Keep winning

When looking at B2B startups, it’s super easy to get impressed by a well-executed growth model that brings new customers in in droves. Of course it is; sales is an art and can be a super tricky one at that, so every time a startup succeeds in closing a deal, it’s reason to celebrate.

But what I personally like to celebrate more is their ability to keep their customers happy by ensuring a high retention and thus a super low churn.

That – to me – is the most powerful indicator of a startup delivering real value to customers by successfully solving a problem, the customer has.

When I meet with startups there are always convincing narratives about how to find and attract new customers and close the deal. But with startups who already have their first product in market, I often find that the story becomes slightly less convincing, when we talk about retention and churn.

Sometimes the story about retention becomes so weird or non-logical that I just assume that the startup in question has a real problem in that department, and they are more than reluctant to share that with me. That – in all honesty – is a huge flag.

Having to work hard on retaining your customers is hard work and honest work. Because even though you may have a great product, lots of other startups or big corporations are out to get your customers with everything from a slightly better product to one that is just a lot cheaper (and perhaps even loss making) than what you have to offer.

You need to have a plan for keeping retention high, and you need to execute on it like your life depended on it. To some extent it does; at least the prospects of your startup ever becoming a viable business.

You need to show that you understand what’s going on, and that you understand what you need to do to keep your customers engaged, happy and finding the best value in your product. And you need to always optimize that approach to ensure that your win didn’t only happen once, when you closed the deal, but that by keeping the customer, you essentially have what it takes to keep on winning.

When you have that, it’s truly worth celebrating.

(Photo by Arisa Chattasa on Unsplash)

Easy to buy

When you’re building something to solve peoples problems, it can be tempting to build feature after feature and try to sell them all to the customers at the same time.

What often happens is that it can be hard to get the customer engaged in a dialogue or a trial – simply because you’re overwhelming them with information about features, solutions etc that they have a hard time figuring out whether your product is actually a potential solution to the key problem you have.

As an alternative, you could start smaller. Start by telling about one thing that matters to a customer segment, who you know is experiencing the problem. Use that as a way of engaging in a dialogue or a trial, from which you can build from, upsell and secure an ongoing relationship to a future happy customers.

Start small. Be easy to buy. And then take it from there.

(Photo by Andrew Ling on Unsplash)

Beware changing models

Can you start out with one type of business model and then transition to a new one without facing huge challenges?

The question is a valid one. And the answer is probably “No” in most cases. And it is worth exploring a bit further, as it’s often a topic that comes up when I meet with founders.

The issue with wanting to change the business model is that what I need and want as a founder and business owner is not necessarily the same as my customer needs and wants.

Let me a simple example from my own life as a customer:

When I order a case of wine from my preferred ‘wine pusher’, I expect it to be an interesting wine from a wine maker, I would otherwise never have heard of and at a reasonable price. Like I am used to.

I do not expect to get an offer for a wine they have produced themselves together with a chef, I have never heard of (even though it probably says something bad about me that I don’t). As I got the other day. And immediately decided to decline.

Why?

Because it broke the fundamental ‘contract’ I have with my regular supplier: You find regular wines from little known places that I can then get a good offer on. That’s the model, I have signed up for. You DON’T try to introduce your own brands into the mix, because that deviates from our ‘contract’.

Could I be more forgiving here and just try it out? Absolutely. And I fully expect that many of their customers do so. Otherwise they probably wouldn’t do it. But I think it goes to show how challenging it can be to make changes to your fundamental value proposition and business model.

I think you need to be very aware of this. Because while it may be tempting to try to change your business model to introduce new revenue streams, cut costs, increase sales, boost your bottom line or whatever, you won’t succeed in it if you’re out of sync with what your customers are expecting.

Don’t ever take even your loyal customers for granted.

(Photo: Pixabay.com)

Bye bye, Endomondo

A couple of days ago an old love affair ended, when I deleted the Endomondo fitness app from my phone.

For what seems like many years I have been a loyal Endomondo user, and for a period of a couple of years I also subscribed to the product to be able to get customized workout plans for my running.

It was a really nice and cool product that carried me through a lot of training sessions and a couple of half-marathons – something which I would never have thought, I would ever be able to achieve (yes, I am that bad a runner).

Now it’s being decommissioned by fitness apparel manufacturer Under Armour (UA), who acquired Endomondo a little more than five years ago for close to 100M USD.

Of course I don’t know the inner workings, and why UA has decided to sunset the service, although they apparently want to focus more on more seasoned athletes.

To me it just seems like yet another acquisition gone wrong after the “Look, shiny new thing, gotta have this”-honeymoon ended.

But alas, it doesn’t matter at all; Endomondo is dead.

UA wants me to export my data to their other service MapMyRun. Now, why would I do that after they have just left me out in the cold?

