Russian Roulette (game): A revolver with five empty and one bullet.
You spin the cylinders, point it at your head, and press the trigger.
Then read these headlines.
"Winners of $1Mn Russian Roulette challenge say they love it. Urge all to play."
"Losers unavailable for comment. Found dead with bullet in head".
The #1 reason that you might have become a founder is to be able to make your own decisions.
The #1 problem that most founders face is having no choices left.
Some founders choose to play Russian Roulette. A choice that might end all future choice making.
Optionality (noun): the quality of being available to be chosen but not obligatory.
But most new founders don't understand the need for optionality.
As Fayaz, mentor of Vijay Rayapati of Minjar told him, the top 3 jobs of a founder are:
- Make sure there's money in the bank
- Make sure the team is aligned towards the mission
- Make sure you ALWAYS have options in front of you.
When do founders learn to value optionality? Usually when they've lost it already.
When over commitments to an existing customer mean you can't pick up a new one.
When founders have no runway left and have to take a severely dilutive funding or debilitating loan.
When there's a $10Mn offer to sell where founders make $3Mn - a life-changing amount - but investors veto it - since it's not enough of a return for their investment.
If you as a founder find yourself in a corner of the chess board, you may still make desperate choices, but those may be forced not free, costly not easy.
So how do you as a founder, especially if you're a B2B SaaS founder, choose freedom, and optionality?
Learn the Art of the Flywheel Defense.
- Find customers who pay you well & on time - giving you margins above 70% to start with
- Build a consumption & value pricing model that gives your customers more value over time so they pay you more over time
- Deliver such awesome value that your customers become your sales people - and get you new customers
- Become cashflow positive month-on-month at the earliest
- Don't burn more than 1% of equity for getting $100K of new ARR in the beginning
This is the path of Value SaaS.
Serial entrepreneurs like Amit of InterviewMocha, Jimit of Socialpilot, Neel of iZooto, and many more in Upekkha have found out the hard way that Value SaaS builds the greatest wealth for employees & founders alike over the long term. While ensuring you're never playing Russian Roulette.
So this Indian Independence day, here's to your freedom of choice in 2020 & beyond - build optionality!