When considering build vs buy on M&A, never underestimate the value of a small team who’s already passionate and thought deeply about the problem.
Product & Startup Builder
How Do You ‘Land’ In A Team As An Advisor
Sometimes one of the hardest parts of Advisory is the way you initially “Land” in the team. Particularly if you’re coming in to assist with some friction or poor communication.
It’s essential that you introduce yourself well and position your participation as an opportunity rather than a corrective measure.
Sometimes You Gotta Quit
Sometimes the best advice is "stop doing that and move on"
On Revenue vs. Scale, Helping Incumbents vs. Disruption.
Revenue vs. Scale
One of the biggest challenges many young startups with global disruption ambitions face is an addiction to revenue.
In the early years, a startup’s job is to grow - fast - not to make revenue or profit.
This might sound counter-intuitive. So let me explain.
An undue focus on customer revenue forces you to pay too much attention to what your first paying customers ask you to do for them for fear of losing them (and your only source of cash). These are often feature requests that might be good for their business, but not necessarily good for yours.
Why? Because existing customers will typically ask for advanced features designed to solve more and more of their particular needs. These needs are often either very specific to the quirks of their operation or are very hard to polish and scale. Making things worse, the requests also tend to come thick-and-fast meaning that you end up developing a broad product surface area without taking the time to really polish everything that’s getting built.
Even with amazing product discipline (where you are translating each specific ask into carefully designed, future-proof and generic product capabilities), it’s very, very difficult to avoid falling into this trap when you are capital constrained and dependent on revenue. 9 times out of 10 it will ultimately be massively distracting, undermine your focus, create overstuffed products and stunt your business growth. It can, and often does, kill your company.
Instead, high-growth startups typically need to raise enough capital to invest in growth without being beholden to the needs of any particular customer or customer segment.
This typically means focusing on a number of key things. They include…
A focused product that initially does only 1 or 2 things really well
A clear marketing message delivered on a beautiful website
A polished self-serve onboarding funnel with standardized pricing
UI and UX that is simple and clear to understand for new users
Well oiled operations (sales, support, biz dev etc)
Referral and viral mechanics
With these features (and many others) you will hopefully be able to win and onboard many, many customers quickly.
Why is quantity better than quality? Because making software is relatively easy. The world is littered with small-scale software projects that were essentially custom-built for a few customers. That’s not building a high-growth startup. That’s building a small software business. The hardest thing in the world is getting broad (even monopolistic) adoption of a product by a whole category of users. It’s hard, therefore it’s valuable. Once you have that market position, you have a captive audience to which you can up-sell and cross-sell a range of new features (with attached fees & charges) over time.
Helping Incumbents vs. Disruption
Another important (and often overlooked) aspect of reducing your focus on revenue is that it allows you to consider disrupting rather than partnering with incumbents. It’s very easy to make the decision to run to big customers and partners to try to get big money and/or lots of distribution. However, oftentimes, a tech startup should be killing - not helping - some of the legacy players in an ecosystem. Or, at the very least, forcing them to play by new rules. This is the very definition of disruption.
To be even more concrete: Often times your first instinct will be to build some great b2b software for the existing players in a market where, perhaps, instead, you should be building a direct to consumer alternative to what’s gone before. A clear example of this is Uber. They didn’t build dispatch software for Taxi companies. They built a new kind of mobility business that dealt directly with riders and drivers - making Taxi companies obsolete. Had they tried the other thing, the story would have gone very, very differently.
Execution Is Not All About Action
One of my colleagues on ‘execution’:
“People always hear that execution is everything in startups.
The problem is that they think “execution” is all about more action. But that’s like an amateur running onto a pro basketball court and running around throwing the ball in the air.
Execution is about getting the ball in the hoop and all of the skill, experience and muscle memory it takes to make that happen”.
Avoid Shipping The Org
When working on product marketing (how you will brand and merchandise your products on marketing materials like your website) you want to be sure to avoid “shipping the org” (i.e. describing things based on the way they were built by internal teams) or doing things for the sake of appearances (e.g. trying to show more products than you have).
You’re number one priority should be to think through the problems and use cases your customers have and describe your product in those terms as clearly and simply as possible.
You Need To Be Talking VC Partners
If you're meeting with VCs, make sure you're meeting partners, or make sure the associates you're meeting with are ultimately introducing you to Partners. If that's not happening, you're probably not getting anywhere.
Brand And Product Design Is Often Underestimated
Brand and product design can be such an important yet subtle aspect to your business success. It's easy to dismiss it as unimportant frosting on the cake, but investors, customers and partners can so often make split second decisions based on subconscious cues like pixel alignment and colors.
Corporate Conferences Must Be Part Of A Larger Marketing Effort
Conferences are good, but must be supported by other marketing activities like a campaign/topic specific micro-site, Webinars, Blog posts and other materials to maximize impact and conversion from the "oh wow" moment to the "sign me up" action.
