Why I started a business at the worst economic point in a generation ?
A lot of people have asked if I’m crazy.. well yes I hope so, but not because I chose to start a business right now, I think that is one of the most sensible things I’ve ever done.
There are more fintech companies failing than ever before; there are less investments being made and therefore more companies seeing their runway disappear at an alarming rate; there are less IPO events and therefore many companies having to hold on and replan the painstaking year long (plus) of data preparation for the big event; there is an incredible amount of restructuring, redundancies and whatever term is chosen by today's headline company of choice, but these are exactly the reasons why I chose to start Cubed right now.
For a company aimed at helping businesses grow and to stop the craziness in an industry that accepts it’s normal for 75% of venture investments to fail, for 90% of startups to fail within 3 years and for only 2% of scale-ups to make it to series D, there’s no better time.
I’ve been working with a lot of companies over the past few months, met with many investors and even more founders & CEOs. It’s undoubtedly a nervous and desperate time for many but how you deal with this is going to have a huge impact on the future of your business and it is not the time to panic and change everything, nor is it time to bury your head in the sand.
Look at the data, have confidence in yourself & your business and above all please be transparent with your employees, your customers and your investors. In my view some of the rash reactions, papering over the cracks and burying of heads in sand is potentially hiding just how bad this is in some companies and not driving the right behaviours.
I’ve seen budgets being cut for C-level jobs, which leads to CEOs needing to carry out multiple roles (I know at least one example where the CEO is doing 5 jobs) and people being promoted into roles without the knowledge to backfill their non existent bosses nor the support of a strong operating model, dataset and some form of actionable insights to at least guide them.
Some business leaders are facing challenges they have never seen before and in many cases senior people are facing the first real setback they have ever seen in their careers. Many were still in education during the banking collapse of 2008 and some were not even born at the time the dot-com bubble burst in 2000, so this is not normal for them and they don’t have the experience to fall back on to understand how to navigate through this. It is the first time in history that this has happened at scale as previously it wasn’t normal for 30 year olds to be CEO’s of large companies and the people making the big decisions had seen similar times on their way up through the organisations.
Easy times have led to over inflated valuations and now we find ourselves in a position where down rounds are becoming common and the people running these “almost accidentally” large companies are not equipped to do so in the current market conditions. Grow at all cost quickly became predictable sustainable growth and that just isn’t the game that people have been used to playing. It also led to what I think we will look back on and consider some of the most bizarre and confusing changes of strategy ever to be seen. An unfortunately common example : it takes roughly 18 months to see the returns on a completely new growth strategy, which inevitably require a lot of front loaded costs and delivers back ended returns, so why have several companies decided to throw away the costs 10-15 months in, meaning there can never be a positive RoI and releasing a lot of highly skilled people who never had the chance to deliver. Yes the economy forced a pivot and yes it is important to preserve cash as the number one priority, but this does not require a sharp 180 degree turn, that’s how you quickly sink a ship !.
Investors likewise are not equipped in many cases to help, which shouldn’t come as a surprise as not many have been operators, they work in the finance & funding business and are usually from a capital market background in large banks (I’ve worked in large banks and in scale ups.. they are not the same thing.. in any way).
So who does help ? Well a lot of smart investors and founders have pulled in people who have been operators, have been there and done it and can turn the ship slowly and in a controlled manner, but there are not enough of these people out there and there are certainly not enough investors taking this approach as they have invested in good people in their portfolio companies, they often choose not to question too deeply or too quickly and they often choose blind belief that it’s going to be ok, until unfortunately it isn’t.
I and many of the amazing people that have chosen to join me on the journey at Cubed have been operators in fintech and banking, understand that consulting & thought leadership isn’t just about saying or telling, but about doing... I’ll repeat that “Its about doing”. We’re old enough and experienced enough to have seen this before and know what to do, but the unfortunate truth is that many scale-up and most startup companies can’t afford people like us full time, but they also can’t afford not to have the knowledge and experience we bring.
I look at the solution as pay for the brain, but not the body. This is why I started Cubed, this is why we work with companies as “operating partners”, as investors and as connectors across our network, being the growth partners for fintechs at this difficult time. We need to work together as an industry and ensure the companies that have the potential to make it to the other side of this are advised correctly and come out stronger.
Time will tell if this was sensible or not, but I know that especially now there is a huge need to guide scale-ups and startups through their growth journey, I know the data model and playbooks we have developed work as they have been proven multiple times and I know the amazing people who are on this journey with me are the best in the business not just from a knowledge and experience perspective but as good humans (THE most important thing in any business). I also know I’m going to have a lot of fun finding out just how crazy I am.
About Cubed
We are the growth partners for fintech companies, helping Fintech founders and CEO’s to scale & increase the value of their company by ensuring predictable, scalable growth.
We are Operating Partners - We’ve been there. We know what great looks like and we know how to make it happen. We have scaled 2 companies to unicorn status (and grown 3 centaurs) in front line executive and operational roles.
We are Investors - We invest in great businesses. Cubed invests in pre-seed through to Series A fintech companies. We know what great looks like and with the investment comes access to Cubed’s Operating Partners to help make it happen.
We are Connectors - We bring founders, executives, venture capital and service providers together in a unique and exclusive community.
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Join the Cubed revolution..
Email: contact@cubed.team
Web: www.cubed.company
