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1/ Beware the tail wagging the dog.
Numbers you committed to your board are not your strategy.
Numbers you think next round investors want to see are not your strategy.
Numbers you committed to your board are not your strategy.
Numbers you think next round investors want to see are not your strategy.
2/ You produce objectives because it's good to have measurable targets, usually ambitious ones. You know it's really hard to forecast so early ... but suddenly your fairly random attempt at predicting the future because the yardstick against which you are measured.
3/ Once these numbers are communicated to the board and across the company, these become the goal everyone is working towards. This many paying customers, suppliers on the platform, whatever the KPI may be.
Your wise investors tell you "disciplined companies hit their numbers"!
Your wise investors tell you "disciplined companies hit their numbers"!
4/ Meanwhile, your plan does not survive exposure to the real world for more than a few minutes, but you feel it's bad or weak to immediately re-assess, so you redouble efforts to hit *The Numbers*.v. Let's get this done!
5/ With venture money, you hire more salespeople, you increase your marketing budget, you drive leads, sales, volumes no matter what.
6/ What you're often doing is in fact scaling prematurely to achieve a random, externally imposed goal that is not related to the reality of your business.
You miss the fact that your salespeople are over-selling, that your leads are poorly qualified, that your CX sucks
You miss the fact that your salespeople are over-selling, that your leads are poorly qualified, that your CX sucks
7/ I've seen it happen so many times. The behaviour of a company is skewed by externally imposed expectations. instead of living close to the reality of its product, with a laser sharp focus on understanding exactly how you sell, why people buy, whether they are successful.
8/ If you are not ready for scale, then don't.
9/ The insight here is: do not confuse your objectives with your strategy.
Premature scaling is a leading cause of startup death.
Your board needs to understand that forecasting in startups is an extremely imperfect exercise at best, not a set of numbers written in blood /eot
Premature scaling is a leading cause of startup death.
Your board needs to understand that forecasting in startups is an extremely imperfect exercise at best, not a set of numbers written in blood /eot
