Early Moves

Triangulation

Cross-checking helps determine distance, maneuver around obstacles, and identify missing objects. Alongside the math, a triangulated team diversifies real skills and increases dependability.

With more distinct perspectives, entrepreneurs add synergy that accelerates forward movement and increases confidence when the same problem is attacked from multiple angles. This nimbleness can be leveraged as co-founders also create an invigorating culture that makes each person feel significant. With back-to-back episodes of You Don’t Need This Podcast featuring my two co-founders in FliteBrite, what a wonderful chance to reflect on talented friends who build as one.

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“One’s company, two’s a crowd,
and three’s a party.” -Andy Warhol

If you’re on the prowl for co-founders, consider the value of triangular patterns. Connectors become connected, so show up and be quick to make interesting introductions. Even when the first degree of contact lacks obvious opportunity, remember it’s often the second and third degree of connectivity that delivers more precision. Over time, generosity within an entrepreneurial ecosystem will expand and tighten engaged networks. Instead of forcefully recruiting co-founders, the open-ended activity of a serendipitist will have us colliding with friends we simply haven’t met yet.

When it’s time to build, bonds that formed naturally will support lasting collaboration with people you already respect. That said, established trust is not an excuse to get complacent. From start to finish, be honest and transparent. Every story ends, so invite difficult discussions early and often. Agree on terms, leave space for change, structure the business, maintain an operating agreement to ensure clarity with less tension, and lead by nurturing the power of triangulation.

  • commit to abundant communication
  • invite responsibility, keep the promise
  • remain attentive to details
  • take blame, give credit
  • celebrate in style

Lone wolves can move mountains and rare resources are required with more human capital brewed in, but the expanded capacity and ongoing resilience makes this odyssey worthwhile. When long-term players play long-term games together, the chemical reaction is an affinity toward work that feels like play. Cheers!

By Ben McDougal, ago

Decisions

The right decision is often the one you make.

When questions linger, they get heavier over time. When I talk about writing a book with aspiring authors, I share how a sense of paralysis occurs. Whether it’s from the writing or publishing process, this mental jam is not from a lack of options, but instead, so many. While it’s important to understand options, the key to momentum is to simply make each decision.

This is not as easy as it sounds. No matter how big or small the decision might be, the fear of getting it wrong stands in the way. Fortunately, while life or death decisions do occur, most of the time, a wrong decision only requires extra resources to make it right. Bad decisions add up, but if it’s just one decision that’s part of a longer sequence, even slight missteps can still move us closer to where we want to be.

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What decision is holding you back?

The decision I’m wrestling with, is if I should continue with my weekly writings. I’m so thankful for the reading room that is Roasted Reflections. It’s been a privilege and a blessing, but I’ve made sacrifices to ship this art every week for almost three years. I hinted at this in Recursion, but with the end of 2023 in sight, it’s time to decide if/how I should continue with this ambitious cadence.

Perhaps I’ve written what needs to be said, at least for now? Would these jolts of energy be missed if they were gone? Writing helps us understand our thoughts, so it’s nice to know if I do turn down the volume, the Roasted Reflections library isn’t going anywhere. I could still occasionally add fresh writings and we’ll stay connected with new episodes of You Don’t Need This Podcast brewing every week. What could I do with the extra bandwidth? Hmm…

I think it’s time. I’ll make this decision here and now.

The next four months (17 weeks) will be sequenced to say farewell to my weekly writings at the end of 2023. I’m so thankful for this remarkable ride we’ve shared together. Every writing will continue to be pure human, thoughtfully crafted, and brewed to keep us building. This will be an emotional process, but we are one my friends. People like us, do things like this, so cheers to all that is next.

By Ben McDougal, ago

First Steps

Watching toddlers learn to walk is adorable. This right of passage also reminds us how fresh motivation may be needed when progress seems to stall.

At first, early moves felt natural and crawling has done the job. As children see what’s possible, expectations are raised. With parental guidance, promising signs are filled with excitement and success feels within reach. Time passes though, and sometimes that loving motivation can lose its luster. Progress stalls and concern can start to brew, but what if the breakthrough is just waiting for a fresh source of encouragement? Even when it’s on accident, as new motivation is introduced, almost all at once, progress proceeds. We scramble for the camcorder and those precious first steps are enjoyed by all. Six more weeks of practice is needed, but this achievement renews momentum that keeps our little ones moving forward.

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For parents smiling as they read this, know that Pure Wonder, #1 DAD, Winding Whys, Training Wheels, Playforce, Santa is Real, and many of the emerging episodes from You Don’t Need This Podcast are just as fun!

For students, entrepreneurs, and intrapreneurs building around new ideas, the dance with innovation may also require shifting gears once in awhile. Next time an engine stalls, step back to consider that alternate angle, talk to peers with different perspectives, take a little time away, or show up unannounced to adapt and get back in business.

By Ben McDougal, ago

Tinker

This is your invitation to tinker.

The Headline Trap is real, life can feel busy, and we all have existing responsibilities, but take a moment to hold your arm as high as you can. Go ahead, I’ll wait…

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Need fresh ideas?
Try this daily exercise.

…ok, now…hold your arm higher! I bet you found room to push further, eh? This is a fun reminder that we all have more to give. Tinkering requires initiative, but we all have extra gears to help us avoid feeling like we left something on the table. Yes, comfortable feels safe and easy is easy, but why not turn a few knobs to see your idea twinkle?

