As I was doing my usual cruising of twitter today, I came across a link to an interesting article called The Notorious CEO: Ten Startup Commandments From Biggie Smalls from www.themetricsystem.rjmetrics.com They pulled some valuble business information out of a famous Notorious B.I.G song called “The Ten Crack Commandments” which is a crash course for street pharmacists. Although the song is about illegal activity, it does offer some valid points about running and maintaining a successful business.
Here are a few of the commandments:
“Number One: Never let no one know how much dough you hold”
For most companies, there isn’t a tremendous amount of upside to disclosing financials. As such, few privately held companies choose to do so. As Biggie says, broadcasting your financial performance can “breed jealousy,” increasing operational risks and arming your competitors with a more informed sense of your company’s weaknesses.
“Number six: that credit… forget it”
Biggie is warning about the risks of issuing credit to customers before you have enough scale to hedge the associated default risk. The broader lesson here is to place a strong focus on cash revenue generation while your business is working toward sustained profitability. Getting cash in the door is extremely important, and anything that delays cash flow will slow down your forward progress.
“Number nine: if you ain’t gettin bags stay [away] from police”
The company you keep can be misinterpreted by your customers and competitors, and sending the wrong message can put these relationships at risk. Keep strategic conversations as silent as possible until things are set in stone and it is optimal to make an announcement (if ever).