Aram Chávez
Faculty at ASU, recovering investment banker, entrepreneur, investor and Thunderbird Alumnus.
The Greek figure Sisyphus cheated death a couple of times and was punished by Hades—forever pushing a rock up a hill only to have it roll down as he reached the summit—sounds a lot like my entrepreneurial history.
As an entrepreneur, rolling up revenues into $1mm in sales is the hardest thing you’ll ever do, professionally. The second hardest is maintaining a positive cash flow. My assumption is you’re going to be cash flow positive (I have a lot of confidence in you). Be cash flow positive, show you can maintain it (they call that sustainability), and you’ll graduate to working “on” the business more than “in” the business.
Most entrepreneurs begin with the startup, and what I just explained was the journey from the start-up to becoming an actual business. I made it sound easy, it’s work, but it doesn’t have to be as hard as others have had it. Why not? Because I’ve done some prep work for you, and it starts with mapping.
Well, lucky for you, I’ve done this for you.
Startup Map
They say knowing is half the battle; this is very true. Why? Because with a map, you see what success looks like. In the military, they utilize several maps (topography, aerial, sonar, etc.) and update them as data comes in. Calculated decisions are made from these maps.
The startup world is similar to a battlefield, but if you’re thinking of a business plan, get it out of your head now. As an entrepreneur, I don’t have time to write a 30-80 page document, and as an investor, I don’t have time to read one. But, if you could open a map of what success looks like, what the journey is going to look like, would you follow it? Yes.
Yes, I’ve attached the link for you to open the Aha To Exit Startup Map ™(the “map”).
This map provides the process, syntax, the order for innovators to commercialize and monetize. It had already been used by VCs but never really documented in full.
Yes, I eat my own dog food, which means I utilize the map for all my investments and companies I start too. This map is more about what to do after you have your “Aha” moment. As Steve Blank once said, “…a startup needs a repeatable and scalable model…”. The map puts you on that path.
Each step of the Aha To Exit Map has been carefully validated and is in the proper order. I don’t know if this is the world’s first documented startup map for innovators to become entrepreneurs, but it is correct. Cheers to the second-mover advantage.
You’ll find it useful if you’re ever consulting for small businesses as well, tell the small business owner to review the map, find where they are on the map, and then fill in the blanks of what they skipped. Eliminate guessing, is what I say.
Liquidity
Every investor thinks of risk and reward, which means we need to address how you should think about exits. You don’t always need to be acquired, IPO, or de-SPAC to have a successful“ exit.” To have liquidity, you can do what Buffett does (channel what you know about Warren), which is to harvest cash flow. Harvesting cash flow is another form of liquidity, and if you skip up to Step 10 on the map, you’ll see there are a few choices on how you exit, harvesting is one way, it’s an easy lay-up and a conservative approach with long-term gains.
Why do I bring up liquidity? You’re going to need to raise capital, and investors want to know the exit strategy. Like Sisyphus, work the rock up the hill, but use the map as the quickest path for the journey—wait for it—“Now you’re cookin’ with gas!”
Aram Chavez is faculty at ASU, a recovering investment banker, entrepreneur, investor, and Thunderbird alumnus.
