Closing Windows of Opportunity
Yesterday, I wrote about the insights Eric Feng shared during the Outlander Speaking Series. One of the things that really resonated with me was his answer to a question. For context, I asked him, “What’s one thing you know now that you wish you had known as a first-time founder early in your career?” Here’s his response: closing windows of opportunity. This has been on my mind all day today.
At CCAW, as at every startup, we always had a ton of things we were working on. Looking back, Eric is so right. I wish I had consistently prioritized opportunities based on their closing windows. Early on, we had an opportunity to be one of the first to offer a specific product category for online purchase by consumers. The market for this category is huge and it was primed for disruption. Being first mover would have required our full attention and fighting some battles to change an antiquated space. There were lots of technical challenges and we lacked a thorough understanding of the category and key relationships in the space. Big hurdles, but they were surmountable and worth the effort because of the size of the opportunity.
I chose to instead continue to focus on a product category that wasn’t growing but in which we had established relationships. Fast forward a few years: we tried to play catch-up in the high-growth product category—but we never did catch up. A competitor beat us to the punch and became a household name. That was a $250-million-annual-revenue decision. I should have pounced on the closing window of opportunity to be a first mover. I didn’t, and we paid the price.
Eric’s concept is simple and spot-on. It applies to everyone, not just entrepreneurs. Here’s an example that everyone can relate to: relationships. No one is immortal, so every relationship is a closing window of opportunity. I wish I’d spent more time with certain people who were in my life when I was young but who’ve since passed.
My mother reminds me often of something my grandmother told her: “Give me my roses while I can still smell them and sense the enjoyment they bring me.” I think Eric and my grandmother are loosely saying the same thing: some opportunities won’t be around forever. Be mindful of which ones are important, prioritize them, and make the most of them while you can—in all aspects of life!
What I Learned in School Today: Fundraising Timing
Today, Outlander Labs hosted its first Outlandish Speaking Series. It’s our way of giving Southeast founders the opportunity to hear from high-quality speakers they otherwise might not. At today’s event, (click "View Details"), Eric Feng, Facebook’s head of commerce incubation, shared insights about the importance of timing in start-up fundraising. Eric was a Hulu founder and general partner at Kleiner Perkins; he’s seen start-up life from a variety of angles.
Eric’s insights were fantastic. Here are some of my core takeaways:
- Missionaries vs. mercenaries – Missionaries are better entrepreneurs than mercenaries because they’re driven by passion. This video explains it well.
- Runway and risk – Fund-raising adds runway to remove risk and grow value. As you raise later rounds of capital from investors, you should be removing risk with each round. For example, you shouldn’t be raising your series B funding without building a product and understanding whether prospective customers want what you’re building (i.e., whether there’s a product–market fit).
- Seed stage – Early investors (pre-seed and seed) understand that pretty much everything is a risk because they’re investing so early in the company’s life cycle. You may have only two people (not a full team), the product might barely work (implementation risk), and you may not have a clear idea whether people will pay for your product (so you don’t have a product–market fit yet).
- Opportunity window – Understanding whether something is an opportunity or a window of opportunity is important. If a window will close on the opportunity, consider grabbing it as soon as you can. Later may be too late. All opportunities aren’t equal, so don’t wait forever if you see a good one.
Today’s session was great and Eric was an amazing speaker. He has a wealth of knowledge that he readily shared with the audience. I’m looking forward to next month’s Outlandish Speaking Series. If you’re interested in attending or seeing other Outlander events, feel free to check them out here or here.
Rookie Mistakes 101: Not Delegating
I shared my thoughts on people’s bandwidth the other day. Today, I want to elaborate on this a bit. I neglected to mention another tactic that helps founders get more done: delegating. It’s something I struggled with early on. Lots of other first-time founders do too.
Early founders often think they’re the only ones who can do something right. It’s the “if I don’t do it, it won’t get done right” mentality. The opposite is often true. Early founders are generalists: to get the company off the ground, they have to know how to do everything. They’re usually just okay at most things—meaning someone else can do them better. Most don’t recognize this, though, and are reluctant to give something up. They won’t let go until they’re forced to.
As I encountered new challenges, I rose to the occasion. I grew. And I learned to delegate. I thought through the best uses of my time and what others could handle. If a task wasn’t a good use of my time and someone else could do it, I’d train them and turn it over to them. This usually meant accepting that they were going to make mistakes at first and that they probably wouldn’t do it exactly the way I did it. This was hard at first, but I got over it. In the long run, it empowered our team and allowed me to focus on the things that mattered most. It increased my bandwidth—and the company’s, too.