Most Platforms Should Start as a Killer Product First
As someone who's tried, too many times, to build a platform first product strategy (leveraging 3rd parties for distribution with a white label infrastructure play) I strongly suggest you DON'T.
Unless you're building extremely primitive services (think Twillio, AWS etc) you should instead build a killer user-facing (consumer or business user) app (hard!), and then offer APIs, Widgets etc for 3rd parties to adopt once they have no choice but to play along.
Think FB Social Plugins, YouTube Player, Twitter Tweet Embeds etc.
How To Evaluate And Compensate For Your Weaknesses
When evaluating and compensating for your weaknesses, I suggest taking a multi-faceted approach:
Be sober and honest about your weaknesses - but also be fair and kind to yourself too. Don’t, however, allow yourself to be crippled by neurosis (i.e obsessing).
While you may never turn them into strengths, lean into improving your weaknesses. At the very least you will understand them better and minimize your blind spots.
Don’t minimize the importance of things you can’t do just because you can’t do them. Recognize their value and...
Don’t obsess about turning your weaknesses into strengths. Focus more on your natural and unique abilities and surround yourself with people you trust who make up for your weaknesses. Be explicit with them about their role in your life and in your business. Ask them to help you handle or advise on those aspects of your life and work.
Listen to the people you hire/surround yourself with! Their advice may, at first, appear wrong. That's because it's not what you would normally do. Do it anyway.
6 Things To Avoid As A Young Startup
As a young startup, the things you must avoid include...
Biting off more than you can chew
Protracted timelines/scope creep that can blow out
Over engineering your solution before you know what your users really need
Vague requirements
Poor/miscommunication between stakeholders
Over promising and under delivering
This is why MVPs and strong cross functional process is essential.
Reminder: If your problem is getting from A to B then the MVP is a skateboard (then a bicycle, then a motorbike, then a little hatchback, then a sedan, then a Porsche), not 4 wheels.
Product Design In 3 Phases
When working on product design:
First you want to get the "architecture" right (E.g. what are the core areas/screens/patterns)
Second, the UI metaphors (e.g. Are lists, feeds, carousels etc the right thing to do in each situation)
And finally, the fine grained details (is it 'your stuff' or 'my stuff', is it 'overview' or 'summary', is it 'done' or 'complete' etc).
Be Aware Of Your Personal Narratives
Be careful of your personal narratives and biases. They might be getting in your way and sabotaging your stated goals. For example:
Fundraising is not 'grovelling for money' - it's sharing your ideas and looking for partners who want to join you on the journey.
Monitor for any internal struggle between wanting to build a 'lifestyle business' and 'high-growth startup'. Both are fine, but they are different things and you should pick one intentionally.
As A Product Manager, You’re Running A Factory Assembly Line
All the data, opinions and ideas are the raw material piled up at the start of the process. Ultimately it’s up to you what gets packaged up and sent down the line for assembly (in the form of a PRD).
If debates are going on too long it’s your job to drive a decision, codify it into a PRD and send it down the line to design or engineering.
Product Prioritization Through Clear Vision
“Given that we have limited resources, what would you say is more important, that it looks good or it's technically accurate?"
As the product manager, your job is ultimately to make it both. The trick is to break the problem down into discrete product "moves" such that each move is both beautiful and functional.
The process is not to figure out what resources you have and then work backwards to something you can ship. Your job is to figure out what you believe the user needs and figure out how to marshal your resources to get you there.
Usually, that requires you to create a shared purpose and mission for your team, a reasonable roadmap of discrete releases/moves and the discipline and focus to keep everyone's eye on the prize.
As A Young Startup, Should You Listen To Existing Customers Or Pivot?
It depends.
If you feel like you have great product-market fit, and there's a large market of like-minded customers you can dominate: Listen to existing customers and continue to incrementally improve your product.
If you feel like you have great and growing product-market fit, but there isn't a big, profitable market left to conquer (or you've found yourself in a product/market you're not passionate about anymore): Sell to someone who wants to tap that market.
If you feel like you don't have great product-market fit and can't see a path towards finding it: Pivot, hard. Ignore existing customers and focus all your resources on the new direction.
Enterprise Sales is Hard But Sometimes Essential
Enterprise sales is very, very hard. But if you can build a team of strong people, process and pipeline it can be a real competitive advantage.
2 Ways To Handle First Calls
As a Strategic Advisor, there’s two ways to handle first calls:
Option 1. Talk about how you could help, in theory, if they formalize the relationship with you. In this case you’re leaning on scarcity and mystery.
Option 2. Help as much as you possibly can, for free. In this case you’re hoping they understand the immediate value and recognize that the devil is in the implementation details.
I prefer option 2.
Add value. The rest takes care of itself.
Platforms: Show Me The Money!
Show me the money!
Devs (especially top 50 apps from FB to Eventbrite) care about new users, re-engagement and money.
Unless your platform is solving fundamental technical challenge like SMS, Voice/Video etc (i.e. you're offering "nice to have" features) you need to demonstrate - in as concrete terms as possible - how you are going to drive new users, more sessions or more money for the developer.