Why do startup CEOs fail? V4

The three-fold purpose of this article:

  • Help startup CEOs and founders understand themselves and identify potential fatal flaws.
  • Help investors, and others, assess startup CEOs and founders.
  • Help assess the CEO’s of traditional established companies.

The following is focused on software and high-tech startups.  Many of the concepts apply to other situations.  CEO failure results from an inter-related set of experience, skills, character, personality, values, morals, ethics, and luck.

You may download a PDF of this article from: Why do startup CEOs fail V4

Research regarding the most critical traits of successful founders.1

Founders with complementary skills sets tend to be successful. “The best founders know their strengths and weaknesses and recruit a complementary team.” Founders of all ages can be successful.  Age is not a predictor of success.”

There are three archetypes of successful founders:

  • Humble Operator: Exceptional at execution, extremely humble while confident in themselves. They are resourceful and gritty. People who worked with them before tend to follow them.
  • Agile Visionary: Usually first-time founders, they are young, visionary, and driven by a desire for greatness. They have a unique perspective on the market they’re going after and an intuitive sense of what their customers want. They test and iterate quickly to incorporate market signals.
  • Seasoned Executive: Experienced older founders, they often have 5+ years of management experience and deep industry expertise. They are intrinsically motivated to build a company. They may have started a company before.

There are three archetypes of unsuccessful founders:

  • Passionate Outsider: Usually first-time founders, they are humble and hard-working. However, they don’t have good founder-market fit and don’t have a complementary cofounder to rectify this gap.
  • Overconfident Storyteller: Charismatic, compelling, and have high confidence. They are likely to be solo founders and they are often not humble.
  • Stubborn Individualist: Slow to adapt to learnings from the market and not empathetic to what the customers want. They are not good at articulating a convincing narrative.

Successful founders have four superpowers:

  • Running her company effectively day-to-day, learning and adapting quickly
  • Results driven i.e. exploring many solutions to quickly finding the best one.
  • Customer empathy, which enables finding product-market fit.
  • Agile thinking i.e. able to iterate quickly based on market feedback, but at the same time persistently focused on the vision.

Successful CEOs have founder-market fit.

Founders with a deep understanding of the market have founder-market fit.  There are 4 signs of founder-market fit:

  • The founders are obsessed with the market. They are obsessed with market knowledge.  This results in them knowing everything about the market, what a day-in-the life of a customer looks like, the customer’s urgent problems, the competitors, et.
  • The founders’ personal stories. Customers are excited by personal stories which explain why the founders are obsessed.
  • Personality is the ability to build a network in the market and the market’s ecosystem.
  • Experience but not so much experience that the founders are constrained in their ability to disrupt, and to be able to see new and innovative ways of doing things. The degree of appropriate historical market/industry experience varies by market. e.g. Developing a new drug requires a degree of past experience.

The first point-of-failure is when the CEO is thinking of founding a company and becoming CEO.  Examine yourself.  Do you already have the characteristics of someone who is likely to fail?

  • Not able to clearly communicate on why starting the company and what the idea is.
  • Not having a very broad set of knowledge or being able to quickly learn a broad set. A startup CEO does it all without the infrastructure of a large company to support her.
  • Not relentless and able to overcome all obstacles.
  • Not able to do things quickly.
  • Not able to quickly learn from mistakes.
  • Not able to work long hours for many years. The average time for a SaaS startup to exit or IPO is 9 years.  But the vast majority fail.
  • Not willing to take risks. The majority of startup CEOs are forced to leave the company at some stage of funding.
  • Not able to minimize cash spending.
  • Not having the funds (personal savings, family, and friends) to live for a significant period of time without income from your company.
  • Not able to ruthlessly prioritize time e.g. who to meet vs who not to meet; problems which must be solved vs can be ignored.
  • Not having the personality and skills to build a broad set of trusted relationships with potential customers, suppliers, employees, advisors, investors, etc.
  • Not able to attract appropriate coaches, mentors and advisors. There are major differences between star athletes and star coaches.  The same person is rarely a star in both fields.
  • Not able to listen, and clearly understand what the other person intends to communicate.
  • Not willing to go all-in
  • Not extremely intelligent.

The second-point-of failure is when the CEO makes a poor selection of co-founder(s) and is not able to manage co-founder(s).

  • Not able to select co-founders with the range of experience and skills necessary for short-term team success. Co-founders should bring diverse experience and skills, resulting in the pool of capabilities necessary to create and launch the company.
  • Not selecting co-founders with similar objectives, character, values, morals, ethics, and time lines.
  • Not picking founders who have the personal financial resources to live until the company can afford to pay them or third-party investors can provide financial support.
  • Not having a common understanding of what each co-founder will contribute e.g. # of hours, capital, finding capital, creating the product or service.
  • Doesn’t have the skills to make the founders work well together.
  • Not being clear on how decisions are made, and who makes them.
  • Doesn’t ensure that the founders are physically located together and working together.
  • Unable to articulate and help the all the co-founders understand and support the higher purpose of the company. If the only purpose is to make money, the chances of long-term success are low.
  • Not having a common understanding of how much of the company the founders are willing to give up in return for capital.
  • Not documenting expectations and assumptions. This leads to future confusion and disagreements. “People forget 40%-80% of what they hear immediately.   Half the information people do recall, is recalled incorrectly”2

 Your next steps

Regardless of the situation, the CEO or founders need the capabilities to be successful in the next 24 months and to be competitively differentiated from the CEOs/founders of competitors.

  • If you are a startup CEO or founder: Assess your self and compare that to how others view you.
  • If you are an investor, advisor, someone planning to join the startup CEO: Review the above criteria and prepare your own list of criteria. Identify the deal-killers or fatal flaws and the criteria that are important. Assess the CEO or founders. You don’t want to be associated with a CEO or founders who will likely fail.
  • If you are the board of directors or major investor in a traditional established company: Prepare you own list of criteria. Identity the deal-killer criteria i.e. whether to terminate existing CEO, not to appoint a candidate as CEO or not to invest in the company.  Identify the criteria that are important. Assess the CEO. Boards should not a have a CEO who is likely to fail.  Investors should not deploy capital to CEOs who are likely to fail.


1 Basis Set Ventures, a San Francisco early stage fund, surveyed other funds to understand their opinion of the traits of successful vs unsuccessful founders.  https://www.basisset.ventures/founder-superpowers

2 Lindsay Wizowski, Theresa Harper, and Tracy Hutchings, Writing Health Information for Patients and Families 4th Edition (Hamilton Health Sciences, 2014), Page 5

Further Reading

How do  venture capitalists assess teams https://koorandassociates.org/selling-a-company-or-raising-capital/how-do-venture-capitalists-assess-teams/


Is your early stage startup planning to fail?

