One of my best business rules is 2x ASAP, a.k.a. “As Soon As Possible & As Simple As Possible”.
Imagine two beach bars: at one, you may select one of five main courses. Costs for the operator are lower and service is way faster. Everyone is happy (except 2% customers, who always complain). Compare to a bar with 60 main courses selection. It will take 20 minutes at least for each customer to make an order. It will cost a fortune to handle the complexity in the kitchen. And because it will also take longer to prepare, you will only be able to serve about a half of the potential customers. What’s better?
We are seeing this all the time with our portfolio companies. They come up with a genius idea, but then they fine tune it for so long that it becomes a monster. Typically, a price list. Instead of a price for a service, we read through many exceptions, bundles etc that all make perfect sense alone, but together it is almost impossible to get it right. And implementing it takes soooo long that the world is different by then.
Customers are no rocket scientists. They hate studying complicated proposals. Their attention span is short and if they are overwhelmed, they leave. Focus on 90% of them and make the decision simple. And do it now.
When dating with prospective portfolio companies, we often get asked about our role in our portfolio companies. How much hands-on are we? Do we interfere in the founder’s decisions? Our reply to that is: “As you wish“.
We are a team of entrepreneurs who have seen that and did that. We have deep vertical expertise in different areas, but we do not push anything. If you wanna go your way, fine with us. If you wanna ask for our experience (and then do it your way), even better :-). We seldom ask for extensive veto rights or Board seats. We believe in accountability of the founders and to be accountable, you need to be in the driver’s seat. Our central value is to support the founder: with finance, with experience, with contacts, with being someone they can trust.
Do all of our founders ask for help? Nope. About 20% prefer to be left alone. With the rest we try to help as much as we can.
I just finished reading of this article and I find it disgusting. That manager says he works for Elon Musk, but in fact he works against him. Anonymous well poisoner.
Tesla is in war time, billions of dollars are working against its success. War generals must have 100% loyalty of their men and must sacrifice all those who work against them. Moreover, what a general! This one is not hidden in insulated headquarters, he fights right in the middle of the battlefield. He works long hours with his men and sleeps at the factory, if need be. In his 46 years, wow. He also does mistakes. The image of him puffing pot was a mistake. But who does not do mistakes? Only he, who does nothing. Are the critics vowing for the prototype of the grey-hair CEO, only seen in boardrooms with mouthful of nicely rehearsed but empty phrases? He, who is so afraid of making a mistake, that he makes nothing?
A CEO who is focused on winning the war, must build his team on people he can trust. Who are loyal to him and are not bravo soldiers who would trade him in if they see it worth. Of course – building a management upon people whose only qualification would be worshiping their leader wouldn’t work. However, still better than having frenemies there – people, that work against their leader.
Did we put our money where our mouth is? Oh yes. More than €3 million worth of confidence in Elon Musk and the leadership style he represents.