Your pivot will result in lost clients

This is true of startup pivots and “focusing” exercises as well…

“Your new life is going to cost you your old one.

It’s going to cost you your comfort zone and your sense of direction.

It’s going to cost you relationships and friends.

It’s going to cost you being liked and understood.

It doesn’t matter.

The people who are meant for you are going to meet you on the other side. You’re going to build a new comfort zone around the things that actually move you forward.

Instead of being liked, you’re going to be loved. Instead of being understood, you’re going to be seen.

All you’re going to lose is what was built for a person you no longer are.” 

― Brianna Wiest

Fundraising requires competition

As a founder, the moment someone starts sniffing around for an investment in your company that looks even mildly interesting, you need to start talking to other potential investors.

This gives you more negotiating leverage and may even help you find a better investor+deal

Disruption and incumbents

Startups are about disruption.

Disruption, by definition, means that legacy players (otherwise known as incumbents) are having their world changed/disrupted in some way.

When dealing with incumbents...

You want to: address their concerns and overcome them with better products, user experiences, and business models. Along the way, focus on those who get it and ignore the rest. They'll either jump onboard later or die.

You do NOT want to: Compromise your vision and work around their fears. You don't want to waste too much time trying to convince those who resist change.

Better: Whenever possible, go directly to the demand side (end-customers) and control the transaction end-to-end. Cut incumbents out or - worst case - come to them with deals/$ (not hat-in-hand asking them to change their business with a clever new product).

What to do when your colleagues don’t like you

Once people decide they don’t like or trust you - it’s very difficult to convince them otherwise.

Everything you say and do from that point forward will be filtered through that lense.

This makes advocating for yourself and personally changing the tide of sentiment difficult (if not impossible).

In a business environment, it takes a strong and articulate leader/manager to push back on false narratives and elevate truth and justice.

But that’s hard and rare to do because the manager risks their own alienation.

The solution?

For leaders:

1. Work intentionally to create a culture of truth-seeking that minimizes personality/emotion-based decision making. Conversely be vigilant about signs of fragility and easy intimidation (ideal case).

2. Encourage direct communication between stakeholders rather than games of telephone.

3. Defend unjustly criticized employees (This reenforces point 1).

For individuals:

1. Ensure careful and diplomatic day-to-day execution so as to avoid crossing the point of no return. (However be careful: too much of this runs the risk of undermining a truthseeking culture of honest communication and rapid improvement).

2. Hyper-vigilance to share your perspective and contributions as you go using a range of communication techniques (clear roadmaps, group status updates, metrics, etc) (taxing but often necessary).

3. Building political alliances that will support you (yuck).

4. Grit and perseverance (but don’t spend too long banging your head against a wall - sometimes it’s better to move on).

In short, it takes hard, intentional work from good faith actors on all sides.

Marketplace Marketing

When building a multi-sided marketplace, consider that each persona in the marketplace has different needs.

Sometimes those differences are subtle, and sometimes they are dramatic. But in either case, the differences matter.

With this in mind, try to avoid making the home page a mishmash of different messages for all your personas. Instead, you typically need a landing page (along with value props, case studies, pricing, onboarding flows, etc) for each persona.

Typically (but not always) the primary home page should be focused on the demand side of the marketplace. This serves not only to tell the story to buyers but also helps potential supply-side partners to understand how they will be positioned if they join your marketplace.

A row towards the bottom of each persona-specific page can make a callout to the other personas and guide them to the right page.

Product-led failures are like Climate Change

Fixing a scaleup's failures in terms of product-led, efficient ways of working is much like dealing with Climate Change.

• Things don't look too bad.

• Symptoms are subtle and seemingly unconnected.

• It always feels like compromises can be made "for now".

• The costs are hidden.

• The ultimate fate is unknown.

However, the reality is...

• Things are very, very bad.

• The various symptoms ARE related.

• The costs are massive.

• The compromises and indecision are destroying morale, momentum, and competitive advantage.

• The ultimate outcome is that a better, smarter, more effective competitor will disrupt the business.

The only question is, how much pain are you willing to tolerate - and for how long?

Leaders add context and clarity

The best leaders (at every level of an org) take confusion and indecision and add context and clarity by asking good questions and using good judgement.

How to organize your squads

Organizing your squads is a puzzle game, not a pinball game.

Product changes/features shouldn't fall through the cracks until it lands on a squad.

Product changes/features should clearly and obviously fall within the mission of a squad with minimal room for debate.

The trick is designing the org with minimal gaps and minimal overlaps.

Sometimes, only the founder can get it done

There are some motions/tactics that only the founder can do.

• Winning first customers

• Closing early partnerships

• Raising money

• Hiring key employees/leaders into the business

• Making key strategic decisions

• Going from zero to one

These things simply can't be farmed out to the team.

I've seen founders who had an 80-90% conversion rate on sales calls while their best salespeople couldn't exceed 50%.