It always baffles me when a company that have just let you down thinks that you want to dive straight back into another adventure with them. I think it’s quite an arrogant assumption.

Instead I have decided to give Strava a go.

I have already clocked my first couple of runs, and I must admit I can see, why Endomondo is being shot down; it just hasn’t got the attention from UA for a long time that I can see Strava is giving their product. It is vastly superior.

Endomondo was great once. Thanks for the memories and the help.

RIP.

(Photo: Pixabay.com)

Customer loyalty during a crisis

A lot of people say that there is never a time as good to start a new venture as in a time of crisis.

Maybe it’s true. I don’t know. But lets assume it is. What are the things that makes it different and perhaps even better?

Normally, most would suggest that the reason it is a good time to start is that you can put pressure on the ressources you need to get going; vendors are hungry for cast and talent may not have the opportunities and bargaining power they had before.

I am not sure that goes for the tech sector, though.

But what I do find interesting is when it comes to customers and customer relationships. Maybe that’s where the real differentiator is?

When I look at my own personal spending patterns during the Covid-19 pandemic, they have largely gone one way: Down. I have cut out a lot of the day-to-day personal operating expenses – the little guilty pleasures – that I have been used to. Simply because I haven’t been able to venture out in the same way.

Now that my spending has been cut back, I am using the opportunity to assess my future spending with bigger scrutiny. I think more about what I spend the money on, and I think more about making sure that I get the value I pay for. And that I relentlessly cut out excess spending.

Case in point: I have become a cable cutter. Goodbye flow TV and big packages. Hello, select streaming services. Net effect? Minus 50 percent in cost. Per month.

I am not assuming that I am the only one who have experienced this. And let me add more to it:

It’s not that I think I am worse off than before. I think what I have now suits my needs better and more precise, and all the stuff I have cut out were things, I could easily live without.

Let’s go back towards the point about a time of crisis being a great time to start a new venture:

Perhaps it is not so much about the short term propensity towards trying to squeeze your suppliers, partners and employees.

Perhaps it is more about making damn sure that you deliver real value to your customers based on what they define as real value – not you.

Maybe it is about making sure that every single time one of your customers contemplate whether they can live without what you’re delivering, they will quickly move on to the next item on their list, because what you’re doing is an evident ‘keeper’.

If you get that out of starting a new venture during a time of crisis, I think you might just have something that will not only be able to make it through the crisis but actually thrive during and afterwards.

You’re welcome.

(Photo: Pixabay.com)

A healthy reminder

The storm hitting The Danish Heart Foundation after their new youth campaign ‘PS I Love You’ was criticized for endorsing – to put it mildly – un-scientific approaches towards a healthier life style for young people holds a crucial reminder for every entrepreneur operating in or trying to do something in the health-space:

Dealing with people with serious conditions is not something that should be taken lightly. Quite the opposite; it demands the utmost care and respect for those you’re trying to make a difference for and the value, you can bring to them.

Furthermore, it is near impossible to get a second chance to make things right. Once you have disappointed it is super hard to come back and convince people that you actually have something valuable to offer to them.

Yes, our personal health is that important. And rightly so.

This offers a stark contrast to most of startup life, where it’s all about getting out there with what you have, fail, learn, iterate and come back stronger. It is a super approach in general – just not in this space.

Of course it doesn’t make the particular case better that it is actually the foundation itself that goes out and miss the mark completely. But entrepreneurs should still take note;

for all the potential of doing good and building potentially great businesses in the health space, you also need to be very aware of all the other things that comes with entering that particular territory.

(Photo: Pixabay.com)

Building in a void

One of the things that many people building new products and services automatically assume is that their would-be customers are curious people always on the look-out for the next big thing. But is that really the case?

Have you ever asked your customers how they find the hidden gems out there that can help them solve all their problems? Have you ever heard them explain how they actively go looking?

We have a tendency to think that everybody is always looking for something new and shiny. In many cases it is totally not the case. Which makes it important for you to avoid the temptation of building something hoping they will come. They most likely won’t – not by themselves anyway. So make sure you have a strategy for how to get them to notice you properly.

(Photo: Pixabay.com)

Go talk to a customer

One of the things that continues to amaze me is the power of actually seeking out potential customers for solving a problem and chat to them about their experiences so far in both experiencing the problem and trying to find solutions for it.

It is easy to get an idea all by yourself. But the idea – or better yet; the theme in which your idea resides – gets so much extra power by actually meeting and listening to the real experts: Those experiencing the problem.

The exercise itself is really simple: Figure out who you need to meet, set up some meetings or chats for coffee etc, show up, ask a few questions and LISTEN. I guarantee you will leave much smarter. And you will be able to channel all that insight directly into whatever it is that you’re doing, if you choose to. And yes; you should.

(Photo: Pixabay.com)