olivergajek

Not the greatest throughput. Too much NFL I’m afraid. The Gamepass app is just too good…

Thomas Pynchon: Bleeding Edge. Very clever.  

I believe that high-growth companies have a natural biorhythm.

Initial phases of dithering, followed by establishing product/market fit, followed (ideally) by rapid expansion, arriving at some kind of relevant role in the market, however large or small that market may be.

Then followed by an exit or, if you should be so lucky, essentially a restart where the company builds a bigger portfolio for the market or crosses into new markets. All that in a finite amount of time. 

Most people and organisations cannot really sustain the level of intensity and attention that is required for this journey for more than 6-7 years. There are exceptions, of course, but less that you think.

Founders, managers, investors would be well advised to remain aware of where they are in the lifecycle in order to gauge accurately how much life energy remains in the corporate batteries.

The founding team are very likely the people who defined not only the product and the strategy but they typically also helped shape the company culture. We assume for the sake of the argument that you have one. 

As the organisation grows founders may or may not retain important positions in the org chart. But they still embody the organisation’s collective muscle memory when it comes to defining why we did what we did to get where we are.

So make sure that new arrivals treat them with respect. They got on board when nobody else would and the new arrivals are standing on their shoulders.

This is a long and complicated topic. I’m oversimplifying things dramatically here.

The basic rule to consider is this: You get VC when you don’t need it and you might not get it when you do. 

Specifically:

1. An investor loves to invest in a company that basically knows what they’re doing and where there are strong answers to the primary questions around team risk, product risk, market risk. A good way to answer these questions is sustained, profitable, and growing revenue. In which case you don’t need the investment to survive. But you can use it to grow faster.

2. If you do go for a VC investment and it’s the strategy you have and there is no Plan B then that will be immediately obvious to a seasoned investor. And will either drive down the valuation or, more likely, dramatically reduce your chance of getting any investment at all.

There is a lot of value in getting some kind of board of directors or advisory board in place as early as possible. Somebody needs to tell you when you’re messing up.

More importantly, somebody needs to tell you when you’re doing a great job. Without the board life can get very lonely.

Your ability to get the right kind of people to sign up for this is also a good early indicator for your ability to attract employees, customers, investors, partners. 

Personally I’d recommend a three people setup at the beginning, minimum two, maximum four. 

For a more systematic view on this topic you may want to look at Brad Feld’s book on Startup Boards.

This one is pretty simple. Pick a (good) lawyer and stick with them. Switching lawyers generates huge overhead on both sides and you don’t have the time or the money for that. 

Corollary: You don’t have to pick the same law firm for all your legal needs. You will probably need to cover separate disciplines (corporate, trademarks and patents, and most likely also IT law) and I’d much rather work with specialist boutique firms for each discipline. 

Better finish the Ten Commandments posts before somebody beats me to it. So here goes.

“Thou Shalt Not Be German”

Meaning two things:

1. Don’t overengineer the product before you introduce it to the market. Of course a beautiful architecture and a rich feature set are wonderful things to strive for. But you won’t know what customers really want until you have put something in front of them and tried to get them to use it and pay for it.Note that this does not mean selling stuff that doesn’t exist (those days are mostly over) or shipping embarrassing crap. 

2. Don’t overestimate your market potential in the German market and don’t underestimate your market potential internationally. Chances are that your product is early and incomplete and therefore mostly relevant for early adopters. Of which there are a disproportionately low number in Germany, a notoriously conservative technology market. Make sure you can address early adopters wherever they are.