Why now? This is perhaps the most strategic question for a startup investor. You can have an amazing team with an amazing product, but if they don’t get the timing right, it won’t be a win.
There were search engines before Google. Social networks before Facebook. E-commerce platforms before Shopify. But these companies got many things right, including, crucially, timing.
As a founding CEO especially, you need to be an optimist. If the timing is ‘now’ when you start, it’s likely already too late. By definition, if you’re starting something that could one day be big, then you are ahead of the market. While it is good to single-mindedly pursue your vision, you also need to be continuously on the look out for signs of pull. Signs that the market that you envisioned is actually arriving.
Most CEOs I know don’t regret raising capital. However, almost all regret how they spent it. This comes down to insufficient focus (another topic for another time) and spending ahead of the market.
The challenge here is to be at once both an unbridled optimist, believing in your vision and a miserly pessimist, not unlocking spend until you see clear evidence of market pull. This is a difficult challenge. Most CEOs don’t get it right.
I think it’s hard to live such opposites on a daily basis. You will go insane. And your team will think you lack direction (or sanity). For the most part, you need to live in the optimist place. Otherwise, the inevitable ups downs of startup life will get to you.
However, on some frequency, say monthly or quarterly, put your investor hat and look with a skeptical eye for evidence that the timing is right. On paper, your shares in your business are likely the single largest portion of your net worth. For most founders, unfortunately, this paper worth never actually materializes, because the company fails. My belief is that if you regularly step back and look for proof of timing before doubling down, you will significantly increase the odds for success.
Questions to consider
When is the last time I stepped back and looked objectively at the market timing for my company?
What clear signs are there that the timing is now?
What clear signs are there to suggest the timing is not now?
What doubts do I have regarding timing?
What steps can I take to remove doubts and establish clear timing?