Entrepreneurs trying to build big companies turn to equity investors to raise capital. If a company is an established ongoing concern, investors can look at cash flows, growth rates, customer retention, capital assets, leverage, and other hard metrics to determine whether to invest and how to value the company. An early-stage company has few if any hard metrics, however. Startups are often just emerging from the idea stage into market trials, and the minimum viable products and services they offer are being tested by beta customers. 

This presents a challenge for the entrepreneur. What will convince angel and early-stage venture investors that what she is building is not only a feasible company but one that has the potential to generate a large return on investment, and maybe even become one of those rare unicorn companies that will make its investors rich?  Read More >>

From the freemium business model to an aggregation business model, the 21st century digital economy has shown that serving customers well may not necessarily provide sustainability for a company unless the firms actively find ways to capture value in the process. It sounds obvious, but many media and e-commerce companies have gone bankrupt, despite improving customer experiences through digital channels, simply because they neglected to capture value.

For instance, many startups emerged and provided cheaper or completely free means of making national and international calls via the web, but later collapsed when they struggled to capture value. A direct 30-minute traditional phone call from Lagos to New York may cost $10, but using an app, the same call may cost an equivalent of $1, where that dollar is the cost of mobile internet services spent on the call. If the app is free (and most are), it has destroyed a value of $9 for the traditional phone operator, even though the app maker has not captured any for itself. Read More >>

The human brain is a prediction engine. A lot of the knowledge that you gain from experience is used to figure out what is likely to happen next. When you walk into a conference room before the start of a meeting and see other people in attendance, you feel comfortable that the meeting is going to start soon. When you see a colleague walking up the hall who works in marketing, you predict that you’ll soon be talking about a new campaign.

When things go as you predict, you feel comfortable. At the start of that meeting in the conference room with your colleagues filing in, you can sit down relaxed and talk with the person sitting next to you. If, however, you walked into that same room and found it empty—or filled with people you didn’t recognize or expect to see—you would probably feel uneasy. You might pull out your calendar to see if the time or location of the meeting had been changed. You would pay a lot of attention to what was going on. Read More >>

In times of uncertainty, it is crucial for leaders to rally around the why behind their mission. There is a tendency to overlook the why when decisive action is needed, but it is essential to steering the course of the business. The why illuminates what needs to be done and how it can be accomplished. The why gives the whole team a sense of purpose. As Friedrich Nietzsche is quoted as saying, “He who has a why to live for can bear almost any how.”

Over the past decade, my perspective on leadership has been guided by one simple mantra: Start with why, inspired by the book of the same title by Simon Sinek. In my time as an engineer, starting with why was fundamental to tackling every new product or feature. Starting with why meant understanding the pain points of the user and defining the success criteria for addressing the pain points. From there, we could specify the functionality needed (the what) and set a plan for developing the product (the how). As I became a leader, I found that these same principles apply to management — always, but especially in turbulent times. Read More >>