The introduction of a disruptive technology leads to the collapse of sales of recorded music. Does this refer to the impact of legal and illegal digital music downloads on CD sales? Certainly. However, it is equally applicable to the first widespread adoption of broadcast radio in the mid-1920s. During that period, record sales plummeted by more than half. Sales did not recover to pre-radio peaks until the late 1930s as record companies embraced radio to promote their products. How can a founder apply history to current business issues?
Founders are visionaries. Each founder has had at least one insight that led to formation of a venture, and probably a lot more. Ironically, the tumult of day-to-day operations in a leanly staffed startup company may prevent the founder from effectively filling the role of visionary.
To achieve the next breakthrough, a founder may need to step back from day-to-day operations. Bill Gates and other creative entrepreneurs made a habit of one or two annual “think weeks.” During a think week, they were completely isolated from the day-to-day operations of the business. Instead, they read business and technical articles from related fields, biographies of entrepreneurs, and industry history. A senior management off-site retreat can also be used for this purpose. For some, it is simply spending quality time with advisors and mentors who are willing to share their experiences.
The solution to day-to-day problems may lie in taking time away from them. Clearing your mind might also lead to your next creative breakthrough.
Investment Company Status Considerations for Cash Positioning in Wake of Bank Failures
Given this week’s headlines, many emerging companies may be asking themselves: “Why am I holding so much cash?” The Investment Company Act of 1940 (the 1940 Act) may be to blame. “But I don’t have any intention of being an investment company. Aren’t those mutual funds or…
Distressed Bank Update as of March 16, 2023
In the three days since federal authorities announced sweeping measures to protect depositors of Silicon Valley Bank (SVB) and Signature Bank and help prevent additional bank failures (as discussed in our update of March 12, 2023), the U.S. banking system appears to have stabilized, at least temporarily.…
Short-Term Cash Management Alternatives
In response to recent client questions regarding the various considerations and options for holding short-term funds, we have prepared a reference chart comparing certain key characteristics of demand deposits with government securities, money market funds, and other short-term cash management instruments. Please note that this information is…