Manage Your Plan: When to Hold - When to Fold

A few years ago I was invited to sit on the Advisory Board of a Venture backed tech startup in our industry. I tried not to act too excited when the CEO, in his best matter-of-fact voice, said:

"Mark, I'm putting together an Advisory Board and I'd like you to consider joining."

I had my eye on this company since it had won a West Coast Angel competition – and its first $1M~ investment. The Series A was a forgone conclusion. Automatic. I'd be joining some pretty heavy hitters on the Board. Many of them I either knew from industry events over the years - or knew of. I took a few days to mull it over. The time. The travel. The distraction from running my own company. In the end, the chance to join a group of talented executives, and help guide a funded tech-startup was just too much. The fact that the technology platform could revolutionize our industry didn't hurt either.

"If the offer is still on the table – I'm in."

I believe was what I said on the phone. Over the subsequent months the business model and planned execution was laid out. There was already an existing platform under full fledged development, customers, and revenue, albeit small, when I arrived in NYC for an industry trade-show. I met the CEO at his booth to get the latest demo and see the technology in action. As we walked to the back of the Convention Center and sat down, he let me know the development schedule and first planned Advisory Board Meeting. Then he dropped the bomb.

"We're going to turn off the sales and marketing effort so we can devote more time to building out the platform features."

I felt like a goalie turning around to pull the puck out of the net. Red lights going off all over the place. The CEO clearly had a plan to develop THE best technology platform – the question in my mind was for who? I listened carefully to all of the reasons why turning off the customers and revenue made perfect sense. Then I looked at the CEO and asked if he could keep the customers going while he built-out the platform. Others asked during the months following, but the plan was in place. By the time the first Board meeting convened in Las Vegas, v2 had launched and sales had been turned back on – from a full stop. No traction. No momentum. This seemed very easy to me and the rest of the Board. We need to focus time, effort, energy, and resources on the sales and marketing strategy. The CEO seemed to have another idea:

"We should build out the platform with more features and functionality first."

Ahh yes, build it and they will come. The ruin of many-a-startup. Interestingly enough, throughout the highly charged Board meeting the Venture firm that had the $5M~ invested was noticeably quiet. Surely THEY would chime-in and allow the Founder to see the err of his way. Of course, the company ran itself out of money a few years later. Many of the Board members (myself included) had long since moved-on. Over the years I've owned and operated a number of businesses. I've learned a few things and one of them is never tell a customers you can't help them – simply reset the price for the help you are to provide. If they still want the product or service, then that must be considered in the business plan. In other words, the plan has to be fluid, it has to live, change and morph into a new plan each day, month and quarter. The plan is: start with a plan, and if it’s working try and figure out how to make it better. If its not working then try and figure out how to make it better. You can apply this plan to just about anything you do, just remember - stick to the plan.

-Mark