Table of Contents
By Nicolai Elmqvist, serial tech founder, based in Copenhagen, Denmark. Helping founders avoid making to many mistakes and help them with time management and focus.
Expect Unforeseen Events
I’ve spent most of my professional career as a CEO for different early-stage startups and businesses. As a leader in any business, you are forced to make decisions to drive the company forward. Each day consists of an endless stream of questions to address and choices to make. A great deal of my time is spent on just that. Many of the decisions I make revolve around the business strategy, market opportunities, when to hire, who to hire, who to fire, which technology to use, and when to cut costs.
Founder Time Management
Then, there are decisions around unforeseen things. Things that you need to handled when they kick in. For this, I have made what I call “the 30% rule”. In short it means that I always need to be prepared for spending 30% of my time dealing with unforeseen things. From my experience unforeseen events will come in bigger or smaller chunks. Therefore, founders always need to be ready and count them in when they plan and do founder time management. Trust me, it never fails.
The Truth About Decision-Making
The truth about decision-making is that every choice you make will always be a gamble. No one can foresee the future and decisions comes with a risk. Any good leader will try to do their best to make the right decisions. In some cases, it’s easy and the decision can be made with confidence. Data is available and it feels good to make the choice based on your past experiences. In other cases, it’s a whole different ball game. There is no real experience, very limited data, and no one that can give solid advice. In this case, the decision will mostly be based on a gut feeling.
A great example is how many leaders must have felt during the pandemic in 2020. They needed to make decisions under high pressure. It was extremely hard to predict what would happen and what the impact would be. Looking back on how different government leaders handled the situation differently, it’s obvious that not every strategy worked equally well. They had more or less the same limited set of data and experience in this field. They also had to make a choice with great uncertainty and then face the consequences and effects on both casualties and economics in their country.
This is obviously an extreme example. However, it explains the challenges of always making the best possible decision with the best possible outcome. It also shows how our intuition plays an important role in making the right decision. Intuition combines the emotional reaction of instinct with the intellectual response of analysis. It is feelings combined with thinking.
Take Your Time When Making Important Decisions
I’ve now turned 44. Looking back at 18 years as a startup CEO with both exits and crashes, I’ve made tons of decisions. Good and bad, but most importantly; I’ve learned from the outcome. From being a young and very progressive and optimistic entrepreneur that was not scared of anything, I am now more reserved and take my time before making important decisions. By being too fast your instinct might fool you before you get the chance to think things through. You need to combine the overlapping parts of your gut feeling with your wisdom and fact, read data.
I am now finding myself thinking more about the decisions I need to make. I am bouncing them against my past experiences, failures, and successes. However, I’m also thinking about the reasons why I have made them after they have been made. This reflection enables me to do two things: I become much faster at fixing bad decisions earlier when I see that it was a bad choice. I’m much more in contact with myself and constantly learning.
The Broken Cap Table
In August 2021, I left a startup after spending more than five years. The company went through a couple of pivots and ended up with a broken cap table. (Hear the full story in this podcast on Spotify.) After that I was floating around as a consultant for four months. During that time, I consulted other early-stage startups with the purpose of finding a new place to join. I ended up with four very different offers. At the end of 2021, I found myself in a position where I needed to make a bet on one of them or continue as a consultant. This was a very unique situation. While I was grateful for it, I was scared because I knew that they were all time-limited opportunities. Therefore, I would need to turn down most of them. All of the companies had very likeable people. I had a similar deal with each one of them though they were at different stages.
Data vs. Intuition
I spent a lot of time collecting data to do proper due diligence. I started by analyzing the market, business model, potential, runway, team, investors, and experience. Then, I focused on how I would fit into the organisation, and where I could make the biggest difference and add the most value. The data was there, and in theory, that should be enough. However, it did not give me a clear picture of what was the best option since they were all different. I obviously made my bet. A big part of the decision was listening to my gut feeling and using my intuition to conclude.
Time For A New Beginning
Did I make the right decision? It depends on how you look at it. I did my job and I helped the company raise funds and grow. But after 12 months I realized that there was not a cultural fit between the management team and me. Therefore, I left the company in the beginning of 2023. This made me think that it was about time to give something back to the community. Therefore, I launched dilution.io to give back some of my experiences to the startup community. One of them is the free share dilution calculator and fundraising forecast tool that I developed for my own use.
At the end of the day, intuition and values (along with many other factors) brought me to where I am now, so I believe that trusting your gut in combination with the data available will take you a long way. There are other factors that you can not foresee and there are unforeseen events that you just need to count for.