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One year ago, UVC published the first volume of the Upstate Founders Playbook, a compilation of stories and lessons learned from thirteen amazing entrepreneurs. Just a year later, we are all living in a world none of us could have foreseen. So we went back to these founders and asked what they are doing to manage in this times and the advice they have for other entrepreneurs. In these short missives, you will see how these founders are managing to stay focused, yet flexible, while recognizing that extraordinary challenges often bring extraordinary opportunities with them.–Jennifer Sertl
By Karthik Bala, CEO at Velan Ventures
High growth for startup companies seems like a lofty aspiration in these challenging times. The term high growth sometimes means strong cash flows, growing customer bases, and sales revenues that outstrip the company’s capacity to deliver. More often, it means products with long sales cycles, early stages of market acceptance, or insufficient scale to overcome structural barriers. High growth companies fail for many reasons, but the successful ones have a few things in common. They focus on their unique cash patterns, customer success, talent engagement, and operational effectiveness to buy time and position for success at a later date.
The cash pattern of a business, regardless of equity investment level, comes into sharpest focus during periods of volatility. At some level, it represents the runway that a business has. It also represents value delivered and recovered from paying customers. It quickly becomes a quick indicator of what to focus on for future growth of the business. It flows into customer success.
Adding new customers during this period is attractive and helps with business planning. However, ensuring a company’s current paying customers can thrive with its product or service becomes critical to the near and medium term. You can learn the most about your customers when they are under the same systemic stresses that you are. Now is a good time to help your existing customers succeed with your unique offerings.
At an early, pre-revenue stage, your talent base is made up of a small set of true believers. It broadens over time. But for most high growth companies, the right kind of talent is still difficult to find, despite the high unemployment situation. There is a spot of good news here. For my part, I was skeptical of remote work for highly integrated teams. While it’s hard to add new team members in a remote location, it can work. And with our location in Upstate New York, remote work has broadened the distance and range of locations where we can support contributors to our work. Accordingly, now is a time to step up communication throughout your organization. Whereas monthly online meetings used to be sufficient, your team will appreciate shorter meetings on a weekly basis with some business and levity.
As to operational effectiveness, the lean times provide an opportunity to focus on your employees and customers and cut the items that are non-essential. I’ve been surprised at the number of non-essential items that squeeze into organizations over time. They dilute both resources and management focus. Our current challenges offer an opportunity to get back to the basics of build a great team and value delivery for customers.
Overall, operating high growth businesses are challenging in any time. The pandemic provides a new set of challenges at a rate that is no different than was we typically face as entrepreneurs. It’s up to us to rise to the occasion and embrace the change.
If you want to learn more about Karthik Bala’s leadership you can read more in the Upstate Founder Playbook.