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Mar 07, 2024

As trailblazers of growing companies, people like you and me are often so caught up in the adrenaline of scaling that we sometimes miss the cracks forming under our feet. These unseen financial fissures can spread and threaten the foundations we have worked so hard to build. I have been down that road and believe me, it is a journey that is as rewarding as it is perilous.


We live and breathe sales and go-to-market strategies every day. But what about the financial health of our ventures? Have you paused lately to recalibrate your assumptions with the reality of the present? It is easy to overlook, but boy, does it make a difference. I have seen it–our attach rate model predicts a rosy 5%, but the reality is a grim decline to 2%. Yet, we barrel forward, forecasts unchanged in a dangerous game of financial chicken.


Unchecked assumptions in our financial models are like termites in the wood pilings that frame our trail, gnawing away at the integrity of our projections in the financial forecast. Beyond optimistic intentions, we must be honest with ourselves. A little slip here, a small oversight there, and suddenly, the hike forward becomes slippery ground.


Then there's the ignored concentration risk. A key supplier goes under, and suddenly, a growing company's lifeline is cut. As one example, we had a $20 million company go belly up without a diversified supply base after a key supplier's owner passed away unexpectedly. Another example might be that one big client, seemingly reliable, suddenly shifts direction, leaving you out in the cold. More than diversification, we have to understand where the real vulnerabilities lie. Is it in your customer base, your product suite, or tucked away in your supply chain?


Let's talk about margins. We chase them, but do we really understand them? Are we factoring in the costs of scaling, or are we just hoping for the best? Operational debt and technical debt are the bogeymen of the scaling company. Ignore them, and they will come knocking when you least expect it.


But we are not just founders. We are innovators, experimenters, and problem-solvers. We run the tests, we challenge assumptions, and we pivot with agility. The story the numbers tell is the real, hard-earned narrative of our companies.


This is tough. It's supposed to be. But as founders, we are built for the challenge. We have the vision to see beyond the immediate horizon and the grit to push through. The key is to arm ourselves with the best financial expertise and to partner with those who can shine a light on the blind spots.


Here's to us, the bold ones, dancing on the edge of innovation and financial acumen. Let's keep pushing, keep iterating, and keep our eyes wide open as we scale new heights. At the end of the day, it's not just about surviving, it's about thriving in the face of every challenge thrown our way.


Stay relentless!

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