Avoid the pitfalls of investment — The Lottery Dilemma

James Routledge
Mar 31, 2015 · 2 min read

Investors are the blessing and curse of company progression. With so much Seed and Series A funding now in the market, why are so many businesses unstuck?

Receiving investment starts with a feeling; you've got it, everyone’s hard work paid off. “Now we can add those features / build the product we know will disrupt!”

But reality hits… you agreed metrics with your investors, hard deadlines are now in force… excitement fades.

Now I've painted a pretty extreme picture above and in truth, it’s rarely quite so bad. Managing investors is about knowing when or why they influence product strategy. It’s now that a crucial mistake occurs to businesses after taking investment.

Businesses will listen to direction from investors, yet you are the experts. Investors acknowledge this by investing; the business MUST drive the relationship!

Most businesses will have agreed a structured a plan over the next 3–5 years. The trick is to understand how to stay true to it while ensuring you show short term growth.

Here your vision will save you

Investor led strategy will always quick-wins, which rarely shares customer focus. Great design involves thinking in leaps not in so called ‘guaranteed quick-wins’. The best way to enable this is to stay true to a longer term vision. Your product in 5 years time with defined metrics that will carry it there.

How will that journey will look in 3 years time? By understanding where your product will be, you can forecast key changes. These metrics movements enable visibility for the change your investors are counting on.

This doesn't mean you cannot take on short term work to move a number. But low hanging fruit rarely leads to product quality or innovation. By structuring around metrics over features over time you offer a stronger position. These types of conversations are key to getting the most value from your investors. It’ll make them happier to, numbers outweigh conversations all the way to the top.

A warning about strategy conflict

Metrics for investment won’t always be the same as those used to steer your vision. Metrics needed just for investment should be secondary to your vision metrics.

My Golden Rule

Be strong on vision and flexible on strategy. Especially when you have investors.

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