I’ve written before about the use of romantic metaphors in business. I wasn’t about to commit myself to a serious long-term relationship based on a picture (no matter how lovely the lady’s looks) or because my friend said I’d find her delightful (no matter how much I trusted my friend’s judgment). Before making a long-term commitment, it is only rational to get to know the woman in question better. Dating, for me, was intended as an asymptotic approximation to marriage; as the relationship progressed, from going out for ice cream to living together, I expected to get an ever-better sense of what it would be like to spend the rest of our lives together. And, I think that the same applies in business.
Before I’m fully convinced a business is real, I need to see it operating. If it’s my business, I need to build a prototype, pitch a customer, run a trial marketing campaign, hire an employee, etc. I reserve the right to break up (i.e., go out of business) at any point, but I need to gradually progress from “I have an idea” to “I am committed to this enterprise” by actually doing business. Doing business is different from just making slide decks for investors or talking to people; doing business requires actual operation. I’m surprised by the number of would-be startup CEOs who view raising money as Step #1; instead, I want to know I love the business before I ask others to invest in it.
Ironically, as an investor, I’m more comfortable with immature businesses. I think that’s because I’m making relatively many bets with relatively little money and very little time. In 2014, I expect to invest in 5-10 companies, and invest a total amount that is less than the average daily variance in the value of our overall investment portfolio. I’m certainly not going all-in on any one company. But, the greater the commitment I’m going to make to a particular company (whether in terms or money or time), the more likely I am to insist on seeing it operating. If I were going to join the Board of a start-up, I would want to spend some time in the office, or on calls with customers, to see what the business felt like on a day-to-day basis.
I’ve spent the last several weeks in the beginning stages of operating a business. I’ve talked to a number of people about various aspects of this idea and gotten feedback on business models. I’ve built a pitch deck for investors and a sales deck for customers. I’ve even registered a domain name. I’ve built some prototype software. (I’m now a competent Ruby and Rails engineer, a good Puppeteer, can use cloud-init to bring up new cloud instances, and have enough knowledge of Amazon Web Services to create and configure EC2 instances, Virtual Private Clouds, Security Groups, Elastic IPs, and other entertaining virtual computational objects.) I debated whether investing in developing my own technical skills was worthwhile, but my knowledge of the technology underlying the products for which I was responsible has always been valuable to me, so I wanted to have at least a reasonable grasp of how cloud software actually works.
Am I in love with this business? Not yet. There was of course that first flush of excitement that comes with any new relationship. And, I’ve had a good time working on the project. But, there have been some frustrating times too. And, it’s just now firming up enough that I can begin thinking about showing it to friends. Of course, when you’re dating, it may be helpful to get your friends’ opinion of your girlfriend — but when you’re in business, the only opinion that matters is that of your customers. So, before this relationship gets much more serious I’ll have to see what a few potential customers think.