The purpose of this article is to help mentors, coaches, and advisors quickly determine if the early stage startup is planning to fail.  Mentors, et al, may not wish to spend time with founders who are planning to fail.

A secondary purpose of this article is help founders understand whether or not they are planning to fail.

You can download a PDF of this article from: Is your early stage startup planning to fail

What are the 3 greatest contributors to startup failure?1

This research study analyzed 101 startup failures and identified the most frequently cited reasons for failure.  Usually there were several reasons for failure.

  • 42% of the time built a solution looking for a problem i.e. no market need.
  • 29% of the time running out of cash.
  • 23% of the time, not the right team.

How do you recognize a startup planning to fail?

How can you tell they are building a solution looking for a problem, with the market demand unclear?

  • The market analysis contains some information copied from consulting reports or other sources.
  • No documented assumptions, with indications which have been validated, remain to be validated or invalidated.
  • No analysis
  • No validation by interviewing target customers.

How can you tell they plan to run out of cash?

  • No 24+ month cashflow forecast, by month, with key monthly milestones.
  • Assumptions, often undocumented, that angel investors, and pre-revenue funds will provide capital before there is revenue.
  • Assumptions, often undocumented, that little time is required to raise capital and little time is needed between capital raises to demonstrate achievements.
  • Assumptions, often undocumented, that it takes little time to go from a prototype in customers hands to a solution that customers are paying for.
  • Assumptions, often undocumented, that the initial revenue generating solution requires no changes before it can go global.
  • No milestones as to when to cut spending if revenue or capital infusion is delayed.

How can you tell they don’t have the right team?

  • The founders have no experience with the target customers, market place, the requirements of building and delivering the solution.
  • The founding team has major skills and experience gaps and no milestones for closing those gaps.

A red-flag and deal killer for me is:

The founders believe all they have to do is make a few wording changes to the presentation pitch deck to get investors, without having to do any of the foundational work necessary for build understanding through information collection and analysis.  This reflects a common belief that its easy to get money.

How do you recognize a startup planning to avoid failure?

A startup planning to avoid failure has a structure to capture the knowledge and facts arising from learning.  A startup that is not constantly learning will fail.  The reason to document knowledge and facts is to enable the entire team to share knowledge and facts.  The structure outlined below will initially have many assumptions.  Over time, assumptions will be validated or invalidated, and new assumptions will be made. The structure below will also enable the startup to effectively gain value from mentors, coaches, and advisors by sharing assumptions, knowledge, and facts.

 How can you tell they are building a solution for a problem, with the market demand clear?

The startup has facts, assumptions, and analysis of TAM, SAM and SOM

What is TAM (Total Addressable Market)?

  • What would be the startup’s revenues with their future solution if 100% of the global customers demanding a solution to their problem bought the startup’s solution? TAM is the case with no competitors.
  • The solution built in the first 12 months is only a subset of the solution which in 5 years time will address TAM i.e. TAM depends upon the specific nature of the solution at a point in time. Note the phrase “demanding a solution”. You must not include in TAM ghost customers who are not demanding a solution.  If customers don’t know they have a problem and are not demanding a solution, the startup is planning to fail.
  • There is a critical difference between customer needs and customer demands. Customers have a large number of needs.  Demand is customers deciding that they will spend time, effort, and money to get a solution for what they believe is an urgent need.  Often this means that customers will spend less money to meet other needs.
  • Is the startup’s TAM large enough to launch and grow the company? For example, the global smart phone TAM is huge, but the global TAM for smart phones that have a keyboard is tiny.
  • The best way to calculate TAM is with a bottom up calculation, starting with a clear description of the target customer segment, its needs, and then considering the subset of customers who will actually provide revenue, and the revenue per customer. Recognize not everyone in every country will be able to afford the solution.

What is SAM (Serviceable Addressable Market)?

  • This is the portion of the TAM that is within the reach the startup’s distribution channels and partners, and your ability to deliver and support your solution. Geography may be a constraint. This still assumes 100% market share of those customers demanding a solution. SAM will change over time, as growth occurs in geography, the number of distribution channels and partners, and the volumes from each distribution channel and partner.
  • How will customers connect with the startup?  If they are seeking a solution, how will they find the startup?  How will the startup make customers aware of the solution?

What is SOM (Serviceable Attainable Market or Share of Market)?

  • SOM will be lower than SAM for two reasons: the startup may have competitors, and every customer who is demanding a solution may not actually buy a solution.

TAM, SAM, and SOM will vary at different points of the startup’s 5-year forecast.  TAM, SAM, and SOM will also change as the startup validates assumptions by progressing through: initial assumptions, customers interviews, feedback from prototype in customers hands, feedback from initial revenue producing customers, feedback from MVP (initial revenue producing customers who are delighted from the initial set of value they achieve from the solution), customer feedback as solution capabilities are enhanced to provide value to a greater set of customers, etc.

How can you tell they plan to not run out of cash?

  • They have a one-page 24 month, by month cash flow forecast, with key milestones. 24 months is the bare minimum. Milestones must include some key customer traction accomplishment such as: prototype (i.e. not revenue generating) in customers hands; a revenue generation solution with limited capabilities but which still delights customers, etc. Milestones include capital being raised. For each month show: the revenue driver metric, revenues, expenses, profit/loss, key milestone(s) if any.
  • Very few companies obtain 3rd party funding (i.e. other than friends, family) until there is revenue. Only 3% of angel funded companies are pre-revenue.2
  • If you’re planning to raise capital from 3rd party investors, I suggest that you have a one-page five-year forecast, with the current year shown, and the past 3 years, if there is data. Also include the key assumptions and milestones.  Why do this?  Investors who are focused on making money see if you have at least a high-level road map for major growth i.3. 30 times or more.  Given that most startups fail, the only way for investors to make money is to have some startups with massive success.
  • The average seed stage round takes 12 ½ weeks. 20% of the startup require 20 weeks or longer. 20% of the startups require 6 weeks or less.3
  • A fund-raising round can take a long time. This research study examined 13,916 financing events.4 The average time between fundraising rounds was 20.6 months. The time between rounds ranged from 6 months, to 35 months, 68% of the time.  e. 16% of the time less than 6 months and 16% of the time longer than 35 months

How can you tell they have the right team?

