How to Succeed With Your Startup Investments

Vision is great, visionaries can and do change the world. But vision alone doesn’t give you a return on your investment.

VISION ALONE WILL NOT GET YOU ROI

Let me start by saying that I am not a venture capitalist, nor am I an expert in investments. However, I do know a thing or two about what corporate structure and product-to-market paths look like - if they are properly set up. I decided to write this article because in the last few months, I have heard way too many stories about startups or scale-ups that received huge cash infusions. In most of these cases, the companies then made radical spending plans (or no plan), but didn’t deliver and were imploding. 

Vision is great, visionaries can and do change the world. But vision alone doesn’t give you a return on your investment. So if you’re investing in a product, is it enough that the startup energized you with their presentation of great things to come? That the idea was revolutionary? That they were going to disrupt a market with their innovation? I would say absolutely not. 

Some would say that’s because I am more risk averse than most VCs and that may be true. But I also shy away from glitzy sales pitches that don’t have substance behind them to convince me that they can deliver.

ASK THE RIGHT QUESTIONS

What does that substance look like? For me, the first question I would have is about corporate culture. What are their values or vibe, if you will, for the company? How are the founders planning to build a culture that encourages innovation and product delivery? Have they even thought about this? In addition, have they assumed that their product will be a raging success? Have they planned how they will scale to keep pace with delivery demands and product initiatives?

The next thing I would want to know is how they are going to structure their product teams. What recipe are they going to use to ensure not only speed to market, but also quality ideas with clear vision and innovation ? Can they keep delivering products that parallel the zing of the pitch that got you interested in the first place? 

ITERATIVE AGILE BUILD PROCESS

If they aren’t describing an iterative build process that has a holistic team of players, I would be nervous. I wouldn’t necessarily be impressed if they threw out Agile terms like Scrum, Kanban, or XP. Anyone in the product delivery business should know those words. However, do they have the know-how, or have they engaged the expertise to be the very definition of the word Agile - “able to move quickly and easily” - flexible, nimble? This starts with how they are going to recruit talent, build product teams, and manage the day-to-day culture of teamwork.

Having high-performing teams also means that they can quickly find their pace to work together and self-manage. Are the founders willing to hand the vision over to the product delivery team and let them run with it, without micromanaging the process? To do this, the teams have to be coached. They need to find their own value system. And they need to feel empowered to walk or run as appropriate to the situation, and know that they have a support system around them.

WHAT’S THE PLAN?

And finally, I would want to see their first draft Agile roadmap. What feature sets of their product do they deem top priority? Are they overthinking the product and putting everything and the kitchen sink into it? What is their release schedule for time-to-market for the product?

I would recommend considering an investment only after having a good answer to all these questions. While this is not a guaranteed recipe for success, because there is so much more to it than this, it would give you a relative confidence that they are more than idea people, and have a concept of how to make the vision become a reality.

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About the Author:

INDRA A. BOOKS

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