I've seen influencer outreach activities that went nowhere for months that instantly started gaining traction with founder attention.

I've seen big decisions go around and around in circles for weeks until the founder joined the conversation, elevated the thinking, and made a decisive decision after a 1-hour meeting.

Why?

Because - right or wrong - the best founders command a unique level of influence, salesmanship, operational latitude, and creativity that can't be matched by employees.

It might be harsh, but if those employees could do what the founder does (have a vision, start a company, raise money, bring a team together), they likely wouldn’t be employees.

As a founder, be careful about delegating these critical "founder-only" tasks too early. Lean in, and use your superpowers to fast-forward your company to the future.

#founders #fundraising #zerotoone #consultingconvos #startups #scaleups #growth

Is your team burned out?

Is your team burned out? Some ideas…

1. Do they have a vivid and powerful vision to motivate them? Or are they driven by a tactical business goal, by fear of competition - or worse, no goal at all

“Help 1 million people by doing X” is a vivid and powerful vision. This is ideal.

“Raise money” is a tactical business goal.

“Beat company X” is fear or competition.

No goal is when leadership is chasing shiny objects - whatever investors or customers say.

What is your vision? Is your team excited about it?

2. Are you making decisive decisions or letting them linger for too long? Are you allowing confusion to make day-to-day decision making by the team painful or impossible?

Worse than making a bad decision is not making any decisions at all.

Don’t wait for full conviction. That’s impossible. Instinct, passion, experimentation and informed iteration/pivots are essential parts of the startup journey.

3. Do you meet with the team on a regular basis to inject authentic enthusiasm and celebrate the wins?

A little genuine praise and celebration can to a long way to boost morale and help the team focus on what matters.

4. Can you add a new leader or advisor to inject clarity, enthusiasm, cadence and accountability into the team?

The right kind of fresh blood can change everything.

5. Is the team suffering from a lot of incompetence? Fire low performers! Show the team that quality work is valued and rewarded. Be careful about jumping to this conclusion though - bad perform is sometimes the result of bad leadership.

6. Have you tried giving everyone a vacation. Stop everything for a week and encourage everyone to refresh and come back with renewed enthusiasm!

The power of regular all-hands meetings

A well-run regular all-hands (every week or 2) can have a profound impact on a company. It can...

• Set a cadence for the whole company

• Hold departments accountable for delivering big wins on a regular basis

• Force the leadership team to capture and summarize their thinking to the rest of the business on a regular basis

• Build trust between all stakeholders

• Help stakeholders across the company become aware of new developments and encourage people to jump in and help/align

And so much more!

You can’t outsource fundraising

VCs and smart money want to be pitched by the CEO.

Why? Because - as much as anything - they invest in the team running the company.

They need to feel comfortable that the leaders understand the operational details, have a clear and ambitious vision that is rooted in pragmatism and adaptability. They also need to like you.

Equally important - as the CEO/founder - you should want to meet any major investors in your round. It’s going to be one of the most important relationships in your life and the life of your company.

As a result, you can’t outsource the fundraising process.

Own it. Run it. Don’t stop until you drop.

How much money did you waste last month?

How much money did you waste last month?

How much did the gap cost you?

The gap between what’s in your mind and the quality of your team’s day-to-day execution. How much lost business and lost customer confidence did that shortfall create?

How much did the indecision cost you?

Endless conversations trying to reach consensus. Endless research and analysis trying to find conviction. Going around in circles with your team. How much did you spend on salaries during that time? How much productivity have you lost from diminishing team morale? How much progress did your competitors make in that time?

How much did your bad decisions cost you?

Remember those days, weeks or months going down the wrong path and building the wrong thing? What was the price of leaving a bad impression on investors, partners, customers, employees, and more?

How much did that ineffective execution cost you?

How much did your ugly, broken, buggy, hard to understand, hard to adopt, hard to use, hard to love product cost you? How many customers landed on your home page but didn't understand your value props? How many couldn't be bothered finishing your signup process? Do you even have a signup process that doesn't require sales and engineering support? How many tried your product for a few seconds or even for a few days but then never returned? How much time, effort, and money did you spend trying to acquire those users only to see them walk out the door?

How much did those missed opportunities cost you?

How many sales didn't close? Which partnerships failed?.Which investors passed on investing in your business because they "just didn't get it"? What profits did you miss by not investing your time and money in other, better investments?

This is just a taste of the size and shape of opportunity cost.

All because you…

a) Hired that less effective employee
b) Avoided hiring that expensive advisor
c) Balked at the price of that better tool
d) Avoided making that hard decision
e) Put off that difficult conversation

Or countless other “cost-saving” or face-saving activities.

How much money did you waste?

How much money are you willing to waste next month? Next quarter?

Join the conversation about this on linkedin

Should you quit your startup because it’s not working?