  • Assess the skills and experience requirements implied by: the target customers, the nature of the solution to be built, the needed partners and suppliers, etc. Can the CEO’s communication’s demonstrate that the founding team is the right team with the relevant experience, skills, and network.
  • Many founding teams have gaps. Does the 24-month cashflow forecast have the milestones for when the gaps will be closed?

 What are my criteria for determining whether to mentor a startup?

  • There is a documented one-page TAM, SAM, and SOM with supporting facts, assumptions. There are documented interviews (these are NOT sales calls) with potential target customers. This helps answer the question “Are you building a solution looking for a problem?”  The milestones reflect what is accomplished in order to achieve TAM, SAM, and SOM results.
  • There is a one-page 24+ month cashflow forecast, by month, with key monthly milestones. This helps answer the question: “Are you going to run out of cash?”
  • An executive summary has been completed in gust.com with the PDF available. This helps answer two questions: “Does the startup have the right team?” and “Can the startup clearly communicate the market demand, the problem, and the solution?”
  • The gust executive summary has three benefits to the startup founders: #1 Founders answer a number of questions to complete the summary, saving time in the meeting with the mentor #2 Gust has a free software evaluator to assess your input. #3 Gust will enable you to contact a number of angel groups and other early stage investor funds.
  • The one-sentence pitch in the executive summary follows the format of: “My company (company name) Is developing (a defined offering) to help (a target audience) (solve a problem) (with secret sauce).”5
  • A nice-to-have for the startup is a completed business model canvas.6 This holds all the assumptions, and validated assumption the startup has made.

I recognize that the first version of these documents will have lots of invalid assumptions and issues with clear communications.  That’s OK.  These documents provide the foundation for helping the startup learn to succeed.

Your next steps

As a mentor, coach, or advisor:

  • Determine whether the startup is planning to fail or planning to avoid failure.
  • If planning to avoid failure, they may need help with their planning. e.g. what assumptions to make, how to validate assumptions, how to interview potential customers to validate assumptions, etc.
  • If they are planning to fail, are they willing and able to change?
  • If the startup is planning to fail, you need to decide if you can actually have any meaningful impact.

As a startup founder:

  • The first decision is whether you are planning to fail or planning to avoid failure.
  • If you are planning to avoid failure, do you have all the skills to assemble your plan? If not, do you have the mentors, coaches and advisors to assist?


1 https://s3-us-west-2.amazonaws.com/cbi-content/research-reports/The-20-Reasons-Startups-Fail.pdf

2 Angel Capital Association and Hockeystick, “2019 ACA Angel Funders report “

3“What we learned from 200 startups who raised $360 million”, Professor Tom Eisenmann, Harvard Business School, and DocSend


4 https://medium.com/journal-of-empirical-entrepreneurship/how-much-runway-should-you-target-between-financing-rounds-478b1616cfb5

5 The one sentence pitch is further described in this link to the Founder Institute:


6 https://koorandassociates.org/the-startup-journey/what-is-a-business-model/

What does the startup journey look like?

You can download a PDF of this article from here: What does the startup journey look like

What does the startup journey look like?

 The purpose of this article is to outline the major milestones in the growth of a software startup.  Almost every startup will fail. The time and money invested by the founders will be lost.

Phase 1 Build something that solves the urgent problems of a large number of customers.

The CEO is focused on finding and understanding a small group of people who love the great solution developed for their problems.

Founders, friends, and family initially finance the company.

  • The CEO is involved in every part of understanding the customer problems and developing the solution.
  • The founders have an idea. There are at least two founders. The CTO (Chief Technology Officer) is the primary or sole colder.
  • Founders gain an understanding of their target customers, their urgent problems, and the value to them of solving their problems. The founders may interview up to 300 potential customers.
  • Define the business model canvas. The business model canvas describes the value the startup offers its customers and illustrates the capabilities and resources required to create, market, and deliver this value and to generate profitable, sustainable revenue streams.
  1. The business model canvas is a set of assumptions and facts, which are constantly being validated, invalidated, and enhanced. The canvas changes at every stage of startup journey – sometimes changing daily.
  2. The canvas is basis for creating: various implementation plans, marketing & sales presentations, and investor presentations.
  • Build a working prototype, which solves a subset of the problems for a subset of the customers.

Some people and organizations may invest at this pre-revenue point.

  • Keep piloting and revising the prototype until the subset of customers are delighted with the prototype and are willing to recommend it.
  • Achieve a MVP (Minimum Viable Product). Customers are paying for this solution which solved a subset of their problems.

Angel investors and seed funds may invest at this point

  • Keep adding functionality to the MVP, until the founders believe the solution solves the problems of a large number of customers.

Phase 2 Build a company to sell the solution and enable a large number of customers to achieve benefits from the solution.

Venture capitalists may invest several million dollars. Most of the startups will lose the venture capitalist’s money.

  • The CEO’s focus shifts to building the company.
  • Prepare to scale.
  • Scale

Capital continues to be invested to fund the companies growth.

There are three things only the CEO can do, and no one else in the company:

  • Create and maintain alignment of people with the purpose of the company;
  • Nurture the company’s values, morals, and ethics (often referred to as culture);
  • Hire the leadership team and ensure they work well together. Up to 50% of the CEO’s time will go hiring and managing the leadership team. At least 1/3 of the leadership team hires will not work out and must be fired.

Much of the CEOs work from Phase 1 will be delegated. The CTO does little or no coding, while leading at team of 10+ people.

Phase 3 Exit

A financial exit will take from 7 to 15 years.  Few of the founding CEOs will be the CEO at the exit time.

The financial exist may involve:

  • IPO;
  • Sale to a strategic buyer; or
  • Sale to a long-term investment fund.

What is a business model canvas?

You can download a PDF of this article from:  What is a business model canvas?

The purpose of this article:

This article outlines what should be in your documented business model canvas. The business model is the story of who your customer is, why they buy from you, and how you make a profit. The story consists of both narrative text and numbers.

The documented business model canvas is valuable because it helps:

  • Founders figure out how to create a successful startup.
  • Leaders of successful companies focus all the employees on success by communicating what makes the company successful.
  • Leaders figure out why and how to change their company for continued success.

Execution plans are derived from the future state and current state business framework and business model canvas.

You can have more than one business model canvas, representing different points in time.  An early stage startup may have a single business model canvas outlining the future 3-9 months out.

The business model canvas I use is based on “MaRS Business Model Design, Workbook 2” https://learn.marsdd.com/wp-content/uploads/2012/12/Business-Model-Design-WorkbookGuide.pdf .

