I don’t remember much of junior year chemistry class except the lab experiment in which we made fireworks. My lab partner and I doubled and tripled the amounts of strontium, potassium, calcium and other explosives specified in the instructions. Our firecracker dwarfed our classmates' in size and when we lit them after two unbearable weeks of baking, there was no question we misunderstood chemistry. We expected an inferno and were rewarded with a pathetic fizzle and a C-.
We made one critical mistake assembling our pyrotechnics: we failed to add enough oxidizer, the chemical that creates the oxygen to burn all the explosives. Despite all its potential, the firecracker never had a chance. That day I learnt the lesson of the limiting reactant.
Startups are a lot like fireworks. To succeed, startups need the right chemistry, they need to be pointed in the right direction and when they work, they’re “on fire.” Startups, too, have the same problem of limiting reactants or limiting factors. Continuously identifying and counteracting these limiting factors is the key to continued growth.
At the outset of a startup, engineering throughput can be a limiting factor; the team simply can’t code fast enough. At some point, the product launches but no one knows about it. Marketing is the bottleneck. When customers come rushing through the door, money in hand, sales and customer support might stunt the growth of the company. Other times it’s culture or product market fit or money or competition. But for each startup at every stage there is a limiting factor.
A CEO’s most important function as leader of a startup is programmatically searching, finding, and quashing a startup’s limiting factor. The faster a CEO can do this, the faster a startup can grow. Great CEOs anticipate limiting factors and plan ahead, timing new hires with key transitions in a company’s life.
Like anything worth doing identifying the limiting factor can be challenging. Advisors and board members can help here. So can other entrepreneurs who have suffered the same growing pains. But the most important step is to start looking.
So, what’s your oxidizer?
14 January 2013