​

The Resilient Entrepreneur, Edition #59

​

Hi there

I hope you had a great week!

Here are the topics in today's edition:

• Scaling a Startup Means Reinventing How You Work - Constantly
• Your Business Growth Strategy: Should You Think Big or Stay Cautious?
• Your Startup's First Priority: Product, Not Paperwork

Please reach out if you have comments, questions, or suggestions for articles!

Talk soon 👋
Tom

KickKerK

LEADERSHIP FOR RESILIENT ENTREPRENEURS

Scaling a Startup Means Reinventing How You Work - Constantly

The ability to grow as a startup is a direct function of your team being able to adapt to a changed reality if and when required.

“We’ve always done this like that.”

“In the past, we used to do this differently.”

“Someone told me to do this like that, I didn’t know I had to do it differently.”

Have you heard such sayings before? If you work in a public sector body or a large corporation, I bet you have.

But if you work in a startup? You would think things are more vibrant and change-positive in a startup than in a large organization. From my almost 10 years of experience as the Founder & CEO of Yonder, a B2B SaaS company, I have to confess that people in a startup are not necessarily more change-positive than people in a large organization.

Why is that? Let’s look into some possible reasons.

1. Lack of Processes

When you start creating a company out of nothing, there are no processes and there is no org chart (of course!). The founders just do whatever needs to be done.

When you start growing, you will add your first employees. Still, no processes and no org charts. Everybody sits in one room and everybody does whatever needs to be done.

Knowledge is passed orally: “Somebody told me to do this like that.” That’s what it will sound like years later when you ask an employee why he or she did something this or that way.

2. Suddenly — Boom — Processes!

When you grow beyond 10 people, an org chart will slowly develop, and defined job profiles and teams will appear. Now it’s time to document the regular tasks each team needs to perform: Server maintenance, release process, proposal structure, and invoicing process, to name just a few.

Most startups don’t document processes properly until much later, but when you’re serving a B2B market, your customers will sooner or later ask you to be ISO 9001 and/or ISO 27001 certified. Once this happens, there is no way around properly documenting processes.

When we had to go through this exercise, we took it seriously and didn’t just document the way we did things, but tried to make things more efficient by adopting a process-oriented way of work.

And what would people say? “In the past, we used to do this differently.” Well spotted, Sherlock. Processes are never finished, they are updated whenever somebody finds a way to make them more efficient. Continuing to do things like in the past would be a recipe for a stand-still.

3. Continuous Improvement

Call it Kaizen, work with PDCA or the OODA loop, it’s all about the same thing: Continuously improving your operation. That’s key for a startup. First, it’s about continuously improving your product to find product-market fit. Then, it’s about continuously improving your processes to increase efficiency and profitability as quickly as possible.

It’s this step where many people struggle, especially after the 12th iteration of improvements. That’s when they say: “We’ve always done this like that.”

Whether it’s about improving the ticket process, standardizing new customer onboarding, or defining server maintenance procedures: The ability to grow as a startup is a direct function of your team being able to adapt to a changed reality if and when required.

​

LIFE HACKS FOR RESILIENT ENTREPRENEURS

Your Business Growth Strategy: Should You Think Big or Stay Cautious?

A real-world look at the trade-offs between aggressive and conservative projections.

What fits your business best, a business plan or a cash flow plan?

As a one-man business, a cash flow plan is good enough.

In the early stage of a company, a cash flow plan is good enough.

Once you reach product-market fit, your revenues are 7-digit, and your sales pipeline is stronger than just a few contacts from the founders’ network, projecting the future becomes more important and more feasible.

If you want to attract growth investors or even start to think about an exit, you will need a much more detailed business plan alongside your cash flow plan.

There are two ways to project the future: optimistic or conservative. Both have their advantages and disadvantages, and maybe the style of the business plan also depends on the country in which your business is located: In Switzerland, my home country, people tend to be cautious and discreet; in the United States, things are portrayed as bombastic even if they are mediocre.

As the Founder & CEO of Yonder, I have experience with both types of projections. Let’s look into the details.

Optimistic Projections

Optimistic projections are built on modelling the past with actual numbers, calculating some KPIs, and then extrapolating them into the future, using industry-standard values for the core KPIs.

Both revenues and costs are extrapolated into the future, following the logic that if you increase the sales force, sales will also increase.

