100 days ago, I announced my newest venture, Pivotal AG.
Since then, Iโve had almost 100 initial calls with tech founders in critical situations.
Here are five pitfalls I spotted over and over:
๐ญ. ๐ช๐ฎ๐ถ๐๐ถ๐ป๐ด ๐๐ผ๐ผ ๐น๐ผ๐ป๐ด ๐๐ผ ๐ณ๐ฎ๐ฐ๐ฒ ๐ฟ๐ฒ๐ฎ๐น๐ถ๐๐
If youโre not seeing substantial growth AND your runwayโs under 12 months, itโs an absolute red flag (!)
Do not wait for the situation to get worse.
โ Address the potential emergency within your management team and board.
Hit the brakes on costs. Shift to โexplorationโ mode with small, non-expensive experiments to find a new direction.
๐ฎ. ๐๐ถ๐ด๐ต๐๐ถ๐ป๐ด ๐ผ๐ป ๐๐ผ๐๐ฟ ๐ผ๐๐ป
8 out of 10 founders I talk to feel isolated with their strategic challenges:
Thereโs no or very limited support from the board. No advisors involved, and sometimes even no shared feeling of responsibility within the management team.
I see you. But hereโs the thing.
โ Your board members carry ultimate responsibility. Push them to get involved.
Donโt ask for a favor, demand action. Bring in people from outside to get a fresh, unbiased view into your situation.
๐ฏ. ๐ฆ๐ฝ๐ฒ๐ป๐ฑ๐ถ๐ป๐ด ๐๐ถ๐๐ต๐ผ๐๐ ๐ด๐ฟ๐ผ๐๐ถ๐ป๐ด
If youโre not growing and still burning cash, itโs a pretty good indicator that you are on the wrong track. Simple as that.
โ Yes, cutting costs is hard.
But itโs THE best move you can make to give yourself another shot at success.
๐ฐ. ๐ฃ๐ถ๐ป๐ป๐ถ๐ป๐ด ๐๐ผ๐๐ฟ ๐ต๐ผ๐ฝ๐ฒ๐ ๐ผ๐ป โ๐๐ต๐ฎ๐ ๐ผ๐ป๐ฒ ๐ฑ๐ฒ๐ฎ๐นโ
Founders often tell me: โeverything depends on this one dealโ
Or: โif this investor invests in our company, we can turn the situation around.”
โ This is a dangerous mindset to live by.
A business that relies on the decision of one customer or one investor is not sustainable enough. To depend on one is to have ALL the others not buying in.
(read that again)
Reset, and plan your future as if that deal never happens. If it happens then nevertheless, all the better.
๐ฑ. ๐๐ผ๐ฝ๐ถ๐ป๐ด ๐ณ๐ผ๐ฟ โ๐๐ต๐ฎ๐ ๐ผ๐ป๐ฒ ๐ณ๐ฒ๐ฎ๐๐๐ฟ๐ฒโ ๐๐ผ ๐ฟ๐ฒ-๐ถ๐ด๐ป๐ถ๐๐ฒ ๐ด๐ฟ๐ผ๐๐๐ต
Customers might tell you, “If only you had this feature, Iโd buy more”. But donโt take that as solid advice, especially when those โmust haveโ features are not the same for every customer.
โ Itโs almost NEVER just one feature that changes everything.
And if it were, you should be able to monetize it upfront, big.
Only deliver that feature once youโve got a signed, paid agreement from a group of customers to implement it, and if you are sure it really improves your financial situation.