Stick to the knitting
#CapitalAtRisk
Bigger, better, faster, more!
Entrepreneurs are naturally optimistic folk. Always thinking of the future, excited by new things and never satisfied with the status quo.
But, sometimes, could there be a case for sticking to the knitting?
I met a founder recently who had started their startup in 2022 and, although it wasn’t rocket science, it had grown like a rocket ship. The company was raking in revenue because it had great customers who loved the product, and the customer numbers were growing too.
After telling me that the founder then went on to say how they were going to add in artificial intelligence, machine learning, new market segments, expand abroad — all in the next few months. That would take a big fundraise and…
I didn’t quite stop listening… I’m also excited about new things and the future, but I did think; if it’s working so well then why not just keep doing that? Compound that growth, hoover up the revenue, keep costs under control and be in a stronger position to fundraise later down the line, if ever.
Simple not simplistic
It takes a certain kind of confidence to stick to the knitting1. Founders think investors want ever-expanding scope, markets, tech and lots more new stuff. And yes, sometimes we do, but many, many founders would be better off if they looked an investor in the eye and say, “What we do is pretty straightforward. Our customers love us, we make a load of revenue and we’re growing. So we’re just going to keep doing that”.
Thanks to John Graham for the discussion around this topic.
Important: None of these posts are investment advice. If you are thinking about investing you should seek the advice of a suitably qualified independent advisor.
Nick Wheeler first told me this phrase. He said all he needed to do was sell 15-20% more shirts this year than he did last year. And that would come from ‘focus, focus, focus’.