By Miles Nadal, Founder and Executive Chairman, Peerage Capital.
Taylor Swift’s Eras Tour is by far the hottest, global concert ticket of 2023. It may be a commercially clever way to market the singer-songwriter’s impressive musical catalog, but there might be another reason for the sold-out stadiums and passionate fandom; it’s because we can all resonate with the hit singer’s sentiment: All our lives can be seen in “eras.” It’s not just Taylor.
Every venture has its distinct periods. Not all of them are comfortable nor do they necessarily fit into the original master plan, but each one contributes to the development of the business over time while delivering valuable lessons that inform the next era and its success.
As a serial entrepreneur with over 40 years of experience, I know that it is vital to not only recognize the eras of your venture journey but to understand why each era is important and necessary. You sometimes need to go through heartbreak before you find your prince charming.
1. Inspiration Era
For entrepreneurs, the critical challenge of the inspiration era is to overlay discipline and perspective upon vision. This entails listening openly to others who are less immersed in the vision of the start-up.
By nature, most entrepreneurs are optimists and untroubled by self-doubt. They also tend to be hyper-focused on problem-solving and finding solutions to issues within their specific area of expertise. This can cause them to overlook or downplay any unwelcome evidence that their preferred idea and approach lack a sufficiently robust commercial market or may not be scalable.
Rather than succumb to the urge to rush ahead at great speed, it is important to complete a thorough analysis of any plan. No shortcuts. This era is also the time and place to assemble an informal roster of experienced advisors who can test every assumption. Triangulation is key; you need people who can ask you tough questions, provide an external perspective and course-correct as needed.
2. Start-Up Era
The start-up era is romanticized in popular culture as the time when spunky entrepreneurs transform their inspiration into action. Unfortunately, the earliest days of any enterprise are about grinding, and then grinding some more. Too often, however, that reinforces a founder’s natural tendency to get over-absorbed in the details and disregard the long-term need to build a functional network of independent stakeholders.
Ideally, these people will become champions of a venture’s success and will provide both feedback and access to their network as well. When founders raise their heads long enough to foster that community, they can spread the word about their innovative business, even as it takes shape.
3. Growth Era
Once a business gains some traction and begins to expand, there are few things that are trickier to navigate than growth. Failure to grow can be every bit as lethal as growing too aggressively.
At this stage, organic growth is always what entrepreneurs hope for. Acquisitions take longer and there are very often unpleasant and unexpected surprises—on the books or among the team. It is also usually more expensive. Organic growth may take longer and have less strategic flourish, but it can be stress-tested in real time.
4. Professionalization Era
The professionalization and growth eras are a packaged deal. Over time, as a company grows, entrepreneurs must relinquish some control and entrust their vision to a broader circle.
Giving over that control can sometimes be problematic. At times, it is hard for an entrepreneur to identify the critical inflection points where different skill sets and experience are required. When that happens, a company can quickly lose momentum.
This is also the era when processes and procedures—from IT to HR—need to be reviewed and professionalized in order to provide the necessary structure for seamless future expansion.
5. Consolidation Era
This era is the business equivalent of cleaning out the over-stuffed utensil drawer in your kitchen. Inevitably, your business will come to a point where the extra fringe needs to shed a layer. All those stray bits and pieces that no longer have purpose need to be consolidated or cut; this applies to staff as well as duplicate equipment, outdated systems and other overage.
This is especially true if growth entailed acquisitions along the way, which brought more bits and pieces with them. Ideally, the professional managers who joined the team in the last era can oversee this process and will be ruthless in the cleanout. Remember, no one needs three potato mashers.
6. Succession Era
Long before it is necessary, successful entrepreneurs will begin to think about the steps required to sustain the business once they begin to phase out.
Every new hire into a strategic role should include a consideration of the individual’s potential suitability to lead the organization in the future. At the same time, mentoring, both informally and formally, should become integral within the management team.
Rockstar Taylor Swift may not have realized it, but her hit tour is likely teaching business leaders some valuable lessons. By keeping these eras in mind, you might just find your own entrepreneurial love story.
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