From the “sandbox” to “it takes a village”
Leadership teams that recognize that “it takes a village” to build a sustainable, well-governed business – are increasing the probability to be successful. In my experience, there are three core indicators of a sustainable business led by a high-performing leadership team:
- Revenue: It does not have to be in the $ millions. The enterprise must have some paying customers. They are willing to pay something in exchange for a product or service that meets an unmet need or sometimes creates an entirely new product/category aka blockchain or services wrapped around a product. The paying customer sends a signal to investors that there is an “ inkling” of a product that will evolve over time. A paying customer is the surest sign that there is an initial product market fit. Traction is the ability to sell it again, and again and a revenue flow. The top line for Enterprise Value can be expressed in recurring revenues, repeat business, upselling, and cross-selling.
- Governance: documentation that is adapted to the business model and core assets: product, sales, and talent. These annoying “back office’ contractual elements enable the team to scale in a fast-paced environment, show business acumen, and provide safety assurance “around the moat” protecting the enterprises’ assets including IP, Talent, Cap table, Clients, and Partners. These policies and procedures include NDA, PIIA, Information and Security Policies and Procedures, Employment agreements, and Employee Stock option plans, among others.
- Ruthless time management: Scarcity is part of early-stage companies and Time is the scarcest resource of them all. Ruthless time management can be managed when measured and when observed. Track it, and know where to spend your time e.g. customer discovery; recruiting; product development, so as to course correct when priorities change.
Your core skills in managing these three key levers will drive the outcome of Enterprise Value. “Enterprise value (EV) is a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalization. EV includes in its calculation the market capitalization of a company but also short-term and long-term debt as well as any cash on the company’s balance sheet. Enterprise value is a popular metric used to value a company for a potential takeover.”
I have had the privilege of working with founding teams that are unafraid to say that they are not knowledgeable about a certain matter; they are willing to learn; they are willing to bring in the expertise, either through talent hire, fractional hires, Advisory boards, Board of directors with the skills required for the stage of the company. The high-performing leadership team is better positioned to realize the Enterprise Value of the company when adopting a mindset that “it takes a village” to be poised for rapid growth.
If you are authentic; willing to learn and experiment I would be honored to serve you.
Brenda A. McCabe