A business model canvas is only 1 of the 10 components of a business framework (See Further Reading “The Startup Business Framework has 10 sets of components”)

Each of the nine sections of the business model has 4 pieces

  • Definition: of what this section is.
  • Assumptions: What you believe is necessary in the section (both narrative and numbers)
  • Facts: These are the facts (both narrative and numbers)
  • Next steps: includes what you need to do to validate the assumptions.

A What is a business model canvas?

MaRS Definition:

“A business model describes the value an organization offers its customers and illustrates the capabilities and resources required to create, market, and deliver this value and to generate profitable, sustainable revenue streams.”1

B The business model canvas has nine components.

The nine components of the business model canvas are all inter-related.

#1 Customer Segments


These are the target customers.  Each customer segment will have its own value proposition.

Questions to answer include:

  • Who exactly will you be creating value for?
  • Who will pay you? Who achieves value and who pays you may be different – think of Google.
  • How will they recognize themselves?
  • Who will be your most important customers?


  • TBD


  • TBD

Next steps

  • TBD

#2 Customer Value Proposition

My definition of a value proposition

A value proposition is the customers perception of value.

This perception can be influenced by: facts, emotions, family & friends, social media, etc.

The value proposition = (All the customer achieved benefits) / (All the customer incurred costs)

All the customer achieved benefits can include both financial and non-financial (e.g. time savings, convenience, status, etc.)

All the customer incurred costs can include financial (purchase costs, costs to switch to your company, other adoption costs, and ongoing costs) and non-financial (time, inconvenience, loss of status, etc.)

The value proposition also needs to be competitively differentiated.

Questions to answer include:

  • The critical question for early stage startup is: do you have a MVP (Minimum Viable Product)? Do you have some satisfied customers providing some revenue and who would recommend you. An MVP is only a partial solution.
  • The critical question for all established companies and startups who believe they are ready to scale is: Do you have product/market fit? It is clear that there is a large market with a demand for your solution.  A key metric to assess product/market fit is NPS (Net Promoter Score).   See Further Reading “Do you have product/market fit?”
  • What value will the customers perceive they will achieve? This is very different from you opinion as to what value you will deliver.
  • What problems do your customers think you will solve?
  • What customer needs will be fulfilled?
  • Why does the customer believe the value of your solution is better than the status-quo or the competition?
  • What does the customer believe will be the impact of your solution? E.g. 10 times improvement in something?
  • What product or service will each customer segment perceive?


  • TBD


  • TBD

Next steps

  • TBD

#3 Customer Relationships


What type of customer relationship do your customers expect to have with you?

Questions to answer include:

  • How will customers be acquired, kept, and grown?
  • Why type of relationship does each customer segment expect you to establish and maintain?
  • What types of relationships have you already established?
  • What is the cost of each type of customer relationship?
  • What is CAC – customer acquisition cost?
  • How many customers are we losing – churn rate?
  • What is LTV – lifetime customer value? In the initial startup stages, LTV will be less than CAC, because of the need to obtain an initial pool of customers by doing inefficient things that don’t scale.  As the startup is getting ready to scale, it will have figured out how to make LTV exceed CAC.


  • TBD


  • TBD

Next steps

  • TBD

#4 Channels


Channels are how to connect the value proposition to the target customer.  There are three different types of channels:

  • Communications – used to communicate with potential customers. There may be many communications channels.
  • Sales – where customers and sellers agree on the transaction. Usually there are fewer sales channels than communications channels.
  • Logistics – how to deliver the solution to the customers.

Questions to answer include:

  • Through what types of channels do the customers want to be reached? In other words, what channels are most effective? E.g. website, app. Social media, face-to-face, marketplaces, etc.
  • What channels already exist?
  • Which channels are most cost efficient?
  • Which channels are integrated with customer processes?


  • TBD


  • TBD

Next steps

  • TBD

#5 Key Partners


A partner may also be a channel, if the answer is “yes” to one of the following questions:2

  • Is the partner a leading entity with a brand and market position that adds to your credibility?
  • Does the partner add expertise and resources to your product solution in a way that increases the value of the product for the end customer?
  • Is the partner (and their brand/expertise/resources) required to land contract with the key target customers?

Questions to answer include:

  • Who are the key partners?
  • Who are the key suppliers?
  • What key activities, supporting your value propositions, to your partners perform?
  • How effective are your current partners and suppliers?
  • What types of partners and suppliers do you need?


  • TBD


  • TBD

Next steps

  • TBD

#6 Key Resources


“….resources mean any relevant intellectual property (IP), technical expertise, human resources, financial and physical

assets, key contracts and relationships. In other words, resources refer to anything within your control that can be leveraged to create and market your value proposition (e.g., a patent pertaining to your value proposition, key contacts within the industry).”3

Questions to answer include:

  • What resources are necessary to:
    1. Enable the customer to achieve their value proposition?
    2. Maintain channels and partnerships?
    3. Build relationships with customers?
    4. Build revenue?
  • What resources exist today?
  • How effective are they?


  • TBD


  • TBD

 Next steps

  • TBD

#7 Key Activities


“…the key processes that are required to weave together your resources with those offered by your partners to deliver the value proposition, manage channels and relationships, and generate revenue. Examples of key activities include R&D, production, marketing, sales and customer service”4

Questions to answer include:

  • What key activities are necessary to:
    1. Enable the customer to achieve their value proposition?
    2. Maintain channels and partnerships?
    3. Build relationships with customers?
    4. Build revenue?
  • What activities exist today?
  • How effective are the current activities?


  • TBD


  • TBD

Next steps

  • TBD

#8 Cost structure


“…the cost of delivering the value proposition, including the resources needed and key activities involved. We want to answer the following key question:

Does the cost structure provide a reasonable profit?”5

Questions to answer include:

  • What are the largest costs in the business model canvas?
  • What are the fixed costs and variable costs?
  • What activities are the costliest?
  • What resources are the costliest?
  • What is the burn rate? (i.e. excess of costs minus revenue)?
  • What are the most important number for the startup to survive?


  • TBD


  • TBD

Next steps

  • TBD

#9 Revenue Streams


What will you charge your customers and how will you charge your customers?

Questions to answer include:

  • What is the specific value the customers are willing to pay for?
  • What is the value the customers are willing to pay for?
  • How much are they paying today?
  • What is the pricing model? Subscription, one-time, freemium, advertising, etc.
  • How are they paying today? Cheque, credit card, etc.


  • TBD


  • TBD

Tom’s observations and questions

  • There is no mention of carry.

Next steps

  • TBD

C Further Reading

 The Startup Business Framework has 10 sets of components.

