This is a guest post by Christopher Beselin, who is a multi-exit company builder that resides in Vietnam. Christopher was part of the founding team of Lazada (acquired by Alibaba), Intrepid (acquired), Fram (IPO’d) and Endurance Capital Group.
Guest Post Series: “Building, investing & exiting in Southeast Asia”
Disciplined reminders and follow-ups are fundamental building blocks for company-building success
One of the most basic and frequently recurring tasks of a company builder is to remind/follow-up with employees, investors, partners or other stakeholders.
These, seemingly repetitive and mundane, follow-ups and reminders actually constitute one of the core parts of the “job description” of an aspiring company builder – it is absolutely critical to be disciplined about following through reminding.
If you for example want to sign a contract with a bank partner for providing financing services to your customers, you should not just approach 3-4 banks and “hope” to hear back – instead, approach all relevant banks you possibly can think of (in a Vietnamese context there are at least 40 ;).
After reaching out, you make sure to follow-up and remind systematically. The only way to do this without simply forgetting is to put all contacts into an Excel / Google sheet.
For each of them, note dates when you last contacted them and then follow-up every 5-7 days (schedule a recurring slot in your calendar for this, otherwise you will lose control / get distracted by other daily firefighting, and hence lose the discipline to follow-through).
The statistic to keep in mind here is: 90% of sales are closed on the 2nd reminder or later, while 75% of all sales people give up after 1st reminder.
The most relentlessly-reminding-sales person/company builder will win!
Cash collection kills you, not slow sales
Most people are overly fascinated about the grand words of Salesand Revenues. Don’t get me wrong, they are indeed great and they are also what many times keep driving us forward. That being said, train yourself to also see the cash flow perspective of any transaction in parallel to the traditional revenue reporting perspective.
If you succeed in sales, but thereafter fail in collecting the actual cash income, your ARs (accounts receivable) ramp up quickly. Exploding ARs will ultimately kill a company – make sure to always keep your eyes on ARs that are rising.
Furthermore, a high % of ARs / revenues makes your business model expensive (cash intensive) to grow, which in turn means that you are then introducing yet another challenge to your company building efforts: you now need to convince investors to invest much larger sums of money for a given level of revenue traction.
Experienced investors are quick to spot this dynamic and will either pass on your company or negotiate down valuations because of the business’ cash-intensive growth model.
Turn your perspective upside down on this topic: work under the base case assumption that no customer will actually pay their invoices and from there think through the list of actions you will take and implement in your collection process to change this reality that ultimately would kill your business.
Unfortunately, this base case assumption is surprisingly close to the harsh reality for an early stage business – customers don’t usually pay their invoices, at least not on time!
Always be recruiting
Apart from selling and sending endless reminders, this is probably the one task that a company builder never ever stops doing.
Building a business is to a large extent about two core pursuits – i) attract clients and ii) attract a great team of talented people to serve these clients. That’s it.
Keep recruiting even if you don’t need people at the moment – one week later you might suddenly do and then it is a great help to have a head start on the recruitment process lead times. If not, it sets you back a number of months (remember, your most scarce resource is calendar time).
Here the relentless and disciplined reminders come into play again – if you need to recruit one sales manager, you should approach at least 50-100 potential candidates via Linkedin, etc.
Put all profiles in an Excel-sheet and set recurring reminders in your calendar to remember to follow-up on each of the ongoing conversations / processes. The most relentlessly-reminding-recruiter will win!
Never wait
Waiting is probably one of the most harmful things a company builder can do. There is in 9 cases out of 10 not a good reason to be only waiting for anything.
If you think your only option is to wait, think again – there is always a proactive preparation for an anticipated next step that you can be doing or even start to prepare a plan B, C, D, E if whatever you are waiting for should fall through (which should always be the base case assumption, as we touched upon in previous edition).
Besides that, there is in most cases a way to push things through much much faster than by just waiting for a base case timeline to complete (remember to always be in the mindset of compressing all timelines to 1/10th).
Typically, the approach to achieve this is to apply a radical focus on “good enough” and to reshape your team’s perception of what a base case timeline for a certain task should look like. A good basic mindset for an early-stage company builder is that everything can be completed today.
Why wait for someone to send you a perfect submission in 1 week, if she/he can send you 80% of the answer in 1 hour? Why allow yourself to send a perfect email that takes 3 hours to write / edit, instead of just sending the key message and shoot across in 2 minutes?
At the end of the day, a few of these ”radical” timelines will of course not materialize, but then you will still benefit from a much faster turnaround than originally anticipated and you will be left with a tad more of that precious calendar time to achieve more iterations towards success.
Until next time, let’s build it!
