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Today, we have Part 2 of Andrew’s interview, in which he discusses some advice he gave to Mission co-founder, Ian, about being “coin-operated,” and his strategy when it comes to investing in new companies. He believes that investing all comes down to looking at a company’s revenue, the knowledge founders have about their revenue streams, and how reliably they can predict them into the future.
“The reality is that not all revenue is created equally,” Andrew says.
He also explains that no company can be built without a strong foundation, and part of that is knowing where you are, where you are not, why you aren’t certain places, and what you need to do to reach your goals. That takes intention, focus and a lot of hard work, but it’s worth it.
Andrew dives into all of that and more, on today’s Mission Daily episode.
P.S. Check out GrowthX blog series, #gxmxp, which provides tons of information on their step by step market development process!
Quotes by Andrew:
3:15 – “In the abstract, the idea of what we’re looking at the seed stage, especially as B2B SaaS investors, is a revenue machine. Learning precedes revenue. So what are the learnings that allows you to build a predictable revenue machine?”
3:55 – “We require founders to have revenue before we’ll invest because we can. Because this is the age of applied technology and there’s zero excuse for a founder who’s not inventing anything and is doing something capitally efficient to be raising money at the seed stage, pre-revenue. There is simply no excuse.”
4:44 – “It’s not about the revenue you earn. It’s what you learn. So if you’re going to build that so-called revenue engine you have to dial in to what we call the three dimensions of revenue. You have to know the predictability, the profitability and the scalability of each of your revenue items.”
11:35 – “Frustration is nothing but the delta between expectation and reality, and when you set that expectation and deliver a different reality, you create a significant amount of frustration and employees start to grumble and maybe worry and leave. Funders worry about the next round. Board of directors start thinking differently.”
12:55 – “No architect in the world would build on sand, and that’s all this is. No matter how beautiful or complex of a building you’re intending to design and build, build it on a strong foundation.”
13:30 – “When someone says I don’t have time, what I hear is I don’t believe it’s a priority. You have time. You’re choosing to use that time differently. And if you’ve analyzed the things that you need to get done and you realize that your list is longer than the time that you have and certain things are not going to get done and you’ve been thoughtful about what things aren’t going to get done and you recognize the consequence of that and you believe that it’s an acceptable consequence, then you’ve made an informed decision and you just move forward. Simple as that.”
21:40 – “The only thing you should assume is responsibility for your actions.”
22:23 – “Take responsibility. Don’t be guilt. Wow, that something happened that I didn’t think would happen. Well, how did that happen? Why is this person mad at me? Why is my wife upset? Why is my child upset? Why did I not get this done? Why is this person yelling at me, right? Okay, well let me think about it. Don’t avoid it and just be guilty about it and make some nonsense comments to yourself about how you’ll do differently next time. Just spend one second, by the way, and feel what you’re feeling. Don’t label it. Feel it, because what you’re feeling is what it feels like to be alive, and then just understand what you do differently next time.”
30:50 – “The thing that I’m most proud about GrowthX is not some of the performance. It’s not the companies we were able to invest in or the corporations that we’ve helped successfully, or now the countries that we’re working with and seeing some wonderful results from. It’s how we’ve built our company. It’s the way we treat each other. It’s the way we work together and live together. It’s the way that we interact with the founders. It’s an implicit and explicit acknowledgement that as innovation investors, we have responsibilities that go far beyond those of our limited partners, the impact that we can and should have as innovation investors, and to acknowledge the problems facing our profession, to be able to bear witness and acknowledge them, but also to make a promise as to what we’re going to do in our own way to try to help that and to live it and to realize there is going to be consequences.”