How to Help Your Startup Take Flight
Reid Hoffman was right when he said:
“An entrepreneur is someone who jumps off a cliff and builds a plane on the way down”
Most entrepreneurs start with nothing more than an idea and big ambitions for success, while facing terrible odds. While free falling and with zero margin for error, entrepreneurs need to complete a series of highly complex maneuvers and assemble all the parts needed to create a machine capable of flying before running out of space, which in today’s tech startup environment we call: “runway.”
Running a startup and getting your company off the ground before it runs out of “runway” requires clear vision, quick thinking and an ability to adapt under pressure. But with the right balance of skills and teamwork, your company will reach new heights of success!
Before we jump off the cliff and start to build the plane, let’s review some key concepts and terminology that are commonly used to describe the different phases that startups go through while in the various stages of “taking flight.”
The term “runway” is a common expression to indicate how much cash a startup has left before it runs out, at which point, assuming that it hasn’t raised another round of funding, it will run out of capital to keep the venture flying and crash to the ground.
And this is exactly the point: once a startup raises capital (usually in the form of a seed round), it has already “taken off.” It might not be a huge takeoff with booster rockets that will propel it into the sky at supersonic speeds, but it’s airborne. Just by getting some amount of seed capital, the founders have gained interest from investors and bought themselves some time to show that their business idea is viable.
Thus, I think that the term “runway” is more appropriate to be used with early ventures and startups that are being “bootstrapped.” These young companies have not yet attracted VC funding and have not yet fully taken flight. They are still on the runway, trying to gain enough customers or funding to get up to take-off speed. If the entrepreneur and/or the executive team do not raise that first round of funding, they will truly run out of “runway” and won’t be able to take off — and they will crash without ever achieving liftoff.
Once a startup has raised its first round of funding, however big or small, this means that it has attained takeoff speed and has gone airborne.
It doesn’t matter if you only get a few feet off the ground. Once your company has that initial vote of confidence from investors, you are now flying and your focus should shift from obtaining takeoff speed to sustaining flight, gaining altitude and continue on extending your flying time.
Once a plane is up in the air, it can stay there as long as there are no electrical or mechanical malfunctions and as long as it has enough fuel.
The term for an airplane’s ability to stay airborne and travel a maximum distance is “range.”
In the case of startups that have managed to raise that first round of funding and taken off, the most important thing is to remain in the air and to extend their range as far out as possible and, ideally, only come in for a landing when there’s a viable exit strategy (exit, IPO, acquisition, etc.).
For these startups, optimizing their flying machines and flight path is one of their most important tasks.
Note: To test this analogy, think about using these flight terms with existing companies. Would you ever say, “I hope Google, or Apple, or Salesforce don’t run out of runway?” No, you wouldn’t. If anything you’d say, “I hope they don’t crash!” — These companies are already established in the market — they have taken off and are now soaring and you can bet that their leadership teams are very mindful and careful with how they fly them and what flight path they set course on so that they can extend their range for as long as possible. They have long left the runway! And once a company is “airborne,” there are different challenges that arise along the way.
Back to free falling…
Once your startup is “in the air,” it’s time to get busy building your plane. Depending on your situation and resources available, you could end up with a variety of planes: from a small yet reliable single engine one, to a fancy “Porsche of the sky” or a mega-double-decker jet.
Regardless of the plane you end up with, and despite their apparent differences in looks and performance, they all share the same main components that form their bodies and flying instruments and they are all bound to the same physics of flying: should they push their abilities past their limits, the consequences are always the same — they crash.
In a way, startups and planes are very similar — you can think of each part of a plane as having a corresponding team and function in your company , and a malfunction in one component, if not addressed immediately, can bring the whole thing down.
Let’s start by seeing how each component plays a crucial role in enabling and supporting flight (later on we’ll see how mismanaging these components can spell trouble)
· Cockpit (Product & Project Management): From here you get a great view of what is up ahead. You need clear vision and high-level planning to detect early on when thunderous clouds start to form in your flight path so if needed, you can chart a different course (or as startup CEOs say, “pivot” the company).
