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Eric Ashman

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Finding Product-Market Fit: Desirable, Feasible, and Viable

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Finding product-market fit before you run out of cash, patience or passion for the problem you are trying to solve is the race you are running when you launch your startup. But what is it? How do you set SMART Goals against this concept, and how do you know when you’ve found it? My favorite framework for defining product-market fit is the intersection between Desirable, Feasible and Viable. Setting Up SMART Goals to Find Product-Market Fit In using the Desirable, Feasible, Viable …

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The Reality Distortion Field Has Only One Weakness

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This post is for all of the Chief Financial Officers, Chief Operating Officers, and advisors of early-stage companies in the room. A quick word about managing the budget and cash flow process with the founders/CEO's you advise. Someone asked me last week how to manage a planning process where the always optimistic CEO is pushing for higher revenue, more investment, and greater risk taking. The advisor was worried, because cash was tight, and one misstep could quickly run the company off of …

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The Sunk Cost Fallacy – The Roadblock to Meaningful Change

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Have you ever ordered too much food at a restaurant, only to end up with a stomach ache because you felt you needed to clear your plate? Have you ever held on to a stock far to long, watching it go down day after day as your losses mount, reluctant to sell until somehow you get back to even? Or perhaps more relevant to the topic of entrepreneurship, have you ever been reluctant to make a meaningful change in your company because of all of the time, money and effort that's been invested so …

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It’s The 60 Percent In The Middle That Will Kill Your Company

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The 20 - 60 - 20 rule of thumb is a great framing to keep in mind as you think about where to invest in your company, and where you need to dig deeper to avoid throwing good money after bad. Here's how it works. 20% of the initiatives in your company represent clear winners. They drive real growth. They are profitable or have a clear path to profitability. They deliver cash flow. They excite and motivate your team. They fulfill the mission of the company. When it comes to thinking about …

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Making The Best Decisions You Can With The Best Data You Have

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One of the hardest parts of leadership is getting comfortable with making difficult decisions with imperfect data. But it's a critical skill to be able to move your company forward, particularly in an early-stage company. Let's think about the possible sources of data that could help inform your decision-making process. You have an overworked accounting team. They hustle to close the company books each month, pay your vendors before accounts are shut off, and chase clients for payment …

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If All We Have Is Opinions, Let’s Go With Mine

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"If we have data, let's look at the data. If all we have are opinions, let's go with mine." This is a famous quote by Jim Barksdale, the former CEO of Netscape. When I'm advising members of a leadership team that is struggling to break through with their founder, I pull out this quote. Founders have incredibly strong points of view about every aspect of their business. This is what enables them to go from an idea on a napkin to actually launching a company. It's an incredibly important …

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Valuation Makes The Headlines, But Liquidation Preferences Allocate The Cash

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You’ve heard this story before. A startup raises a lot of cash from venture investors over several rounds of fundraising. The company attains the mythical Unicorn status. The billion-dollar valuation. You see pictures of the founders with big confident smiles as if victory is assured. Then the company stumbles, growth slows, valuations fall. And yet, the company ultimately sells for nine figures. It underperforms expectations, but it still sounds like a great result. It's only later on …

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Webinar: Startup Survival Strategy in the Age of Coronavirus

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On Wednesday, March 25, 2020 I delivered the webinar Startup Survival Strategy in the Coronavirus Era. This session was created just at the start of the Coronavirus pandemic. Topics covered include: Setting up an early warning systemUnderstanding your KPIs and the connection to your cash flowTaking decisive action to protect your companyCommon roadblocks to making big changes, including:The Sunk Cost FallacyThe 20-60-20 RuleAnalysis ParalysisPracticing self-care in difficult times …

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The Casper IPO – Investor Leverage, The Hit To Employee Morale and The Tough Road Ahead

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I recently wrote a post about the negative impact of the Casper IPO on investor sentiment in the Direct-To-Consumer (“DTC”) space. Anytime a company in a sector goes public at a valuation that is less than half the valuation of its last round, it’s going to ripple through the rest of the ecosystem. But there is another lesson that’s worth discussing. When I teach the concepts behind Pivot to Profitability, one point I always make is that raising money is a sales process. The better your …

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Learning From the Casper IPO – Investor Sentiment Shifts Fast

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In the world of startups and venture capital, industries move in and out of favor very fast. It doesn’t take much for an industry that’s been attracting huge amounts of investor attention and capital to suddenly lose its shine. We are seeing this happen right now in the direct-to-consumer (DTC) space. Casper recently filed for its IPO. If you don’t know Casper, the company is one of the leaders in the very crowded DTC mattress space. Casper has raised over $355 million in venture …

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Know Your Burn Rate – Set Up Your Assessment Framework

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Stephen Blank describes a startup as an organization formed to search for a repeatable, scalable, profitable business model. They are not small versions of large corporations. A well-run startup is like a laboratory, testing hypothesis, comparing actual results against expected results, and constantly executing small pivots until a company is born. Or unit the cash runs out and your experiment is deemed a failure. To properly run your startup laboratory, you need to get an assessment …

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As Long As You Have Cash In The Bank, You’re Still In The Game

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With venture rounds bigger than ever, it can be difficult for a founder to make the decision to pull back on growth initiatives and focus on finding the path to profitable growth. Seed rounds used to be $250k. Now they are $1.5 - $2.0 million. $5 million Series A rounds have ballooned to $15 - $20 million. The $50 million Series B can be the biggest trap of them all if the company scales into unprofitable marketing channels. In each case, venture capital is raised with the expectation …

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