The best advice startups will never follow

Posted on January 20, 2022 by Dave Berkus

Dave’s note:  This is a reprint of a 2015 insight that seems to have struck a chord with investors and entrepreneurs. None of this advice has changed…

Let me tell you a few short hair–raising stories of entrepreneurs who have raised money and regretted it later.  Here are some rules that entrepreneurs almost always ignore to their future peril.

Don’t take money from relatives who can’t afford to walk away without remorse.  

Do take money from experienced family members only after you ask them if they are sure three or more separate times.  By the third time you can be sure that they aren’t being overly emotional or feel they can’t say no.  Also, if things go south, they are more likely to remember that you weren’t pushy and that you gave them three or more separate opportunities to say no.

There’s a common expectation among entrepreneurs that seed money from family is great – letting close relatives in at the ground floor.  The problem, of course, comes if the business fails.   Some relatives believe that a family bond is an insurance policy, and that all investments or notes will always be repaid, no matter what the circumstance.  Consider whether the family member being asked to invest has the capacity to walk away “happily” from a lost cause.

Don’t take money, especially start–up loans, from unsophisticated investors.  

I was a co–lender and assumed the chairmanship of a young startup where the entrepreneur’s cousin also loaned money under the same terms.  When the business failed, the cousin sued his own relative, me, my wife (who didn’t even know the names of the players), and even my family trust (an estate planning vehicle with no separate assets.)  It took several times the value of the cousin’s loan in legal fees and settlement just to extradite my interests from a suit that had no merit – but would have cost hundreds of thousands more just to get to trial.

Do take loans from sophisticated investors only after you have tried everything to get them to purchase equity…

[Email readers, continue here…]  …and always with clear wording on automatic loan extension if you are making progress but need additional time to meet the full set of goals.

Don’t talk yourself into a high valuation for the first round of financing for any reason…

…even if your hair is on fire and the idea is worth billions.   This lesson is one that is not only hard to teach, but ignored by entrepreneurs on a regular basis.  Early investors who don’t have the experience to compare value or ask tough questions accept the word of their entrepreneur as to valuation.  Later investors will enter that picture only after insuring that valuation is reasonable and comparable to other opportunities for their money, but often will walk from a deal if the valuation for earlier investments was so high as to cause pain for that cohort.   It’s just not worth the effort to argue with early investors when there are so many other deals calling for the sophisticated investor’s money.

Try not to take “dumb money” where the investor or lender supplies nothing other than cash.  

There are five attributes of a great investor (see my book, “Extending the Runway”), the money they offer at reasonable terms, their ability to guide you with advice about the context of your business plan in relation to the marketplace, their experience in the process of growing a company, their knowledge of how to best use corporate resource time, and finally, access to their extended relationships with others who can help speed growth.  Those four additional assets are worth as much or more than the cash offered.

Don’t walk away from rejection by experienced investors thinking that they are stupid or just don’t get it. 

Most of us in this world of early-stage investing have seen thousands of proposals, good and bad.  Even if we don’t seem to get your brilliant idea and buy into its value, we may be comparing it to previous lost investments or industry experiences far beyond yours.

Do ask three sets of progressively deeper questions to get down to the heart of why they didn’t invest.  

Every contact should be a learning experience. And those with sophisticated investors are doubly valuable.  A well–phrased ‘no’ could well be a step toward a correction of course and a later ‘yes.’

Posted in Ignition! Starting up, Raising money | 2 Comments

If you’re lucky enough: Celebrate your exit!

Posted on January 13, 2022 by Dave Berkus

How might you view your successful exit from the company you have spent so much effort to build?

You’ve worked hard for years to reach the payoff, and the money sure looks good as you contemplate the wire transfer to come, and then watch your bank account fill to a level you only dreamed of during those rough cash flow years.  You might even allow yourself to admit that you almost lost it all several times during this long run, and that only you knew how close you came to the abyss.   But you did make it, and that’s what counts.

Your set of complex emotions

Whether the exit was as large as you hoped, or whether your goals of taking care of all the people who helped you get to this point were realized, the exit itself generates a complex set of emotions in all of us.

First there comes a sense of relief and maybe guilt.

You no longer need to worry over daily cash or threats to your net worth.  Then you experience a feeling of guilt when you realize that not all your early associates share the same outcome, either financially or perhaps with their continued employment with the buyer.

