“Once you get funding, make sure you keep running, because you’re always going to be half-way there,” advised Nico Berman in his presentation at PulsoConf in Guadalajara this morning. Berman, a partner at Kaszek Ventures and formerly of MercadoLibre fame, addressed the audience on a very pertinent topic in the entrepreneurial lifecycle: what happens after funding.
What makes him an expert on it? With MercadoLibre, he and the team have been through it all. “We’ve made millions of mistakes in millions of things,” he admitted. His mission with Kaszek, alongside partners Hernan Kazan and Nicolas Szekazy, is to impart the knowledge they’ve gained through their mistakes and dedicate themselves to helping up-and-coming entrepreneurs grow. He remarked:
We know this is a long-term thing. It’s a process. You have to have patience and dedication.
Part of that process is funding, one of the most elusive but essential elements of the entrepreneurial path. Instead of going the typical route and discussing about how to get an investment, Berman talked about the post-funding phase – an equally important part of the equation.
Nico Berman’s recommendations for life after funding:
First, celebrate. Getting funded is a big deal, and it merits a break to enjoy the moment. “Make sure you enjoy it with your team,” Berman advised. “It’s not a personal victory, it’s a team victory, and the entire company gets a push.”
Then, go back to work. Celebrations can’t last forever, and know that you have to get back to work the next day. Berman compared raising a funding round to running a 10K race. It’s exciting to finish, but you’ve still got a half-marathon and marathon ahead.
Stay focused. Capital is only the beginning, so keep your eye on the prize. “It’s very easy to lose focus after a round,” he warned.
Avoid the Disney trick. Berman recounted an anecdote of visiting Start-Up Chile. Housed in a spectacular space with tons of tools for startups, the workplace is an entrepreneur’s dream – so much so that it’s easy to get too relaxed and fall into what Berman referred to as the “Disney trick.” It is crucial to focus on developing traction and get ready for what’s next, including raising that next round of funding. “You can’t recuperate what you haven’t done,” he said. “The clock is ticking, and if you don’t take advantage of every day, you’re not going to make it.”
Have a plan. You’ve got to set out a plan that is both challenging and realistic, and that is in line what you’ve sold to your investor. Know what you have to do every month and how much revenue you need to generate.
Prioritize. “This sounds very obvious, but I assure you that most companies get lost,” Berman remarked. Prioritizing is essential, and an especially slippery slope in tech. You can’t do everything at once, and if you try, you’ll lose focus.
Be agile. Try things out, and make changes fast. It’s incredibly dangerous for companies, after receiving money, to start working on big projects that take months to prepare for launch. Approach your startup with building blocks; don’t work in a black hole.
Manage your money. Stay on top of your accounts, and know what’s happening. When in abundance, it’s easy to get off the trail.
Keep your culture. Maintain what’s unique about the culture of your company, and bring in people who are in line with that.
Hire right. Helping the companies in their portfolio hire top talent is Kaszek’s top priority, thus building top-notch teams. “Make sure you bring in champions,” Berman said. “Hire fast, fire fast. You don’t have time to waste.”
Do things that don’t scale. A strategy out of Paul Graham’s playbook, this is a way to keep learning and foster growth. You may stumble upon something unexpected. Once you find something that works, make it efficient, and make it scale.
Invest in your product. And pay attention to customer service, too. Berman made a specific nod to technology talent investments, advising companies with a core that is at least half based in tech to hire internally and not outsource.