When Cash is King, Knowledge is Queen

Lotan Levkowitz
Jun 23, 2020 · 6 min read

In times of crises, we often refer to the phrase “Cash is King”. This saying gained popularity after Pehr G. Gyllenhammar, CEO of Volvo, used it after the global stock market suddenly crashed in 1987. To this, I would suggest one minor addition:

“When cash is king — business intelligence is queen”.

Many often describe an entrepreneur’s journey with terminology borrowed from the battlefield. As a former commander in the Israeli Air Force Intelligence Corps, I learned how crucial obtaining the correct, most-accurate information, before others obtain it may be to one’s strategic positioning. This idea has also been expressed in the ancient writings (with regards to the importance of intelligence in a wider sense):

“The reason the enlightened prince and the wise general conquer the enemy whenever they move and their achievements surpass those of ordinary men — is foreknowledge.”

Sun Tzu — the Art of War

In the past few months, the world has been dealing with COVID-19, and the economic ramifications of our response. At such challenging times as these, startup founders must realize that a different approach is required for their business: it is a time for a “war time” leadership. In this article, I will explain the importance of gathering fast and accurate insights at times of crises, and propose a few ideas on how to transform your organization into a part-time intelligence superpower, without significantly increasing your expenses. As a startup CEO, you must know how to function as a decision-making machine, and for healthy decision-making — you must be reliant on reliable data. As Jim Barksdale, former CEO of Netscape, wittily put it:

“If we have data, let’s look at the data. If all we have are opinions, let’s go with mine.”

Be a Smart Leader at Times of Change

In the early days of your startup’s journey you learn a lot about the market’s dynamics. You gather market insights that later enables you to sharpen your company’s offering and build a strategy that best fits these market’s conditions and positions you for future opportunities. Slowly, you become knowledgeable. You learn to improve based on the feedback that arrives from the market. Every now and then you get your hands on an incredible textbook or meet an industry veteran with tips that connect your thoughts, and help form the right game-plan.

The air starts to clear and you finally have a road-map for your company. Then, with no prior warning — an elegant black swan event appears and turns the whole world upside-down. All of those hard- earned lessons, the market insights that you’ve thoughtfully gathered and the plan you thought to masterfully execute — may no longer be relevant. In turbulent times such as these, you are expected to make faster decisions.Lots of them.

What Information Should Your Company Gather?

  • Market — Is there a change in the priorities of my customers? Are my competitors still able to close new deals? What is my competitors’ cash situation?
  • Customers — Are they still buying? What happened to the sale cycles? Do customers still have the budgets required for purchasing your company’s products? Is the procurement division approving new vendors? Are they changing their work habits? Are any of my internal champions at risk of losing their jobs?
  • Your Offering — Is it still relevant? Is it now more relevant than ever? Are only specific parts now relevant? A crisis is a great time to re-evaluate your offering. Try to understand the new needs and priorities of your customers, the identity of your buyers and the expected impact of your product. You want to prioritize your marketing teams’ outbound actions based on intent signals — as it is better, of course to target potential customers that are still in-market.
  • Organization and Management — What are the back-to-normal guidelines amongst peer companies? Is there a change in the expected compensation of your employees?
  • Future Planning — When is it possible to go back to previous behaviors (e.g. international traveling)? What are the realistic projections that we can infer for your company’s work plan?
  • Fundraising — Can we take advantage and raise money, delaying the next big round? Which deals have actually closed on such days? What are the actual valuations? How does the investment process look like these days?

How to Add Reconnaissance Agents and Stay Lean?

Good news! You already have reconnaissance agents on your payroll. Remember the early days of your company, and how every few days you found a key insight that really helped you add another piece to the puzzle? You should spread this mentality of survival-learning to your entire team. But how?

  • Define Questions — Outline a few key questions that will help your decision-making then share them with your management team. Define a leader for each research area. Encourage staff with access to relevant people outside of the organization to gather the most important insights according to the proposed questions.
  • Transparency — Transparency with all of your staff members is crucial. You may consider to start a broad forum that will set the business intelligence targets for the entire team in a transparent manner, with constant updates. Gather this forum on a periodic basis until you feel comfortable with your new market understanding. The broader the composition of your forum, your chances for interesting serendipity moments will only increase.
  • Information Sharing — Like in the majority of highly-efficient intelligence war rooms, sharing the most updated status and news is of utmost importance. Get yourself and your leadership well-acquainted with your BI/CRM tools, a lot of information is hidden there. You might set a repository/spreadsheet that gathers all the information and highlights the main takeaways. It will help get everyone up-to-speed in minimum time. It will also help you to guide your people to the right targets.
  • Increase Your Friction — allocate more time than the usual to talk with other founders, and investors that are not involved in your company. Talk with industry leaders on a regular basis to get their perspective. Ask your service-providers about your results and projections relative to other peers.
  • Train and Orient Your Agents — Your board members, your advisors and your service providers all have a strong interest to help you: your success is theirs. They also have broader perspectives as they spend 99% of their time outside of your company and may encounter the missing information that you’re seeking. Guiding them with the open questions that you have would help them to gather the right pieces of information and market intelligence tailored for your most pressing needs.
  • Red Team & Competitors — Allocate few team members that will be in charge to analyze and monitor your competitors behaviour. Look at their publications, talk with potential customers and learn what they hear in the market. Talk with your competitors as your cooperation has never been so critical.
  • Eyes on the Prize — While allocating resources and attention to gather precious information, you must not forget your main target is to build your company and to keep solving market problems. Your adventure as an intelligence officer is just an important attribute that you attain, but you are still captain and your responsibility is to steer your company safely into harbor.

Past crises have taught us that the companies that will emerge stronger from the downturn have the greatest chance of becoming tomorrow’s market leaders. Enriching your organization with quality data, which will help your decision-making processes, will give you a great advantage in the race.

Good luck, and stay safe and healthy!

Grove Ventures

Grove Ventures specializes in early-stage, deep technology…

Grove Ventures

Grove Ventures specializes in early-stage, deep technology investments. We invest in people first and are committed to creating value by utilizing our cross-industry interpersonal networks, strategic partnerships and extensive industry experience.

Lotan Levkowitz

Written by

General Partner @ Grove Ventures

Grove Ventures

Grove Ventures specializes in early-stage, deep technology investments. We invest in people first and are committed to creating value by utilizing our cross-industry interpersonal networks, strategic partnerships and extensive industry experience.

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