Then the money…

Then you focus on the money in your bank account, smiling at the accomplishment of accumulating assets that are tangible and can be valued, perhaps for the first time.

[Email readers, continue here…]   But what about the pause to celebrate?

What most entrepreneurs fail dramatically at is to celebrate the moment.  To celebrate with those who took the journey with you, with those closest to you who sacrificed as you spent those long hours away. To celebrate with your suppliers who helped you, especially during the rough times.  To celebrate with your customers, who worry over continuity and look to you for assurances that the transition will not negatively affect them.  And to celebrate for yourself, for making it all the way to the finish line.

…and consider those whose exits were not so great.

Not many founders or entrepreneurs do experience the success of a favorable sale of the business they dreamed would make them rich.  Many fail multiple times.  Some fail in the first year of the attempt.  Others are diluted by subsequent investors to the point where there was nothing for them to celebrate at all in a sale.

So, as you prepare to turn over the reins to another; to separate from a business that has become a part of your being, it is time to think of nothing but the good done, the examples set, the positive company culture you leave behind.

Remember the lessons learned, and friendships gained.

As you begin to focus upon the future, remember the emotions, the lessons, the lasting friendships from the past.  I often advise managers, CEOs and entrepreneurs always to part on a positive note and never burn the bridges of any past relationship.  You’ll never guess whom you’ll meet in your next act, and how they will be able to contribute positively to your next success.

Take time to reach out.

So, celebrate your exit by reaching out to as many of those who’ve helped along the way as you can.  Close this chapter of your life on the highest note possible.  Take a long breath.  Then do as all good entrepreneurs do.  Start dreaming of the next big idea.  Take with you the best wishes from those in your past and build upon the education you received with this effort.

Here are some thoughts for you.

Write a book. I did.  Write a handwritten letter to someone who helped you make it to the finish line. That extra effort will shock and please them.  Call an early key employee and take that person to dinner as a thank you for those hard times.

Hit the beach.  Pay attention to your family.  Think about investments and tax efficiency.  Go into a mental dark room and dream about your next act.  Take a long breath, or weeks of long breaths. Exhale slowly.  This is what a moment of reduced pressure and responsibility feels like.  Savor that moment.

Then if it strikes you as right, start the process all over again.  May you have only the greatest success in your next act, whatever that is and wherever it takes you.

Posted in The liquidity event and beyond | 1 Comment

VC investors: Don’t be greedy even if you can.

Posted on January 6, 2022 by Dave Berkus

First, the marginal exit event:

Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders.  Especially when outside investors, venture capitalists or angels have put in substantial money, and the sales price is not enough to give them a reasonable return for the time and money invested, these investors can be – in a word – greedy.

The order of liquidation or payout

Most sophisticated investors will take either a promissory note or preferred stock, both of which come before founder or management stock in a sale or liquidation.  Promissory notes come before any equity, and most late equity investments come before early equity investments, even of the same class of security.  This makes for some head-rubbing when attempting to calculate the return on investment with a proposed sale.

…and there are those accumulated dividends.

Further, preferred stockholders can be recipient of accrued dividends in a sale or liquidation.  A rather common but small dividend rate of six percent becomes a massive amount after seven years, almost half again the value of the original investment.  And some preferred investors have participation rights, where they take all the above amounts, and then also convert their shares into common stock and participate again alongside the founders and option holders.

Sometimes it takes a court case to unravel onerous terms.

It is in this combination of possible methods of amassing a return that greed can become a significant factor, so much so that the courts are sometimes stepping in to void some of the most onerous terms of investment agreements when challenged by those locked out of payment in a sale.

Here’s an example that will make your heart skip a beat.

[Email readers, continue here…]  Take a situation where the VC investors finally see the chance of a return after ten years, with participating preferred and fifty percent of the ownership after several rounds.  A marginal sale at twice their original invested amount could yield a starting value of eighty percent of the sales price due to the VCs (fifty percent invested plus accumulated dividends for ten years at six percent which equals thirty percent of the sale price) and then fifty percent of the remaining twenty percent after participation. The result is that the preferred shareholders would receive ninety percent of a sales price (nearly was double their investment), compared to the remaining ten percent shared by the founders and all others, including angel investors and option holder-employees.  Ouch!

No-one complains if the sales price is ten times the investment since there is plenty to go around.  It is in these marginal sales that the formula distorts returns so badly in favor of the investors.

