In 1519 Hernán Cortés set sail with his crew for current-day Veracruz, Mexico. Cortes was a talented young man who had quickly risen to become secretary for Governor Velázquez of Cuba, where he resided. Cortés became a man of substance with an Encomienda (basically giving him feudal rule over the indigenous people of a province). This new position of power also made him a new source of leadership to which opposing forces in the colony could turn.
Upon landing in Mexico, as legend has it, Cortez had the men burn their ships, leaving no option but to press on! Their ability to retreat to their previous way of life was gone; their safety net had been removed. The fear of his men returning to Cuba, rather than embarking on the journey to the Aztec Empire, is what made him decide to destroy his ships. They no longer had any option but to accompany him on this journey. The same fire that set the ships ablaze also allowed Cortés’ men to complete their mission and be a part of something greater than themselves.
Whether all of the above is factually correct or not doesn’t matter; metaphorically, it is very powerful. I recently completed an investment in a company that had a 10-year history prior to our investment. The story of Cortés came up in conversation with the CEO. Together with his co-founder, he had built up and run a highly specialised company with deep technology and engineering competences, a roster of blue-chip industrial customers, and a highly differentiated product offering. They had enjoyed the backing of a wealthy investor without many questions asked, but also with little involvement in the business. The investment rationale for the incoming investor syndicate was to radically reshape and scale the business, transforming it from a custom industrial solutions business to a scalable products business.
The CEO expressed that the new path he was embarking on was akin to “burning the ships.” There is no way back to the old, the ambition is much bigger, the investments he will undertake are much larger, the people he is hiring more ambitious, and there is a whole new team on his board. He knows that there are high expectations of him to lead the expedition to new markets, defeat aggressive competitors, and land new types of customers. In addition, he is likely to need more financing to continue fuelling the business plan and strategy.
While all of this can look daunting, he and his co-founder are also incredibly excited and invigorated by the energy and enthusiasm that has been unleashed by “burning the ships.” I am sure It will carry them far. As a side note, the CEO also practices karate, so he knows what an honourable fight is, and that patience is critical when building new skills. I don’t know what the future will hold for them as founders, nor for us as investors, but I do know that I am as excited as they are and will do everything in our power to make them successful.
Burn some ships, sometimes — and embrace the challenge!!!
