Make it simple to buy

Are you unwillingly driving customers away from you by having a complex, ‘inside out’ business model? You should definitely check.

If you do, you should do your utmost to align your business model with how your customers are running their business and make an effort to just slide right in as the perfect solution to whatever pain, they’re experiencing.

The above dawned on me recently when I had a conversation with some great startup people about their business, their business model and their pricing strategy. While everything they said made perfect sense from their point-of-view, I realized something:

Every time their product was presented to a potential customer, the customer essentially had to first understand the startups preferred way of doing business before making an assessment as to whether their way of doing business and the product would make sense to get into their own business.

This seemed strange for a couple of reasons:

First, we know that the market is hugely competitive, and that complexity has the potential to kill any deal, if there is a simple alternative just there for the taking.

Second, we know that closing a sale means reducing the steps and reasons to say ‘No’ to a bare minimum. Whenever you introduce any kind of friction, you’re essentially adding potential opportunities for your future customer to just say ‘No’ to whatever it is, you’re offering.

So what to do instead?

Make an effort to understand your potential customers, how they do business, and what the challenges and pains are that your product could easily help them overcome. And then package your product in such a way that you’re the obvious solution for them to say ‘Yes’ to – every single time it’s presented to them.

There is really no excuse for making buying your product too complicated for customers.

(Photo by Ibrahim Boran on Unsplash)

Back in the engine room

One of the things, I have always enjoyed, is getting my hands down in the day-to-day grind of operations; ensuring that the wheels are in motion, running smoothly and any issue is dealt with in a timely manner. I absolutely love oiling the machine here and there, ensuring it spins properly.

For that reason I am excited to announce that I have joined our great portfolio company Cortrium as their interim COO for the coming months to help the management team there run operations and prepare for the next significant steps forward in the companys development.

I have been helping Cortrium out with marketing and other things for the past 9 months, and its a great company with an even bigger potential. The MedTech company specializes in longterm ECG Holter measurements and reporting, and they have a very innovative and forward-leaning tech stack of both hardware and software ready to help doctors and cardiologists diagnose people with atrial fibrillation, which is one of the leading precursors to strokes.

It’s not often that you get the chance to combine something you love with the opportunity to work on something where the ‘why?’ is as evident and awesome as in Cortrium, and I am really looking forward to working with the entire team to help them on fast forward.

(Photo by iSawRed on Unsplash)

The new reality

Currently it’s not for the fainhearted to follow the developments on the worlds stock exchanges. 15 years of bull market has been replaced by an ugly bear which seems to send anything with an incling of tech down, down, DOWN in the market. Well, it pretty much sends everything down to an extend where it can resemble a stock massacre. 

The development in stock quotes is not interesting in itself – things go up, and they come down again. What’s interesting is the shift to a new reality that the movements are an indicator for; the end of ‘free’ money, rising inflation, rising costs of production and a shortage of both key components and talent. It is truly challenging times. 

In the face of such adversity, you can be forgiven for giving up and just wanting to bury your head in the sand until this whole things blow over. Because how do you cope, let alone adapt to this new reality? Most of us have never tried anything like it, so we’re in uncharted waters trying to learn how to swim before we drown.

But it’s exactly when you have to develop a key ability in an instant that you’re perhaps the most capable of doing so. There is just no workaround. So when the immediate shock gives way, it’s time to assess where you are, and what all this means for you and your startup and start adapting to the new normal. And I think there are a couple of things, you need to address and get used to.

First of all, you need to control your burn and your business fundamentals. The good times where it was growth at all costs, and nobody cared about the cost are over, as far as I see it. Going forward there will be much more scrutiny on your commercial model, and whether its viable or not. If it is and you can prove it to investors, you will still be able to attract funding to grow and seize opportunities (more on that in a bit) that may present itself. Furthermore you avoid getting into a situation where you need to raise new funding with your back against the wall. That’s a bad situation to be in in general – now it’s just plain terrible for you. So don’t go there. 

Second, be aware that a lot of the ‘smart’ growth tactics you have deployed in the past and probably semi-automated probably won’t have anything near the same effect anymore. Your customers don’t have the same spending power or urge to spend, as they had before, and you will most likely see cutbacks towards skipping things that are considered non-essential. And let’s be honest; a lot of what’s available out there are non-essentials that few customers would truly miss, if they had to cut it. 

With that there is also an opportunity. An opportunity to put your automated growth machine on the back burner and instead spend some time and energy on talking to customers face-to-face, listen and really understand where they are at, what they truly need and how your product applies to those things. You wan’t to ensure that you truly understand how your product is truly – and please don’t blow smoke in your own eyes here – essential for them, so you’re still considered valuable and thus they will continue using and paying for your product. 

