All else being equal, the team with the better distribution strategy will win.
All else being equal, the team that ruthlessly and relentlessly executes (vs the competition) long term will win.
Financing is a function of the business model. The arguments over raising vs bootstrapping are akin to debating whether to take a car or airplane, it’s entirely dependent on where you’re going and when you need to get there. Opendoor needed a lot of cash to get off the ground, Instagram didn’t.
The founder(s) has conviction in their vision of the future, and knows which direction leads there.
The founder(s) can articulate that vision and business in almost offensively simple terms.
The employees can articulate the same vision and business in almost offensively simple terms.
The founder(s) must be magnets for talent. OR in extreme cases, excellent coaches. This is almost always an AND.
The founder(s) are both ruthless & empathetic. Introspective & delusionally confident. Irreverent & observant.
There is founder(s) / market fit. Home Depot founders couldn’t build Pinterest & vice versa.
The exception to founder quals is a product and corresponding model that require beating consumers away with a stick to halt growth. E.g. Slack.
The team exudes (positive) energy. Employees are pumped to be there. They’ve got the Mo.
Business equation simplified to Dollars In => Dollars Out. Roughly translates to unit economics.
The growth strategy is predicated on an arbitrage the market is missing.
The company must have an Accumulating Advantage. Flywheel is nice but not required.
The Why Now makes sense.
Most, if not all, mainstream commentators would scoff at the business and write it off.
All businesses are created equal. Home Depot makes 6x more money than Netflix. Time horizons be damned.
Time horizons matter. Value creation matters.
Final rule…there are exceptions to every rule.
Finally, what’s wrong & what am I missing?
Note: These aren’t *necessarily* in order.
First published on December 7, 2020