When a company is first launched, some components may not exist, or may be very simple. Successful growth results in the evolution of the framework, with components being created and modified

The 10 components of the business framework are all inter-related( e.g., every component requires talent).  The following article provides more detail.



Do you have product/market fit?

  • Do your customers love your solution?
  • What is the size of the pool of customers who will pay for your solution?
  • Will your solution make money?

The following article provides further detail.


D Footnotes:

[1] Page 5 MaRS Business Model Design, Workbook 2

2 Page 10, MaRS Business Model Design, Workbook 2

3 Page 9, MaRS Business Model Design, Workbook 2

4 Page 11, MaRS Business Model Design, Workbook 2

5 Page 11, MaRS Business Model Design, Workbook 2

What does the Toronto startup ecosystem look like? (V4)

This document focuses on the high-tech and software startup ecosystem, and outlines the different types of organizations comprising the ecosystem, whose scope is global.  This is not a detailed listing of every ecosystem member. So far, I have identified 25 different types of organizations.

The core of the ecosystem are the founders.  Founders start with an idea.  They create a MVP (Minimum Viable Product) which satisfies some early customers.  Then, they refine the MVP until there is product/market fit. (Current customers recommend the product and there is a large pool of potential customers who have problems that can be solved by the startup’s solution.)

#1 Incubators and accelerators

There are a broad range of incubators and accelerators and almost every one is different. As a startup evolves, it may move among several different types of incubators and accelerators.  Incubators and accelerators focus on startups where can have maximum impact by utilizing admittance criteria and processes. Common characteristics of incubators and startups are:

  • Links to investors.
  • Access to lawyers.
  • Access to mentors and advisors.
  • Networking with other startups.
  • Financing is sometimes provided.


The goal of an incubator is to help take a start-up to the point where there is a MVP (Minimum Viable Product). The process takes 12 to 24 months.  The founder decides what incubator resources to draw upon and at what time.

The key characteristic of an incubator is co-located office space with other start-ups.


The goal of an accelerator is to quickly grow the size and value of the startup to enable future funding. The key characteristic of an incubator is taking a start-up company (which already has a Minimum Viable Product) through a very structured 3-4 month process. Actions and outcomes are required every 1-2 weeks.

As of Sep 3, 2019 Toronto has:1

  • 29 pre-incubators.
  • 63 incubators.
  • 54 accelerators.

#2 Venture studios

A venture studio comes up with an idea, assembles a team of founders, and provides capital for the startup.

#3 Angel investors

There are individual angel investors as well as angel investor groups. Angel investor groups have government supported infrastructure (e.g. staff, office space), but the government does not provide capital to startups applying to the angel investor groups.  The capital comes from the angel investors.

As of Sep 3, 2019, Toronto has 216 investor organizations and companies.1

#4 Crowdfunding platforms

Investors make small online contributions.  There are two types of crowdfunding:

  • The investor does not get equity. Their return is a future product or service.
  • The investor does get equity. Any investor living in Toronto may invest up to $2,500 into a crowdfunding equity investment, with a limit of $10,000 per year.  Accredited investors may invest up to $25,000 at one time into a crowdfunding equity investment, with a yearly limit of $50,000.

#5 Pre-seed or seed investors

The goal at the pre-seed stage is to demonstrate that the solution meets a market need.  Pre-seed investors expect the following outcomes at the end of the pre-seed stage:

  • There is a MVP (Minimum Viable Product being used by some delighted customers with some revenue.
  • There is documented product feedback).
  • The team with the necessary skills has demonstrated that they can work together.
  • There are documented experiences with customers which provide facts regarding potential market size and market demand.
  • Conversations with distribution channels and partners have started;

The goal at the seed stage is to demonstrate that the potential market is large and that there is strong demand for your solution.  Seed investment is used to transform the initial MVP into a solution which customers from a large market will demand.

#6 Series A, B investors

At the series A stage, the founders believe they have product/market fit, and the investors believe the startup has both product/market fit and the potential to scale. Key investor questions are:

  • Who are customers and how will they be cost-effectively reached?
  • How will you make money and predictably grow?

Debt financing becomes available from debt investors.  At the series B stage, the startups have been successfully scaling. Debt equity continues to be available.

#7 Post-series B investors

Both equity and debt funds exist.

#8 Niche market investors

There is at least one investor targeting profitable startups focused on a niche market they dominate.

#9 Investment dealers/underwriters

Sartups can raise equity by listing on the CSE (Canadian Securities Exchange), or on the TSX Venture Exchange.

#10 Organizations to sell your startup

These organizations will help you sell your startup, once it’s achieved some success.  They can also help you buy other companies.

#11 Talent development programs

Some organizations train people, to enable them to be hired by startups.

#12 Outsourced or offshore talent providers

Many startups have offshore software development teams, or use outsourced resources for part-time or specialized needs.

#13 Talent acquisition

This includes job boards and companies which enable Toronto startups to hire people from outside Canada and relocate them to Canada.

#14 Associations

There are associations focused on specific types of members e.g., VC (Venture Capital), accelerators, startup CEOs, startup CTOs, etc.

#15 Advisors – legal, financial, functional

Every startup requires a range of advisors.  For example, financial software can collect and report on a board range of information.  An accountant can advise on how to set the software up.  Lawyers are key to providing advice on the range of legal and regulatory requirements, and how best to meet them.

#16 Startup operational services

These SaaS (Software as a Service) companies provide operational services needed by startups e.g., finance and financial reporting (cash flow, profit and loss, balance sheet, etc.), CRM (Customer Relationship Management), help desk, payment processing, etc.

#17 Reviews of startup companies

Some companies are focused on reviewing startup solutions.  Other companies enable reviews of startups as a sideline to their main business (e.g. job boards enable employee reviews of the CEO).

#18 Conferences

Conference organizers manage Toronto conferences focused on startups.  Many of the organizations in the Toronto ecosystem also host events.

#19 Regulators

Every startup needs to be aware of regulatory requirements as soon as they start raising capital.  Financial Services startups must be compliant with many more regulatory requirements.

#20 Federal government programs

Startups can benefit from tax credits, financing, and advisory support. When going global, Canadian trade commissioners are based in 160 global cities.  The startup Visa program enables a foreign employee with a job offer to quickly obtain a visa to work in Canada.

#21 Ontario government programs

The Ontario government has numerous programs, including the funding of the infrastructure for angel groups.

#22 Municipal programs

Many cities have their own programs.

#23 Ecosystem researchers

Facts about startups are available in databases.  Some organizations conduct and publish fact-based research regarding startups.