The result is an impressive growth plan, first and foremost on the top line. And of course, the materialization of this impressive growth plan needs upfront investment.

Conservative Projections

Conservative projections are built on little upfront investment, and managing your cash needs on funds collected from operating the business. When the forecast becomes more positive than projected, you can make additional investments, but not before.

The result is a less impressive growth plan on the top line, but a much more impressive growth plan on the cost side: People will wonder how much you can achieve with so little.

Side-by-Side Comparison

Now for the interesting part. We have modeled our business using both optimistic and conservative methods. Below is a screenshot from our revenue and cost models:

The solid bars show our conservative projection, using the cash flow plan as the basis. The black line shows our optimistic projection, being much more aggressive on the cost side, leading to higher revenues.

Which scenario do you think is more profitable? Here is the EBIT comparison:

Surprisingly, the EBIT is comparable for both models.

So, which model is better now, the optimistic or the conservative projection? It depends on a whole lot of factors, such as investors, geographical markets, and personal taste. But irrespective of what social media tells you about entrepreneurial success, there is more than one way towards success.

​

INSPIRATION FOR RESILIENT ENTREPRENEURS

Your Startup's First Priority: Product, Not Paperwork

Why founders must focus on product-market fit before drowning in admin tasks.

Excitement is in the air. You have just founded a new company, and you and your co-founders set to work. What do you need to do?

Register your company, set up a web page, register a domain, set up your company email, get an accounting tool, and design a logo.

The to-do list is endless.

All fine and good. But do you make money with all those administrative tasks? Let’s put it that way: You don’t make money if you focus on administrative tasks too early, but if your company grows you will end up in chaos without administrative processes, which will lose you money.

But let’s get back to the early days of a company.

1. Finding Product-Market Fit

When you start a new company, you will do so with a firm product idea in your head. Maybe you already have a potential launch customer, maybe you already have some first leads. But in most cases, entrepreneurs will start with a product idea in their heads, untested by the market.

The lifecycle of a new company starts with all odds against it. Either you offer a product that directly competes with existing products, putting you at a disadvantage. Or you offer a product so new and unseen that adoption in the market is slow and painful.

As the Founder & CEO of Yonder, I remember being laughed at at a trade show, hearing that the product we started building would never work in the market.

Not nice. Are we doing something wrong, or did we just run into somebody who doesn’t know what he or she is talking about? Go back, research, discuss, improve.

A few improvement cycles down the road, your product will not look the same as that first idea that floated in your head when you started the company.

In my view, the best example of a product morphing into product-market fit is the Apple Watch. Originally designed to “have your emails on your wrist”, product-market fit was found as a fitness tracker and health device.

2. Product Consolidation

Fast-forward a few years. Your company has now amassed a considerable amount of customers. Although they all bought the same product, their use cases might differ slightly: Your early customers might still demand privileges and extra features, and later customers might never have known the original product. Product consolidation is hard work, as you need to remove the extremes in your product without upsetting your customers too much.

Besides functional consolidation, your product will also need technical consolidation. In IT, we speak of refactoring — doing the same thing better, more efficient, and less error-prone.

Functional and technical product consolidation often go hand-in-hand, as some bugs reported by your customers can be solved for good by refactoring.

3. Product Scaling

Fast-forward another few years. Your product is stable and consolidated, and at some point, you will start thinking about the long-term growth perspectives for your product.

Will you be able to sell your product as a stand-alone product in the future, or will you need to join a bigger platform to accelerate growth?

Do customers want to integrate your product into theirs, and you will need to develop an SDK?

Or is it enough to interface with a few other products your customers use?

Conclusion

All those questions are product questions. If you don’t want to engage in product discussions, don’t start a company.

Founders should spend 99% of their time on product questions.

​

About Me

Growing a company 📈 in uncertain times 🔥🧨 is like running a marathon—it demands grit, strategy, and resilience.

As a tech entrepreneur 💻, active reserve officer 🪖, and father of three 👩👦👦, I share practical insights and experience on entrepreneurship and resilience in The Resilient Entrepreneur, my weekly newsletter.

When I'm not solving problems, I recharge and find inspiration in the breathtaking mountains 🏔️ around Zermatt 🇨🇭.

Like this newsletter? Please share it with your friends!​

​

​

​​​

​Unsubscribe · Preferences​