Sometimes these investors volunteer to be fair to all.

Fortunately, and perhaps because the courts have not looked favorably upon these overwhelmingly one-sided outcomes, many VCs will voluntarily forgive either accumulated dividends or participation in a marginal sale, especially if the sale is cultivated, planned and carried out by the efforts of the common shareholders including the founders.

One tool often used: the “cutout” for management

Although many VCs are openly against allocating a “cutout” for management in marginal sales, practically speaking, management must be taken care of in marginal sales, or the sale might not happen at all.  In a cutout, some percentage, usually fifteen or twenty percent of the total sale, is allocated to management to continue operations through the closing period and help in closing the sale.  That further reduces the amount available to founders if not still in the ranks of management.

Here comes the headline:

So, this advice is directed to those investors.  Don’t be greedy even if you can.  You will not be moving your IRR needle enough by grabbing a few extra dollars in a marginal sale, but you will incur the wrath of a number of stakeholders who would be more than willing to spread the word far and wide about your greedy ways.  And that reputation will last for a long time in the entrepreneurial community.

Conversely, I have praised and seen others praise VCs who volunteer to eliminate participation clauses even before knowing the ultimate sales price in a deal.  It is those investors who receive the loudest accolades since they have given up a right for the good of the rest of the investor and management community.

Posted in Depending upon others, The liquidity event and beyond | Leave a comment

My hard-earned lessons from negative exits.

Posted on December 30, 2021 by Dave Berkus

In my life as an early-stage investor, I’ve been closely involved with so many businesses, there were bound to be numerous stories of  actual and near failures, hopefully from which to learn lessons for all of us as we go forward.

The emotions we feel when “turning out the lights.”

Several times in my investing life, as the final board member making the arrangements to dispose of remaining assets, I have literally been the one to turn out the lights, carry out the documents, books and records to my car, and become the only remaining contact between the failed business and the investors, bankruptcy court, or creditors.  I volunteered to do this several times when there was no-one else, even the founders, to do this.  And these were emotional experiences to say the least.

We ask ourselves “what if?”

In aviation circles, we read in our pilot magazines about “Never again!” or “I learned about flying from that.”  Pilot-authors tell their stories in the first person, and all of us readers slow down to think while reading of these events, wondering “what if” or whether this could happen to me.  And if it did, would I have reacted differently?  Most importantly, we think: ‘Now that I know this, would I behave differently if it did happen to me?’

How about the entrepreneur -founder?

Professional investors rarely attach a red letter upon a failed entrepreneur.  In fact, if that person can tell their story and relate the lessons learned clearly, there is a positive response many of us will make to the next pitch from that person.

Investor pattern match

[Email readers, continue here…]  We who invest look for patterns from previous experience.  Some of those patterns help us to spot and avoid problems we have seen play out in the past, often to disastrous conclusion.  We learn to worry over obsolete inventory, too rapid hiring, failure to spot industry trends that make an offering less attractive, and so much more.  Most of us can tell specific stories of losses that led to these expensive and gut-wrenching lessons.

Here’s a near miss that just happened.

I just helped an entrepreneur to consider reorganizing his young business from being a value-added reseller into a software and consulting company.  It would not be handling the expensive hardware that is part of its required sale at all, other than to recommend alternatives and charge for coordinating the purchases of differing supplier products, oversee the installation. It could then charge for setting up, integrating, and training the company’s software, all because its customers would not know how to do any of these important tasks.

This follows from my previous insight: “Where there’s mystery, there’s margin.”

Asa result, the entrepreneur could avoid a fundraising effort, reduce working capital, make friends with the salespersons of multiple companies that could supply leads and references, and become instantly profitable.

Some fatal elements that might become only a near miss.

So, what if that startup could not have raised funds? What if it had a hiccup in collection of payment from a large hardware order?  What if the hardware manufacturer had serious problems with product quality on site?  All these things which could have driven the company out of business when betting very large amounts on other companies’ hardware would be avoided.

Why do we tell this story?

Turning out the lights from a company following an existing business plan to extinction teaches us lessons.  Pre-thinking alternatives to the events causing the negative exit might just prevent it.  Which would you rather do?

Posted in Hedging against downturns, Protecting the business, The liquidity event and beyond | 1 Comment

Jeff Bezos asked a question that blew me away!