#24 Startup charities

The Upside Foundation focuses on startup companies donating stock options.

#25 Coworking space companies

Once the startup leaves the founders’ homes (or accelerator) they move to a coworking space. These companies also enable a startup to quickly establish a global physical presence.

As of Sep 3, 2019 Toronto has 73 co-working space organizations and companies.1


1 Startup Here Toronto   https://startupheretoronto.com/startup-support/

Do you have product/market fit? (V2)

How do you know you have product/market fit?

You have product/market fit if:

  • Your customers are so delighted that they are recommending it to others.
  • Your customers would be extremely disappointed if your solution disappeared.
  • Your customers can describe the big problem they had and the big benefit they achieved from your solution.
  • There is clear demand in the market place for your solution.

You do not have product/market fit if:

  • Your customers are not recommending you to others.
  • Your customers would not be extremely disappointed if your solution disappeared.
  • You customers cannot describe the big problem they had and the big benefit they achieved from your solution.
  • The marketplace is not demanding your solution. You have to persuade/educate your customers that they have a big problem with a big opportunity.
  • You are not clearly and obviously differentiated from competitors in terms of the value customers achieve. Your only differentiation is price.

 How do you measure product/market fit?

The single most important question is asking  “Would you recommend our solution to others?”  (Follow on questions could be “If so, why?  If not, why not?”) This metric is known as NPS (Net Promoter Score).  What is your NPS? Above 0 is good. Above 50 is excellent. Above 70 is world class. How do you compare to your industry and competitors? What has been your NPS trend?  You can find links to more information about NPS in the Further Reading section at the end of this document.

A more detailed question for customers would be (Sean Ellis developed this). “How would you feel if you could no longer use our product or service?”

  • Very disappointed.
  • Somewhat disappointed.
  • Not disappointed – it’s not really that useful.
  • I no longer use.

At least 40% of your target customers must say “very disappointed”.  If it’s less than 40% you need to reposition/change your product.  One approach can be to segment the answers to find a customer segment where the response is above 40%.

You must understand the group above 40%.  The five questions to ask them are:

1) who are you (demographically)?

2) why did you seek out our product/service?

3) how are you using our product/service?

4) what is the key benefit you’ve achieved?

5) why is that benefit important?

How large is your TAM, SAM, and SOM?

Having the facts to demonstrate that you have product/market fit is not enough to make the decision to invest capital to grow your business.  You need to have facts regarding your TAM, SAM, and SOM.

What is TAM (Total Addressable Market)?

What would be your company’s revenues with your current solution if 100% of the global customers demanding a solution to their problem bought your solution? You would have no competitors.  The focus here is on your current solution, not the solution you might have in five years time.  Note the phrase “demanding a solution”.  You must not include in TAM ghost customers who are not demanding a solution.

Is your TAM large enough consider growing your business? For example, the global smart phone TAM is huge, but the global TAM for smart phones that have a keyboard is tiny.

What is SAM (Serviceable Addressable Market)?

This is the portion of the TAM that is within the reach of your distribution channels and partners, and your ability to deliver and support your solution. Geography may be a constraint.  This still assumes 100% market share of those customers demanding a solution.

How will your customers connect with you?  If they are seeking a solution, how will they find you?  How will you make customers aware of your solution?  How will your customers and you connect?

What is SOM (Serviceable Attainable Market)?

SOM will be lower than SAM for two reasons: you may have competitors, and every customer who is demanding a solution may not actually buy a solution.

How do your customers perceive your competitively differentiated value proposition?  How hard is it for a competitor to copy your solution or to provide a better value proposition to your potential customers?  What is your retention rate and your churn?

Will you company make money?

You must now build a cash flow financial model for your company, to determine if your business will make money. Some of the components of the model include:

  • Current results and future targets for TAM, SAM, and SOM.
  • LCV (Lifetime Customer Value).
  • CAC (Customer Acquisition Costs).
  • Costs to deliver and enhance the solution. Many startups overlook the ongoing need to enhance the solution by fixing bugs, keeping pace with evolving customer needs, and staying ahead of the competition.
  • Financial costs and investor exits.
  • The costs of acquiring, retaining, developing, and exiting. Talent is the greatest challenge.  Unlimited capital is available for a successfully growing business.  Quality talent is the scarcest resource.

My Observations:

  • Most startups don’t actually achieve product/market fit with a large TAT, SAM, and SOM.
  • Many startups are not able to successfully scale, because the founders are unable to transform the company and themselves.
  • Many existing large companies have lost product/market fit and are in a fight to survive, often with declining TAT, SAM, and SOM. These companies don’t recognise they are in this situation and devote the bulk of their resources to resolving secondary issues, leading to decline.

Your next steps, regardless if you’re a startup or a long established company:

  • Document the facts and assumptions regarding product/market fit, TAM, SAM, and SOM.
  • Validate assumptions, resulting in facts. It is critical that product/market fit is based on facts rather than dreams and hopes.
  • Build your cash flow model.
  • Do all of the above in the context of a documented value proposition and business model. The further reading section contains links to workbooks from MaRS, which will guide you through the documentation.

Further reading

The Net Promoter Score concept was initially developed by Bain.  The following is a link to the Bain website homepage for Net Promoter Score, which contains several short articles:


The following is a quick overview of using Net Promoter Scores:


Business Model Design Workbook from MaRS:


Crafting your value proposition Workbook from MaRS:



The startup business framework has 10 sets of components.

Purpose of this document

This document outlines the business framework of a successfully scaling startup.  When a company is first launched, some components may not exist, or may be very simple. Successful growth results in the evolution of the framework, with components being added and changing.

The 10 components of the business framework are all inter-related( e.g., every component requires talent):

1       What can only the CEO do?

There are three things only the CEO can do, and no one else in the company:

  • Create and maintain alignment of people with the purpose of the company;
  • Nurture the company’s values, morals, and ethics (often referred to as culture);
  • Hire the leadership team and ensure they work well together.

Many startups fail because:

  • People are not aligned and working towards the purpose.
  • Morals, values, and ethics vary, leading to inconsistent and dysfunctional behaviours and decision-making.

2       Company purpose

What is the purpose of the company? Why does the company exist? The description of the purpose of the company should be positive and outwardly focused on how you benefit customers and society.  For example, Nike’s “authentic athletic performance,” rather than “sell lots of shoes made in China.”  Is the purpose of the corporation to make as much money as possible? How should the company benefit society?  Or, should it?

