one googles this question, he will find the following reasons at the top of the list:

1. Market Problems
2. Business Model Failure
3. Poor Management Team
4. Running out of Cash
5. Product Problems

I have to agree that these root causes could be attributed to the early-stage startups, but in this article I want to talk about the scenarios where venture capital companies have already examined the company and its product(s), checked for points (1), (2), (3) and (4) and still chose to finance these enterprises. Since VCs are the most experienced organizations out there in the startup assessment business, we have to assume the best vetting process possible.

My Experiences

I have worked with a lot of tech startups around the world over the course of last twenty years. All of these companies have been in the “post VC financing” stages and here are the somber facts:

• The vast majority of them failed (roughly 9 out of 10 which aligns with scientific data)
• In almost all of the cases the product, business model and cash situations were in a reasonably good shape

So, what happened?

Company grew getting more and more customers. Customers were getting bigger in size. Contracts they signed were getting larger and larger. Companies were becoming more and more profitable. And at one point of time (usually when the said organizations reached approximately US$10 million in revenues threshold) the company just couldn’t handle one of the two (and frequently both) things:

• Product development that was sophisticated enough to handle the demands of the markets
• Professional services: ability to deploy their software/hardware at the client’s site

Reason? Complete disregard to all aspects of project management and requirements engineering

And no matter how many times you would tell the C-level people  

“Guys, roll up your sleeves and work harder approach does not work any more! You need to invest in project managers, business analysts and proper project management methodologies”

no one was willing to listen.

Sign#1: You Never Plan and Discourage Others To Do So

Planning never helped anyone. Milestones and deadlines are unnecessary responsibilities and may cause severe headaches at times. Oh, and Gantt charts are for pussies!

Sign#2: Whenever Asked “When Do You Need This By?”, You Always Answer “Yesterday!”

First of all, this answer is hilariously funny! All team members and project managers especially simply love it! In addition it will raise your profile at the company as a no-nonsense, roll-up-your-hands-and-work-harder type of guy.

Sign#3: You Simply Love Having A Lot OF “All-Hands-On-Deck” Meetings

When inviting people always follow “the more, the merrier” approach. Are you planning to discuss high-level scope of the project? Get all of the technical team members in that damn conference room as well! Discussing detailed database design? Invite sales and marketing people; they will be thrilled to learn a lot of technical terms. Oh, and never, NEVER prepare an agenda for the meeting. Things will just sort themselves out.

Sign#4: You Never Trust Anyone

This especially goes to the estimates supplied by your technical team members. Whenever you hear something along the lines of “Well, I think this task should take me 5 or 6 days”, roll your eyes incredulously and decrease the estimate by 50 or even 70%. Believe me, your team members will come to love and respect you for your tough love.

Sign#5: Remember, There Are Always Evenings and Weekends

Always delay sending that all-important email containing a complicated change request until 4:55 pm, or, even better, 4:45 pm on Friday.

Sign#6: You Provide Specific Technical Advice At Any Opportunity

Tell your designed which colour combination is the most appropriate for the dining room. Find coding errors in your programmer’s script. Explain the basics of scheduling to your project manager. Educate your engineers about how to build ships. After all, division of labour is the thing of the past!

Sign#7: You Ignore Risks

Bad surprises do not happen on good projects! Scope creep is a myth created by those evil business analysts. Users always know exactly what they want and they never say, “Oh, and I just thought about this very important feature” in the middle of product acceptance procedure.

Found this somewhere on the Internets and just had to share it!

Son: Dad, what do you do at work?

Father: I work as a project manager on outsourced projects, son.

Son: So, what is that like?

Father: (thoughtfully) Well, kid … imagine that a customer calls and tells you that one of her employees has been wounded by a spear, and now has this lance sticking out of his belly …

Son: And then what?

Father: So, I conduct a preliminary assessment of the project scope, timeline and budget and then tell the customer that the spear needs to be carefully removed and that the total cost would be $1,000.

Son: And then what?

Father: Well, the client usually replies that my proposal exceeds her budget by a very large margin …

Son: So, what do you do in this situation?

Father: For a mere $500 we end up bending the spear around his body and coating it with a flesh-coloured paint so it doesn’t stand out so much!

And what is your favouirte project management joke?

