Football fan or not, you probably had to be hiding under a rock or hibernating in a cave if you haven’t heard about the European Super League. About a month ago, 6 elite clubs in the UK along with the likes of Barcelona, Real Madrid and Atletico Madrid from Spain and Juventus, AC Milan and Inter Milan from Italy all joined to what is now being called the “Dirty Dozen” to form a breakaway league. There was even space kept for a few more additional clubs to join and that the league would be started ASAP. Exactly 48 hrs later, a month to the day, it all famously came crashing down.
The VC and the capitalist in me was able to clearly see the rationale of it all:
- Create a league where only the so called “elite” play and hence you are the judge and the jury
- No unnecessary need for qualification, you get to play every season
- The League has the best teams in the world, hence it augurs for better quality of football (and the associated drama, on and off the pitch)
- TV and commercial rights can be sold at a massive premium implying more money, now and long into the future
- Money money means greater ability to buy better players which means better football!
It just makes perfect sense!
Well it’s not that straightforward is it? As a Manchester United fan, my first reaction was that of disgust, disgust that they chose a time like this when the world is dealing with a devastating pandemic, when even large clubs are struggling to make ends meet, when small and large institutions are trying to choose humanity over profiteering. Clearly I was biased by massive amounts of emotion but football is about emotion, about passion, about loyalty and uniquely, about legacy and a long standing rich history.
But I think the foremost feeling among fans, players, coaching staff, administrators was that of betrayal
The whole edifice came crashing down within 48 hours, the collective negative backlash from pretty much everyone who was not part of the decision making made it impossible for the people with power to look for support, they had to take a U turn.
What can we learn from this?
As an early stage VC, I work with founders who are operating under enormous stress, constantly processing information from multiple sources, drinking water from a fire hose to try and take decisions, pivots and key business decisions, often with incomplete or partial information. It is not an easy job and it is not one that I envy. There are a few things that we all, especially early stage founders can keep in mind as they navigate their companies. If you are a founder who is on the cusp of taking a key decision, a pivot that will change the direction of the company, change the core value proposition for your users, employees and investors, then here are some pointers worth thinking about:
- Users/Fans: All clubs exist because they have fans, all companies exist because they have users, because users spend time and money on your product/service. I cannot stress this enough but most of the answers lie with your users, ask them and they will tell you, their feedback and insights are critical to your existence and hence keeping them and their feedback as part of your decision making process is absolutely critical!
Raising capital is not a validation of your business model, it simply means that a few investors share your vision of the future. Users spending time and/or money on your product/service is the one true validation of your business model and product-market fit
- Coaching Staff & Players / Employees: One of the standout pieces of evidence that came out from the European Super League debacle was coaching staff and players also coming out in public to condemn the unilateral decision taken by a few in power. Usually, employees for fear of retribution and their jobs do not come out to publicly condemn their employers, but in this case, the decision was so dramatic, so insensitive, so unilateral, that they too spoke out. It is important to take your employees in confidence, hear their views and take their buy-in. It is unlikely that ALL of them will share your vision and thats fine. What is important though is that you have an open transparent relationship with your employees who work as hard, if not harder than you and communicate critical decisions and be willing to take feedback.
- Shareholders / Investors: This is the critical third piece of the puzzle that needs to be brought on. If you have investors, especially ones with VETO rights, then it is mandatory that you bring them on board. But even if you don’t, I have always encouraged founders to keep an open line of communication with ALL their investors, angels all the way to VCs on the Board, keep them abreast of all developments — good news and bad news.
The last thing investors want are rude shocks/surprises, give them good news fast but give them bad news faster
While it is always prudent to take most decisions sans emotion, especially business decisions, as human beings I do not think that is possible. Early stage founders have many stakeholders to manage and while it is a daunting task, some of the best founders have a way to not only “managing”, but also influencing these very same stakeholders. They have this innate skill of bringing together their co — founders, early employees and investors on the same page, this unique ability to get them all to share a common vision & goal and I can tell you, they are the ones who most often go the distance.