Larry Fink, in his 2018 letter to CEOs, said “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate…..Without a sense of purpose, no company, either public or private, can achieve its full potential…..And ultimately, that company will provide subpar returns to the investors”[1]

3       What are the company’s values, morals, and ethics?

What are the company’s values, morals, and ethics?  These are often referred to as culture.

Values: Values are what someone thinks and feels internally and the rules by which they make decisions about what they should or should not do. Values have different importances, which are helpful when people need to trade off or balance one value versus other values.  You make a decision based on what you believe is “the right thing to do.”

Morals: You are judged by others as to whether or not your actions are moral or immoral.  Morals reflect external observable actions and behaviours. Morals are decisions, actions, and behaviours which people feel are right or wrong, good or bad.  Morals are actions and behaviours arising from one or more values.  Not all values are related to morals.  Morals are based on a broader perspective than just the individual.

Ethics: Ethical decisions, actions, and behaviours are based on following a documented set of standards or principles.   Many companies and professions have a Code of Ethics.

Values, morals, and ethics should also tie back to the purpose of the corporation. Is the sole purpose to make as much money as possible, constrained by laws, regulations, and company policies?

Some companies have published a set of decision-making principles.  A famous example is Bridgewater Capital (a $150 billion investment fund).  Ray Dalio, the founder, has published many of his beliefs in the book “Principles”.

4       Customer perceived value proposition

A value proposition is the customers’ perception of value.  This perception can be influenced by facts, emotions, family and friends, social media, etc.

The value proposition = (All the customer achieved benefits) / (All the customer incurred costs)

  • All the customer achieved benefits can include both financial and non-financial factors (e.g. time savings, convenience, status, etc.).
  • All the customer incurred costs can include financial (purchase costs, costs to switch to your company, other adoption costs, and ongoing costs) and non-financial (time, inconvenience, loss of status, etc.).

You will only succeed if the customers believe your value proposition is better than the alternatives, which may include the status quo.

5       Business model

5.1      What is a business model?

A business model describes:

  • The value the company enables its customers to achieve.
  • The resources and capabilities to create, market, and deliver this value.
  • How to generate profitable and sustainable revenue streams.

5.2      What are the 9 elements of a business model?

  • Who are your target customer segments? Some segments may not provide any revenue. g. Google seeks to provide the best search experience, which enables Google to generate advertising revenue.
  • What is the customer’s perceived value proposition of your solution? How are you different from, and better than, the competition?  The value proposition includes all of the customers’ costs and benefits associated with adopting your solution, which includes any transition costs from existing solutions.
  • What are your customers’ expectations of their relationship with you? g., if it’s a software product, how often will there be updates with new features?  How easy will it be to install a new version?  Will customer service be a chatbot or a live person? Etc.
  • What will be your channels to the customer?
    1. Communications channels with potential customers?
    2. Sales channels which result in a sales transaction?
    3. Logistics channels which deliver the product or service to the customer?
  • Who are your key partners? A partner is more than a channel. A partner may be: enhancing your credibility due to their reputation; adding value to your solution due to their resources; or enabling you to close sales.
  • What are the key activities? Which processes and actions are required to manage partners, channels, and resources in order to enable customers to achieve their value proposition.
  • What are the key resources to enable customers to achieve their value proposition? These include: intellectual property, technology, people, contracts, financial and physical assets.
  • What is the cost structure to create and deliver the value proposition?
  • What are the revenue streams? These could include: subscription-based per person per month, free for a basic service, with multiple tiers of extra services with fees, etc.

6       Talent Management

Talent management is the foundation for success. Key processes include:

  • Determining talent requirements;
  • Being an attractive place to work for target talent;
  • Acquiring, retaining, developing, and exiting talent;
  • Compensating talent.

Only the CEO, and no one else, can hire the leadership team and ensure they work well together.

7       Capital and cash management

A monthly free cash flow forecast, with detailed assumptions is critical.  You need to understand, and model, what drives revenue and costs.  A rapidly scaling business will have negative cash flow, and likely negative accounting profits.  You need to be able to understand and describe this to both investors and employees.

8       Investor Management

You must define your target investors and how they will enable value creation within your company.  Start building relationships with investors before you need the capital.  Ask potential investors if it is alright to include them on your monthly investor update.  Shareholders will require additional detailed communications and meetings.

9       Exit Management

The founders will leave the company at some point, even if it’s by death.  You need to first establish founder expectations regarding exit and potential risks, such as unexpected death. Processes and legal frameworks should be in place to deal with the risks.  Planned exits, including selling stock as part of an IPO, need careful planning.  The founders need to take into account their personal family, tax, and financial situations.

10   Governance

  • Governance is the set of relationships and the structure to set and achieve objectives, and monitor performance.[2] You need to be clear on how decisions are made.
  • Begin with setting out the stakeholder(founders, shareholders, CEO, C-Suite) expectations and then producing the necessary legal, policy, and procedure documents.
  • Governance will dramatically evolve from the early stage with only two founders, to a company with hundreds of staff.
  • Governance documents may include:
    1. Articles of incorporation and bylaws;
    2. Shareholders agreement and shareholders voting trust;
    3. Board of directors mandate and board approved policies;
    4. Board of directors delegation of authority to CEO;
    5. CEO Management contract.

Your next steps

To enable discussion with your investors, founders, board of directors, C-Suite, and advisory board, download the following one-page slide:

The startup business framework has 10 sets of components

Further reading

“Crafting your value proposition Workbook 1”, MaRS Entrepreneur Workbooks, https://learn.marsdd.com/wp-content/uploads/2012/12/Crafting-Your-Value-Proposition-WorkbookGuide.pdf

“Business model design Workbook 2”, MaRS Entrepreneur Workbooks, https://learn.marsdd.com/wp-content/uploads/2012/12/Business-Model-Design-WorkbookGuide.pdf


[1] https://corpgov.law.harvard.edu/2018/01/17/a-sense-of-purpose/

[2] Summary of  “G20/OECD Principles of Corporate Governance”, 2015  https://www.oecd.org/daf/ca/Corporate-Governance-Principles-ENG.pdf


Leadership talent is the underlying cause of startup failure.

There is some debate regarding the relative importance of the idea vs talent.  Talent is the most critical.  It is the talent which: comes up with the idea, changes the idea as learning more about the customers, and successfully grows a profitable company.  Lots of people have ideas.  Few people can successfully achieve results.

 Founders are often the cause of start-up failures:1

65% of the failures of high-potential start-ups are due to people problems: relationships, roles and decision-making, and splitting the income. More than 50% of founders are replaced as CEO by the third round of financing.  In 73% of these founder replacements, the CEO is fired rather than voluntarily stepping down. The founder’s passion, confidence, and attachment to the start-up is initially a great strength. Founders often refuse to revise their strategy and business model, underestimate and misjudge the need for additional skills, and make decisions that don’t reflect the current situation.

