Aligning Long Term Goals With Short Term Ones Crucial for Business' Success, Agrees Panelists Founders and investors shed light on important aspects of building a business for a longer time horizon
By Priya Kapoor
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Building a business is a long term journey. But it is often seen that the founders only focus on long term goals, and ignore the short term objectives. Such a move, however, can backfire and is often seen to be a recipe for failure of many businesses.. At the panel on 'Building companies with longer term horizons', that took place at Entrepreneur 2023 summit, founders and investors came together to shed light on such important aspects of building a business for a longer time horizon.
Said Dhirendra Mahyavansi, Founder & CEO, Turtlemint, "Long term vision and goals are critical for setting the guiding light and for directionally moving the company, especially when there is volatility. But it's extremely important to keep sight of short term goals. They should be aligned to long term vision and when they are executed, they need to be prioritized. Many co-founders do too many things in the early days and that becomes a reason for failure. If you are aligned to the core business and trying to solve for one specific problem that has the right unit economics, then possibly you can come out stronger for building that."
Concurred Shridhar Marri, CEO and Founder, Flyfish.ai, "We have to present both scenarios-short term combined with long term vision. Without a combination of these scenarios, it is difficult to raise investment today. Secondly, we have to also bring a much deeper understanding of the market, how consumer behavior is changing and the evolution of the business model etc."
Right founder fit
The panelists also discussed identifying right founder fit and on building unit economics to raise capital.
Santhosh Duriaraj, Venture Partner, Brinc: "Looking at the right founder-fit for the right problem fit in the market might be a major solution for all the challenges that could arise in the later stage. Not every founder is meant for every investor and vice-versa is also true. A founder should introspect that an investor falls in the rader. VC funds also are looking that a founder work for a longer term. Having the guardrails right at the very initial stages in a company can set the tonality of how you are going to grow and your trajectory towards the both parties coming together to solve that."
Said Sanjiv Rangrass, Venture Partner, Unitus Ventures, "In the last one or two years, I have realized we were all getting swept by the euphoria of high valuations. But with the bubble bursting now and euphoria out, I am a bit more confident. I believe the markdown on valuation is good. It is fuelled by investors colluding with founders. They have really pushed people up on GMV. But how can it in the long term, result in profitable business when DNA has been built on revenue. I focus on building unit economics and if you don't get it right, I wouldn't fund."
Panelists agreed that there is capital available, waiting to be deployed but there is change in approach. "It's no longer a FOMO based investment. The discussions are taking a minimum of more than two months. However, going in you have to be fully prepared.. When you go, be targeted. Go to the right set of investors whose vision and goals match with yours.," added Dhirendra Mahyavansi, Founder & CEO, Turtlemint.
Risk mitigation strategy the need of the hour
For businesses, creating a comprehensive risk mitigation strategy is of great significance. "It actually brings a multi stakeholder perspective not only to the employee and client but also across market investors and gives 360 perspective. Once you do that you can build outcome scenarios. If you identify adoption as a huge risk, you have to invest in user education. If technology is a challenge, you have to build enough layers of moat as you keep building the company. There are various solutions and scenarios you can build based on the entire assessment framework. You cannot really mitigate all the risks, you have to prioritize. High impact risks need to be tackled right away," added Marri.
