“Nothing concentrates the mind like your execution in the morning.”
I read a report that most startups prior to the Covid 19 pandemic crisis only had 2–6 months of cash left in the bank. What an awful situation to be in and my heart goes out to these companies (some of them are actually in my portfolio). But for some of the companies this can actually be a blessing in disguise.
Constraints are powerful and breakthroughs only happen when your back is against the wall.
It is a VERY stressful and terrifying time but this happens for athletes, soldiers & entrepreneurs. This pressure is like a furnace and the African saying is that this “furnace either melts you or it forges you.” This is how major innovations and big changes happen in these specific periods of a person or company’s life. This is also the only way major growth or strategic direction happens.
The optimal situation for a startup (and person) is “Yarak”, a term I learned from Falconry. It’s the super-alert state where the bird is hungry, but not weak, and ready to hunt. The best startups are always on the edge.
If the hawk is too well fed, it’s just not hungry or eager enough to hunt. If it’s not fed enough, it’s too weak to catch anything even though it is hungry.
This is why bloated startups just don’t work. We have all heard of the software startup that raised $10m usd (or more) before they built or launched any product (Comment not relevant to Deep tech or Biotech startups). Majority of these companies end up going nowhere because they lose their focus, creativity or sense of urgency (kind of like children of rich families). They build up too many people and costs because they can just throw money at a problem. This is exactly the same reason why big companies suck at innovation.
On the other hand, not having enough money, ie. being too starved of resources is a crisis. You are literally stuck in everyday survival mode everyday. This is where you have to thread the needle. You absolutely need to have a longer term vision of where you want to get to. But to get there you have to do is compress your view and plan into a shorter timeline. Instead of thinking of a year or 6 months from now, what you do is look at the next 2–3 months.
If your situation is really dire, you focus on getting through the next 2–4 weeks. Day by day, you manage your costs structure and focus on the critical piece of the business and generate new opportunities. You are forced to prioritize doing the toughest but also the most important thing to survive (“Eating the frog” in productivity parlance). This is also usually a critical thing that has to be done to get to the next day or week. Do NOT think or look too far away. With the lack of certainty and clarity, it’s very easy to fall into despair or think the situation is hopeless.
The goal is to survive. As long as you keep pushing, keep making decisions and keep taking the hard actions, new opportunities will eventually show up. This is also the moment where the deepest insights appear. It’s not a fun stage to be in but it’s inevitable if you are pushing on the frontier, trying to create something big and meaningful for yourself and society.
Also we humans tend to underestimate ourselves and our own capacity and potential all the time. The famous former Navy SEAL and ultra long distance athlete David Goggins, has the 40% rule: “When your mind is telling you you’re done, you’re really only 40 percent done.”
So keep pushing & keep fighting! Or as Winston Churchill stated, “If you are going through Hell, keep going.”