Telephone Book Numbers

We have recently come up with a revised strategy to launch our start up business and brand. The interesting thing about the strategy is that it lives on the precipice. Which means it could really boom and change our whole proposition and propensity for success, or it could really bomb and fail. In short we have adjusted our strategy for launch. Our contingency will now be the original strategy if the new ‘phase 2’ launch fails.

This created an interesting situation with our Venture Angel (seed funder). We re-crunched the numbers, spreadsheets, profit forecasts to revise the financial story. Turns out if this thing works everyone gets real rich, real quick. We’ll sell a zillion widgets. Great.

We met with our Venture Capitalist to go through it. This is where the lesson kicks in.

He just looked towards us and said, “Whenever I see telephone numbers like that, I disregard them and sometimes, I disregard the person presenting them.”

He was very clear and measured with his response. Heavy lesson, we nearly lost him through some entrepreneurial stupidity. Let’s call it entrepreneurial exuberance. We immediatly recalibrated and just discussed the strategic implications and why it ‘could’ work. Rather than what the numbers look like if it did work.

Put simply he was focused on what would make things work, not the benefits if it did. There are still a couple of really big if’s to our revised strategy; like consumers actually embracing the concept and our ability to deliver it.

It’s fine to you think know what the financial boon looks like, but never present it. You’ll just lose credibility, like we did. Keep your dream numbers within the inner sanctum of your start up.

When you have a rather big opportunity on your hands that could really kick, break it down into components:

• Rather than long lead P & L’s, just show Internal Product Margins.

• Rather than spruking about how many widgets you can sell in a year, just show some launch or test market volumes.

If the venture capitalist is any good he’ll know what the upside is.