business strategy

[Pekka]

Do you know anything about business?

I'm in a situation where I've returned from few pitching events and got follow ups from VCs, the point is, they want to invest (what seems to me) a lot of money, considering it is a start up. So I've got infrastructure from my partnership with another company, that also provides my developers and part of the management. So on top of this, we're running test marketing soon and looking to pass a million euros in revenue within the next 9 months. Most of it will be sucked by product development though.

The point is... as the founder, owner and CEO, I think I should step down from the CEO position and be more of a founder and management, because I do dig operational side of it. The point is, it is still a hot start up, and basically I can't afford all that VC money. The company is not for sale (until it reaches Godless amounts of value), and I don't want to give up control, as this business is based on high substance and knowledge.

This is what I'm thinking: I should get a new CEO who is a superstar with start ups, let that person run for a year or two until we reach our potential globally, or then we don't succeed and that's it. Given it succeeds, I'll just change the accelerator team into a more experienced CEO and pay bigger points. In two years time, given that we reach the first million in some months, projection is pretty good so THEN we could accept VC money in and keep the control regardless.

What do you think? When is it the right time to get VC money in? How much is needed? We can gather up to one million more from angels and ourselves, but we're looking to hire up to 20 people before the end Q1 in 2010.

As you can see, I don't know much about these things, I do know about the product and the service though. Business? I have no clue. You? What should I do? For example, I've been invited to a multinational next week to discuss what they'd like to do (they want a part of it), and I'm sort of not feeling it. They've got money but they don't have the mindset for this venture, and I think they might also lack in the fortitude of the testicular side as well.

[DaShi]

I wouldn't accept money from the Viet Cong, if I were you.

[BeBMan]

So is it another Vietnam?

[ZEE]

Do you know anything about business?

I'm in a situation where I've returned from few pitching events and got follow ups from VCs, the point is, they want to invest (what seems to me) a lot of money, considering it is a start up. So I've got infrastructure from my partnership with another company, that also provides my developers and part of the management. So on top of this, we're running test marketing soon and looking to pass a million euros in revenue within the next 9 months. Most of it will be sucked by product development though.

The point is... as the founder, owner and CEO, I think I should step down from the CEO position and be more of a founder and management, because I do dig operational side of it. The point is, it is still a hot start up, and basically I can't afford all that VC money. The company is not for sale (until it reaches Godless amounts of value), and I don't want to give up control, as this business is based on high substance and knowledge.

This is what I'm thinking: I should get a new CEO who is a superstar with start ups, let that person run for a year or two until we reach our potential globally, or then we don't succeed and that's it. Given it succeeds, I'll just change the accelerator team into a more experienced CEO and pay bigger points. In two years time, given that we reach the first million in some months, projection is pretty good so THEN we could accept VC money in and keep the control regardless.

What do you think? When is it the right time to get VC money in? How much is needed? We can gather up to one million more from angels and ourselves, but we're looking to hire up to 20 people before the end Q1 in 2010.

As you can see, I don't know much about these things, I do know about the product and the service though. Business? I have no clue. You? What should I do? For example, I've been invited to a multinational next week to discuss what they'd like to do (they want a part of it), and I'm sort of not feeling it. They've got money but they don't have the mindset for this venture, and I think they might also lack in the fortitude of the testicular side as well.

[DaShi]

Have you thought about applying to business school? Or you could hire Drake to run your company?

[Pekka]

No I don't have time to apply to a business school. I'm already the person responsible for the basic set up, the product, the service, in other words the substance. What I need is ... not to waste years in school to learn what my best options are in a situation like this.

I see all these start ups going for venture capital, while I think in my case it's not the right time as we've got angels that allows us to run for a year more already. All I know is that my way of doing this is fast; it's either success fast or lose fast. It's a fast business, growing one, or not at all. The product and service itself is about... like of course they're competing against other products and budgets, but this is convergence tech and first of its kind, so we're facing a risk where we lose to other players if they adopt the same service and already are well established. Because the product is SIMPLE. Very, very simple. So we need to run with it fast and dominate the field, if we're slow, it's not going to work in the long run. That's why we're in a bind with VCs. We could definitely use the money to gain more momentum.

edit: I already have 3 people, who are more than experienced and skilled in what they do. But we're trying to penetrate a market with high risk/high yield proposition. We are confident in our substance, however, I think it is either success or failure, and this depends on the go to market strategy we choose. We can't simply claim its aggressive, there needs to be a more specific plan that actually fits this market and our product. We have ideas, everyone's got ideas. Some of us even have experience, with similar start ups, management etc. But this is crucial, so I'm all ears for suggestions.

