When most of us reflect on a crisis, we picture an unforeseen event. We think of chaos and uncertainty.
In reality, a crisis is simply a turning point. Derived from the Greek word krisis, meaning “decision,” a crisis is a make-or-break moment where we as leaders must choose whether to pack it in or press on. The event itself is arbitrary. It’s up to us to decide what’s next. And for members of the United States military, resiliency is the path. Failure is not an option.
At TFX Capital, we invest in proven military leaders working on breakthrough ideas and technologies in the commercial space. With experience as their guide, our founders navigate the complex life of building a startup, scaling, and seeing it through. During the COVID-19 pandemic, we had a rare opportunity to observe our founders improvise, adapt and overcome in a high-intensity environment and in real-time.
Separate the signal from the noise
Crises are disorienting. When a scenario doesn’t play out according to plan, confusion, panic and chaos set in. In the military, it’s known as the fog of war. While this disarray can’t always be avoided, it is treatable. For Randy Caldejon, it’s all about goals.
Caldejon is co-founder and CEO of CounterFlow AI, a network traffic analytics provider and TFX portfolio company. Before entering the startup world, he served in the U.S. Marine Corps for 15 years during Operation Desert Storm and Operation Desert Shield and worked at the NSA.
When the pandemic and accompanying uncertainty began in 2020, Caldejon’s team was in the midst of a capital raise. Cash was tight for everyone, including investors, and discussions came to a halt. Caldejon recalled some advice he learned in the corps.
“As a leader, the mission always comes first,” Caldejon said. “Don’t ever start something without knowing what the primary objective is. That’s very important.”
For a startup, that meant survival mode. CounterFlow reduced expenses and deferred compensation for key leaders, and the mission prevailed.
TFX Capital and the CounterFlowAI leadership (pre-COVID)
Don’t just communicate – over-communicate
When a crisis is in full force, keeping a team aligned is mission critical. To stretch situational awareness, military leaders are trained to increase communication cycles in an accelerating crisis.
When COVID-19 arose, we also adopted frequent touchpoints. TFX Capital gathered all hands on deck and encouraged company boards to meet weekly or biweekly to drive strategic and tactical alignment. Sensing an opportunity to add value, we brought experts to the forefront to speak real-time about what they were seeing and doing, and we booked a webinar to support our founders.
Caldejon took a similar approach with CounterFlow. He gathered his key leaders to assess standing objectives, financial runway and existing commitments. The team made its share of tough decisions but stayed on track. When all was said and done, CounterFlow was able to raise needed capital and the company avoided layoffs.
“I kept everyone informed almost on a daily basis,” Caldejon said. “I actually went out of my way and told people, ‘Hey, we’re going to get through this together. We’re a team.’”
Stay focused and moving forward
Even in normal times, running a startup comes with immense pressure. The challenges of the past year just upped the intensity. But the eleventh hour is a time to bet on oneself.
When I think of startup founders, I sometimes think of the 2015 film The Martian. It’s the story of an astronaut scientist who is stranded on Mars and forced to adapt to the red planet’s harsh environment all by himself.
Being a founder is also a solo journey. Even if you have co-founders on your team, feedback loops can be irregular and you’re somewhat out there on your own. In crises and emergencies, you have to lean upon your own ingenuity and problem-solving.
Caldejon keeps his bearings by staying action-oriented. He tracks personal and companywide objectives to ensure CounterFlow is headed for success and uses a quadrant to prioritize and adjust.
“I don’t have time to worry,” Caldejon said. “We still have to get to our next checkpoint. You almost go into autopilot. You don’t think about failure. It’s about survival.”
Work the problem
Founders can find resilience from many places. You don’t just have to be a military veteran, but it helps. The U.S. military specifically recruits and trains for resilience systematically and at scale. From Day One, military service is a crash course in determination. Over the course of a military career, an individual is guaranteed to undergo physical, mental and emotional training as well as pressure-testing in a controlled environment over and over again. We develop a strong problem-solving and critical-thinking skillset that will add value to commercial teams after service.
Today, when veterans transition out of the military and into the private sector, they bring those skills and resilience with them. Nearly 10% of small businesses in the U.S. are veteran-owned, according to the U.S. Small Business Administration. I believe resiliency is a core reason for high veteran representation among successful business leaders.
While COVID-19 may be the latest stress test for today’s founders, it won’t be the last. The resilience born from this past year’s challenges will make a major impact on these founders and their teams for generations to come.
