Communication and Planning in a High Growth Company

Ralph Waldo Emerson once said, "Speech is power: speech is to persuade, to convert, to compel. It is to bring another out of his bad sense into your good sense."

For quite some time I have suggested a plan (see below) of communication to clients and BAN participants.  It's not anything ground breaking, but it is a programmatic way for a company to facilitate orderly communication.  Nonetheless, it is amazing how few of them really follow it (or any other) systematic plan of communication and I think it ends up hurting them...potentially a lot.

Effective internal communication among stakeholders (Management, Employees, Board, Shareholders, JV partners, etc.) is critical to coordinating efforts and maximizing the opportunities for success, but it doesn't just apply to startups...most companies would do well to try and systematize some regular forms of communication.

Suggested Plan:

1.  Quarterly (maybe monthly early on) board/advisors meeting
-- Progress
-- Plan
-- Challenges

2.  Weekly recap email of progress and "to do" items

3. Monthly Financial Statements *(email updated statements even if no revenue)
-- Income Statement  (aka P&L)
-- Balance Sheet

4. Annual letter (recap and vision)

If you are looking to make a change for the better in your business, give it a try or work out your own plan and let us know how it goes.  I bet you will be surprised at the energy and progress it will create.

Niche, Dominate and Repeat

I was having a conversation with Jonathan Sides, Daxko VP of Finance, the other day about startups in Birmingham and he told me a bit about their story.  He summarized their business strategy as "niche, dominate and repeat."

I have seen a lot of strategic theories and there are plenty of books that talk about niching, but I had not heard that phrase used as a complete strategy before...I loved it.

"Niche, dominate and repeat" encapsulates a lot of good strategic thinking because "niching" forces a company to define exactly what they want to be and who they want to serve while "dominating" reinforces that niching process and encapsulates most of the strategic tools such as:

• product/service differentiation
• value proposition planning
• creating a minimum functional unit
• customer experience focus
• adoption planning
• etc.

"Repeat" is also a critically powerful tool because it implies both continued process improvement and new market growth.  

A lot of business planning and strategy is cumbersome and somewhat clunky to use, with graphs and graduate level books to understand and it can be difficult for many entrepreneurs to actualize the theory.  On the other hand "niche, dominate and repeat" is just four words and it doesn't take a rocket scientist to figure out what it means.  With that kind of simple strategy, everyone on the team ought to easily be on the same page and what a powerful place to start.  I don't think it is a surprise that the guys at Daxko are getting it done.

If you are in an existing business or starting a new one..."niche, dominate and repeat" is not a bad place to start.

Just Do It....

Nike has made the phrase "Just Do It" famous.  They started with the sports arena and now it is a part of the American English lexicon.  It applies to business as well.

I have seen many smart people and good businesses suffer because of a desire for perfection...the perfect label, the perfect timing, the perfect product, the perfect customer, etc. etc.

Unfortunately, waiting for perfection usually is a permanent wait.  Even Apple's Steve Jobs (a notorious perfectionist) has to eventually declare the product "good enough" and start selling, but for most startups even a Jobsian style wait may be too long and wastes two of the primary advantages of a startup...speed and flexibility.

For most startups, the best strategy is to plan quickly, execute to the best of your ability then iterate.  By following a speed to market strategy startups can take advantage of their relative size and use it against the bigger, slower competition.  It also has the advantage of minimizing the time spent in the negative cash flow "valley of death" and that can significantly increase any businesses chances of success.

So don't sit around waiting....Just Do It.

The company financing life cycle...

I ran across this diagram of the financing cycle of startup companies on eandua.com and thought it was an elegant expression of where true seed stage capital fits in the overall scheme of our economy and the critical role it plays despite it's relatively small dollar amounts.

I also think this points out a somewhat obvious, but often overlooked, concept...things can really start to take off once a company gets to Break-Even and is cash flow positive.  


That is why I believe the goal of most seed stage investments should be to get companies to a positive cash flow.  When a company gets sustainable positive cash flow all kinds of good things are possible because the home runs have a chance to happen, but solid returns can be achieved over time even without them.

Sales, Sales, Sales...

"I don't care how good of a manager you are...you can't manage ZERO to a profit."  Jim Watkins

For as much time as we spend talking about value propositions, brand position, messaging, social media, etc. the fact remains that REVENUE (for most that means Sales) is the first key, without it any business will fail.

Of course, like building anything there are essential steps and you don't improve by obsessing about the goal, but instead by taking action steps that move you toward the goal.

Nonetheless, it is a good reminder by my dad that, in business, REVENUE is the first goal because without it all the other stuff is pointless.