If I've learned anything in six years of early-stage investing, it is that, at the bottom-line, end-of-the-day, all that matters, beyond the founding team of course, when evaluating startups is sustainable growth and opportunity size.
Are you growing fast enough? Is that growth sustainable and do your economies of scale make it affordable? Is your opportunity big enough and transformative enough to keep growing at an accelerated rate for years to come?
What does that mean? It means the best founders are focused on one thing: fast-paced sustainable growth. Everything, from building the right cultural team, to having the right investors, to building the right products, should revolve around it.
So, what can founders do to create the ability to super-focus on sustainable growth?
1) Find the right life-cycle investor(s)
Raising money is time-consuming. It is also highly dependent on performance.
But, one thing that makes it much easier is having a committed, supportive lead in your corner across multiple rounds. For example, one company I have backed in their seed and bridge rounds has a lead investor who is also the lead distributor of their product in the United States.
That lead underwrote most of their bridge and committed to the bridge investors to lead a B-round in late 2016 - contingent of course on continued positive performance - and expressed interest in acquisition in 2017, which helped secure the bridge commitments in only a couple weeks.
Knowing that the B-round lead was there, and tied directly to the distribution network, reassured reinvesting and new investors, cut down the CEO's fundraising time by at least a month, and let her focus almost exclusively on sustainable growth.
2) Build a culturally-attuned, independent sales team
As founder, you are always your company's best advocate. But micromanaging sales relationships does not allow growth and scale past a certain point.
The best leaders know how to do two things: hire the right personas Head of Sales who is a cultural fit for them and for the organization writ large, and then give that person the berth, confidence, and resources that can build a team capable of executing: from lead generation, to proposal, to account management.
This allows the CEO to focus on building brand, awareness, and focusing on larger-scale strategic partnerships and channels, while knowing that they have a strong team behind them successfully closing all those opened doors.
3) Go for the transformative market opportunities
Growth becomes less sustainable as markets become more saturated. The greatest CEOs, from Elon Musk on down, have an intuitive sense when a market opportunity moves from exciting to maturing, and are able to drive their companies on the narrow line between executing on the markets they have already opened while pushing constantly toward new frontiers.
While hardly startups anymore, Google and Amazon are perhaps the best examples of this: in fact, Google created Alphabet just so it could separate its mature, saturated ad business market opportunity from its divisions opening new frontiers. Although many of those frontiers will fail to be transformative markets, identifying the one that is, and that will drive high volume sustainable growth well into the future, should always be the main focus.