[DaShi]

You'd need to give a lot more information about your business for anyone here to make good suggestions on how to run it. However, I think you best bet is to do as you said before, find someone with the acumen to run the business side of this thing. Since you're an unproven startup, it will be hard to get a big name, who is willing to put his reputation on the line for it. So you'll have to make due with someone who may still be developing their skills and reputation, just as you are. Also, this will have to be someone you trust a lot.

[Krill]

Oh god what the **** are you doing back?

[Lorizael]

Oh god what the **** are you doing back?

Being awesome. Now shut the **** up and be nice.

[Krill]

Hey, I didn't say I didn't like Pekka I just thought he was being awesome by making the scumbag bankers pay for their mistakes or something.

[Lorizael]

Well. Carry on, then.

[DanS]

VCs tend to offer contacts with potential management, so that's a plus in their column. They'll also take a huge chunk of your company for the money, which is a big negative in their column.

My sense is that you will get a much better deal with friends, family, and angels in this first round. These folks won't give you more money than you need. This may be the difference at the end of the day between having control of the company and not having control. But $1 million will not get you to 20 employees in 2010 Q1. Well, not with any "runway."

Even if you don't take VC money at this time, make sure that you have your business plan updated, because you may need to go to them on pretty short notice.

Regarding management, do you really need high-powered management at this time? Can it wait for a while?

[Sirotnikov]

I think your decision is a very smart move.

I think that you should hire a professional CEO who would run the company and people, while you remain the owner + visionary / technical officer.

[Japher]

If you want 20+ employees by the end of Q1 2010 I would at least start hunting for a CEO now with the expectation that you won't find the right guy/gal until the end of the year, which will probably be a good time to bring one on. You definitely need a builder who shares the same vision for the business as you do; is it to build and sell, or build and develop?

Congrats on the start-up, by the way, it takes a lot of balls. Something SC always had.

I would take VC money until I absolutely had to. Then it would be in the form of convertible shares / penny warrants leveraged so you always have a majority of the shares. The only thing you really have to leverage, assuming here, is the IP, so you want to gather as much as you can before offering to sell some of it.

Congrats and good luck Pekka. If this is successful you should definitely apply to be a Kauffman Fellow, unless the bug gets you first. Oh, and don't neglect the family.

[Az]

Do you know anything about business?

I'm in a situation where I've returned from few pitching events and got follow ups from VCs, the point is, they want to invest (what seems to me) a lot of money, considering it is a start up. So I've got infrastructure from my partnership with another company, that also provides my developers and part of the management. So on top of this, we're running test marketing soon and looking to pass a million euros in revenue within the next 9 months. Most of it will be sucked by product development though.

The point is... as the founder, owner and CEO, I think I should step down from the CEO position and be more of a founder and management, because I do dig operational side of it. The point is, it is still a hot start up, and basically I can't afford all that VC money. The company is not for sale (until it reaches Godless amounts of value), and I don't want to give up control, as this business is based on high substance and knowledge.

This is what I'm thinking: I should get a new CEO who is a superstar with start ups, let that person run for a year or two until we reach our potential globally, or then we don't succeed and that's it. Given it succeeds, I'll just change the accelerator team into a more experienced CEO and pay bigger points. In two years time, given that we reach the first million in some months, projection is pretty good so THEN we could accept VC money in and keep the control regardless.

What do you think? When is it the right time to get VC money in? How much is needed? We can gather up to one million more from angels and ourselves, but we're looking to hire up to 20 people before the end Q1 in 2010.

As you can see, I don't know much about these things, I do know about the product and the service though. Business? I have no clue. You? What should I do? For example, I've been invited to a multinational next week to discuss what they'd like to do (they want a part of it), and I'm sort of not feeling it. They've got money but they don't have the mindset for this venture, and I think they might also lack in the fortitude of the testicular side as well.

Not following, brah. So you want to step down from being CEO, because you enjoy the Technical and Operational sides too much? Just get a good man who can be a super solid CFO ( with a solid management accounting background also ) , get solid legal advice, and that way you can still steer the boat, and micromanage Operations and Technology.


You can be the president and have a CEO also but that's, that's too much management....

Also, brosefus, I am in the Job Market also, with a science degree and a year of bussiness school