When nothing seems to be going right within your company.
When your cash runway is getting shorter, and your cash burn is getting higher.
When your team is searching for answers, and looking to you as the cliff is approaching.
One of the worst things you can do during this moment in time is to start throwing spaghetti against the wall, hoping that you find something that sticks.
Your search for solutions can get frantic. Every day you come in with 5 new ideas for your team. Your team frantically tries to figure out how to layer those 5 ideas on top of the 5 from the day before…and the day before that.
Everyone starts working on their own set of priorities. Tactics become disjointed across the organization because there is just too much going on.
Everyone finds themselves in more and more meetings because there are so many different projects happening that communication is breaking down.
More time in meetings means less time in execution mode.
Projects are started without fully thinking through the details because everyone feels the urgency to move fast. Which means that the execution gets worse and the expectations are unclear.
And so the cycle continues. 5 new ideas the next day. Cash burn accelerates. You get closer to the cliff.
This is a death spiral for an early stage company burning through cash. It’s far too common.
When you find your company in this situation, you need to slow everything down, not speed everything up.
At the time where there seems to be the greatest urgency to find answers, you and your leadership team have to take a breath, stop, and take the time to make a thoughtful plan.
There are two paths to righting the ship quickly that you have to follow simultaneously when you get into this situation.
First, you have to stop chasing the unrealistic sales projections you’ve been promising your board and investors. You have to refocus on where the business is right now, how it’s been performing, and rebuild a sales plan that your team can beat. (Building sales plans in this situation is a topic that I’ll cover in more detail in another post).
If you keep putting unrealistic revenue goals in front of your team, continuing to show month after month of missed targets, you feed the frenzy for solutions while demoralizing everyone as they fail to find them.
Second, you need to focus on ‘stop doing’ items.
Right now in your company, there is work happening on projects that have no positive impact on the company. There are teams working on projects that have a 3-year payoff and you have 8 months of runway. There are teams that have found their own priorities while you were throwing spaghetti against the wall, and their work doesn’t roll up to anything that matters right now.
Throwing spaghetti against the wall requires lots of extra people and investment to sift through the spaghetti in search of answers. Organizations often end up hiring and growing expenses just at the time when they should be doing the opposite because the growing number of ideas requires a growing number of resources to manage them.
You have to cut expenses to meet your more realistic revenue goals to extend your runway. This is why you have to stop the frantic search for solutions and ideas. You have to get back to core truths about what is working right now and what team is needed to execute on a reasonable business plan.
Take a breath. It’s stressful.
Take solace in the fact that there is no silver bullet.
Give you and your team the time and space to work the problem. To do the hard work of thoughtfully finding the path forward. Get everyone off of the hamster wheel.
And when you have a moment, clean up the spaghetti that is slowing sliding down the wall.