Food For Founders #51
F3 is a FREE weekly newsletter where we find the best concepts on the internet that will move the needle in your business.
|Stephen Alred Jr.||Oct 11, 2019|
Heads up…this is going to be a dense one….
There's a lot of dualities that happen when you're running a company, and those opposite "facts," usually rear their intimidating heads when you're trying to figure out the differences between what is a strategic move that has tactical implications vs. the best tactical moves on the strategic side.
Sometimes you get too far into weeds to realize that you aren't doing the things that will lead you to success. Sometimes you are too far off the ground that you lose sight of what's happening in your company. I fight for this equilibrium every day at KnowCap.
There are days where I am too dialed in and days where I have released so much that the tactics on the ground become detrimental to the mission and vision of the company.
You also have to figure out what the opportunity costs are for making a decision, both for the long term and the short term. What are the consequences of each action? Whether it's a HUGE positive outcome or medium positive outcome. You need to know these things and weigh them against their relevant risk factors.
For example: On one hand, you have a decision that could net you $100k, but also has a 50% chance of failing. The second decision has a possibility of $40k, but a 25% chance of failing. Which one do you take?
The first option is a better risk. However, if you are about to go bankrupt and miss payroll, the base hit is a better call than swinging for the fences (side note: I don't watch baseball).
When this duality is considered from an entrepreneurial level, you start to enter into a state where you're not sure what's right or what's wrong. The opportunity costs become complex assessments because you're really at that stage where it's just about de-risking your decisions.
At the earliest stages, it's not necessarily making the right decision but making the most right decision. Because...at the end of the day, with most of the decisions you make, you will not know their effects for years (or at best months).
This can be tricky for a lot of entrepreneurs and can cause analysis paralysis, or cause hasty decision making. My encouragement - shorten the lifecycle of your decisions and instead approach them as experients. You need to be acting so quickly, almost too quickly (let's call it uncomfortably quick).
If you are an early-stage company, you need to be learning from your decisions at a very, very rapid pace. The company that can make the most customer-informed decisions in the same timeframe as their competitors wins.
Why do you think it's so important to talk to your customers every day? They are basically paying you to be product managers for your company - you just have to leverage them that way.
If you're making decisions too slow you can't learn from the mistakes, and you can't double down on the success. Making decisions slowly means that every choice has a more significant impact on the course of your business.
Think about it...one decision every three months vs. nine decisions every three months...who wins? The one that is able to see the effects of their decisions and then course correct, or double down, the fastest.
That's why startups can beat large corporations (you saw what happened with Webex and Zoom???), they can test and iterate faster.
With startups, there won't be anything that's 100% right or 100% wrong. There will be more right and more wrong. Figuring which is which is the key.