Identifying and defusing entrepreneurial ‘land mines’
When building a startup company from ground zero, it can be very much like walking through a field of land mines. When crossing a field laden with land mines, your objective is to get to the other side as safely and as quickly as possible. You must be careful in both building and following your roadmap to get there.
The problem is that at any given moment, a step in the wrong direction can blow up in your face and potentially and permanently kill your progress.
The same is true for a startup. Your objective is to get to market as quickly and as profitably as possible. You must build your roadmap in a way to avert the potential pitfalls that will impede or kill your progress.
So how do we proactively account for such unexpected moments ad how do we minimize the likelihood of their occurring?
Often the key is to first and foremost prioritize those issues that have the greatest potential negative impact on your success. Look at all of the mission critical items in your plan and prioritize according to the level of negative impact they will have on your business if and when they come up short. In laying out our roadmap to success, the tendency is to usually focus on those aspects of doing business (getting the financing in place, developing the product, aligning marketing and sales). While all of this is certainly an important aspect of building our success, it is only one part of it. As we build out these plans and have our overall roadmap in place, it can be extremely helpful to put all of our plans on a white board, take a few steps back and look at it from a macro perspective.
If you get your mission critical items all together in one place for you to look at, you will often be amazed at what will jump off the page. When reviewing your plans, the questions to ask at this juncture, are of all the mission critical items in place, which ones will have the greatest negative impact on our progress if they fall short or fail all together? The answer to this simple question will determine what items demand your time and attention to ensure they stay in track.
Some examples here may be helpful. You are working on financing and have an angel group conducting due diligence. Everything seems to be going well. You expect to close a deal with them in the next 60 days, so you shift your efforts to product development and regulatory issues while the angel group works through the diligence process.
The thought process is that in 60 days, the product will be much closer to reaching the minimal viable product stage, the regulatory roadmap will be complete, and the funding will fall into place.
The due diligence with the angel group is well and all looks good. Then at the end of the 60-day process, when you least expect it, you step on a landmine. The angel group reports that they love the need for your product in the market, they love your approach, but due some unexpected issues with their current portfolio, they have decided not to make any additional investments at this time. Because you felt exceptionally good about the prospects of them investing, you reduced the amount of time spent on the investor road show and did not keep a full throttle approach to raising money. You now find yourself in the position that cash is running low, you have nothing substantial in the works and time is running out.
This scenario almost constantly plays out with many early-stage startups. In this example, which is simply one of many, the company should have kept working with as many vetted investors as possible until a deal was closed and the money was in the bank.
There is an old adage that says, you buy the champagne when the deal is signed, but you don’t pop the cork until the money is actually in the bank. The lesson here is that to ensure your success, you must identify and prioritize the mission critical items and weigh the impact that any misses will have on your ultimate success. Those that have the greatest negative impact are the ones that must command the lion’s share of your time and effort. Knowing what needs to be done and then actually doing is the key to your long-term success.
Here at Lead Read Today, we endeavor to take an objective (rational, scientific) approach to analyzing leaders and leadership. All opinion pieces will be reviewed for appropriateness, and the opinions shared are solely of the author and not representative of The Ohio State University or any of its affiliates.
Your email address will not be published. Required fields are marked *