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This blog post is inspired by Rick Ross, who sang Hustlin’, one of my favorite rap songs of the 2000s. I heard the song the other day, and Hustlin’ the song got me thinking about Hustling the cultural phenomenon.
Hustle culture is synonymous with startups. Hustling captures a lot of what founders do every day. But there’s a certain bravado to the word, a certain “fake it till you make it” sensibility that is more apropos to life as a Silicon Valley founder than life as a climatetech entrepreneur. If I’m picking a word that’s more appropriate to climatetech founders – with sincere apologies to Rick Ross, it’s not hustling. It’s juggling.
Every Day I’m Jugglin’
Hustle culture may be the aspiration, but juggle culture is the reality. And let’s be clear, there’s a lot of juggling that climatetech founders need to do, especially those founders building capital intensive businesses. Hiring, product development, customer acquisition, board management, fundraising. There is simply no shortage of unique activities that founders need to juggle as they build their business.
To complicate matters, there is often a complex set of trade offs and competing interests within each activity. Founders get the joy (sarcasm noted) of juggling between activities and juggling within activities.
There’s an entire row of books in Barnes & Noble dedicated to this topic, but there’s no instruction manual to juggling. And this blog post isn’t intended to be one either. Rather, the message here is a simple one: a climatetech founder must want to do it. Not be willing to do it. Not make room for it. You must want to juggle, or the life as a climatetech startup founder is going to get old quickly (public service announcement – building a climatetech startup happens slowly).
No disrespect to the hustlin’ bros vibe coding their way to the next breakthrough AI-powered pet dating platform, but a successful climatetech founder must have the genuine intellectual interest, heartfelt passion and drill sergeant diligence to juggle between and within activities all day long, and then do it again tomorrow.
You’re deep in technology development in the lab when you realize you’re late to a meeting on an HR matter about compensation, only to be cut short by the investor call that you cannot be a moment late for, followed by the conversation with your marketing team about how to position your product’s environmental attributes when you have to summon the energy to meet with the customer on your pilot project, and on, and on, and on.
Juggling between tasks is an obligation of every climatetech founder. But let’s enter the positive spin zone for a moment – it’s also an opportunity to learn what you’re good at and what you’re not. What do you do with this hard-earned knowledge? Hire for the areas where you don’t excel!
Juggling between matters is one thing. Juggling within matters is another. It is both art and science to understand and appreciate how decisions you make will impact various stakeholders in your company from team members to customers to investors. You’re waging a personal debate in your head, and the decisions you make must serve the company’s long-term goals and immediate needs.
You will juggle competing priorities in a multitude of decisions about your employees, your product, and your company. Let’s use a very timely example and dive into one such juggle that is a constant source of tension and has far reaching ramifications for your climatetech startup: valuation.
Valuation: The Ultimate Juggle
Valuation seems like the classic “up and to the right” issue that requires zero juggling. As long as it keeps going up, you’re good. In fact, valuation is a much more complex issue that will require the founders’ constant attention through the company’s lifecycle force weighing competing interests.
Let’s examine a few scenarios, starting with the one that seems counterintuitive but is most relevant to the moment.
Your valuation is high.
Perhaps too high. Like the rent, too damn high.
Most folks dream of a high valuation. More importantly, increasing valuation is the fundamental goal of each investor in your business. But, there is such a thing as too high a valuation.
If you raise during a hype cycle (hello 2021!) and secured a valuation that just feels frothy, it probably is. Now, you have to deal with a few major challenges:
Growth solves all of these problems, so you have to make sure when you consider valuation that the valuation is something you can quickly grow into. If not, then prepare yourself to address the next issue.
Your valuation is going nowhere.
Flat valuations aren’t necessarily a bad thing. Sometimes, it is more of a reflection of the macro environment than a company’s individual performance. But stagnation in valuation can lead to stagnation elsewhere – across your team, your brand and your customer pipeline.
Stagnation over time can become very troubling. It can deter investors from investing in your business. Even worse, it can prevent investors from investing in your business without significant change (translation: you’re fired).
Your valuation is too low.
With a low valuation, you will not have to worry about growing into your valuation, but now you must worry about dilution. Raising capital at a low valuation will create cap table problems and cause you to sell more of the company than you wish. That spells trouble for you and every other common shareholder, including all those common shareholders in waiting – your employees with stock options!
A low valuation could be a signal from the market, and one you should be mindful of as you bring your product to market. Do investors not see what you see? Or are you not seeing what everyone else sees? And if it’s you – the founder(s) with the vision problem – are you prepared to keep building this company if it is not going to yield the return you anticipated? There are ways to navigate around low valuations. Some are financial engineering (a refresh of stock grants). Some are performance (blowout quarters or years). But even the best of ways may not dig you out of the hole created by initial low valuations. What’s the goal of this valuation juggle? A perfect valuation? Absolutely not. There’s no such thing as perfect in company building, especially climatetech. Think Goldilocks, not da Vinci, and aim for a valuation that enables consistent, compelling and manageable growth. In other words, a valuation that is just right-ish.
Be Kind to Jugglers
Just right-ish? Why the ish? Because this @#$% is hard. Damn hard. And more often than not, we’re too hard on ourselves.
We can’t spend our days chasing the perfect decision. In the world of startups, perfect decisions don’t exist. What we must do is make decisions, lots of them, relying on thoughtful partners, the best information we can assemble, and our own judgment. Some decisions will be wrong. But right-ish decisions will build upon each other and create real momentum for your business. The reward for such momentum will require more decisions to be made, but such is the life of a climatetech founder, who must deal with competing interests everywhere, even on her own calendar.
Remember, you’re not hustling, you’re juggling.
