In a startup, focus on internal controls and building a sustainable business to increase shareholder value.
When your startup is pre-revenue, pre-launch, there is a tendancy to focus 100% of your efforts and resources towards building your product or service and making it to launch. The idea is that if you aren’t successful in your launch, nothing that happens beyond that will matter. I believe this is a fallacy. You can’t over index on the post-launch future, but you need to make sure you are building a business that is sustainable as a going concern.
Sophisticated investors will want to know that you have appropriate separation of responsibilities; that you have good IT security; that you are budgeting and planning; that you are keeping professional accounting records and closing the books each month; that you have written policies and procedures around key processes and functions; that you have employment contracts with NDA for key employees. These are just a handful of important internal controls that won’t do anything to bring you closer to launch. Furthermore, not having them could add unnecessary risk on your startup. And having them can signal that you are a serious and professional business to potential customers and/or investors.
When you are pre-launch, pre-revenue, you don’t need to be overly concerned about building business systems that are efficient at scale. Instead, you should focus on observing each business process thoroughly and indentifying the pain points that need further attention. You should also be on the lookout for edge cases (events that happen infrequently) to see what those pain points are. If you try to anticipate all the pain points and edge cases before you launch, you will end up investing resources in managing activities that aren’t really significant drains on time, financial, or people resources. In the end, you would have been better off spending your energy learning about what really matters to the business and diverting resources there.