· Engines (Engineering): They create the thrust that propels the whole plane forward and provides the speed needed for the wings to generate lift and the control surfaces to be able to manage the plane’s attitude. Your startup’s engineering team is the behind-the-scenes engine of your company — without them, you won’t have any forward momentum.
· Wings (Sales, Marketing & Customer Support): They generate lift and allow the plane to remain up in the air.
· Tail section (CXX & VPs): These are the control surfaces. They correct the plane’s attitude. Like the wings, they relay on the engines to generate enough thrust for them to be effective.
· Main cabin (Customers): Your passengers have a destination to reach (a.k.a. “job to be done”) and have come on board your plane so that you can take them there. They’re relying on your startup to keep its promises and give them a comfortable, easy customer experience.
In order for your customers to reach their destination, it is extremely important that your plane flies as smoothly and efficiently as possible.
This requires that all parts function at optimal performance, and in perfect harmony with each other.
Mismanagement, overload, lack of speed, too much speed and other factors can end in disaster. Here are a few scenarios to avoid:
Cockpit (Product & Project Management):
· Trying to see too far out onto the horizon (such as too far ahead product roadmaps) can cause CEOs to miss seeing the thunderous clouds forming up ahead. Unless you hit your next marker you may not reach your destination. So while keeping an eye over the horizon is important, your focus should be on what’s immediately in front of you.
· Relying too much on what the instruments say (also known as being too “data-driven”) and not taking into consideration other factors to get a complete picture of the plane’s attitude. Instead of having a “data-driven” culture at your startup, try the philosophy of being “data-informed” — and taking in a wider array of contextual clues when forming your strategy.
· Bad cockpit management and distractions can cause you to provide incorrect inputs (also known as too many, too frequent product changes) to the engines (engineering team) and flying surfaces (sales and customer support), thus reducing their effectiveness.
· Engines perform best when the air in front of them is clear and stable. And just like the engine in a car, they have an optimal performance power configuration (known in the startup world as “time required to develop new features and bug fixes”): too slow and they won’t produce enough thrust for the wings to generate lift ; too fast and they can stress the wings and flying surfaces causing them to lose control or break apart.
· They can also suffer from power mismanagement from the cockpit (too many, too frequent product changes) or frequent power changes, configurations and inputs.
Wings (Sales, Marketing & Customer Support):
· These parts of your startup “plane” create the lift (sales leads, revenue, user growth and retention) that helps keep the whole company up in the air.
· But without enough thrust (new features and bug fixes) from the engines (Engineering team) can cause these components of the company to stall and bring the whole plane down.
Tail section (CXX & VPs):
· Although they are at the back of the plane, this is the primary course setting part of the plane — where the executives and leadership team set long term goals and make course corrections as needed.
· If the flying surfaces are constantly “course correcting” (changing strategies, chasing initiatives, etc.) they can over stress the entire plane (company), causing stress fractures (burnout) that can potentially lead to structural failure (low morale and high employee turnover) which is what always, ultimately, brings planes down.
Main cabin (Customers):
· Although your passengers are the ones that initially help you to take off by buying tickets and getting onboard (early adopters) and keep you up in the air with customer loyalty and repeat business, if they are not properly treated and managed, they will become dissatisfied and agitated and will choose to switch to another airline at the first possible opportunity, leaving you and your plane empty and lacking the revenue to keep the fuel tanks full and the plane aloft.
In my 10+ years of “flying planes” (working at startups), I’ve seen and experienced lots of technical problems and bad weather, but if I had to provide the “one” reason why most of these ventures came crashing to Earth, it always came down to this: team!
No one part of a plane can fly customers to their destination and do the whole process over and over again in a consistent and profitable manner — a plane is a complex machine with many parts that combine and interact to make a more powerful whole. In the same way, no one person or department within a startup has the power to make the company scale, grow and prosper for the long-term. It’s imperative that all pieces of the company come together and form one single “plane,” with a cohesive team where everyone is playing their part and supporting each other.
It doesn’t matter the size of your plane or how many customers you carry — your startup needs all of its “parts” to be firing on all cylinders and aligned in the same direction. This spirit of teamwork will give your company the best chance of a smooth takeoff, a longer flight range, and comfortable landing (exit strategy) for your founders and employees alike.