A CEO coach compiles a checklist for entrepreneurs based on reoccurring themes that have emerged again and again over coffee dates with founders.
By Karil Reibold (Consultant, Executive Coach for CEOs and Strategic Planning)
For over 20 years, I have loved working with startup entrepreneurs. A passion for their idea radiates from their very being. I am always happy to meet with entrepreneurs over a cup of coffee to hear what they are imagining for their next venture. My mission is to turn each passionate entrepreneur into a passionate leader and CEO who builds great companies for the future. To that end, I have noted a common set of themes that has emerged from the intense discussions over the countless cups of coffee that I have consumed.
So many entrepreneurs have lots of great ideas some disruptive and some groundbreaking. Regardless, what problem is it solving for customers? Is the customer in enough perceived pain to purchase the product? And if so, what is the return on their investment (ROI) = Customer: How long until I make back the money I paid you!
- How big is the market for your solution and is the market willing to pay for it? Great idea and it solves a problem! Check!! But how many customers have the problem and are they willing to pay you to solve it? Clue: Lots and lots of customers.
- Who else is solving the problem and what makes you so different? No really, why should a customer choose your solution over your competitors? Is it easy for the customer to understand why you are the right solution?
- But, this leads to my next question? This one has stumped quite a few. How are you going to make money? That means positive EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) = revenue- all expenses= remaining dough. Some key components: Sustainable revenue model with consideration for pricing pressure and customer churn; Cost to acquire new Customers (CAC) vs. Lifetime contract value; Cost of delivery at scale with healthy margins, increased efficiency and productivity across the organization.
- I always ask entrepreneurs what are your next most critical key hires and why? It is a delicate balance of preserving equity capital while meeting the timing of the market and making strategic investments in success. But, building the right cohesive team is as important as building the right product offering.
- While on the topic of team, don’t forget that investors are also part of the team. They will likely be around for at least 4 years, so make sure they are a good fit for your business model, culture, management style and bring with them a business network that furthers the company’s goals.
- How much dough do you need to turn profitable? Does your financial plan pass the SNIFF test? Do you have the right balance of conservative revenue and the necessary baseline expenses to create a foundation for long term success?
- Be very clear on the uses of capital and the outcomes that drive value into your company. Set measurable goals around proven business and technology concepts, early customer acceptance and building your “bench” that create enterprise value and allow the company to secure follow on financing to reach scale.
- Lastly, I am a firm believer in building sustainable scalable companies. To me, in building a successful company an exit strategy for shareholders will happen either in the public markets or through an acquisition. But, it is equally important to know who could be an acquirer by understanding your competitors, the marketplace and who your company is disrupting with your product offering.
Innovation is the key to our future success. Coffee is always brewing, passionate ideas deserve to be heard and future leaders need to be developed.
What have you learned during coffee dates?
This post originally appeared on Turning Passionate Entrepreneurs into Passionate Leaders
About the guest blogger: Karil (@Karilr) has over 20 years of experience as a results driven senior operating executive. Most recently, she served as the CEO and President of Whaleback Managed Services were she was responsible for creating a culture to deliver a best in class managed service offering which drove revenue growth for over 16 consecutive quarters.