Think Bigger!
Not another article on having big goals.
I think you’ve been reading and hearing gurus talk about thinking big, have a big vision. I’ll do my best not to repeat what they say but know that there will be some points that are generally the same. Ever wonder why all these successful business owners talk about thinking big and having a big vision? Is it wrong to look at your market and say, “Gosh, it is going to take me some time to cover the local market.” Or that covering your own market will already be enough. This would work for some investors who happen to share your goals. Remember, investors have options which we talked about in our post about competitions and ultimately, they are looking to make the highest possible gains at the shortest timeframe. If you’re looking to raise a large seed fund, the part where you have to think big will have to kick in.
Here’s an example from a personal encounter, a local startup was seeking for USD-1million in funding. As part of my lines of questioning, I asked for some details on what the funds were used for. The startup founder explained that the use of funds were for marketing and client acquisition. Loved this. Followed up with, how much will you make from this funding (gross)? The answer, a little under 10%. It did not make sense. What I am trying to highlight here is the funds should help the company expand or acquire more accounts. When pushed, the business did not have plans for a big expansion nor was it used to acquiring key accounts that will grow the business revenue exponentially. Why am I sharing this? In my experience, when you are raising serious money, it should equate it to some form of exponential growth rather than organic growth. When pushed, it was found that part of the funds will be allocated for non growth related expenditures. Ultimately, the pitch did not go through further discussion.
Exponential Growth
What does it mean when we talk about exponential growth? To Whom? How Much? The answer lies within how much homework you have done. Chris Voss once said you fall to your highest preparation. (one of my favourite quotes)
You fall to your highest preparation. - Chris Voss
How big can your business grow to if budget is a non issue? What would be a major milestone in what time frame would mean a jump in valuation for your company that spells gains for your potential investor? Last but not least, how would you get there? Having prepared for exponential growth means your company will have the chance of achieving that because that is within your trajectory. This is especially important because failing to plan is planning to fail.
Once a Venture Capitalist shared to an audience that if they were to give you 10 times the amount you’ve asked for, can you achieve what your company set out to in a-tenth of the original timeline? The essence of it is not just time but also its exponential growth. However, that is not a question that any venture capitalist would ask you, so don’t use it as a reference. What I am trying to convey is think big, to tap into a larger audience, a larger pool, a larger market. Because even a homegrown app have the potential to tap into a large market if you dare to dream.
Exponential growth means better numbers which translates to justified valuations, whether it is from earnings, or cashflow. With healthy numbers, the IPO preparation or the sales of their holdings to other interested parties becomes a viable exit for early investors. This would make investing in your company comes with an expected timeframe and a foreseeable exit.
Stop limiting yourself and drive yourself with a big enough vision. If you are not sure of how big you should think, reach out to us and we might be able to help with that.