The one lie every founder tells themselves
By David Kenney
Sanity Check Podcast Host…available now
If you are a founder cogitating over your pitch deck, stop. Pitch decks are a waste of time for start-ups.
Yes, many companies get funded with exquisitely designed pitch decks and slick Founders.
Journalists love a wonderful story on a successful funding of a company. But who writes about and celebrates companies slogging it out?
There is no playbook on building companies to be world class.
I’m putting out the challenge. Can you figure out what is the ‘the one lie every founder tells themselves’ by the end of this blog?
Whilst capital raising is interesting, let’s look at the reality.
Facts:
1. The quality of your pitch does not dictate success.
2. Closing a round does not build a product people want to buy
3. Building a business before (and after) a raise is the only thing that matters.
So, what is the major determinant of a company’s success?
TLDR: You.
I’m not saying to forget about raising. Quite the opposite.
Bootstrapping may be better in the short run, but in terms of the size or likelihood of an exit, capital raising (at the right time) is vital.
Start your capital raising once you have proven a few things. If you get a few things right, you will be strictly auditioning the very best investors for your first funding event.
Have a good (and honest) look at your skills, capacity and potential. Please don’t ask your Mum, your partner, or your best friend for this feedback! It’s a ‘You’ thing.
Ask yourself and really be honest. Go find the best people you can and then calibrate or assess yourself against the 8 questions below: -
Forget about ‘your why’?
Instead, please ask yourself these questions:
1. Who are ‘your people’? Are you obsessed with a real problem (linked to a vision)? Is that vision so big that (if you can pull it off) it will change the way ‘your people’ will behave well into the future?
2. What have you worked out about this problem, the sector, and does it matter massively?
3. Are you resourceful?
4. Are you attractive (to work with)? How magnetic is your personality?
5. What’s your potential to engage with a community at scale?
6. Can you sell (to customers, employees, investors…anyone)?
7. Do you have tech skills? And ;
8. Are you committed enough? This is likely a ten-year journey of pain. Possibly towards a dead end.
Why are these the question I ask you to consider?
I’m my humble opinion, they are the ingredients which translate to business acumen.
Get this right . The delivery of your vision (the world you describe) is likely to become a reality.
Quick reminder, have you worked out what ‘the one lie…’ is yet?
We can ignore none of the above factors; the total package is the complete set.
Of course, you may assemble a team, find your gang, but can YOU build this team?
I have observed and developed business acumen in my work alongside hundreds of founders. My journey with world class entrepreneurs has been rewarding. They are some of the smartest people in the world. I’ve loved every minute. Doing my bit in their team has been for me an amazing ride where the learning has been rewarding beyond belief.
Let me break it down:
1. Can you build a world-class team?
2. Will you leverage great technology?
3. Can you reach customers globally?
4. Will you attract and keep customers in an increasingly cheaper ways?
5. Can you provide increasing and sustainable value to your chosen group of customers?
6. Will you say no to almost everything else? This needs complete focus.
Well, if that’s you, congratulations. You may take a well-considered slice of the action. Look at you and your magnificent business model.
For some more colour:
1. Are you brave and smart enough to build a business at a speed?
2. Can you head (mostly) in the right direction?
3. Please consider creating a hand-picked ‘rock star’ group of investors to join you on your mission.
4. Remember, you are trying to reward and challenge your talented team and believers along the way. Be thankful to those who helped you along the journey.
Ok. So, have you figured it out?
Its reveal time.
So, what is the one lie every founder tells themselves?
Money will solve my problems…
Not true.
That's your job. Are you capable of being a world class CEO?
As yourself, honestly… How do you line up against the 8 items to determine whether you have got business acumen and can cut it as a CEO?
You can have an abundance of money, or practically none. It all comes back to you and your business acumen.
So respectfully, it isn’t about how well you pitch, or how much money you raise. They are the outputs.
You need to work on the inputs. You don’t need funding to build a world class business. Benchmark yourself against the 8 questions above and fix or fill the gaps.
If you have ever invested in a successful start-up, you know the founder covered the 8 areas personally or within their team. If the business failed, it will no doubt have been because of missing some 8 factors that were missing.
Get your inputs right. Work on building you and your business. You may well enjoy a 1000x return for your team, your investors, and yourself.
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