Posted on December 23, 2021 by Dave Berkus

Here’s the question:

This piece of wisdom came from Jeff Bezos, founder of Amazon, during a board meeting for one of the companies where he sits as board member.  Jeff asked the question “Is there anything big or small, which is working better than you expected? Is there anywhere we could double down?”

What a great insight.

Bezos’ point was that we spend a lot of time focusing on what’s not working in Board meetings (especially during difficult times) and not enough time focusing on what is surpassing expectations and how we can “double down” on those areas. Often times the key levers in businesses are found in little things that are really outperforming, whether by intention or not.

Why is this question so intriguing?

Although the scale of those businesses Bezos works with is probably much larger than those we deal with, his question is intriguing for multiple reasons.

Looking for that silver lining…

[Email readers, continue here…]   We worry over projections and fix our budgets to match, and then we manage to the revenue and costs of the budget.   But what if we separate ourselves from that mindset long enough to search for and find sparks of success sometimes buried within our sales statistics.  A geographic territory or single product in a larger product line, or a service that was developed as an afterthought:  do any show unusual signs of breaking out and becoming unanticipated successes?

Is “doubling down” a pivot for your core focus?

Can we change our thought process, alter our marketing focus, take resources from other areas if needed, and double down to back up potential winners in the making?  Most of us would track the increased revenues, look at those in the light of total revenue progress, and monitor the actuals against the budget.  A visionary like Bezos might pivot to make the rising star a centerpiece of our focus, quickly adding resources to support it, and seeing how far we could push it to make an unexpected success.

Could you be missing your “surprise breakout?”

We all should have our antenna up looking for what’s working, and where we should double down.  Surprise breakouts are rare and wonderful, to be supported immediately to the limits of our resources.  That’s the way small companies become big companies.  It’s the way surprising new products and services emerge from the pack and create new market leaders.

Posted in Finding your ideal niche, Growth!, Positioning | 4 Comments

Patent litigation can kill the small guy.

Posted on December 16, 2021 by Dave Berkus

Here’s the bright side to patents.

When you think of patents, you think of added value to the corporation in the form of protection of its intellectual property. In fact, many corporations spend millions developing surrounding patents to form what is known as a “patent thicket,” much like Brer Rabbit jumped into to protect himself against his detractors in the briar patch. Investors like to see patents or patent applications as evidence of intellectual property value and barriers to entry.

But there is a darker side to patent protection.

The cost for filing patents and extending the filings to multiple countries is expensive, but often manageable. The problems come from either prosecuting or defending a patent, and those problems can come in many forms.

The risk of a challenge from a third party

First, if your patent is challenged at any point, even after it has been granted, the cost of defense is dramatically higher than the original patent filing and attorney fees. It has become a common practice for large companies to fight their patent wars in the Patent Office itself, by filing legal challenges, requiring re-examination and sometimes an appeals process that can lead all the way to appeals court.

…and the risk in prosecuting a violator

[Email readers, continue here…]  Second, if you elect to prosecute a violator of your patent, you begin a process you cannot easily abandon.  Depending upon the size of the company or companies you go after, some will counter sue for violation of adjacent patents they may own or sue for causes seemingly unrelated to the patent. This happened to one of my companies, and the cost of defense escalated out of control, exceeding the cost of prosecution, ultimately contributing to the death of the company.

Now back to the headline.

Third, if you are sued in a patent case, and elect not to settle the suit early (bypassing a strategy of the prosecution), then your defense costs increase over time to reach amounts a small company CEO would never permit if in control of the situation. But to defend a lawsuit is not to control it. And patent litigation can kill the small guy.

Posted in Protecting the business | 1 Comment

Is there gold in your old intellectual property?

Posted on December 9, 2021 by Dave Berkus

Digging through your IP closet for gold…

In past years, several times a month I’d have lunch with one of my CEOs, and each time we’d find ourselves digging into the intellectual property developed by the company over the years, just to refresh ourselves about what the intended use was back then and whether new developments or technologies might make these older ideas and patents relevant again.

Finding connections with a fresh set of eyes

Since I have been involved at the board level with so many companies over the years, sometimes I can see connections that might be missed by a CEO with a singular focus. So, I was surprised and excited when one of these verbal fishing expeditions during a lunch brought up a technology the company had patented years before and forgotten.  The Internet was young back when the patent was first filed by the Company, and their patented product allowed a visitor to dial into a computer (does anyone remember dial-up electronic bulletin boards?) and be redirected to a screen form that would allow the user to identify themself, pay any fees required for use and agree to the terms of service. Sound familiar?

