Haste Makes Waste – Early Choices MatterHaste Makes Waste – Early Choices Matter https://c-suitenetwork.com/advisors/wp-content/themes/csadvisore/images/empty/thumbnail.jpg 150 150 Chris Rabalais https://secure.gravatar.com/avatar/068c285a3a18ca62614a5a9bcc9da947?s=96&d=mm&r=g
Like you, I have heard most of the cultural clichés and stories around patience. …and like you, I did not want to hear most of them at the time. It turns out our parents were all much smarter than we gave them credit for. The cold hard reality is that most significant undertakings take far longer than you ever imagined and cost more than you could have dreamed in every possible category. Who wants to hear this? You? Me? Nobody does. We humans are impatient and we seem to be wired up that way. The trouble is that often works against our best interests. Let me explain:
In the beginning when a project is new and fresh, everyone is excited and energy levels are high. This is absolutely critical to getting anything off the ground. The trouble comes when important details or strategic considerations are overlooked. Business is complex and in the modern tech age, that is truer now than ever before. There are far too many elements to this for a short piece, so I will focus in on one… whether or not to take money from a particular group and/or the public markets and when to start thinking about that.
Here is the answer: BEFORE you start hiring people and raising money
Start with the end in mind. Are you building this company to take it public? What is your exit strategy for your investors? This is one of the hardest things I have had to learn as I am more driven by mission than by profit. The vast majority of your investors, no matter what they have told you, want to make as much money as possible as soon as possible off your idea. Read that line a few times and get that in your soul. Even the most noble non-profit must continue to generate donations and the best for-profit company in the world will not last long if it continues to lose money. Even if you do not particularly ‘love’ money, respect it and understand that everyone is bound to the same rules. If you deal with the exit question up front and realize this truth, you are ahead of the game.
Now… to something a bit more ‘in the weeds’… let’s talk about Facebook. More than 5 years ago, I walked away from FB when I saw what was happening and it was inevitable when they went public. At that point, the game becomes nothing but quarterly profit reporting. Nothing else counts. The development of the law is far behind the technology and law enforcement is usually a cleanup job. This means the crime has already happened and the best you can hope for is a remedy for the injustice later. In the case of Facebook, the name of the game is selling advertising and the demographic information (YOU) to the highest bidder. The rest of this sad tale is playing out in real time.
Pick a side and stick to it.
In our case, this has meant walking away from financing of questionable sourcing and business deals we cannot engage. With nearly 900 stockholders, you might be asking how this is possible. The answer is that I am the sole legal director. Now, this was not any sort of design on my part. It actually resulted from the exodus that took place when the world crashed in 2008. I was left as the only director because nobody else wanted the job. That is no longer true but the legal situation has not changed. I am still the sole director. This gives me the ability to make sure that our nearly two decades of development and vision does not take an impatient bad turn at the last minute and end up causing more harm than good. So you are probably saying… ‘How can this help me?’
Think through your ownership structure, voting rights and board BEFORE you start raising significant money. As the stakes grow, investors will (rightly) want a seat at the table and all these details will come out. A smart early investment here will pay handsomely and prevent soul-crushing battles in the future.
In a few days, we will be announcing the “Sports Markets Trading Council” patterned after The Hero Club to facilitate a more robust dialogue with our internal preferred stakeholders in developing The New Sports Economy.