 The top nine reasons for start-up failures were identified by CB Insight:2

( I’ve shown below my point-of-view as to why leaders and leadership were the root cause.)

  • 42% no market need – not obtaining facts as to customers and their needs.
  • 29% ran out of cash – poor management of cash flow and poor reputations with investors.
  • 23% not the right team – unable or unwilling to assemble the right team.
  • 19% get outcompeted – not aware of the competition and customer needs.
  • 18% pricing/cost issues – not aware of customer needs and the competition.
  • 17% poor product – poor ability to design and build a product meeting customer needs.
  • 17% need/lack business model – not understanding a business model is needed, or unable to define one.
  • 14% poor marketing – poor marketing skills.
  • 14% ignore customers – clearly a leadership problem.

 Why do companies find themselves in crisis?

“The assumptions on which the company has been built and is being run no longer fit reality.”3

 Major business changes almost always fail:4

  • Major changes almost always fail. 12% of change programs succeed.
  • 38% produced less than half the expected results.
  • 50% diluted the value of the company.

Most venture capital backed start-ups will fail5.

  • Three quarters of VC backed firms in the U.S. don’t even return all the investors capital..

Your next steps

To enable discussion with your board of directors, C-Suite, and advisory board, download the following one-page slide:

Leadership talent is the underlying cause of startup failure


1 “The venture capital secret: 3 out of 4 start-ups fail”, Deborah Gage, Wall Street Journal Small Business, September 19, 2012  discusses research by Shikhar Ghosh, Harvard Business School

2 “Top 20 reasons start-ups fail”, CB Insights, Oct 7, 2014

3 Peter Drucker, Harvard Business Review, November 2009, Page 90

4 “It’s 8-to-1 against Your Change Program”, Bain website, Managing Change Blog, 2017 June 23

5 “The Founder’s Dilemmas”, by Noah Wasserman

Startups often fail in the transition to scaling.

Startups often fail in the transition from product/market fit to successful scaling, because the talent requirements are different.  The problems faced by leaders in those two situations are very different.  Many leaders are not able to transition.

Getting to product/market fit requires a small team making constant changes to build a product which delightfully solves urgent customer problems:

  • CEO focus on building a delightful product.
  • Everyone does everything. There are no full-time managers.
  • Doing things that don’t scale and are inefficient.
  • Limited management processes.
  • Key metric is customer satisfaction.
  • Heavy investment in engineering.
  • With an engineering team of less than 6 people, the CTO (Chief Technology Officer) spends most of their time coding.
  • There are lots of coding, technical, architectural issues and decisions.

 Being ready to scale requires an architected business and suite of with supporting processes and technology, able to efficient roll out an evolving solutions which will change the world:

  • CEO focus on building talent and a company.
  • Management structure in place. Roles and responsibilities defined.  Fewer generalists, and more specialists.  Full-time managers.
  • Focus on efficiency in order to profitably scale.
  • Management processes and supporting technology in place, especially for talent acquisition, development, and retention.
  • Decision-making drive by several key metrics.
  • Heavy investment in marketing and sales.
  • CTO no longer coding most of the time – may be a full-time manager.
  • Broad set of issues and decisions.

The CEO must do what only the CEO can do, and must not delegate:

  • Creating and maintaining purpose and alignment.
  • Hiring a leadership team and making sure they work well together.
  • Nurturing the company culture.

 Your next steps

To enable discussion with your board of directors, C-Suite, and advisory board, download the following one-page slide.


Successfully scaling startups are different from public companies. V2

I observe major differences between long established public companies and successfully scaling startups.  The two major things that strike me are:  the startups have an in depth understanding of the customer; and the startups are incredibly focused on having the right talent: talent in management, on the board, on the advisory board, as well as talented investors.

This version 2 of my document includes 3 key concepts:

  • Startup board of directors are focused on creating value. Public company boards often focus on “oversight”
  • Startups make 5-10 minute “pitches” for investments, focused on “What is the customer problem” and “What is the solution the customer will pay for” Public companies often have very long presentations regarding “business cases”.
  • Startups are constantly re-inventing themselves and transforming. Public companies often view transformation as a one time event and create temporary organizations such as “The Transformation Office” and “The Chief Transformation Officer”.
Successfully scaling startups Long established public company
Planning driven by: what is the customer problem or need; how does the customer perceive that the solution is significantly differentiated. Planning driven by vision and mission statements.  Often little differentiation among competitors.
Often clarity as to the beneficial impacts on society. Beneficial impact on society is not a consideration.
Focus on meeting the needs of customers Focus on growing shareholder value
Every member of the board of director is focused on growing company value.  They have previous experience in growing value. Board of directors has an “oversight” role.  There often the concept of “noses in, fingers out”.
Investors make decisions based on talent: talent of the founders and management team, talent on the board, talent on the advisory board, and talent of the other investors. Talent does not play a major role in deciding on whether to invest or divest.
Most things are broken most of the time.  The focus is on solving the daily issues which arise from scaling and meeting evolving customer needs. Risk management and Enterprise Risk Management play a major role.  Focus on “mitigating risk”.
Transformation is an ongoing and integral part of the business. As the company grows from a few co-founders to 10 people to 50 people to 150 people to 500 people, the company re-invents itself every 6 months.  Everything changes: the role of the CEO, who you hire and how you hire, how internal meetings are structured and organized, the technology, the business processes, etc.

There are no such things are “Chief Pivot Officer” or “The Pivot Office”.

Companies launch stand-alone transformation initiatives.

The is a Chief Transformation Officer and a Transformation Office.

Transformation is views as a focused one-time event,

The start-up is the disrupter due to deep understanding of the customer and providing solutions which the customer sees as very superior and different. Companies are “disrupted” because they no longer understand customer problems, needs, and why the customer should buy from them.
Uses advisors and experts who can help invent (and re-invent) and create what will be successful in a future which is very different from what was successful in the past. Use advisors and experts who understand in detail what has been successful in the past in the industry, with other companies.  The phrase “best practices” is often used.
Pitches to justify investments are often 5-10 minutes long.  The focus is on:

One-on-one interviews with potential customers have validated that there is a problem and customers would consider for a solution.

Minimum Viable Products are piloted until the there’s validation that customers will actually pay for the solution.

Then major investors are made in growth

Business cases to justify  are built, with long and detailed presentations.

Often years pass in building a solution before launching to initial customers.