The Second Act - Magazine - Page 21
HAVE A CLEAR IDEA OF
THE SOLUTION YOU’RE
HAVE A CLEAR PLAN ON
CRITICAL MILESTONES &
Founders can get too caught up in the features and
Effective cash management and bootstrapping, as much
attributes of the product, versus creating a solution with
as possible, is critical to the success of your venture. The
a clear path to monetize it. At the end of the day, if the
quicker you can get customers to pay for your product,
target customer doesn’t see value in your solution, then
the more attractive your business is. At the end of the day,
your business doesn’t stand a chance. You must first
you’re building a business not a product. You don’t need
understand the addressable market you plan to serve and
to create the best solution on day one. Create a minimum
the challenge you’re looking to solve. And remember, the
viable product (MVP), use customer feedback to iterate
more critical the problem and simpler the solution, the
and make it better. Once you have paying customers,
easier it will be to drive business momentum.
it becomes much easier to target the right sources of
capital to the appropriate stage of the company’s growth.
This may mean a pivot rather than starting from scratch.
It’s likely there were elements that worked well in your first
It’s also important to plan an exit strategy from day one.
venture that can be leveraged for your next. Take stock,
This means you should be creating a plan around business
leverage the solid foundational elements and then tweak
and funding milestones, while also building relationships
as necessary — whether it’s features, technology, code
with potential acquirers much ahead of planning an exit.
base or monetization aspects
BUILD A GREAT TEAM.
FORM A MENTORSHIP
ECOSYSTEM THAT WORKS
There’s nothing more important to investors than the
It’s not likely a board of directors will be needed right
team they back in a venture. You need to have a solid
away, however, building a core group of mentors and
leadership team that buys into the vision, while providing
advisors in the seed stage will not only be critical to advise
diverse skillsets and perspectives to achieve it. Make sure
on short-term goals, but long-term growth down the line.
the core team you hire has a clear role to play in achieving
When doing so, identify people with the experience and
that vision. Finding the right people and incentivizing
knowledge that’s relevant to the business. Take stock
them with the right equity incentivization plan is key to
of gaps and seek out advisors with the right industry,
your success. Once they’re in the door, leverage their
technology, finance and marketing expertise to help
knowledge but also their network to hire and build a team
make the business a success. Creating and working with
an advisory board is excellent preparation for eventually
establishing a board of directors.
FOCUS ON UNIT
Be focused on key metrics from the start. Knowing
everything from the cost of acquisition and retention rates
to lifetime value of customers and burn multiples will help
you to understand the health of your business and what
you need to fix along the way to allow it to thrive. Break
down your business into key goals and metrics relevant
Reflecting on what your first venture taught you
and how to bring those lessons forward will be
critical to set the next venture up for success.
Having a clear view of the problem you are trying
to solve, creating an organization supported by
the right people and working towards building a
sustainable business with a clear exit strategy will
allow you to succeed in creating a scalable and
to every phase of your growth and leverage data in your
decision making to get better.
T H E SECO N D ACT | 2 1