But Why?

Being an investor and board member means that you are close to the companies you invest in but not “in them.”. This near and dear relationship creates some interesting challenges for both the management and the investors. One of them is understanding the difference between information/reporting and a real understanding of what is going on in the business.

I often find myself saying “but why?” at board meetings:

• “Revenues are soft this quarter” – but why?
• “MAUs are up 150% over last quarter” – but why?
• “We are going to miss our ship dates” – but why?
• “We expect to decrease our hosting costs by 50% next quarter” – but why?
• “We can’t seem to get any interest in the next round” – but why?
• “We are getting a lot of inbound interest from investors” – but why?
• “We have a lot of turnover in our engineering organization” – but why?

The beauty of working with investors who see a lot and have seen a lot is that they can often help you diagnose the disease by looking closely at the symptoms. But you have to be willing to engage in that exercise and be open to hearing “but why” and be prepared to answer it.