⚡ Get All Content for 20% Off ⚡

The 3 Decisions We Didn't Make That Totally Changed Our Business With some decisions, it's better to not decide-- yet.

By Lloyd Tabb

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

When starting a company, conventional wisdom says that you need to decide certain things early and focus. However, when we founded Looker, my business partners and I put off making some key decisions until the future was clearer. This approach allowed us to focus on our product vision and customer growth.

In the early stages of founding our company, there were three nagging questions:

  1. Should we accept venture capital?
  2. Was our company going to deliver a product or a service?
  3. Would our software be on premise or hosted?

We clearly knew what we wanted to do: deliver flexible access to data into the hands of as many folks inside of our customers' organizations as possible, so they could make better decisions.

What we didn't know was the best way to structure a business to do that. Should we sell software? Should we sell consulting? Would customers be comfortable having their crown jewels (data) in the cloud? How much consulting would it take to deliver our value?

We didn't know. We also didn't worry about not deciding. In founding this company, I learned there are three decisions that startups can benefit from postponing.

1. Whether or not to seek venture capital.

Some great businesses aren't venture businesses. It's important to give your business time to develop before you decide venture funding is the right approach.

Related: These Website Mistakes Are Costing You Money (Infographic)

If you take venture funding, you are jumping on the racetrack. You are looking to build a fast-growing business that's going to be enormous. If you have great product/market fit, going with venture capital is a fantastic route. If your product/market fit isn't strong and you've taken venture capital, you may be locked into a strategy that's suboptimal for what you're building.

We waited to see if we were a venture business. We could provide value almost immediately, so we also generated revenue very early. That early revenue created a discipline in the business to pay close attention to the economics.

Looker was cash flow positive when we decided to take seed investment. The size of the round wasn't important – the partners were. We chose investors we knew very well and who would give us the most flexibility in our business model, timing, and approach.

Throughout the next year, we saw tremendous product/market fit and a repeatable sales and delivery model. It was only then that we decided it was time to explore venture funding. We found an investor who deeply understood our product and philosophy. Electing to accept or pursue venture funding should be timed to give your startup the best combination of growth potential and flexibility.

2. What your end product will ultimately look like.

When we started, we weren't sure if we were going to be a service (where we do all the customization) or a product (where we sell the tool and the customer does all the customization). Again, conventional wisdom says "decide this early." In my experience, if you maintain a consistent company vision, exploring your offering as both a product and service will allow your business to steer itself in the ideal direction.

At Looker, we decided to take customers in both service and product models, providing different degrees of customization. To avoid being locked in as a service company, we decided that, as a rule, all customization must happen inside the product.

Related: The One Thing Your Company Needs Right Off the Bat

In the end, after learning how the product was being used, we didn't make the decision we thought we had to make. We sell Looker as a product, but we take a forward-deploy approach (our free trial), building out enough design patterns to ensure the construction of the application is very successful. So we are a service too.

3. Your technology needs.

Often, startups feel pressure to make technology decisions that lock them into a deployment strategy, before knowing critical aspects of their customers' IT trend adoptions. It is best to wait to make a decision, to maintain flexibility. You may also learn, like we did, that the decision is inconsequential.

When we started building our business, we didn't have a clear picture of how our product would be deployed. Would we be a cloud service or install in our customers' infrastructure? We thought that, at some point, the majority of our customers would go one way or the other, but at the early stage we couldn't know which.

We had to select the right programming tool for a scenario we couldn't know. So we chose a flexible tool, JRuby, which didn't force us to choose one side of the on-premise or hosted debate. It also turned out we were wrong about believing we had to make a decision: 50% of our business is on premise today, and the other 50% is hosted.

By saying "I don't know right now," we chose flexibility over and over. Each time, we were surprised. Product or service turned out to be a false choice, as did on premise or hosted. Deferring when to take money until we knew we were a venture business made it much easier to raise the money and to do so with the right people.

Not deciding too soon can be a very good decision—one that lets your business grow stronger than it ever would have otherwise.

Related: 10 Must Attend Tech Conferences in 2014

Lloyd Tabb has been a technology revolutionary for 25 years, driving important trends in how the world uses the Internet. Originally a database and languages architect at Borland International, Lloyd left Borland to found Commerce Tools, where he wrote the first application server for the web. After Commerce Tools was acquired by Netscape in 1995, Lloyd was Principal Engineer on Netscape Navigator Gold, led several releases of Communicator, and helped define the creation of Mozilla.org. As CTO of LiveOps, the first commercial crowd-sourced company, he designed the crowd-sourced ecosystem. Lloyd was also a co-founder of Readyforce and advisor to Luminate, and is currently founder, chairman, and CTO of Looker Inc.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Business News

Costco CFO Reveals Uncertain Fate of $1.50 Hot Dog and Soda Combo

CFO Richard Galanti reveals that the price will stay the same — but only "for a while."

Business News

The Most Unexpectedly Popular Side Hustle of the Decade Has Low Startup Costs and High Markups

A new report shows that vending machines are a popular investment — and the industry is set to grow up to $3 billion by 2031.

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.