Successful startups that struggle with the effects of fast growing companies and building up the right team. Visionary founders that have no ambition to grow and put all afford into workactions and kicker-table. Motivated entrepreneurs that do not know what to do with their innovation.
The MAD INSIGHTS challenge common believes about start-ups and typical ways of doing things. We share our experiences as investors and serial entrepreneurs and give insights into organisations and technical visions in the start-up world.
There are literally tens of thousands of books, blogs, vlogs to teach proper business modelling. It seems there are more people teaching how to create a business model than actual business models being created. From “10 questions” over “10 business models to inspire” to “55 business models” of St. Gallen I find most of it incredibly interesting. But for most companies, especially startups it is not them to decide.
The first and foremost question is: “Whose problem do we solve?”
The second question you ask the answer of the first one: “How do you want your problem being solved?”
And there it is, your business model. It will not be created on your whiteboard, not in your discussions with family and friends and definitely not by the advice of your investor.
It reveals itself in the interaction with your actual and potential customers. If it does not, you might consider the non-existence of a valuable business model. The truth is, that most models only work on flipcharts and excel.
Why Financial Planning & Analysis Is Different From Accounting
In German speaking regions most financial tasks are summarized in “controlling” and then they are given an attribute of strategic and operative controlling. But in fact they are fundamentally different and that is why we prefer to call them by different names, i.e. accounting and financial planning and analysis (fp&a). Controller hate being called accountants but I prefer working with angry controller than fundamental flaws in the financial steering setup.
Accounting is focused on an accurate picture of the past. Accuracy is far more important than speed and nothing you can trade off for something more important.
That said, startup management is all about predicting the future with a very loose connection between the past and the future. Planning for the upcoming 12 months is not based on the past 12 months. Guessing the unknown within a range of 25-50k is more valuable than staying in the known territory and predict it with a max 5k error.
It requires different mindset and often different people. Hence a successful startup CFO is a master of fp&a and rarely a master in operative controlling or accounting.
INSIGHTS into MAD Things
Wie zwei Acceleratoren in Tirol durch die Coronakrise navigieren
We at Mad have a longer history of criticizing the KFC Culture (Kicker, Fun and Cooking), which is so prevalent in many startup hubs. We like to play kicker, we love to have fun and we love to cook (we are damn good at that, btw).
BUT, you do not build a successful company around that. Many startups now fight with the problem that their cultural narratives, their team bonding breaks down. Disappointed, lonely guys hanging around in their Corona home offices desperately trying to find alternatives to KFC.
Instead, they should have realized that customer focus, inclusivity, permanent change are the foundations of a successful high-growth organization. Each of these values survive the Covid19 lockdown easily. Such teams react quickly, set new goals, find new opportunities, embrace the quick change of the roadmaps. And find new ways to celebrate, to interact and to have fun together.
If the CEO and HR are busy with maintaining KFC, because that’s the way their cultural priorities are set, the startup is doomed.