After 66 posts in this Startup Decision Making blog, I took a break after the February 4, 2020 issue. As it happened, that was just before the Pandemic was widely recognized. I had enough content for my intended book, and I had become very busy providing advice to more than 100 clients of MMM, the law firm that anointed me as EIR in the summer of 2018. I had developed most of my intended curriculum, and it was time for a sabbatical. I hope you missed me!
As you may know, I decided in November 2020 to return to my roots as an Executive in Residence at the ATDC. My roles there include education and ad hoc mentoring for ATDC members, and I am also allowed to make investments and take active roles in startups where I’m a good fit. Perhaps 2 or 3 such opportunities will present themselves, which is about my limit over the balance of my career. I’m in good health, but I’ve aged out of the adventure of building 9-year overnight successes.
Over the course of 2020 I have seen many startups and early-stage companies that have capitalized on the Pandemic. They already had good products and were just waiting for the market to catch up with them. Some have enjoyed spectacular growth rates. Great examples are all those telemedicine companies that had been limping along for years and then suddenly had a Medicare code and floods of physician users that absolutely had to have remote visit solutions. Of course, I also saw many companies that had to completely reinvent themselves, perhaps by using their built technology in a totally different market. And there were more than a few that made the wise decision of letting go and planning to return later with a better idea for a better time. Those with technology bona fides had plenty of opportunities to fill openings in corporate America’s many sectors that thrived through the Pandemic or with the larger startups funded by all the VC and PE money that had to be put to work somewhere.
Unfortunately, my book publisher was one of those that chose to let go, but I can find a replacement when needed.
The title of this essay refers to a common dilemma in the startup world. My guess is that if I were keeping score, I’ve had more trouble with starting early than starting late. It’s hard to invent a market without some worthy competition to help you and challenge you. On the other hand, if you are a bit too late, those ahead of you in the line may obscure all your pathways to growth.
I’ve done some deep dives on several companies lately where the products were very intriguing to me. But, in some cases I’ve quickly discovered a large number of direct competitors that have already raised maybe an average of $40M in VC money, have achieved some scale with paying customers, and have rather polished products. I didn’t find many of these on the competitive chart in a deck; I chased them down through my own connections. Suffice it to say that both customer discovery and competitor discovery can be lacking when a product is too quickly developed and unleashed on the market. My advice in situations like that is to stop what you’re doing and reapply your skills on another checkerboard where there are some open spaces to jump to.
Being early or late is easier to grasp when there’s a rhythm to life and some ability to make sound predictions about next week or next quarter. With the release now of the Coronavirus vaccines, there is renewed hope for a return to normalcy, e. g. the Masters in April. However, there’s little comfort in the logistics that get needles into arms at only 10% of the rate that was projected, as is the case at the time of this writing. There’s also a lot of uncertainty about the population’s receptiveness to the vaccine. Either one of those issues could keep us wearing masks into 2022 or beyond and racking up thousands more Zoom hours than we dare imagine. They may scare us off airplanes and continue to crunch entertainment, dining, lodging and all the categories that have been wasted by the various lockdowns and restrictions of 2020. How do we plan for that?
You can doom scroll just like I can, and you see the stats. My personal observation is that Covid-19 has spread much faster after the Holidays than any of us really expected. My wife and I have a cabin in a North Georgia resort development. As recently as two months ago there were relatively few cases; now every conversation begins with a list of who’s newly infected. Even the property manager who handed out Christmas bonus checks to the staff picked up Covid at that celebratory event. We’ve had to radically distance all contact with other humans and keep it all outdoors. A daily dog park meetup is the center of our social life. It doesn’t help that mask wearing is frowned on up there. Our Atlanta home is in a 55+ condo that is a pretty tight bubble, but right now our internal restaurants are closed. Everyone is on high alert and much more cautious than our country friends; masks are mandated; and we quarantine incoming travelers per guidelines. I keep hearing people in both locations say that the virus seems to be appearing out of nowhere and infecting people at random. Everybody is duly anxious about this invisible threat.
All that may seem off topic for a blog providing business guidance, but you have to place an implicit bet on whether you think your market is at a positive inflection point on the strength of early vaccine distribution results or we’re all in for a very long haul to herd immunity. Specifically, if you received and used a PPP loan from last year, will PPP 2.0 bridge you to normalcy? What do you do with your office space if there’s another year or two of WFH? How do you regain personal connections with your most important customers via the intimacy of Zoom? There is potentially a whole raft of decisions that none of us hoped to confront for the second year in a row, or longer.
We will have to wait to see if Operation Warp Speed is really about speed or about the alternate definition of “warp” as yarns in a loom.
For just a few seconds, let’s take a deep breath and recall a sample of Richard O’Brien’s lyrics from The Rocky Horror Picture Show (1975):
Time is fleeting
Madness takes its toll
But listen closely
Not for very much longer
I’ve got to keep control
I remember doing the Time Warp
Drinking those moments when
The blackness would hit me
And the void would be calling
Let’s do the Time Warp again
Let’s do the Time Warp again…”
Not again, please.