Like a Cockroach
Have you ever heard the term cockroach CEO in the startup scene? It's a well-known phrase in the U.S. In the past, VCs often dismissed these people, but in the tough economy this year, they’re proving to be the ones who were right all along.
What is Cockroach Mode?
The term was used back in 2017 during the era of high growth, often by VCs who looked down on startup CEOs that prioritized survival over scaling.
Key Traits of Cockroach Mode:
1.
Minimizing Burn Rate: Drastically reduce expenses to maximize runway.
2.
Focusing on the Essentials: Set only the three most critical goals and eliminate the rest (including drastically downsizing staff if necessary).
3.
Staying Hopeful: Never give up, even when failure seems inevitable. These CEOs are masters of survival, and they somehow remain standing even years later.
Earlier this year, a founder in the VC’s portfolio faced a dire situation: the company was on the brink of failure due to funding shortages and poor performance. The investor suggested an exit strategy through acquisition, but the founder refused and entered “cockroach mode.”
This founder cut the burn rate by two-thirds, stripped the company down to focus on three core goals, and let go of everything else. Despite the overwhelming odds, they never lost hope.
In the end, her persistence paid off. The company met its goals and successfully secured the next funding round.
Lessons Learned:
1.
Listen to Investors, But Own the Final Decision: As the CEO, the buck stops with you. Investors don’t always have the right answer.
2.
Be Relentlessly Resilient, Like a Cockroach: Cut everything down to the essentials and focus solely on what matters most.
3.
Survival Matters as Much as Growth: It’s not just about scaling; sometimes, staying alive is the real victory.
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