A Risk-Based Lens

As a startup CEO, a robust risk-based lens is one of our most potent decision-making tools.

In a startup, there is always too much to do on any given day. You will never have enough time or resources to do everything you could be doing to improve your company’s chances of success. Therefore, you must prioritize and make choices using at least three buckets:

• What must only I uniquely do?
• What should I delegate substantially while remaining in an oversight role?
• What can I delegate completely?

Often, the right lens to make such decisions is based on risk. Whatever represents the most significant risk(s) to the business should get your priority attention. Ask yourself:

• Is the topic at hand an existential risk to the business? Will the wrong result, poor outcome, or possible implications result in the end of the company? If possibly so, this deserves your priority attention, likely with the input of internal or external subject matter experts to help you consider the full range of potential resolution approaches.
  
  Examples: An unrecoverable regulatory violation. A devastating lawsuit. Running completely out of funding.
  
  
• Is the subject of attention on the critical path to your next major value-inflection milestone? Know what the next step-up in valuation depends on at all times so you can use that insight as a way to prioritize where you and your team are spending your precious resources.
  
  Examples: Working product prototype that meets critical specifications. Compelling pivotal trial results. Regulatory approval. First paying customer. Referenceable client case studies. Reliable manufacturing. Authorized reimbursement codes. Repeatable and scalable sales process. Cash flow breakeven.
  
  
• Is good enough acceptable? Work where good enough is acceptable often implies a low risk to the company for essential tasks.
  
  Examples:  Business cards. First version of the accounting system. Co-working space to provide an address and business collaboration location. Startup membership in relevant industry groups.

The danger is that we all tend to slide towards tasks and activities that are relatively easy for us, such as work that we have experience with, fits squarely in our skill set, is quick and easy to accomplish, or is otherwise not scary, incredibly hard, or otherwise overwhelming. However, this is a seductive error.

Your most precious resources are your time and attention; the hard stuff is what de-risks your startup and creates massive value inflections. That means you must overcome your natural human tendencies and push yourself to tackle the tough work over and over every day. That kind of self-discipline is imperative for a startup leader because there is no one around to tell you how you must spend your time each day. You got into startups because you wanted your work to matter and to be outside of the big company grind under the thumb of a boss who would make the choices on where to invest your time. As a startup leader, only you can make those choices, and you have to develop a clear lens to see where the value can be created. Then, you have to have the tenacity to motivate yourself to tackle those problems that make you uncomfortable, as that is also where the innovation hides.

Use risk, with an emphasis on immediate risks within the next year or so that stand in the way of achieving your next milestone, to help you decide where to put your energy so it will make a meaningful difference. And delegate all the rest of the lower-risk stuff to your team and contractors.