Context Rules
A proprietary company building methodology to start, grow, and successfully exit technology businesses.
Any journey starts with a clear vision of the destination including the reasons and motivations for embarking on the adventure and the odds of success for completion.
Providing you with the knowledge of which tools to use.
Context Rules is a navigation system for entrepreneurs that provides a methodology proven over 30 years that guides What to do, Why and When, by Whom, How well and then How.
Task Physics
We have identified 21 core competencies necessary for building successful companies. We call this the Task Physics - the What to Do.
Core Competencies
Knowledge and Experience:
Start-up Company DynamicsGeneral Business Experience and Knowledge
Industry Experience
Business Model Experience
Vision/Strategy
Leadership/Culture
Classic Functional Area Expertise:
IP/TechnologyProduct/Software Development
Customer Discovery/Product Marketing
Go-to-Market Strategy
Direct Sales
Channel Sales
Strategic Partnering/Licensing
Marketing/Lead Generation
PR Awareness and Branding
HR/People Management
Operations
Manufacturing/Supply Chain
Fundraising
Operational Finance
Legal/Regulatory
Human Physics
Context Rules differ from other methodologies and advisory services in the importance we place on understanding, supporting, and growing the people - we call this the Human Physics.
“Knowing what to do, when, and why, and by whom, and how well, and then...how.”
~Context Rules Mantra
Context rules increases efficiency and reduces failure-risk by calculating and then directing WHO is the best suited to take on specific tasks.
Thinking Styles
InnovatingSynthesizing
Executing
+
Management Styles
LeadingInfluencing
Contributing
x
Intuitive Skills
Social AwarenessEmotional Intelligence
Business Acumen
÷
Personality Traits
OpennessConscientiousness
Extroversion
Agreeableness
Anxiousness
=
Who
The best person to take on the task.
Equity Model
Our journey begins with your financial end goal. Our proprietary Equity Modeling Tool allocates equity based on your goals, the skills needed, and the expected work required. It is a trust building exercise that aligns all of us for success.
Equity Structure based on trust and transparency.
Context Rules includes an equity modeling tool in its navigation system. The system is unique in that it starts with the end in mind and provides an equity structure that incorporates the founders goals, anticipates resources needed, and shows a path to the founder to meet his/her vision for the company.
Your Personal Goals
Your Personal Goals establish the destination.
The Promise of the Business
Your Financial Goals at Exit, using different possible outcomes, establishes the promise of the business.
People You Need to Bring
Then, based on the competencies of the team and the needs of the business, you decide the people you need to bring on the journey. with you.
“The Context Rules Equity Model is the packing list for your journey.”
Key Inputs to the Equity Model
There are several inputs that create inputs into this equity model:
Personal Goals Questionnaire
Gets at what the founder really wants to do, how much time they are willing to devote, why, and ultimately, their goals for the business.
Founder’s "Number"
If you are successful based on the effort you are putting in, what is the dollar amount you’d like to receive if you’re bought for cash.
Founder and Team Completeness Assessment
This tool illuminates the skills the founding team has and doesn’t have that is needed to complete the journey. This is an important input source for Part 3, Initial Founders Shares.
From there is a process to validate these inputs with detailed bottom-up financial plans supported by key action steps. There are Three parts to this equity model that founder(s) optimize to structure their company:
Exit Value
The exit value is the anchor for the model; it establishes everything and because it’s the key driver of the founders’ "number." It’s important to us because we believe in your journey and want you to fulfill and breathe life into your dreams.
Financing Assumptions
We believe you should raise as little as possible. In the early stages of a business, risk is higher and what you give up is higher. We can help you and be efficient by mapping milestones and complimenting the resources needed to complete your success at each stage.
Insider Shares
As others are investing their time and talent, this thoughtful approach of sharing creates certainty that you will need for others to be motivated to help you along the journey.
Eight Context Rules
Early stage companies exist in an ecosystem that is consistent with the General Systems Theory of organic systems. GST proposes that complex systems share basic organizing principles irrespective of their purposes, and that these principles lead to explanations and predictions of both system limits and opportunities for optimal functioning.
Our successful business building approach is governed by 8 Context Rules for early stage companies which are:
Their failure is high
Early stage companies are susceptible to existential threats and permeable boundaries
They are complex and interrelated
Growth oriented organic systems move toward complexity and differentiation
They are dynamic
Organic systems have feedback loops and are constantly adjusting to internal feedback and external inputs
People and cash resources are constrained
There are limitations on the system with hard boundaries
They require constant blending, balancing and optimizing
Organic systems must maintain homeostasis and adapt to survive
There are distinct phases
With growth come new stages with new challenges; system tasks and people adapt, and the system learns over time
There are both human and task “physics”
A founder's personality and behavior has an outsized influence on the system, as do certain key leaders. Also, systems develop procedures and processes that become structured and reified in the service of efficiency and predictability. These human and task “physics” impose limitations on the organic dynamism of the system.
Time is relative and finite
Windows of opportunity open, stay open, and close; some decisions need to be made with urgency, some are better delayed
The Benefits of Context Rules
Our methodology and operational principles make starting a business more predictable and efficient
Founders have a higher likelihood of hitting exit goals
The founding team understands what they have and don't have and what will be needed for the journey, allowing for predictable planning
We can improve success rate + enjoyment along the journey
Investors are drawn to companies who use context rules as it de-risks their investment
Founders combine personal goals with a fundraising approach that helps them achieve their goals and reduced dilution
Founders see bumps in the road before they happen
How is context rules different from everything else out there?
Most other models and resources focus on doing the ‘what’ and ‘how.’ These models don’t provide a methodology that addresses the dynamic and situational (context) nature of real life. We provide a way to analyze key decisions and opportunities, continually moving foward
Applying Context Rules effectively results in doing what matters most by, “always knowing what to do, when, and why, and by whom, and how well, and then how.”
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