About the Author

Jamal Moustafaev, MBA, PMP – president and founder of Thinktank Consulting is an internationally acclaimed expert and speaker in the areas of project/portfolio management, scope definition, process improvement and corporate training. Jamal Moustafaev has done work for private-sector companies and government organizations in Canada, US, Asia, Europe and Middle East.  Read Jamal’s Blog @ www.thinktankconsulting.ca

• Please follow me on Twitter: 
• Like our page on Facebook: 
• Connect with me on LinkedIn: 
• Subscribe to my RSS feed: 

Jamal is an author of three very popular books: 

Introduction

Have you ever been involved in a project that was in a bad shape? By “bad shape” I mean the following two scenarios:

• The project is so late and over the budget, that there is no point in continuing it
• The project was a dumb idea from the inception

Have you ever asked yourself a question:

“Why the heck is the management continuing to support this ignominy?”

These projects have been called “runaway trains” and “black swans”. They destroy reputations and companies. So, why is it so difficult to kill them? And yes, I do understand such concepts as sense of attachment, pride and egotism. But if you are a rational, intelligent individual, don’t you have to realize what exactly is at stake (i.e. your company, your shareholders and their money)?

The Kahneman Phenomenon

Enter Daniel Kahneman, a psychologist who won the 2002 Nobel Prize in Economics. In his article titled “Prospect Theory: An Analysis of Decision under Risk” he and his co-author Amos Tversky described the following exercise, that I encourage you to do as well as I describe it.

Imagine that I offer you the following two gambles:

Gamble A: A 100% chance of losing $3,000 (i.e. you have $4,000 in your pocket, I threaten you with a gun and walk away with three thousand of your hard-earned money)

Gamble B: An 80% chance of losing $4,000, and a 20% chance of losing nothing (i.e. we throw some kind of dice and there is a 20% that I would leave you alone with your money).

Don’t try to use any statistical or other techniques to answer this question; just go with your gut feel. There is no “right” or “wrong” answer to this question. Which one of these choices would you pick?

Now, let us try a very similar exercise, but instead of robbing you, I am giving you money this time.

Gamble C: A 100% chance of receiving $3000 (i.e. I just give you three thousand dollars)

I have got some exciting news recently! My third book “Project Portfolio Management in Theory and Practice: Thirty Case Studies from around the World” has just been released by Auerbach Publications.

So, to commemorate this event, I will be publishing a series of infographics dedicated to project portfolio management models in various sectors. Todays industry is Telecommunications.

About the Author

Jamal Moustafaev, MBA, PMP – president and founder of Thinktank Consulting is an internationally acclaimed expert and speaker in the areas of project/portfolio management, scope definition, process improvement and corporate training. Jamal Moustafaev has done work for private-sector companies and government organizations in Canada, US, Asia, Europe and Middle East.  Read Jamal’s Blog @ www.thinktankconsulting.ca

• Please follow me on Twitter: 
• Like our page on Facebook: 
• Connect with me on LinkedIn: 
• Subscribe to my RSS feed: 

Jamal is an author of three very popular books: 

I have got some exciting news today! My third book “Project Portfolio Management in Theory and Practice: Thirty Case Studies from around the World” has just been released by Auerbach Publications.

So, to commemorate this event, I will be publishing a series of infographics dedicated to project portfolio management models in various sectors. Todays industry is Product Development.

About the Author

Jamal Moustafaev, MBA, PMP – president and founder of Thinktank Consulting is an internationally acclaimed expert and speaker in the areas of project/portfolio management, scope definition, process improvement and corporate training. Jamal Moustafaev has done work for private-sector companies and government organizations in Canada, US, Asia, Europe and Middle East.  Read Jamal’s Blog @ www.thinktankconsulting.ca

• Please follow me on Twitter: 
• Like our page on Facebook: 
• Connect with me on LinkedIn: 
• Subscribe to my RSS feed: 

Jamal is an author of three very popular books: 

Introduction

In recent years I have been spending a good portion of my consulting time on rescuing troubled projects around the world. Very often I would receive an e-mail stating something to the effect of:

Hi Jamal,

Our company is currently experiencing certain issues with our (typically flagship) Project X and we would like to hear your opinion on how to remedy the situation. Would you be able to fly here for a project audit?

As a result of this, after having been exposed to a multitude of various troubled initiatives, I decided to attempt to systemize different types of problematic projects and potential approaches to their rescue (see Table 1). Please also note that I am trying to combine both the project portfolio management (i.e. value) and project management (i.e. on-time, on-budget, etc.) aspects of project success.

Table 1

I am not sure whether this problem is representative to other project managers, but since I keep encountering it over and over in my project management career, I will dedicate today’s posting to it.

