Is 2016 the Year of Just Staying Alive?

The discussion about a bubble have continued for over a year and with the early 2016 drop in worldwide stock prices and economic sentiment, many folks are weighing in on what it means to venture fundraising and how companies should react. Here is a brief summary of three recent articles on the topic.

In Dear Startup: Here’s How to Stay Alive by Heidi Roizen in her Adventures in Entrepreneurship! blog tells entrepreneurs the game has changed, tough times are here, and it’s time to hunker down and extend your runway.

“When a market turns, we tend to see the signs earlier than the entrepreneurs working on the front lines. This market? I’d say it has turned. It is going to be hard (or impossible) for many of today’s startups to raise funds. And I think it will get worse before it gets better”, Roizen states.

Here is Roizen’s list of behaviors for staying alive when funding goes dark:

Exponential Value of Internal Compensation

Getting the most from scarce resources is the key to success for every startup. This often comes down to how to get the best people to do the right things at the right time. Unfortunately, with limited cash, a need to spread ownership thinly, and a huge list of things to get done, early stage companies are challenged with getting the right skills in the right quantities.

First of all, let’s examine the resources available to recruit and motivate people and then explore a few different ways to apply these scarce assets.

Managing Risk – Defining Product and Market Risks

Risk and risk tolerance are important concepts for entrepreneurs and investors. Many people believe early-stage investors, venture capitalists, and successful company founders are people willing to accept a high degree of risk. I’ve found this to be far from the truth and, in fact, most often value is created by those intensely focused on identifying and efficiently managing risk.

In this five-part series on managing risk in high-growth technology companies, we’ll cover:

  1. Defining risks around Product/Market Fit
  2. Business Model Risks
  3. Execution and Scaling Risks
  4. Identifying and quantifying risks
  5. Risks management strategies
  6. Prioritizing and optimizing risk exposure

Knowing When You’re Ready to Scale

It was near the end of the third day of our annual planning meeting. Matt joined the meeting late, listened for a few minutes as we tightened up the language around our big objectives for the year. As he took control of the meeting, Matt described the opportunity in front of us and asked each of us to go to the board and write what we thought our revenue goal for the year should be. We’d just grown annual revenue from $8.6 million to just over $20 million. Our bottom-up planning approach suggested adding $15 million on top of the $11 million added last year would be challenging, but doable. Doubling was possible, at least according to the arithmetic, but in a professional services business that’s adding a lot of people and a lot of additional billing hours. “What should our target be? Can we double again? Are we ready to really scale this thing?”, I wondered.

Focus On What You Control

The lessons learned from participating in sports and being on a team have broad applications across our live and careers. This has been an interest of mine since I entered the workforce and over the next several weeks I’m going to put together a few articles about...