Thinking of other uses outside that older box

From my more recent experience, I recognized that this describes exactly what every guest must do when attempting to gain access to the Internet in a hotel, or Starbucks, or any of thousands of public places. It wasn’t about paying for service we now expect at no extra cost just about everywhere, it was about a patent that covered that expansive service. I recalled that there was a patent war already in full swing in this very segment, centered about who was first to file a patent in just this use case.

Could your patent be older than the presumed leader?

[Email readers, continue here…]   It turns out that our patent was years ahead of those others and was general enough to cover all forms of guest access to the Internet, not just dial up as originally intended. The CEO directed the Company to begin  what turned out to

be years of user challenges, a profitable licensing effort or alternatively lawsuits to protect the patent when that was required. Lots of work and millions of revenue in return. Don’t get me wrong though. It is expensive and risky to pursue patent offenders. Larger corporations will attempt to challenge the patent and draw a company into an involuntary fight using the US Patent Office as the battleground. One such company dropped 2,600 pages of documents on the desk of the patent examiner in its attempt to invalidate the Company’s patent.

Do you have some of that hidden treasure?

Intellectual property is the principal asset of must every technology company. The value of old patents cannot be easily estimated as new technologies reinvigorate those patents for new uses, such as the one we discovered during that fateful lunch. So: do you have hidden treasure in your vault?

Posted in Growth!, Protecting the business | 2 Comments

Budget from the top down or bottom up? A puzzle.

Posted on December 2, 2021 by Dave Berkus

Here’s the argument:

Many people believe that bottom-up budgeting leads to waste and misdirection. The advocates of top-down budgeting are strong in their belief that if you give each person or department no guidance, they will budget to their wants or specific needs, not to those that support a corporate goal.

Why some CEO’s argue to budget from the top.

So, they argue: Give your people a top-down generated target. Have them fit their plans into the target.  This way the corporate financial and strategic goals come from the top, as they should, and all departments fit into those strategies with their contribution and their overhead.

The risks they see in allowing bottom-up budgeting.

Over many years, in in many companies, I’ve overseen budgeting both ways, and agree with the top-down advocates that bottom-up budgeting is often masked waste in the form of allowances for unknowns, extra padding for protection, and even higher budgeted expense numbers to make the managers look good at the end of year by under-spending, that are found deep within bottom-up budgets.

Flip the coin. Here’s the other side.

[Email readers, continue here…]   On the other hand, often departments cannot fit their required costs into the structure required to meet a profit goal for the corporation, or just as important, corporate revenue goals. In both instances, top down or bottom up, negotiations between department and corporate managers require compromise. The difference is that in a top-down budget, the discussion almost always centers on compromises to meet the corporate goal, a much more important discussion than one centered around department goals.

When to use bottom-up?

Budgeting from the bottom up more often works in non-profit enterprises, where many departments are involved deeply into the detail of staffing and program delivery, and where the goal of the non-profit is service, not profit.

Either way, a budget is a necessary road map for a successful enterprise and should never be ignored or worked upon after the year is already underway.

Posted in Growth!, Protecting the business | Leave a comment

Recognize your five critical business risks.

Posted on November 25, 2021 by Dave Berkus

If you could predict a crisis within your business before its occurrence, wouldn’t you move to prevent or reduce its impact?  Making such predictions is a skill that can be developed, and here’s one method of doing so.

First let’s eliminate external risks for this conversation.

Of course, there are external risks that cannot be controlled or predicted but can be planned for as well – natural disasters, sudden political or economic events that rattle the entire economy, and more. That discussion is for a future time.  Here are risks you can address.

Here are five basic kinds of internal risks that a business faces over time.

First, there is market risk.

Will the marketplace accept your product? Is there a market for your class of product at all?  Market risk is constant and should be of greatest concern to any executive or entrepreneur.  Mitigating market risk is not easy.  Someone within your firm must be finely attuned to the changes in the market, including subtle signs from competitors.  If you are big enough to have a dedicated product manager, that person is a good candidate for this ongoing task, as is a marketing manager, who should be attuned to the changes in the environment.

Second is product risk.

