There is so much turmoil right now. Frankly everywhere. In public equity markets, which is of course spilling over to the startup capital market. In bond markets. In university funding. In government agencies and government contracting. Turmoil in government regulations, international politics, the cost of everything! It seems pretty overwhelming. If you’re in the startup phase, sometimes you don’t know where to go.
So I thought I’d share a couple of pieces of advice that have stood the test of time that came from one of my staunchest supporters and mentors, my Dad, Mike Toomey. He retired as a CEO in the global chemical industry and served on the boards of tech companies, including as an “insider outsider” on the Board of our first company, DoBox. You’ve heard me talk about “skiing the avalanche” while raising money in the DoBox days. Things were truly terrible in the overall funding market. And when funding is terrible, startup-land can feel pretty terrible too.
When we were building DoBox, and then navigating the sale of DoBox during the funding avalanche, my Dad gave me several pieces of advice that I wanted to share that I hope will be helpful to you on your startup journey.
1. Look reality square in the eyes, then, and only then, can you make good decisions
It’s easy when we’re overwhelmed to look to place blame or bury our head in the sand. But my Dad reminded me to be brutally honest with myself. To look reality square in the eyes, even if it hurt. Be extremely clear about the situation, the players, their motivations, and the options available to me (see #2!) And then, and truly only then, could we make good decisions.
2. Always have a plan B
Now, this one is tough to execute to, but even if the plan B isn’t a very good one, make sure you have one. If you have only one option, then you have no negotiating room and no leverage. This is a huge problem if you are raising money or if you’re selling your company. It’s a huge issue if you have too much of your business in the hands of one customer or one supplier! It’s a huge issue if the rules change or turmoil arrives. Always have a Plan B.
3. Contracts only matter if something goes wrong
This one was something of a surprise to me, but my Dad had been inking and managing contracts for his entire career – both at the customer and supplier level, and at the joint venture and global CEO level! And he has been right! When we’re busy, trying to get everything done, and one of those (important) things is inking a contract, it’s easy to be a little sloppy. Everyone is in the “honeymoon” phase, and we all want to get to the good stuff. But if you remember that the contract only matters if something goes wrong, like me, I expect you’ll approach those contract deals with a lot more care!
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