As some context, much has been written about the early stages of a company being the hardest and where most startup failures occur. Going from an idea to a product to enough paying customers that you’ve validated there is a real business. Here’s your situation:
- You have few, or no, customers you can point to on your logo slide.
- The ones you do have, nobody’s heard of before.
- Some prospects see your product and think it’s interesting but aren’t ready to pour real money into it.
- Other prospects give you positive comments that “you’re really onto something” which is then followed up with “keep us in the loop as you evolve.” Which is code for a pat on the back and to, “call me when you have a real product.”
- You have no salespeople, or the ones you do have are still trying to figure out how to pitch it and sell it.
- You aren’t getting leads.
Sheesh, that sounds rough! How in the world do you do this?!?!?! While I don’t have all the answers, and LevelEleven is just getting started on our path to a great company, I’ll share some things we’ve done to get where we are today. I just started writing down the ideas, and magically it worked out to be 10. How about that… ha!
- Stop acting like the startup stereotype. People who work in a startup take pride in being more casual, creative, and innovative. But remember, this is a business, investors gave you real money, and execution is what’s going to make you win. I was in a meeting at a giant enterprise recently, and I was so proud of our team. We didn’t show up in jeans and t-shirts, get there late, and unprepared. We were a tight ship. Big companies love the innovation startups bring, but also want to know you have the horsepower to serve their needs. Play the part.
- Proud to bootstrap? You’re doing it wrong. I’ll probably get some flack on this one but here goes. Some can take great pride in “bootstrapping”, and I kind of get it and it sure would stroke your ego if you can make it work. But you’re hurting your odds tremendously. If you think you’re onto something big, don’t horse around. I’m not saying be a drunken sailor and throw loads of money at anything. You need to be disciplined about it in trying things with a hypothesis in mind, measure it, tweak it, and adjust as necessary. But spend at levels that you can really learn something, and don’t over analyze small things either. I see far too many people overanalyzing small things, or making really bad cultural decisions over a few thousand dollars.
- Don’t over-stress on dilution – it won’t matter if you win. Especially when you are really early stage, people get too carried away with minimizing dilution. Of course you don’t want to sell away too much of your company, but if someone is offering you more money – take it. Losing a few extra percentage points to get some money is well worth it because it will either give you the cash to try more things and gives you extra runway if something goes haywire. Plus more money in the bank improves your posture with VC’s on the next round (i.e., because you don’t NEED their money, you just WANT their money) where you can probably make up for that previous dilution anyway.
- Over invest in customer success. Much has been written about this, and rightfully so. While we’ve done well here, I wish I had obsessed about it even more early. If there is one area to be that spend-happy drunken sailor I mentioned above, this is it. Spend money on travelling to visit customers, hiring a customer success leader, technical support people, strategic minded account managers, and tools like Gainsight to monitor what’s going on. If you don’t, and I guarantee you’ll be sorry.
- Find customer stories – anything will do. Customer stories are happening right now within your customers, so go hunt them down. Ideal state is to get some hard stats, which are great. But even without stats, find out the customers story – why did they buy your software, what was going on before, what did they want to change, how have things changed, how is the team reacting. When talking to prospects, the most powerful thing you can do is share someone else’s story because it shows you understand.
- Get in front of customers. Nothing beats being face-to-face and seeing your software running within someone’s office. It’s a great way to find those stories mentioned above, but it’s also a fantastic way to guide your product roadmap. Our best product ideas came as a result of seeing how people use our software, and learning why people didn’t buy. When I work on our roadmap, it’s based on multiple points of input – highly specific feature requests from customers, general comments from the market about what they are looking to achieve (in our world, it’s improving sales performance), and asking our sales team what capabilities would help them win more often.
- Be a thought leader and have a content strategy. When you’re product is new you can’t point to having all the features someone may need, and you also can’t point to a load of customers or ROI stories. But you can tell people what you think, and if they like your perspective they are going to be attracted to what you’re doing and where you’re headed. This is where content marketing is so important – write blog posts, create eBooks with tips on how to do things related to your software, and work on earning speaking engagements. Your goal is to genuinely offer content that’s helpful to people and holds value standing all on it’s own – independent of using your software.
- Just get deals done. Far too often I hear early stage companies sweating over contract details, payment terms, pricing, etc. Just get the deal done. When we were at the very beginning trying to get our first handful of customers, once I had someone highly interested and ready to buy here was my talk track when it came to talking pricing and proposal… “As you know, we are just getting started here but we know we’re on to something important. Bringing on customers isn’t just about paying the bills – it’s about getting feedback on the product so we can make it better, and earning case studies. So in summary, I’m a terrible negotiator right now. Our standard pricing is ____, but tell me what you think is fair and let’s get started.”
- Tinker and test within the marketing and sales funnel. I have to say this is probably my favorite part – tinkering. It’s remarkable the impact you can make with just small tweaks. We’ve modified our pricing multiple times, and the impact was literally immediate. We’re always testing new sales decks, new qualification criteria, and new ways to optimize our website to generate leads. There are an immense number of steps in the buyers journey, any of which can always be improved.
- It really is about the people. Above all else, it comes down to the people. It’s a hard one to fully grasp until you’ve hired great people and people who won’t work out. But great people are always worth the investment and will more than pay for themselves. I’m literally always recruiting, regardless of if there are open positions. Because you never know when you’ll come across someone great. And when you do, you gotta grab ‘em.
So that’s what got us here, and I wish I would have known in the beginning. Because despite our rapid growth, I still think we could have done it faster. Okay now back to work… because this next stage is going to be even harder, and probably even more important.