From Point A to Point B
I ran into this graph the other day. It gave me an opportunity to reflect. Swamped by the months-long bubble talk, I find it somewhat refreshing to get back to the basics, the micro- a typical startup’s journey itself.
On a conceptual level, we seem to understand the famous Startup Curve. But I find this graph better, perhaps in a more simple yet unintuitive way, to capture the early phase of startups. Most likely, it occurs on a regular/irregular base even to a later stage startup.
From 0 to point A,
that’s the phase when you feel like your hard work equals to the progress you have made. You are hopeful, determined and excitedly pitching angels and seed investors of your dream. You are making noticeable progress.
Between point A and point B,
it really f*cks with founders’ mind because it’s so counter-intuitive. And investor tends to either lose money or miss big opportunities at this stage. This is the hellish grinding phase. At this phase, you feel like the world is coming to an end. Game over. Because you feel like the more effort you put into the product/company, the situation seems to keep getting worse. You started doubting, not just about the company, but about your worthiness as well. A lot of founders would give up before they can reach to point B. But the ones with stubborn convictions survived and strived. They are the rare ones.
It’s typically hard for investors to step in at this phase as well since every pattern-matching signal is screaming at the investor’s face — “The ship is going down, GET. OUT!”
However, this is an important phase to set mediocre investors from the great. The great ones have conviction in the founders, just as the founders have conviction in the company. While the mediocre investors are busy being overwhelmed with the negative outcome and blaming how they got into this investment at the first place, the great ones persist.
Yet it’s still risky. A startup could very well not be able to hit Point B for thousands of reasons. But IF it does, a supportive investor can gain the best rewards, financially and emotionally.
It requires courage, trust and conviction on both sides to make this work.
Welcome to the promised land! Something worked!
Point B is the tipping point that we often associated with “black swan event” or “exponential growth” — it’s also unintuitive yet it’s very magical. At this point, expect you would get a lot of VCs cold calling, emailing and trying to chase the next big thing. It’s all good. Take advantage of that. But also be very mindful and careful that choose the investor you have the most trust with, because, who knows, the circle might repeat itself again. From Point A to Point B.