August 2022

Most businesses hope to achieve two key financial goals — consistent profitability and steady revenue growth. Many startup founders are great at building a product, but have never had the opportunity to learn what it takes to grow a business. In the article linked below I introduce a general framework for understanding revenue growth and the three key disciplines to achieve profitable revenue growth.

Every month there are generally only three sources of revenue for your business. The easiest category of revenue to grow, if you have it, is “Continuing Revenue from Existing Customers.” The second easiest category of revenue to grow should be “New Sales to Existing Customers.” “New Sales to New Customers” is the hardest category, but is still essential. Without this category, you never get to having “Existing Customers.”

To grow revenue from these three sources requires three key disciplines. Marketing is everything you do to make potential customers (and existing customers) aware of, and desiring what you have to offer. Sales is everything you do to enable the completion of the transaction of a customer purchasing what you have to offer. Operations is everything you do to successfully deliver the value proposition of what you offer to customers. To successfully grow your business you need scaling operations – the ability to do so well, even as the number of customers and transactions are rapidly increasing.

Read the full article here.

Touraj Parang’s new book Exit Path teaches entrepreneurs how to prepare for the sale of their company.

I’ve been founder or co-founder of multiple startups. One ended in a successful sale to a large corporation. Everything went smoothly. Having now read Exit Path, I understand why. In that case, I was blessed with a co-founder who, by his nature, did all the right things to position us for a successful exit. For another of my startups, we realized that it wasn’t going to reach a scale that was self-supporting and we started pursuing potential acquirers. We spent time in serious discussions with one potential acquirer, but in the end failed to close a deal. Having now read Exit Path, I understand why. Thankfully, we still had plenty of runway to shut down gracefully, providing plenty of time for customers and team members to transition. 

Touraj Parang has had similar experiences. His first startup ran out of cash and exited poorly. His second exited well. Since then he’s been involved in many more deals, both on the buying and selling side, and he’s learned what factors are within the founder’s control that can significantly influence whether a successful sale happens or not. Exit Path is his attempt to turn the lessons he has learned into a manual to set entrepreneurs on a path to exit as well as possible. 

When he gets into describing the execution of an exit strategy, the book does its job exceptionally well. Parang describes what entrepreneurs need to do, when they need to do it, and why. He also educates founders on aspects of the transactional process that most of us will rarely (if ever) have encountered, pointing out areas requiring particular attention, and when it’s critical to get specialist advisors involved. That being said, the book gets off to a slow and somewhat muddled start. Don’t give up. Work through these opening sections and you’ll soon discover the wealth of invaluable information in the back half of the book.

Bottom line, Exit Path provides a guide for entrepreneurs in how to successfully sell their startup. While the last section of the book is absolutely essential reading for anyone in the midst of selling their business, the preceding three sections explain what every startup should do well in advance of that event to dramatically increase their chances for success. If you’re an entrepreneur, or dream of becoming one some day, I strongly recommend that you read Exit Path by Touraj Parang.

Read the full review here.

Integrated Operations describes leveraging technology to connect the right people through the right processes to make smarter decisions that impact a business’ core operations. Integrated operations has had a particularly significant impact on industries and companies with complex distributed assets and operations.

In the article linked below, I provide two case studies from the telecommunications industry, from two different stages in the life of WilTel.

In the first case, the TNSS system collected alerts and alarms from across the network and presented them in an integrated fashion to technicians in WilTel’s Network Control Center (NCC). This systematic integration was a dramatic improvement over the “swivel chair integration” in place at other carriers at the time, but required close coordination between network operations, engineering, IT operations, and the TNSS software development team. The end result was fewer outages and quicker responses, along with increased customer confidence in WilTel’s network.

In the second case, WilTel Communications Systems implemented a “Smart Hands” program, leveraging highly capable voice technicians at customer sites, supported by a centralized team of data networking gurus, to rapidly expand from being a dominant voice systems provider to being a full-line voice, data, and Internet solutions provider. 

Read the full article here.

Many founders are visionaries by nature. Their company was started because they envisioned a future that didn’t yet exist and pulled together a team to make it a reality. As the company scales, it becomes critical that the founder/CEO also recognize that they are ultimately responsible for the integration of every aspect of the business. For visionary founders, this is not obvious, natural, or easy.

Someone needs to make sure that all parts of the business are working in concert to ensure that customers are being served, revenue is being collected, expenses are being managed, and the business is growing in a healthy manner. Everyone — investors, customers, and employees — will look to the CEO when those things don’t happen, so ultimately the CEO is the chief integrator. If that’s not his strength, then he needs to make sure someone else is playing that role on his behalf. 

In the article linked below, I lay out fourteen specific tasks that a founder/CEO can tackle to drive effective integration across the growing business.

Read the full article here.