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)

The crisis plan

One of the worst things you can do is to try and make important decisions when you’re under great stress. While it can sometimes be necessary, the chances that you get it right are rather slim.

The best way to mitigate the risk of ending in that situation is to always have a contingency plan; a pretty straightforward plan that says what you are going to do if the shit hits the fan, and you need to get into full crisis mode.

Will the contingency plan always fit the crisis situation spot on? Of course not. But it will give you a much better vantage point to deal with the crisis from than – worst case – sheer panic.

A good contingency plan should focus on how you plan to deal with the really tough questions, if you need to:

How do you minimize your burn to the essentials without risking killing your company in the process? How do you deal with your team and let them in on what is happening in the best way possible? And following on from that: How do you scale your organization to the new reality in the best possible way?

These are all super hard decisions that no one are comfortable making. But by at least having given it some thought well in advance, when things are still looking good and going in the right direction, you’re able to address them with much more clear eyes and a sharp mind.

You can always hope and work towards ensuring that you will never get to use the plan. But at least you will have one. And that’s a huge difference.

(Photo by Jason Leung on Unsplash)

Don’t ask. Fix!

When things don’t go according to plan, many of us immediately start to ask ourselves the obvious question: “Why?”

But maybe that’s not the best approach. Because when you ask why something happened, in the absence of absolute honesty – which is often the case – excuses, good and bad will take over. Because we all know there is always a perfectly reasonable excuse for why something didn’t pan out.

When we make excuses we’re not only in essence being dishonest to ourselves and others. We are also failing to learn anything, so that we can get it right the next time around.

What to do?

Maybe we should focus on using the same approach any workshop will use, when you send your car for service. They will perform a diagnosis on your car in order to figure out what needs to get done. What they absolutely won’t do – unless your case is very special – is start speculating as to why something happened to your car.

They focus on fixing the problem.

You should do the same, when things don’t work out. Instead of pondering “why?” and coming up with excuses, focus on what needs fixing, and what you can learn from the experience. And once you have done that and have a moment for yourself, by all means start pondering the big questions in life.

But not a second before.

(Photo by Olav Ahrens Røtne on Unsplash)

Ask strategic questions

Not everybody is a brilliant strategist. And that’s ok. Yet every founder team need a strategy for how to develop and grow their startup, and what do you do, if the very thought of developing a strategy just gives you an uneasy feeling?

The simple answer is that you make it as easy as you can for yourself by ensuring that you have a simple platform from which you can get to work on your strategy.

There are many different platforms, you can use. With platforms, I essentially mean approaches. And there is one approach that is more powerful than most and which will easily help guide you through the process without too much pain:

Start by asking strategic questions.

What is a strategic question?

A strategic question is one that borrows from the “How Might We…”-methodology of the Google Design Sprint process (or maybe it was the other way around, doesn’t really matter) and allows you to frame your goal and aspirations for outcomes as a question.

A couple of examples:

How might we utilize our strength towards Segment A of customers to launch successfully with Segment B?

How might we grow retention in our customer base over 97% month over month?

Get it?

When you asks questions like that, you can start plotting suggested answers to them. You can word these like outcomes, i.e. “Launch 1:1 Customer Success offering for Premium Customers” and then look at which actions you will need to take in order to deliver on that.

When you have that sort of Christmas tree of objectives and actions – essentially an OKR structure – you’re well on your way to formulating a strategy: You will be crystal clear about what you will be doing, what the result is going to be and why you will be doing it.

The rest is – more or less – just a matter of getting it written up in a format that can be shared and discussed with your team and various stakeholders, before it becomes the new strategy to guide your venture towards even more more success.

But remember: It ALWAYS starts with being able to ask the right open-ended questions.

(Photo by Hello I’m Nik on Unsplash)

Don’t try to be Keith Richards

Whenever you talk of ‘Sex, drugs and rock’n’roll’, you have to think of the legendary Rolling Stones. Not only have they made an eternal contribution to great music that will live forever. They have also lived the above myth to the extreme.

Lead guitarist Keith Richards has been chief among those trying everything on the planet and then some. And it has shown, time and time again.

I distinctly remember a concert with them in Copenhagen, where during band introductions somebody had to step up to the ol’ geezer and shout into his ear where on the planet he was playing that particular night:

“Oh yeah…Copenhagen! Pleasure!”

And then a big grin on his face before going full body and spirit into yet another one of their evergreen hits.

While slightly funny in itself, the real interesting thing about Keith Richards is that he was not supposed to have been there at all. Judging from what he has done to himself over the decades, he should have been dead long ago.

Apparently the combination of a very strong immune system (that scientists will want to study when he’s gone) and luck has kept him alive.

That last part is the essential one here.

Luck.

If luck hadn’t played its very significant part, Keith Richards would probably not have been around to tell his countless tales. Luck enabled him to do so.

It wasn’t part of any masterplan on his part. If there ever was one it went up in smoke – literally – in the 70s. Because you can’t plan for luck.

Neither can you.

If luck is a key ingredient to your future success, take a step back and reassess what you’re doing and how you can work to ensure that you’re not so dependent on something as fluffy, fledgling and very little under control as luck is.

