Decades ago the Ad Land pioneer Rosser Reeves asked, “What do you want from me? Fine writing? Or do you want to see the sales curve start moving up?” We may argue, half a century later, as to how widely Ad Land holds that sentiment. Startup Land depends on it – or at least depends on the sales curve rising fast enough to beat the burn rate.
Or does it?
Years ago, Eric Schmidt described Google's business strategy as “URL” -- Ubiquity first, Revenue Later. That worked for Google, but many venture capitalists who invest in technology seem to take it literally. There is a lot of money poured into companies that may still be in the red for years, like Amazon, Pinterest and many others.
Dollars and Cents
Sadly, most people in Ad Land are insulated from business results until the moment when agency layoffs are unavoidable. Agencies have been slow to embrace results and accountability. One pundit says clients are complicit.
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Because Startup Land is for the most part small and nimble, it’s impossible to be insulated from business results. Everything is very out in the open. If your company hasn’t gone public, you’re still accountable to your investors, whose money you’re spending to grow the business. Our investors hold us accountable, and I wouldn’t have it any other way.
Traveling in these circles, however, I am struck by how few investors really do their homework on the day-to-day operations of the companies they invest in. Some are far more interested in financial instruments – credit facilities, warrants and the like – than in what makes the sales curve go up. Many investors love seeing stock prices rise on the possibility of future results. (Today's news suggests that caution is order.)
Kiss a Lot of Frogs
There’s an old saying, repeated often in Startup Land, that you have to kiss a lot of frogs before getting to the prince. It applies both to raising capital (which we recently did) and raising the sales curve (which we are always doing). As I’ve mentioned a couple of times in this series, it’s easy to get impatient.
Impatience may be a virtue, but don’t lose focus. Whether you’re in Ad Land or Startup Land, focus on delivering results, not just the promise of them. It's the only way to create real value.