Not having children of my own, I don’t have first hand experience as a parent, but I have observed certain things about raising children:
- It takes more time than you anticipated.
- No amount of planning can account for all the variables of things that can happen.
- The best laid plans had better have an alternative.
- It takes more money than you thought.
- Preparing for tomorrow often means choices and sacrifices today.
- No two children behave or act the same.
- It is all worth it in the end.
From “What Have I Gotten Myself into” to “This is SO Worth It”
From my observation of parenthood and the practical experience of starting and growing my own business as well as working with numerous early stage companies, there are definite parallels between parenthood and entrepreneurship. The two most common refrains are “what have I gotten myself into” – when things are the most challenging, and “this is so worth it” – when things go right.
Getting through Growth – Terrible Twos and Teenagers
As businesses are born and grow they present challenges comparable in scope and timing to rearing children during the dreaded “terrible twos.” As the company matures (often a misnomer for both teenagers and companies) the teenage years are filled with learning lessons which experience has already taught many but which must be repeated because, of course, it will be different for us. Drawing the parallels first with the terrible twos:
□ Learning to walk (sales)
□ Learning to share (delegation)
□ Making friends (investors)
□ Cutting our teeth (competition) (Okay, we get our teeth a little earlier as kids!)
□ Learning to talk (market)
□ Getting over frustration (maturity)
□ Trying again and again (perseverance)
□ Following rules (compliance)
□ Dealing with timeouts (recovery)
As companies continue to grow and “mature”, they deal with new issues and challenges:
□ Asking for a bigger allowance (raising additional funding)
□ Justifying behavior (answering to stakeholders)
□ Overcoming “everyone else is doing it” (staying true to the vision)
□ Taking responsibility (taking responsibility)
□ Asking for the keys to the car (demonstrating proof of concept)
□ Getting your license (getting paying customers)
□ Going on dates (forming strategic alliances)
□ Demonstrating maturity (achieving profitability)
Regardless of the phase or stage of growth, businesses, like children, take tremendous amounts of resources (time, money, and energy) to raise well. Like the parent/child relationship, each business is a unique combination which requires consideration and application of core discipline with the flexibility and fluidity of innovation, attention, and perseverance to achieve success. Through the ups and downs and the cycles of success and failure, the relationship must be tended and nurtured in order to get a healthy offspring.
“Oh, What an Angel!”
It is easy to see the angel in the sleeping child. It is far more challenging to find the angel for your early stage business. Your business child has unique needs which early investors must understand and be willing to support. Early stage investing has its risks and rewards, and usually isn’t a one time influx. Angels play critical roles in the incubation and funding of proof of concept and initial commercialization efforts.
While angels are important, many businesses do find a way to bootstrap the organization without angels. These entities are unable for various reasons to convince others that their particular sleeping child has angel potential, so they scrimp and save and go into personal debt with credit cards and other means to fund the future. These businesses often reach maturity with an added advantage – fiscal discipline and honed leadership which focuses on the necessities and not on the luxuries. These organizations know the value of every penny, not just the dollar.
“Everyone else is…”
Forged in adversity, organizations which bootstrap their way to success find they don’t worry about “Everyone else is…” They are too focused on what they need to do. It doesn’t matter what the latest fad or trend is; who is speaking where; or what the latest press release is saying. Survival requires fewer mistakes, more results, and getting commercial revenues happening. Without the “safety net” of outside investors, also without the potential for “interference” in the vision, it is about what is being achieved in the business and who cares what everyone else is doing.
Curfews and Major Milestones
Every business as it grows encounters the equivalent of curfews and milestones. The milestones are readily apparent:
□ Proof of concept
□ Commercial validation
□ Positive cash flows
□ Public Offerings (or other funding)
□ Significant revenue levels
What isn’t quite as apparent is the implication of those milestones on the growth and maturity of the business. Investors and other stakeholders often set a curfew – how long they are willing to wait for proof of concept, profitability, return on investment, and exit. The established curfew frequently contributes to whether a business succeeds or fails – not everyone has the same expectations of the relationship and a willingness or ability to continue when curfews are reached or exceeded. Teenagers get second, third, and even more chances after blowing curfew (after suffering through loss of privileges, of course). Businesses rarely have multiple chances to deliver. The expectation of a return on investment within an imposed timeline may mean that the business that doesn’t make it before curfew and so faces a timeout – permanently.
Fledglings and Empty Nests
The successful business goes from early stage to growth stage and, like the teenager off to college, usually requires an additional influx of capital to fund the next stage. Growth requires new resources and expansion of existing capacity. It requires acquisition of assets and new skills and talent. From toddler to teenager to maturing business, the demands and the dynamics evolve. The successful business like the humans who comprise those organizations constantly changes and grows, asking for more, creating more, and generating more opportunities. The learning never stops in organizations which continue to grow. Raising a business is an investment of many lifetimes, beginning with the founders and, if we’re lucky, those who continue the legacy long after the founders are gone.
Copyright ©2006 FOCUS Resource, Inc.