There are three turning points in the life of a new business, pivot points which set its course and shape its fate. These moments hold whether it’s a startup or a new business growing within an established company. These posts are about how to navigate the least visible but most critical of these moments.
The most visible of these moments comes when the venture transforms from a startup into a real business serving thousands, if not millions, of customers. This transition stresses, sometimes to the breaking point, the original people and ideas that brought the company to the brink of that growth. It’s often when the founding team is replaced by professional managers; when the infrastructure they built on nickels and dimes reaches its limits; or when well-funded competitors emerge from the shadows. The wrong decisions, or stumbles in execution, open the window for competitors to leapfrog a business and capture the growing market. As a result, how businesses handle this transition sets their fate for many years to come.
Before this, there is a subtler but no less crucial moment—when the founding team commits itself to pursuing, with all their focus, a particular market and offering and to building a company around a particular business model. This is the startup’s (real) launch, when it takes on its first serious investment and commits to a growth plan that satisfies those investors. Here the goals of the new venture get baked into the DNA of the company. Every decision and every resource at the company’s disposal focuses on achieving that goal. Set the wrong target and the business lands in the valley of death, with too little money or support left to pick themselves up and try another direction.
The most critical turning point lies even earlier, in the months before a new business is launched and in the few months following. This is the time of the entrepreneurial leap—when the original innovators and entrepreneurs make the earliest decisions and take the earliest actions that will define the very business itself and the vision they will take forward. At this stage, the early questions include,
— Should we go forward at all?
— What current problem are we addressing?
— Which markets and customers should we focus on?
— What kind of business should we build, and what do we want from it?
— What technologies should we build it with?
— What early team should we put together?
— What outside partners do we need, and when?
At this stage, each of these decisions seem relatively harmless. It’s just an idea, after all. It’s just a couple of friends or colleagues sitting around talking; the plan is more an abstraction than a reality; and the stakes are still low. If nothing happens, who would notice?
But ask the wrong questions, avoid the difficult decisions, or put off the more uncomfortable tasks and you put the entire venture at risk. These early decisions and actions create the foundation on which a new venture is built. Bring in the wrong co-founders, build on the wrong technologies, organize around the wrong market or offering—even create the wrong culture among the founding team—and it may take years to undo the damage.
Our programs focus on the entrepreneurial leap and the challenges that begin in the three or so months before launching a new business—including whether to invest your time, money and energy at all—and the next nine months of building that business into a venture worthy of committing your own time, money and energy into bringing to a reality.
We won’t spend time talking about how to grow a startup or a small business inside a large company. We won’t talk about scaling that business into a more permanent enterprise. These are important phases and they’re already well addressed by the current literature. More importantly, they’re only relevant to those who have already made the entrepreneurial leap. And they’re only useful to those who have made the leap well.
This set of posts presents the concepts and tools we have gathered, tested, and evolved in our programs that enable entrepreneurs and innovators to identify and make the best decisions in the first and most crucial of the pivot points they face—whether to start a company at all and, if so, how.
It’s not about running a new business. It’s not even about starting up a new business. It’s about making the leap. We’ll describe the set of decisions and actions that happen, either consciously or unconsciously, at the earliest stage of a new venture and that will shape the fate of your business before you may realize it.
The experiences, ideas, and exercises provided here will help you to look at promising opportunities quickly and cheaply, to determine the best path; to commit with confidence and with the right amount of resources (neither too much nor too little); and finally to craft a development strategy that quickly proves (or debunks) the potential of the new business.