Setting a strategic course and vision for a startup is one of the most potent weapons to get your company on the right path, become capital efficient (because you will spend your resources wisely to reach your goal), and then get to a premium exit valuation. Yet, many startups don’t spend sufficient time early on setting their strategic course. This post offers some simple tips in doing this.
Since I am a professional angel investor, many people now see me through that lens a finance guy. People who have known me for some time would think that laughable. “Dan is a techie or a strategist,” would be a much more common refrain. Good angels must help their startups with more than just money startups need the benefit of the experience their professional angels can bring to bear.
The first step in setting a vision for you company is simple sit back in a quiet room and think about what you define as success. Write down all of the statements that come to mind. If there are several co-founders involved, do this as a team activity (or maybe do it individually and then come together and merge your visions). While anything is acceptable, specific statements are most helpful. Examples might be:
- Newco achieves $100M in revenue.
- Newco is recognized as the market leader in the emerging XXX category.
- Newco is acquired by XXX for $300M.
- Newco revolutionizes solar energy production with its latest generation of solar cells.
- Newco’s proprietary algae system creates the first commercially viable alternative to petroleum for gasoline.
- Newco buys Microsoft.
Several statements are probably better than one.
With these in hand, think about the date at which you hope to achieve those goals. Then comes the fun part.
Write the front page Wall St. Journal article that appears about your company on that day. Remember several things.
- The headline is important; it must reflect the story.
- Newspaper stories are written as an inverted pyramid structure. The most important information goes at the top of the story and the details follow.
- The total article must set out why the achievement is important in both a business and strategic sense. Why it is a milestone?
This will be fun, but it is often more challenging than it appears to be at the surface. Try it and post your feedback.
For extra credit, put together the time line of headlines/articles that get you there.
If done well, it will point out with a degree of precision where you are heading, what it will take to get there and if there are differences among the founders, or other key stakeholders.