Have you ever been involved in the project with a fairly senior but absolutely clueless stakeholder? You know, the one who never bothers even to attempt to understand the topics or problems discussed, but is always ready to ramble for minutes (and sometimes hours) about absolutely useless solutions? Here is a couple of examples:

Example # 1

PM: And now, guys, I want to discuss the issue about the reporting for senor management. The executives want to see “Subcontractors Travel Time” as a separate line item to distinguish it from the “Subcontractor Labor Time” … The problem is that our system is not capturing this info (turning his head to the real subject matter expert, the Senior Systems Architect) Bob, any thoughts on this topic?

Bob: Well, we could …

Energetic Stakeholder: (rudely interrupting Bob) Oh, I know! You should talk to Melanie from the HR department! Schedule an all-hands-on-deck meeting with her right away!

PM: Melanie? But she is from Human Resources … She has neither financial, nor IT background to help us.

Energetic Stakeholder: Well, she did some reports for our executives six or seven years ago!

Bob: Listen, she did create a couple of HR reports in a different system (Excel to be precise) long time ago. But, trust me, when I tell you that they have NOTHING to do with out issue. We can’t address this problem until we ask our subcontractors to report their travel and labor time separately. We need to talk to the Subcontractors team …

Energetic Stakeholder: (defiantly) I must insist that we talk to her!

Example # 2

PM: Ok, people, today we are going to discuss the functionality of the “Add Item to the Shopping Basket” page … Some of the features on the menu are: state taxes, shipping options, “people who bought this item also bought these items”, customer reviews, number of product photos allowed, zoom options, etc. We have A LOT do discuss, so let us get started!

Business Analyst: Ok, let us start with the taxes issue. Here is what I was able to find …

Quite some time ago I published an article titled “The Dangers of Being a Good Project Manager” where I discussed some of the shortcomings of being an efficient project manager, namely that some people tend to think of a well-managed project to be easy and a poorly run endeavor to be complicated.

A friend and a project management colleague of mine recently shared this hilarious and yet deeply disturbing story of his home renovation project with me.

Bob (let us call him that) and his wife buy a new house that is in need of significant upgrades. Here are the parameters of the project:

• Scope:
  • Install New hardwood floors (includes the removal of old carpet)
  • New stairs Including removal of the old ones)
  • Repaint kitchen cabinets including installation of new door handles
  • Repaint 3 rooms
• Budget
  • $10,000
• Timeline
  • The most interesting constraint on this project – only 5 days. The problem was that the current owner could only move out on the 25^th of the month, while Bob and his family had to vacate their rental on the 31^st.

Considering the extremely tight deadline, Bob – as a true project manager - realizes that the key to success on this project is planning. So, three months before the date he starts to visit hardware store, talk to specialists and bring home numerous samples of paint, varnish, hardwood etc. The following conversation occurs on more than one occasion at Bob’s household:

Bob: Hey, Nicole, take a look at these eight samples of the hardwood flooring. Which one do you think will accentuate our furniture?

Nicole: Oh, for the love of God, Bob! The move is three months away! Three months! Why do we have to spend our Friday evening looking at those samples? We will figure it out a week or so before the move.

Imagine the following situation:

You are an experienced project manager and you have just been invited for an interview by a large company. Your skills are a perfect fit for the project the organization is about to initiate. You have been told that that the estimated duration of the project is approximately two years and the firm is willing to pay top dollar for the right talent (for the sake of the argument let us say “$150 per hour”).

You arrive for the meeting and after a long discussion you suddenly realize that the project in question is a proverbial wild-goose chase. For example, you understand that it would not deliver any value to the company (pet project of an executive), or the constraints imposed on the venture, be it time, budget or scope, will prevent the team from the successful delivery of the final product.

If these examples are too complicated or ambiguous, imagine the following conversation:

CEO: (summoning you to her office) Hey, John! We are planning on starting a brand-new product initiative here at XYZ Inc. and I want to hire you to lead this project.

PM: (interested) OK, I am listening …

CEO: (solemnly) We are planning to build a new state-of-the-art typewriter!

PM: (surprised) A typewriter???

CEO: Yes! Internal company stakeholders are very eager to co-operate with you and provide you with all the high-level features and detailed requirements of the future device. In addition, the team will be given a reasonable budget and deadline to deliver the final product. What do you say?

PM: (shocked) But it is 2016! Nobody uses typewriters nowadays!

CEO: (angered) Well, John I can’t say that I appreciate your attitude! If you don’t think that you are ready, I think I can easily find another project manager to deliver this project for our organization.

(NOTE: If you still think that the above dialogue is completely insane, just read the “The New Ashgabat Airport” case study I have written a couple of weeks ago)