If you want to be an entrepreneur (not a solopreneur), delegation is important. The quicker you embrace it, the quicker you allow yourself, your team, and your company to grow!
Is Your Business Idea Capital-Intensive or Capital-Light?
In years of consulting with large corporations, I learned a few things. Purchasing inventory requires a lot of capital, and companies sometimes struggle to unlock that capital. They often resort to selling inventory at a loss just to get their capital back. Warehousing inventory is another financial burden. Leasing space to house inventory and hiring people to manage the warehouse is a big expense.
When I started CCAW, I had all these things in mind. I knew I wanted to help consumers acquire the parts they need, but I didn’t have the capital to accomplish this in the traditional manner. Bootstrapping forced me to get creative. I found ways to leverage the existing warehouse infrastructure and inventory of suppliers and manufacturers. We did it manually at first, but once we figured out the winning formula, we built technology that allowed us to scale it. We were able to do this in a very capital-light way (relative to others in our industry). Most of our capital went to hiring people and building technology.
Entrepreneurs setting out to solve problems should think about the amount of capital required. Will you need trucks, machinery, inventory, or legal help to bring an MVP of your solution to market? What else?
Most businesses will fall into either a capital-light or capital-intensive bucket. Great businesses can be built either way, but knowing early on which bucket you’ll be in is important. The amount of capital required will have a big impact on things like company strategy, your ability to raise capital from investors, and barriers to your entry.
If you’re thinking about entrepreneurship and have a solution in mind, take the time to understand whether it’s capital-intensive or capital-light. This will have a big impact on your decision-making!
You Can Handle More Than You Think, but It Takes Time
Recently I was sharing with a buddy best practices I used to manage CCAW. Technology systems. Team alignment frameworks. How I structured my day to juggle my multiple hats. And we talked about how my responsibilities expanded as the company grew. When I finished, he seemed dazed. “Sounds like a lot to deal with,” he said. “How do I get the point where I can handle all that at once?”
As I rattled off all the things I did, I realized it was a lot. The days were packed and the to-do list was never-ending. CCAW was a ship and I was the captain, responsible for it sailing smoothly. With so many moving pieces that kept increasing in complexity, it was no small task to manage it all.
I was always busy. There was never a time when I was like ”Hmmm . . . I don’t have enough stuff to do; I think I’ll go find more to add to my plate so I can keep busy.” As the company grew, we were confronted with new challenges that forced me to rise to the occasion. It was uncomfortable, and each hurdle forced me to take on a little more than I thought I could handle. After years of this, my capacity was many times larger. I was able to handle much more than I thought I was capable of when I started CCAW.
My journey as a founder was one of gradual growth—over years—that came about because I kept being put in uncomfortable situations that tested my limits.
If you’re looking to do something great but aren’t sure if you have what it takes, know this: most people who were once in your shoes didn’t have “it” in the beginning. They grew along the way, and you can too!
Working from Home: Week Thirty
Today marked the end of my thirtieth week of working from home (mostly). Here are my takeaways from week thirty:
Email management – I’ve written about my struggles with email here and here. This week, I began using Superhuman. So far, I like it. I’ve even gotten to inbox zero, which is a big deal to me. I’m not familiar with most of its features yet and I’m looking forward to learning more about them in the coming weeks. I hated responding to email from my phone, but Superhuman has changed that. I’m now aiming to handle most email by phone.
Next chapter – I caught up with a few founder friends this week. The next chapter was on the minds of a few of them. It seems that this is the season for people to ponder what they’ll work on next. I shared my experience—as I’m happy to do anytime—and I hope it was helpful.
September reflection – September was a month of transition and lots of new things. It was a bit hectic and, at times, overwhelming, but energizing as well. I’m looking forward to settling into my new normal in October.
Week thirty was a good week. The pace felt right and I have a better handle on things. Next week will mark seven months of working from home, which is hard to wrap my head around.
I’ll continue to learn from this unique situation, adjust as necessary, and share my experience.
Google Supports Black Founders with $5M
Earlier this year, Google’s CEO expressed the company’s commitment to racial equity. One of the initiatives it created was the Google for Startups Black Founders Fund. The fund provides Black founders with a share of $5 million in non-dilutive cash awards (i.e., Google has no ownership interest in the recipient companies). The grants were for $50,000 to $100,000. Each founder will also receive hands-on support from Google to help grow their company. Here are a few Atlanta companies that received awards:
- Clubba – Virtual after-school clubs for kids ages 7 to 13 led by college-student counselors
- Countalytics – Computer vision and machine learning to help clients save money by managing inventory more efficiently
- Kommute – Video messaging platform that helps teams communicate, collaborate, and connect remotely using the power of instantly shareable video
- MantisEdu – Immersive high-tech learning activities for students
- Musicbuk – Virtual education marketplace that gives students access to trusted, vetted, professional musicians for one-on-one music lessons
The full list of companies, with founder contact info, can be found here.