When we accept an invitation to tinker, financial capital can speed things up, but time is usually the primary capital required. It’s amazing how much happens by showing up and activating a few early moves. While more of everything will be needed to commercialize an idea, thinking about this exploration through an adaptive lens of seasonality also reduces the weight of side hustles.

If you’re having a hard time finding inspiration, force yourself into environments were others are tinkering too. Community events within an entrepreneurial ecosystem can provide energizing human, intellectual, and network capital, but classrooms, makerspaces, hackathons, and coworking spaces are where people are tinkering together.

Whether it’s at home or in the community, tinkering celebrates pure wonder and will nourish your innovative spirit. Even if the answer is “no”, at least you’ll know.

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Things you dedicate time to will grow.

By Ben McDougal, ago

Fresh Powder

Let’s take a lift to the top.

Whether you ski or snowboard, you’re not getting far without the right equipment. Financial modeling is an important technique that helps you simulate different scenarios for your business. Imagine we’ve made it to the top of the snow-covered mountain. There are endless ways to make it down. Similarly, there are endless ways your business can evolve.

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This caffeinated contribution was written by Jeff Erickson. Based in the silicon slopes of Utah, Jeff is an angel investor, experienced advisor, avid skier, and leads partnership development at Forecastr. Forecastr is a financial modeling platform that helps founders forecast revenue, predict runway, and use dynamic insights to get funded.

Having worked with hundreds of early-stage startups, I often hear founders talk about how everyone knows financial projections will be wrong, so why is financial modeling important?

A financial model is a tool to help forecast the financial performance of their company over time. Financial models are generally based on a combination of the company’s historical performance and assumptions about the future. Financial models can be used by entrepreneurs to help make better decisions when raising financial capital and to assess the potential returns of a given venture. Returning to our mountainous metaphor, think of financial models as your map of the snowy terrain. It provides an overview of the area, routes to explore, and dangers to avoid. Similar to a trail map, financial models use numbers to set the scene, then help entrepreneurs determine the speed and direction of their business. Along the way, they also help identify potential risks and optimize how different types of resources are used.

As a startup founder, it’s important to understand why investors ask for financial models. A financial model is essentially your roadmap for the future and it gives investors an understanding of how you plan to generate revenue and scale up over time. Having a solid financial model demonstrates that you have done research into the market, understand potential risks and opportunities, and have thought through the key drivers for success in your business. Ultimately, your financial model helps investors see how you think about your business and whether you understand the levers that matter. It also gives them confidence when they see that you know how to strategically allocate the money they may invest and that you know how to project and manage cash flow.

Most investors speak in the language of finance. Terms like run rate, CAC, LTV, runway and burn rate are common vernacular. Going through the process of building your financial model helps you learn, decipher and understand this language of finance. A shared understanding will help you more effectively work with investors. A common mistake for many founders is thinking that it’s you and your financial model versus the world. Instead of falling in love with your assumptions, consider how you can work with potential investors, by using the financial model to analyze various scenarios. When founders can cruise down the mountain with investors, while explaining different scenarios in real-time, strategic partners will get excited about taking the lift back up for another run.

Ready to create a financial model that’s useful? Most models have historically been built in spreadsheets, but new software tools, such as Forecastr, make it easier for companies to create financial models. Entrepreneurs need to be aware of the changing terrain in order to make the best decisions for their evolving business. Let’s avoid the trees and carve out a few key steps that will land you in a position to know the numbers.

Define

Before you can create a financial model, it is important to define the company’s business model, revenue streams, and financial objectives. This understanding will help determine how you structure your assumptions in order for the projections to accurately reflect what could realistically happen with your startup.

Gather

Once you define company goals, gather historical data relevant to creating accurate projections for your startup’s future performance. This includes information such as past sales, costs associated with running operations, generating revenue, customer acquisition, and any other financial data that may help tell the story of your business.

Build

Using qualitative (e.g., industry trends) and quantitative (e.g., past results) data points, begin building out realistic assumptions to drive your financial model. Here are templates for a jump start! Begin with customer acquisition (e.g., paid ads, partner referrals, reseller channels, sales outreach, etc.). Next, build out assumptions around revenue streams. Consider all the ways you can make money by adding value to your customers (e.g., advertising revenue, product sales, services, etc.). Now you’re ready to build out assumptions in regards to building a team, then focus on projecting the changes in your operating expenses based on the company’s performance. Finally, consider any required expenses to scale your business and how you plan to finance the overall venture.

Validate

With all your initial assumptions in a financial model, it’s important to track the accuracy of your assumptions each month and update the numbers based on actual data. As metrics are consistently tracked over time, your financial model becomes more accurate and reliable. You will notice trends in customer acquisition, identify the most profitable revenue streams, and monitor your expense projections. Additionally, you will be able to run different scenarios using your financial model to help you confidently make better decisions in running your business.

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I hope you’ve enjoyed this month’s theme, dedicated to early moves that help anyone avoid that new business idea from floating toward someday! As you compile the various resources you’ve created into an investor pack, you’ll be astonished at how well you understand your new venture. As you stay committed, the self awareness brews confidence from true understanding and others will be even more excited to join you.

By Ben McDougal, ago