Evaluate Your Performance. Always.

Newsweek’s behind the scenes look at the election is fascinating reading and one thing that popped into my head as I was reading it tonight was the role of measurement & self-evaluation:

For the first two debates, the Obama campaign asked members of focus groups to turn dials to measure their response to the candidates. Every time Obama seemed to quarrel with McCain, or even criticize him, his readings went down. For the third debate, the word went out: no “Crossfire”-type wrangling. The Obama campaign had been bracing for attacks on his relationship to Bill Ayers for months (in the spring, focus groups had been assembled to gauge how those attacks would play to the public). The format of the third debate brought the two candidates almost side by side, seated at a table, so Obama would have a more difficult time keeping his distance. But he prepared, as always, to keep his cool. In rehearsal, Craig-as-McCain was so over the top in his efforts to bait Obama that both men dissolved into giggles at one point. But at other times, Obama allowed himself to get angry. Later, when he watched a video of the rehearsal, he saw himself and vowed: no shouting, no talking over McCain. A little subtle needling might be permissible.

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None of us should ever make the mistake of thinking that we don’t need feedback or that we won’t benefit from a critical evaluation of our performance.

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Advice for Entrepreneurs

Fred Wilson has a great post up about macro trends and their impact on VC and startups. The paragraph that jumped out at me was the following:

And I don’t think the startup economy and venture capital is immune to this new reality.

So what should we do about it? Well first, we need to be careful with valuations. If financial assets are going to be subject to downward pressure then inflated valuations will not be sustainable. We need to be careful with the amount of money we invest and burn. Companies that are capital efficient and cash flow positive will fare better in this environment. And we need to be prepared to wait a long time for liquidity.

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In my mind, the critical challenge facing anyone starting a company is how to get it to be self-sustaining as quickly as possible while using as little capital as possible along the way. Balancing growth with capital conservation is a great example of the line that needs to be walked between goals that can seem to be in opposition to each other. I’ll write more about this particular issue in another post because it comes up again and again. In the meanwhile, good luck with your respective businesses.