Of course successful people are lucky too. But most of them – 99% would be my guess – also made it with more hard work, focus, determination, grit, talent and whatever than sheer luck saving them from stupid decisions.

You should work your way towards success. While Keith Richards is undoubtedly a legend, he is and will remain a terrible, terrible role model.

(Photo by Vale Arellano on Unsplash)

Vision needs strategy

Most startups are founded on a vision; a wish to help bring about change to something in the world. But many lack a coherent strategy of how to get there in the end.

How come? The difference is in the meaning of the various words.

A vision is like a desert mirage. It’s aspirational, something we can imagine but is not real – yet.

A strategy is a plan to find the waterhole in the desert, so to say. It doesn’t have to be a complex plan with a lot of moving parts, but it needs to be a plan that can – if nothing else – convince people that not only might you be on to something. You actually also have some kind of idea of how to capture it.

Many startups frown at the word ‘strategy’ and doing strategy work is a pretty long way down the list of priorities. But while it’s true that execution is key and should take precedence over ‘thought’-work, they still need to set aside time to develop the plan.

Otherwise how are they ever going to make it to the fulfillment of the vision?

By luck? By endless trial-and-error?

Of course not. So get the strategy that supports the vision in place. Make it flexible based on what you learn on the journey, but nevertheless utilize it as a map to get to the destination, you’re longing for.

(Photo by Austin Chan on Unsplash)

The dangers of ‘digitalization’

The Danish Management Society‘s new focus on “Digital Reshaping” – whatever that wording means – made me think;

Whenever somebody talks about the need to ‘digitalize’ products or processes in an old industry company, you as a digital expert should be quite alert. Perhaps even worried.

Because what does the phrase really mean?

I will tell you what it seldom means;

It seldom means that the company in question is looking to question every single process and product it has in order to ask itself questions like “Is this still relevant?”, “Does the product serve a clear need in the market?” and “Have we REALLY understood what it means to make this a success in the current and future market?”. And make the necessary brutal decisions the answers demand.

It seldom means that the company is looking to change it’s entire operating model to embrace the uncertainty of a fast moving market and favor smaller, nimbler experiments as a way of understanding the need in the market before pushing for the big product delivery. And it never means a higher tolerance – embrace even – of risk. Or even a longer time horizon to get things right.

And it seldom means being really ambitious about the people you get on board and – crucially – the mandate you give them to actually make the needed changes happen and – hopefully – put the company on a better trajectory.

All of the above are in my humble opinion key elements for actually making the necessary things happen that will change the trajectory of the company into something better aligned with the needs of the current and future market and customers.

Of course you could be in luck. But alas, you will seldom see these things. What you will see when companies look to ‘digitalize’, though, is;

Doing more of the same but in a slightly different way. Typically by investing in expensive systems from convincing vendors and trying to operate them even though they are often overblown compared to the value they end up delivering to your company.

More of the ‘big bang’ releases that are being touted – using various fancy words – as ‘transformative’ or even downright ‘disruptive’ (which they never are, ed.) that end up failing in spectacular and (sometimes) even depressing ways.

The same old guard of people sitting there making all the decisions lacking the necessary insight into the depths of the matter and what needs to be done while confirming to each other that they have long ago figured this out. And the ruthless of identifying the scapegoat for failure and weeding out of everybody else, who think and try to act in a different way.

The end result?

More blindfolded investment. More wasted investment. More convenient scapegoats when things again don’t go according to the grand ol’ plan.

And very little real change.

So beware. And demand all the right answers to the proper questions, before you get involved.

(Photo: Pixabay.com)

TikTok and a lot of…nothing

What does a Trump rally, TikTok users and startup tactics have in common?

They are here and now – and there’s not necessarily a grand plan for how to move on from here.

When I saw that apparently a viral TikTok prank of securing tickets for Trumps rally in Tulsa and then (of course) not showing up and leaving the hall half empty, I was reminded of a similar way that many young startups operate;

They hack their way forward. Growth hacking is just one of the terms.

While growth hacking – or just hacking – can be a real powerful tool and bring you forward here and now, it very often is not useful on the longer term. The results generated can easily prove unsustainable.

A quick example:

A couple of years ago on a hot summer afternoon in Copenhagen, I watched a young startup giving out free cold beers to anyone who would download their app (which had nothing to do with beer).

A super efficient growth hack that coupled their need for extra downloads to serve some metric goal with the bypasser’s need for a cold beer on a very hot day.

But also very, very short term. What’s the chance anyone of those who got a beer ended using the app? Close to zero.

Same with the TikTok happening. Super efficient and (to some) fun even. But what’s the impact going forward? Probably close to zero.

Why?

Because now that it has been done, the Trump campaign will have learned what can happen and will most likely adjust for it going forward. If anything there is a risk that the campaign going into the crucial months has been made more robust from this and thus – potentially – more effective.

In this respect the TikTok thing can end up being counter productive in the end. Just as those cold beers on a hot summer afternoon in Copenhagen.

So what’s my point in all this?

My point is to make sure you have a plan. A pretty thought through plan where you at least understand what the things you’re doing short term contribute to the overall goal and how to make adjustments to the plan based on how individual initiatives play out.

It is very seldom that those just jumping from one very short term thing to the next end up with the victors spoils.

(Photo: Pixabay.com)