Congratulations to all the founders who received awards. And kudos to Google for this initiative and the impact it will have on the community. I’m excited for these founders. The sky is the limit!
The Southeast Is Home
I previously shared my journey into venture capital. On that journey, I had an unexpected insight. As I was networking with venture capitalists on the coasts, I noticed a strong interest in Atlanta. Not just startups in Atlanta, but the city. I was peppered with questions about housing prices, social events, sports, schools, and the diversity of neighborhoods. I asked about their cities, too. Most of the people I chatted with were in coastal cities like San Francisco, Los Angeles, and New York.
When I described Atlanta and the quality of life here, many people said something like “man, I wish.” I was surprised. Many of them (not all) didn’t necessarily see their current coastal city as their long-term home. The reasons varied, but the pattern was clear. My impression was that they’re where they are because these coastal cities provide the best professional opportunities in venture capital. Not because they feel like home.
Outlander Labs focuses on investing in founders who operate in the Southeast. We view the Southeast as a region with amazing talent and great founders. And something else, too: home. It’s a place where founders can have amazing entrepreneurial success and also the quality of life they want. It’s a place they see themselves being in for the long haul.
The Southeast has some great venture capitalists, but not nearly enough of them (as compared to the coasts). I hope that Outlander and other firms can lead by example and change this. Through our performance and our diverse team, I hope we can show that the Southeast offers not only amazing professional opportunities for all in venture capital, but also a place to call home!
Today I participated in an idea session with my Outlander Labs teammates. No agenda, just a topic and a conversation about ideas. It was a topic that I’m not knowledgeable about, so my goal was to listen and learn. And boy, did I! The team’s collective knowledge was vast and we ended up with great ideas. Today was an opportunity for me to fill a knowledge gap, and it highlighted something else for me too.
As I listened, I noticed a pattern. Idea compounding. Sounds weird, so let me explain. Our team is composed of highly intelligent people who, individually, have great ideas and unique perspectives. As one person shared a thought, you could see the wheels turning in everyone else’s head. Then someone else shared an idea inspired by the previous one. This went on for an hour and resulted in more great ideas than we can possibly execute. A high-class problem for sure.
Our idea-generating exercise was highly effective because we approached the topic as a team. Had we assigned it to one person, I have no doubt that their ideas would have been really good. But approaching it as a team resulted in ideas that are great (or so we think).
I wish I had had the benefit of idea compounding in my early days at CCAW. I chose the solo founder path, and it was difficult. I was forced to come up with all the ideas, which were far from great. Years later I hired high-level thinkers and our idea compounding led to some of CCAW’s greatest breakthroughs. We overcame enormous hurdles and made tons of traction in a relatively short time.
Idea compounding is one of the many benefits of working with a team. And great ideas can be the difference between success and failure for early-stage companies. For any founder wondering why you should consider recruiting a co-founder: idea compounding is one of the many reasons you shouldn’t go it alone!
Making Better Decisions by Removing Emotion
One of the things I had trouble with for a long time was making a personnel change when someone wasn’t a good fit for their role. Once I hired someone, I’d invest time getting them up to speed and getting to know them as a person. When goals weren’t being met or performance wasn’t up to par, I struggled with what to do. The data and other facts were telling me one thing and my personal connection with the person was telling me something else. In most instances, the personal connection prevailed—often to the detriment of the team member.
Looking back, I was prolonging the inevitable. Most of these team members were great, smart people; they just weren’t good fits for the roles they were in. The more we tried to pound a square peg into a round hole, the more frustration swelled on both sides. When I recognized this and made a change, things started to go better for them and the business. Sure, there was short-term discomfort, but they transitioned to a position they were better suited to (with CCAW or another company).
I see now that my emotions have sometimes hindered me from making tough decisions. Subtracting feelings from the process is difficult. It requires taking a situation at face value, deliberately ignoring what you’re feeling, and reaching the appropriate decision. That’s no easy task, especially when the decision affects others and isn’t popular.
This is something I’ll probably never master, but I can aim to get better at it. I do a better job now of identifying when it’s happening—the first step. When I think it is, I get input from credible people (sometimes writing down my decision-making process and sharing it) before making a decision.