Start Up Stories

Even Start-Ups Need Dashboards

Posted in Uncategorized by Devon on January 1, 2009

instrument-panel

It’s late July, and we are starting to talk to investors, assess capital needs, and thinking about how to value the business; the average start-up is valued at about $2.8MM.  We are still talking to banks, without much success but, the financial sector looks like a target-rich environment for innovation.   Our business model at this point is still interest rate arbitrage – which requires a normal interest rate to function; the storm is gathering and we aren’t paying enough attention to interest rate futures!  Our little boat steams ahead into the gathering hurricane.  We continue to build IP around the interest rate arbitrage model which will be another dead-end, at least near-term.  Someday interest rates will return to normal and we may be able to reactivate the original model. 

 Lessons Learned/Questions to Ask Yourself    

1.      Think hard and long about spending the money to file a patent before you’ve got a market-validated business model; you can burn a lot of precious money that way for very little return.

a.      How much customer feedback do you have on this idea you are about to spend $10,000 patenting? 

2.      Beware of the persuasiveness of your own arguments; you’ll begin to believe your own nonsense at your peril.  Stay close to the market and get market validation early and often.

a.      Is there a sales guy on your team pressing your ideas against the market?

3.      Even start-ups need dashboards, we should have been reviewing interest-rate futures weekly!

a.      Where’s your dashboard of forward-looking metrics that represent business model sensitivities?

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