In the space of a few days I have been approached by two projects seeking my collaboration.
They are two very different projects. In very different sectors, although both are based on technology.
But both have similar problems with the technological development part.
And they are looking for someone to get involved in the project.
And to take charge and take responsibility for the technical development to go ahead in the right way.
They both have a similar story. They have done a lot of the development but they are not satisfied with what they have. They have delays. They lack quality. They don’t deliver the results when and as expected.
And they are also in similar situations because they have the rest of the project ready for launch.
They have the customers on the edge of their seats (so they say).
But as they are not delivering on time, they have a very important risk, not only that the project will be delayed, but also that clients that they have worked very hard to get will end up losing interest and forget about the project.
So, as I recommend for any business where technology is key, they look for someone who is involved and committed to the project. They look for an expert to help them solve these technology issues.
And the way they do that is by offering a stake in the project to the expert.
So far the two projects are two peas in a pod.
But that’s where the similarities end.
So, first of all, we sign a confidentiality agreement. So that you can rest assured. And because I’m going to ask many, many questions.
On the one hand, as a technology expert, I need to know all the technical details.
And on the other hand, as a participant in the project, I’m going to ask about the business plan.
Because, at the end of the day, if I am going to put even my time and knowledge I am being an investor in the project.
I could put that time and expertise into another project for another client.
By committing to this particular project it is because I expect to see results in the medium to long term.
So it has to be sold to me.
As an investor I am not interested in having a percentage of something that is going to be worth zero.
Or I may not be able to afford to start recovering my investment in 5 years.
And this is where the approach totally varies between the two projects.
One of them immediately hands me a document with all the information of his business plan.
A market study, what market penetration they expect to have, the possible channels through which they plan to enter, the volume of sales they expect to achieve, the investment they have already made and the investment still to be made, the income and expenses forecast, …
By the way...
If you are interested in these things I'm talking about.
If, in addition to intellectual curiosity, you have an interesting project that, perhaps, is not progressing as you think it should.
Then these articles I write may be useful to you. Give you ideas. Make you think. Discover new strategies.
If you want to be informed quickly when I publish something new, without relying on the AIs of facebook, instagram, linkedin and others to decide for you what is relevant and what is not.
Then I suggest you sign up to this mailing list.
That way, every time I post something new you will get it promptly in your email inbox.
It's free, it's secure, you can unsubscribe whenever you want, blah, blah, blah. It's a mailing list.
Anyway.... let's get on with the story.
The bottom line is the numbers on when that is expected to start paying off.
Of course it’s up to me whether I believe these business plans or not. I know that it will never work out as planned. But it gives me a clear idea of everything that has been taken into account and I can detect if something important is missing. In addition, all of us involved in the project have a point of reference to see if things are going or not.
The other project, on the other hand, has a very clear plan of marketing and growth actions, but there are no clear answers to the questions about dates, costs, expected revenues. With foundation, as Karlos Arguiñano would say.
The plan seems to make a lot of sense but I lack the information to ground it.
Has everything been taken into account?
How do we know if we are doing well or not?
And when I say that I’m putting on my investor’s hat and I want to know when I’m going to get back what I invest, the first thing they say to me is “But we’re not investors. We are the founders.”
That’s not really the case. If you are a founder of your company, you are investing, even if it’s just your time and effort and probably a lot of enthusiasm in this project going forward.
Therefore, you should have a more or less clear and more or less credible expectation of when you plan to get back all that you are investing there.
This does not mean that everything has to be financial. An emotional result of helping to improve your environment is also worthwhile.
But you have to have information to decide if it really makes sense what you are doing or not.
We have to be clear about that.
If I am the founder of my company, it doesn’t matter if I have partners or if I go alone, I am playing several roles within it.
On the one hand, I am probably one of the managers and I have a decision on the strategy of the company. Where do we go? What do we do? How do we do it? What do we prioritise? With whom?
On the other hand, I may also be a specialist in certain functions. I may be in charge of design, production, purchasing, sales, technology or whatever. I may do a bit of everything, or I may do none of these and delegate everything to others.
As a manager and as a specialist I should have a salary for my work as soon as possible. Commensurate with my functions and responsibilities. Perhaps with certain bonuses based on the results I achieve.
But I will also probably be an investor. Even if I don’t put in any money, I’m sure I’ll put in (a lot of) time and enthusiasm for the project to go ahead.
As an investor I will take a risk. I will gain financially when the business generates profits. Once all the expenses have been deducted, which include the salaries of those who work in the business.
I cannot forget that I am an investor.
And as an investor I have to write down in my calendar (take note right now) a review, at the most, every 3 months to see how the business is doing and if it still makes sense to invest money, time and illusion in that project.
If it does, go ahead.
If not, is it time to consider a change of direction?