Last week Gerry and I pow-wed over the execution of RedStores Ventures – and how we have to match the execution of business different when executing with funding in mind.
Basically, and I think I am repeating from before – I borrowed on ideas from another blog – and focused on risk mitigation and clear deliverables – assuming we go for funding 3 times.
1st time – the stage is to prove the concept – working model, market acceptance and basic working framework. We are actually almost done this part – and at this point – I have funded this stage. We will want to aggressively push on signing up potential buyers and seeding some products – which could require few hundred $K, which I will likely get from Angel side. This would be for next few months. In this stage, we would be still working in a ‘cash conversation’ mode – and being very careful with our money.
2nd draw – this is the stage where we would begin preliminary scaling of the business model – expanding and investing into strategic staff – longer term marketing, etc. This is the phase, where we will need 1-3 million in funding – and will likely get this from VC’/Angel pool. In this stage, our goal will be to expand on our model, to fill in the org chart with the people we need, to provide for faciliaties (warehousing, ISO certification, training, licenses, etc.) This is where the spending mode will need to change, from a “cash conversation” mode – to a more liberal spending – where we will need to spend based on 1 to 2 years out.
3rd draw – this will be the full expansion capital – the stage at which we may want to bring in a professional CEO that is specialized in operational business issues and is able to take a working model and operationally grow it. In this case, my philosophy is that we all have different strengths – and that a startup/development CEO is a much different CEO than that of an operational company. So, this is the phase where we would onboard more capital, I’m guessing in the 5 to 8 million range – and drive the business into heavy black and into the big numbers that we will need.
So, with all this – we also looked at exits – and although my preference would be to see this as a standalone company – I could also see people like Amazon, being quite interested in our model. Given how amazon is turning into a market place, what would be better for Amazon for example, to pickup a company that is able to help its re-sellers get stock. So, given consideration to all this, I’m personally much more interested in running RedStores as its own business for a long time, BUT for VC’s and Angles – I do need to consider if I can offer an exit if a need should arise. And I can.
So, we have some aggressive plans to sign up buyers even in pre-launch phase – and also to add hug amount of products into our system through high automation.
When speaking to friends, acquaintances about the business model, so many say that hey “ I could use what you are building” – and to me – that is as good as an indication as any market study that we are doing some right things. Proof will be in the pudding through when we go out there and start signing up buyers.
What is interesting though at this point – is that in my mind – I have a crystal – and I mean crystal clear vision of the model. I am clear on what we need to do, where we need to go and the moves we need to make. There is a great deal of peace with that kind of clarity. As I was developing RedStores concept over last years, it wasn’t till last months, and weeks that I have begun to have this clarity of vision.
With this clarity, comes tremendous power. For example, I have no doubt about the path, nor about the business model. I am clear on the step and effort required (a lot of effort but all doable).
So, at this phase – it feels that the hard work has been done – the creative process to figure out where we are going to be is done. The path to get there also. All that is left now is execution. And execution is just a series of steps – and hard work and perseverance. And I know that with the team we have built so far, we can execute.
So, in a way – I’m now impatient about getting there – getting to our draws, getting to the customer counts, getting to the buy counts.
And if you think about that, it also means that key KPI’s are now established – and we can focus on those KPIs as the lighthouse.
Incidentally – it would seem RedStores got DoS over last couple of days. I have to say – I like it! Yep – we are getting DoS’s and I like it. Let me see – would perhaps our competitors be starting to work ON US – before we are fully launched. Hmm - ok – perhaps hopeful thinking – but wouldn’t it be cool if Alibaba was DoS’s us now.