External stakeholders, such as investors, often put pressure on startups to perform, such as increase sales, while you want to refine your product, extend your portfolio or similar. You generally feel that your creativity and innovation drive and passion is threatened by these external stakeholders? Can you give me some tips and real-life examples or past experience on how to solve this dilemma of conflictual demands?
External investors are doing their jobs, they are just concerned about the financials of the startup. That is why it is very important to clarify in detail the roles, responsabilities, deliverables, dates, etc.. before close the deal, in order to agreed those point of possible conflict with a risk matrix
I recommend you to refresh the relation, put in the table the situations that are concerned you, regarding the investors, always understanding the essentials of their roles, i.e. investment returns. You should realize a new process of communication with your stakeholders solving their interests and yours.
Hi.
This depends upon your options and state of business. If business sustainability is an issue, then increasing sales is critical. In which case this is good advise! I have advised a few scenarios where if sales did not increase with urgency the business would have gone belly up.
At the same time investors have to learn to preserve the soul of the business. Normally founders are very good at it and it is the reason the business succeeds. If business is meeting the goals then you should have this flexibility. If not, then you have to bring the stakeholders together, and present and agree on a shared plan and vision. Also a process to resolve conflicts. This is also your key role. Collectively, you both have to decide in the interest of the business.
A conflict-less situation in business is non-existent. And there is a range of resolutions from resetting the relationship to picking the battles you fight.
Let me know if we should talk. All the best. Bye.
If you have invited investors inside, they do what investors do: They protect their investment. They use the tools they know, which are most likely more short term than your time horizon.
If you want to retain your creativity, innovation drive and passion, build your own war chest, so you decide on your own burn rate; in that case, your burn your own money, which can be done at whatever speed you prefer.
You could also invite different investors, who will be more patient, or more in tune with the innovation drive you prefer.
But you are where you are, and must make the best of it. A few tips on that:
1. Allocate time for investors and innovation drive separately. They are two different mindsets. And you most likely need the investors to be happy, and they only ask questions if they are not. Tuesday and thursday for external stakeholders - monday, wednesday and friday for creativity.
2. Change your mindset with regards to the external stakeholders; maybe they have something valuable to offer you? Do they have some smart money-characteristics? Where are they coming from? Maybe they are not a "necessary evil".
Let's set up a call to discuss this mindset further. It will be easier for me to give you input, if I know your circumstances better.
Best regards
Kenneth Wolstrup
Hi,
I've worked for 3 separate venture-backed firms and I've seen/experienced what you are describing time and time again.
You need to put yourself in those investor's shoes. They invest in dozens of companies and have given you their hard-earned money in hopes that one day, they will earn a multiple on their invested cash. If you were an investor, you would feel the same way about your money....UNLESS the CEO/cofounder of the company convinced you that this creativity can translate to more revenue for the company which in turn, equals more money in their pocket in the future.
Your job, in short, is to sell that innovation or creativity to your investors to make them understand the value proposition of that innovation so that they won't feel the need to turn on the heat. This is why the job of a CEO/Cofounder is so difficult- you are the face of the company and you have to guide operations, focus on innovation, sell to customers and internal/external stakeholders, among many other things.
I am happy to provide tips and show you some real-life examples on how the companies I worked for in the past were able to solve this dilemma of handling different agendas. Let me know if you want to book a call and I would be happy to explain in greater detail.
Best,
Kevin
