The Curious Case of the Reluctant Entrepreneur. A hitherto unknown Conan Doyle story? No, rather the tale of a founder, “Olivia,” who refused to change her business model when faced with negative investor feedback. What should have been a relatively simple change of strategy became a Go/No-Go decision instead.
First, some background information. “Newco” had been in pre-revenue operations for more than a year and a half. It needed substantial outside investment in order to gear-up its manufacturing and execute its online sales plan. Initial feedback suggested that Newco’s model lacked defensible IP and would suffer financially when competitors knocked off its products. Fortunately, Newco could still license the technology in question. Problem solved.
Not really. Olivia objected. Why? Because the new model was more “limiting,” lacking the “open source” foundation of the original model. Olivia felt that this change would limit Newco’s long term potential, something she dreamed would have Facebook-like scale and implications someday.
Really? Facebook? Newco’s investor presentations and business plans made no mention of Facebook-like results, or anything remotely resembling a global presence.
What is fascinating about this true story is how often I witness its occurrence. It takes many forms. In its most common guise, it’s the story of an entrepreneur who pitches his/her five year financial plan to investors, but leaves unspoken his/her much grander dreams. By itself, this omission is not necessarily a problem. The difficulties surface when these entrepreneurial dreams conflict with short term corporate reality. Take the case of Joe, CEO of “JoeComp” a regional, foodservice-focused supplier with a profitable business model. Joe, however, dreams of success in the high volume, marketing driven, retail market, where he can make a real name for himself. When Joe hears about the possibility of selling to Costco, he jumps on it. Nine months later, JoeComp is out of Costco, its absence barely noticed, unless you happen to glance at the red font in the company financials, or at the pallets of unused retail packaging in its warehouse.
I have no objection to founder-as-visionary personalities, even those I consider reluctant entrepreneurs . . . when their visions are stated and on record. Teams seldom do well achieving unstated goals.
Entrepreneur Mentor and Startup Quarterback | Startups + Small Businesses + Home Businesses.
Specialties – Strategic Planning | Web Design | Digital Marketing|
Hans van Putten owner of 40parkLane,llc ran operations of his food manufacturing company for 17+ years building the Carolyn’s Handmade brand under the umbrella of 40ParkLane,llc.
After the successful sale of the food business, he took advantage of the years of strategic planning, operations management, web design, digital marketing and photography experience , to help startups, small businesses and home businesses and has been involved in a number of start-up ventures since.
Prior to founding 40parkLane,llc Hans worked for the Gillette Company for 10 years in various financial roles of increasingly bigger responsibility, leaving as Director of Business Planning for The International Group at Gillette HQ, Boston. Hans has an MBA (Marketing & International Business) from Aston University, and a BA in Business Administration from IHBO de Maere.