What Founders Forget
I love working with start-ups. The excitement, enthusiasm, bullish confidence, all of it is based on a conviction that ‘we’ have something special that nobody else has, or is better at than anyone else on the planet. Sometimes its a widget, sometimes it’s a perceived better understanding, often times its based on lessons learnt through domain experience, but always its an utter belief that it’s the best solution bar none.
And why not! If you don’t have that confidence, that will show through in the way you sell, and it will certainly make it harder to convince others that you are worth their commitment.
As Woody Allen once said (get used to Woody references…), ‘all objectivity is subjective’ – or was it the other way around?! The point is, no amount of competitive analysis or deep end-market intimacy will support that assertion 100%, but the belief that this solution is the best is absolute – and that’s the way it should be….
But how do you sustain that distinctiveness over time, how do you continue to passionately define your market-leading credentials as competition – and even occasional market rejection – starts to eat into that confidence.
I believe there are 2 parts to that resilience.
One is obvious, constant market benchmarking and (reactive or pre-emptive – the latter is better!) R&D is fundamental to keeping your solutions fresh and different in ways that customers want. Your competitors don’t determine your difference, you do, by staying close to what the clients want, not what the alternative solutions provide… you don’t need to be constantly innovative to be successful, but you do need to sustainably deliver innovation to continue to be of value – to your market and your shareholders.
2. Risk Management
The second factor might surprise some of you – risk management. I’m not referring to balance sheet resilience, I’m talking about really knowing and showing how to handle your business. Yes, taking care of your customers is critical, and binding their needs into your plans makes perfect sense, but if you don’t balance that customer service ethos with systematic controls, an all-in culture and operational excellence, no amount of relationships will smother concerns about your ability to deliver. In my experience, you always need to be ready for ‘due diligence’, that scary audit exercise that validates the internal controls and processes that underpin any business.
When you completed that virgin Business Plan, your first step towards global domination, you knew you had to prove that you knew your difference was special. But you also had to know how you were going to hold it all together. As you develop the business, the market reminds you to focus on that difference, or die. Its just as important to reinforce the ways and means of delivering and sustaining that strategy.
Your value lies in the compound of these 2 factors, and it is never too late to get that right – particularly if you are preparing for external valuation ahead of extra funding or the ultimate value realisation event. Never lose that start-up passion, but make it easy to see the hard investment that made that work.