I know it’s much easier said than done - but to build a successful startup you need to…

1. Ship product that solves a problem

2. Sell product and/or raise money

3. Use the funds to focus on your startup and hire help

If you’re not able to do the above then ether…

1. The problem you’re solving isn’t painful enough or real

2. Your hypothesis for the solution isn’t right

3. Your implementation of the solution isn’t good enough (this might also be because you’re trying to boil the ocean or your business model isn’t right)

4. Your go-to-marker tactics aren’t good enough

Don’t keep banging your head against the wall. Don’t quit. Figure out what’s going on and fix it.

This might involve some hard introspection, hard choices and a hard pivot (potentially into a new startup all together).

A large part of Startup success is rooted in momentum.

A large part of Startup success is rooted in momentum.

Why?

Because part of the defining characteristics of startups is that they are high-growth. High growth requires speed and compounding effects.

But why?

Because...

a) Software is relatively easy to create.

b) Software economics, flywheel effects, and VC funding dynamics mean that they often exist in a winner-take-most market.

c) Momentum and success attract momentum and success.

d) You typically have a limited runway (capital to spend) and need to maximize your outcomes to succeed at closing your next funding round.

This means at least 3 important things.

a) Competition will come for you.

b) Opportunity cost is typically your largest cost.

c) Smart investors also know all of this and look for it.

You need a healthy level of paranoia and hustle (but not recklessness and thrash).

Don't put meetings off to next week that you could have this week.

Don't let decisions linger.

Don't start and stop.

Take effective/efficient action.

Don't forget you are typically competing globally - you need to meet or exceed the best in the world - not just in your local market.

Build momentum. Maintain momentum. Use momentum to win.

Performance Rubric for a Product Manager

Do you have a performance rubric for every function in your scaleup?

It should define what AWESOME looks like for every aspect of the role.

Here's a small taste example for a Senior Product Manager across "Fail", "Below Expectations", "Meets Expectations", "Exceeds Expectations" and "Total Rockstar" for the role aspect "Product Strategy Development"

Fail
Is unable to develop a solid narrative and roadmap for 1 squad despite help from manager. Does not work well with their team to refine the plan and or with leadership to get buy-in.un

Below Expectations
Is able to develop a narrative and roadmap for 1 squad with some supervision. Generally works well with their team and leadership to refine the plan but requires some assistance to get full buyin.

Meets expectations
Is able to develop a solid narrative and roadmap for 1 squad with no supervision. Works well with their team to refine the plan and works well with leadership to get buy-in.

Exceeds Expectations
Is able to develop a solid narrative and roadmap for 1 squad with no supervision. Assists/mentors others to do the same. Works well with their team and broader stakeholders to refine the plan and works well with leadership to get buy-in and push the status quo.

Total Rockstar
Is able to develop a solid narrative and roadmap for more than 1 squad with no supervision. Assists/mentors others to do the same. Leads/influences other teams and the org to refine their plans and and drive leadership decisions.

Misalignment is often the root cause

When things are misaligned across departments, product areas etc, the problem is not any particular decision/implementation but the misalignment itself.

You can spend all day trying to improve the specific implementations - but until you address the misalignment, things will continue to be broken.

There are no Sacred Cows

There are no sacred cows.

Find inefficiencies, bureaucracies, pain, and suffering in your org. Highlight it and fix it. Don't take no for an answer.

Who's job is it? YOURS.

Reducing complexity to create products

Most people don't understand how to identify common patterns to produce opinionated products.

They see the world as endless shades and believe that the complexity is not only inevitable and necessary, but also desirable and beneficial.

It's like looking at the rainbow and having the sense that there is infinite complexity and therefore infinite colors. Simplifying the spectrum seems impossible.

Great product managers look at a rainbow, draws bounding boxes and gives each part of the gradient a name. Yellow, red, green. blue etc.

They understand that by reducing the complexity into just a few well defined conditions, people will be able to more easily refer to parts of the color spectrum and accelerate everything from casual discussions, to artistic endeavors to even developing color science.

They also understand that rationalizing the complexity is not only possible, but highly desirable. Because they know that's exactly where value is created.

Do you know how to pivot successfully?

Thanks to cognitive inertia - it's so, so easy to make a pivot, change 1 or 2 of those things, and then accidentally forget to align the rest.

Essential things about your business can end up in an awkward, misaligned state. Part of your business has transitioned, and part of it has not.

A pivot can and should impact every aspect of your business. Brand, positioning, business model, pricing strategy, go-to-market tactics, product strategy, product UX metaphors, and more.

One way to make it easier is to create a migration strategy.

In 1 table, list every aspect of your business in each row.

In column 1, describe how you're currently handling that aspect of the business pre-pivot.

In column 2, described how you intend to adjust things as part of any kind of transitionary state.

In column 3, list how things will be done in the new post-pivot world.

You might be surprised how much can and will change.

For hints at what aspects of your business to list in each row, check out the business alignment stack I created last year.