Totally controllable within your organization, the quality and durability of your finished product should be at the top of someone’s job description. Whether it is you or a quality control manager, someone must assure that the product or service you send out to the world will not fail to perform at least to the level of customer expectation, if not to delight those customers most likely to be critical.

Third is finance risk.

[Email readers, continue here…]   Too often the person you call your chief financial officer is trained in accounting, which is primarily a process of looking backward over events in the past. A real CFO must be one to project and plan for the future as well, aware of the need for increased cash during times of growth or market disruption, and aware of the weekly challenges of shifting cash flow.  The worst thing a fragile, entrepreneurial business can endure is to run out of cash.  Not only is the enterprise threatened, but confidence is shaken among employees, suppliers, even customers. Competitors have a field day when hearing about cash problems at a company; and the rumors they pass on can reverberate for months or longer after the problem is solved.

Fourth is competitive risk.

This consists of two separate risks. First: do you have a significant barrier to entry to keep competitors from undermining your effort?  And second: does a competitor have a better story and product to compete effectively against your offering? Someone within your firm must be finely attuned to the changes in the subtle signs from competitors.  These include having a current knowledge of competitors’ hiring practices, pricing strategy, and more.

Fifth is execution risk.

This falls squarely on management to perform, to take the company to and beyond profitability. It is your job to oversee the constant gathering of information, efforts to mitigate these risks, and even to hold senior level planning meetings around analyzing data and asking “what if…” questions that bring out the doomsday scenarios that could hobble your company.   Once defined, the obvious next step is to role play responses to each challenge, or even to put in place preventative measures well in advance for each identified risk.

Running into one or more of these is inevitable.

When one or several of these events hit you and your team, and they certainly will someday, you’ll be better prepared to respond quickly and with a more appropriate, planned response. That will reduce the possibilities of suffering a catastrophe and will more quickly calm the many stakeholders who have reason for concern, looking to you for assurances.

Here’s your homework:

Why not plan a series of meetings with the appropriate members of your firm to discuss these challenges as you and they identify them, and prepare a plan for overcoming each? The time it takes may well be the difference between survival and doom; or it may be the plan that distances you from your competition if any of these events do occur in your mutual future.

Posted in Protecting the business | 1 Comment

What can go wrong with your business growth?

Posted on November 18, 2021 by Dave Berkus

So, your business has begun to take off.

You’ve figured out your channels of distribution, pricing model and how to support your growing list of customers.  Don’t be alarmed by this next statement.  That’s relatively easy.

You can be the one to develop a product or service, promote it, and support it when you are a small operation.   But what if you need to repeat the process of positioning, selling, and supporting your product ten thousand or more times as often as you do today?

What could go wrong?

It’s worth repeating my every three million dollar crisis insight.  You will have recurring crises as you grow your business.  These are predictable and usually arrive in the same recurring order, and often with every $3 million in additional annual gross profit from revenues as you grow.

Your first two predictable growth crises

The first crisis is financial, funding the business, development, inventory, and marketing. The second crisis is organizational. At about the twenty-employee level, the organization is too large for one person to handle internal operations, and a new level of management must be inserted between the founder and the existing team, causing communication and control issues that many founders have not experienced.

[Email readers, continue here…]   And the third predictable crisis is…

… quality control. At about $6 million in revenue, there are so many new customers that product or service quality is stretched to the limit, and complaints about quality surface in quantities you never experienced previously.

Then it usually starts all over.

Guess what? And, at about $9 million in annual revenue, the cycle repeats, with financial needs for additional working capital and money for growth churning to the top of the problem stack.  And, as you grow, the same class of problems returns but with a larger scale and more urgent cry for attention – and more ruinous if not solved.

Know these three and plan for them.

It is important – no it is urgent – that you solve these problems and know how to spot them coming in advance. To scale any company to a large size, you must know how to solve the problems of production, customer service, working capital needs and more in order to keep the company on the rails.  The cost in lost efficiency, customer referrals, and corporate reputation is too high not to make this a priority for a growing business.

Many of the insights in the BERKONOMICS series deal with the issues of scaling your business.  As you feel more and more comfortable being able to scale each portion of the operation, you will be able to focus upon other areas of weakness, spreading the risk out and into a manageable range, rather than overwhelming you and your growing staff with their magnitude.

But wherever possible, it is best to nail down the processes and structure before and as you scale the business, not in emergency response to issues as they develop and grow to threaten the enterprise.

Posted in Growth!, Protecting the business | Leave a comment