By Ben Pidgeon
Welcome back from the long Memorial Day weekend celebrating our nation’s heroes; enjoying time with family and friends; perhaps taking in the greatest spectacle in racing, the Indianapolis 500; or, if you’re like me, catching 2022’s first bona fide blockbuster movie, Top Gun: Maverick, which grossed a a record $156 million over the four-day holiday. I am sure Tom Cruise, the producer, and director are ecstatic about the ROI after a two-year delay on the film.
Here’s my review of Top Gun: Maverick: “WOW.” What a wonderful sequel to a film I watched many times in my youth. “I have the need for speed” and so many other phrases are still in my lexicon.
As I was watching the film, I couldn’t help but compare the nearly impossible mission (another Tom Cruise tribute – pun intended) to the mission of starting a company and what that means to investors. In Top Gun: Maverick, pilots had to be precise, adaptable, and a little lucky as part of a team led by a visionary capable of seeing how to succeed. How is that different from a startup?
Today’s environment requires the same precision of startup teams. You have to stay focused on the core business, recognize what you’re good at, hire talent where you have gaps, and don’t get too thin on efforts. At the same time, you must be able to evaluate new opportunities as they arrive with a set of KPIs that increase the startup’s longevity or cash flow. It’s o.k. to say ‘no’ to opportunities that aren’t mutually beneficial or don’t align with your mission. Finally, startups must stay laser focused on target market personas and develop a strategy to get them as enthusiastic fans/buyers of your product.
Adaptation is the next parallel between startups and Top Gun: Maverick. Specifically, market conditions and customer sentiment are changing. What is your response? One approach might be examining the cohort of customers acquired in the last 30 to 90 days and comparing them to the prior period. Are they the same or different in the price they paid for your product or service, their decision-making process, or in your cost to acquire them as customers? Have new threats or competitors arrived on the radar, how does their offering compare to yours, how well are they funded, and do they have momentum? Examine this data carefully with as much objectivity as you can apply – are there any adjustments to your business that need to be made? This is critical; the last three years are probably not going to look like the next three years.
The last similarity is luck, and is tricky to discuss. It is likely the X factor in the success of many startups. I often ask startup founders and CEOs: Would you rather be lucky or smart? Personally, I would rather be lucky. You can prepare for smart by gathering information, critically thinking through scenarios and hiring talent where you have gaps. Luck is out of your control and somewhat randomized or odds based. However, I think you can increase your odds of being lucky. Situational awareness, being able to identify and take advantage of true opportunities, focusing on what you can control, being relentless in your preparation, and putting in the work can increase the odds in your favor.
As investors, we know startups are risky and that founders must be gutsy, resilient and laser focused. Even so, they will make mistakes. Their primary job is to make sure that those mistakes aren’t fatal. As you invest, whether with VisionTech Angels or another group, think critically about who is in the cockpit, where you put resources and welcome to the “Danger Zone.”
Interested in learning more about VisionTech Angels, our approach to investing and how to join our angel investing network? We welcome new members. Please contact Executive Director Ben Pidgeon or visit our website here.