USS Pivot

October 30, 2016: It’s commonly expected that startups will pivot as their original concepts meet the tests of the market. Even the most carefully crafted plans may not correctly anticipate customer behavior, may overlook competitors, may run into unexpected technical obstacles, may be blindsided by external forces, and may ultimately not translate the founder’s vision into a workable business model. It’s generally better, however, to pivot than perish, and startup teams that can accept reality and adapt are the ones that are most likely to succeed again and again.

lazy way to fish

October 23, 1016: There’s been a lot of talk about stamina in the Presidential campaign, and coincidentally I’m reading two books about historical figures whose success was propelled by an abundance of that trait. Startups are never easy, and, if you are the founder, you need to have a continuous reserve of energy to meet the challenges ahead. You must be able to light up the room with your enthusiasm when you are with your team, or with customers.

a very low maintenance dog

October 16, 2016: As the founder of a startup, you have three constitu- encies: your customers, your team, and your investors. Being a low maintenance leader is a great way to get the maximum support from all three. This is not such a common term; it’s much easier to find references on low maintenance pets, for example. For this week’s essay let’s define some of the traits of “going low when others go high” (sorry but I couldn’t help that rephrasing from the politics of the day).

birds in mirror

October 9, 2016: This week’s essay takes a look at the personnel issues of trying to scale a company. A young entrepreneur inspired this; he wonders why his employees are not always eager to take on more responsibility. He’s trying to scale to meet customer demand, and he’s running into a common problem I have experienced many times.

they're a maze

October 2, 2016: From time to time I’ve been involved as an investor or as an entrepreneur in companies that had to go back to the well for new money. If the business is on track, those can be nice up rounds. If not, there’s a potential squeeze play coming from those who do take the risk going forward.

Hannibal in battle

September 25, 2016: The startup community in any town is generally viewed as a collegial place where eager entrepreneurs pursue their dreams and encourage one another’s achievements. It’s a happy world.

Putin and Kerry 2016

September 18, 2016: In startup financings there is usually much discussion about control. The founding group always wants to maintain voting control, and there is a valid argument for leaving enough room in the cap table to allow for subsequent higher value rounds. As I have frequently written, most professional investors will give you the psychological win of maintaining a voting majority but will protect themselves on the downside with the terms and conditions of a new class of stock such as a participating preferred.

MLB stats

September 12, 2016: Today’s essay is on running your startup by the numbers, once it is no longer a twinkle in your eye and has actually started. Too many entrepreneurs fall prey to their vision and allow it to overcome reality. I’ve done that myself many times and have had to be reeled in by my CFO.

Bobby Jones ca 1921

September 5, 2016: Some recent successful exits in Austin have caught my eye for the relative simplicity of their business models. Patient IO is a case in point. AthenaHealth (NASDAQ: ATHN) acquired this young (2013) company to anchor a more individualized approach to patient care. ATHN was already a strategic investor, and Patient IO had participated in its More Disruption Please accelerator. So, no introductions were necessary.

LBJ and Eisenhower on Air Force One

August 28, 2016: All the muddled news of this past week about the health of our presidential nominees suggests a look at career horizons. We talk a lot about investment horizons; many VC partnerships are set up for ten years, on the theory that the money is put to work early and all the portfolio is exited by the tenth year. I can name a few companies in the 16th year of one of these arrangements, with no end in sight. They’re all too stable to fold up and be gone, or they are growing steadily but not fast enough to bring a meaningful outcome into view.


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