“Fortune favors the bold.” — Cicero
As someone who speaks with a number of early stage and pre-funding founders, I get the question a lot of my impression of what this crisis will do to early stage financings, etc. My answer is simple: The current financial turmoil really is the least of your problems.
Instead, the big question to wrestle with is really the same for us as it was when markets were more favorable. That big question to ask yourself is am I thinking big enough?
My 3 step formula in these times are:
- Look honestly at your business idea, asking if its a big enough idea. Push yourself to expand your vision, mission and impact that your idea can take on.
- Push forward boldly in your execution. Follow Cicero’s advice. It’s the best way to assure success. Waivering or doubt will only kill you, partiuclarly in these more dangerous times.
- Avoid worrying about “the market” or anything else you can’t control. If you can’t control it, you shouldn’t spend time worrying about it. Be super optimistic, think great big thoughts–there are plenty of pessimists now, they can carry the negativity water. You stay away from that.
Here’s some longer context… Before I became an entrepreneur, I remember doing a thought experiment as I read through the Forbes 400, the richest 400 people in America. Briefly, the thought experiment tried to identify patterns among all the entrepreneurs on the list. There is a business (not a personality) pattern that I think emerges if you look at a tapestry of names like Gates, Buffett, Page/Brin, Jobs, Walton, Bloomberg, Schwab, etc. That pattern is consistently *big* ideas, where those ideas have a massive sway in our lives and economy today:
- PC on every desk, in every home (MSFT)
- Universally findable information (Goog)
- Stock broker services for everyone (Schwab)
- Selling for less (WalMart)
- Financial services information platform (Bloomberg)
Now if you listen to big thinking VCs like Vinod Khosla or John Doerr, you can see that again, they’re thinking big–in particular around cleantech.
Many early stage entrepreneurs with whom I’ve met and spoken over the past two months have interesting ideas and they’re showing traction against them. Users, awards, even in cases customers. This is super to see. The question that I commonly see though is one around ‘bigness’ — even if this thing was a hit, how many people would it impact?
I argue that if you really think that venture funders are important for you to achieve the dream of your business, then you need your 1-sentence statement of your business to get you somewhere near the ballpark of those bullet points above. It should be obvious why the opportunity — if achieved — is a big, big deal. If you can’t make that clear, then that’s at least a yellow flag.
My suggestion to early stage startup folks is not to worry about the current financial crisis. Focus instead on thinking about how to ‘blast out’ your business in a manner that makes the impact to customers and the impact to the world bigger. Stay focused on that, and if you can start executing efficiently and credibly towards that vision, then the financing piece will work itself out.
Put this way, its exactly the same advice worth taking when markets are more favorable.