And now, you’ve got to keep it all going. You’ve got to keep all the plates in the air as you drive everything to the next level.
In part 2 of this three part series, here’s what mattered in year 2 of entrepreneurship – and what I realized I didn’t need to bother to think about.
The Second Year: What Matters
Fueling Sales. It’s at the top of the list for a reason. You should still be sales person #1. At the majority of sales meetings, calling customers, finding opportunities. Sales momentum fuels every other part of the business – and the ability to attract more customers, investors, talent and media.
Your First Capital Raise. Find GREAT investors to work with. People who are not taking advantage of you. People who believe in your mission, aligned with your trajectory. Who will set up your financial structure to support your goals – and not in ways that’ll make raising future rounds more difficult.
Finding A Great General Counsel. Our general counsel has been with our company since our first round of funding. A great general counsel is one that gives you terrific advice (both legal and business advice). Look for someone who is sensitive with his or her time and billing, and who will be honest when something is falling outside of their expertise. You want someone who pulls in an expert when they’re unable to help.
Hiring Your First (Junior) Employees. We talked about this in part 1 of this series. Building a solid company is going to require an exceptional leadership team. In year 2, you’re likely still too young to attract that kind of talent (or for that kind of talent to thrive in your company!). Focus instead on smart, driven employees that can wear many hats, who are interested in scaling with the organization. Don’t promise high-level titles as you’re likely going to hire above them.
Learning the Business. Because you have a junior team, you should still be involved in every function. You’ll learn the business UP and DOWN. I still know all the tiny grocery chains across the U.S., I how product gets mixed on the line, I’ve taken part in every tradeshow we attend. Managing the team and business today, it provides a crazy level of context when issues arise or decisions need to be made. You know what your team is facing and have a sixth sense of contributing factors.
Identifying Key Partners. Year 2 is the point where you need to identify what partners are key to your business – and fight like heck to get them onboard. In the food industry, having a stellar broker is critical. We made a deal with ours to represent us nationally early on – and it’s been a partnership that has fueled our growth for the past three years. Other partners may also be relevant – PR agencies, digital media partners, etc. Identify who you need to help you grow and get them involved.
Validating Your Financial Model. Remember the financial model you put together in year 1? How is it working? What assumptions were wrong? Go back to what you set up, anticipated, forecasted and planned during year 1. Make sure your business still works. Be ready to address what is not. You’ll likely fine-tune your model for the coming year ahead based on what you gleaned from evaluating year 1.
The Second Year: What Doesn’t Matter
Fancy Offices. Don’t you dare think about unlimited free snacks, or fancy desks. You don’t want your office to be a dungeon (that scares off talent!), but find an affordable way to make a comfortable, fun place to work, in a convenient location. To date, our office is near 100% Ikea. There is no good reason desks should cost $900.
Doling out C-suite or VP titles. Resist the mindset or idea that you need to stack your company with C-level and VP talent in your 2nd year. Or, that the young hires you brought on board should be automatically advanced to these roles. Focus instead on where and what you can do today to attract high-level executive talent in the future. You might not be the right fit for these hires today but now is the time to set the stage.
Profitability – Prioritize Growth, Growth, Growth. Momentum brings more momentum. In year 2, keep your eye and efforts centered on growing – customers, revenue, distribution, partnerships. Be sure you’re also laying the right foundation for your scale so that as you grow your business can support it.
Anything Capital Intensive. Stay Lean. You’re going to need that money to make sure you reach a big milestone before you need money again. If an issue or problem arises between now and then, you’ll have the means to solve it. Be conservative and careful with your money at every turn.