Willingness to pay is going to be the only metric that matters here. Forget about most other metrics right now. If you can’t get your customers to pony up the cash for what you provide and have them continue doing so, you have a serious challenge. It’s that simple. 

The benefit of this simplicity is that once you get this right, you will know that you have the strongest possible foundation that will pretty much insulate you and your startup from market turmoil. You will know for a fact that what you do and deliver is essential to your customers, and that any future downturn will hurt a lot of others before it hurts you. 

Knowing that is priceless. It allows you to get a bit out of the crisis “all hands on deck”-mode and start thinking about the future and pursue interesting opportunities. What do I mean by that? Could be that one of your competitors don’t have the same stamina that you do and suddenly provides an opportunity to consolidate. Consider it. If it makes sense, and you can get the financing right, consider doing it. Exploit the crisis of others for your own benefit. 

Do whatever it takes. And understand down to your very core that this is a new reality we’re looking and have to operate in.  

(Photo by Tobias Bjerknes on Unsplash)

Tactital vs strategic use of data

There is no doubt that data forms a really solid basis for making business critical decisions not only in large organizations but also in startups. That especially holds true when ressources are tight, and the ambitions are grand; you need to really ensure that what you’re spending your time and money on truly works towards keeping the momentum high.

In reality it might not always be so easy to work with data in the most impactful way. Because it’s not only about looking into the numbers and keeping track of incremental improvements. It’s more about knowing where you want to go with your startup, figuring out which metrics make sense in order to report on your progress and then setting yourself up with data sources that enables you to keep track and optimize the operation, so you end up meeting or exceeding whatever goal you might have.

Doing this the right way takes dedication and a fundamental feel for and understanding of the underlying business dynamics, your products or services and – not least – your customers and their needs and expectations. In other words, in order to be able to use data in the most efficient strategic way, there is a lot of prep work you need to do beforehand, which doesn’t necessarily have a lot to do with data in itself.

And this is precisely where I often see warning signs when I look at especially early stage startups and the way they try to work with data in order to grow and scale their business. Many of these don’t have as much of a strategic view of how to enable their business to run on data as they have a more tactical view on using data.

So what is a tactical view on looking at data?

An example could be that you’re trying to grow engagement of your app. You want to get users to spend more time in the app and engage more by liking or sharing things. You could pretty easily define a couple of more or less standard metrics, and you could also quickly find a ton of tutorials online that will help you optimize for those more or less generic metrics (let’s just choose Daily Active Users or DAU as an example to make it concrete).

It would indeed be possible to apply well-recognized best practice ‘hacks’ towards optimizing for those metrics, and there would probably also be some improvements to show for it. But the trouble is that not only is this a very mechanical, one-size-fits-all approach towards working with data. It is also short term and has no real bearing on either the quality of the product or service, you’re offering, let alone the needs and aspirations of your customers.

Thus, in essence, by applying this generic tactical approach towards working with data in your startup operations, you end up optimizing for…what exactly?

This is precisely the reason why it’s so important that any effort working with data to improve the prospects of your startup and meet the goals, you have set up, needs to be strategic in nature. So what does that mean?

First of all it means having a general direction of travel, you want to take your startup on.

Second, it’s about validating with customers and market research that the direction is the right one and – if executed in the best way – will actually bring the wanted results to your startups prospects for success.

And third it’s about figuring out what that direction in tandem with the validation from the market and customers means in terms of defining custom metrics that both prove to be valid indicators of success and which are also possible for you keep track on.

Once you have those metrics in place to represent desired strategic outcomes for your startup, you can start doing the setup of your data and analytics to support keeping track of it all. The first time you go through that exercise it will probably feel like a lot of work, but just like plumbing for your home, if will not be something you need to do more than once. Once you have it settled, the systems are in place, and data is flowing like you want to, you’re set.

And then – and only then – are data set to work efficiently for you and your startup.

(Photo by Stephen Dawson on Unsplash)

Meta thoughts

Everybody that seems to have an opinion about Facebooks recent name change to Meta seems to have aired it by now.

So naturally, I thought it time to went my own two cents on the subject; why it changes nothing about the fundamentals, why it’s different from Googles renaming to Alphabet, why Mark Zuckerberg needs to succeed with the exercise and what bet he is making in order to make it happen.

First things first: Of course the rebranding from Facebook to Meta doesn’t change anything about the vast challenges that Facebook is facing.

On the contrary; the name change is a testament to the fact that one of the worlds leading brands in terms of market capitalization has become so toxic, it needs to be incinerated from public view.

It says a lot about CEO Mark Zuckerberg and his merry crew that they would rather throw their brand out than actually work to address and solve the myriad of issues affecting Facebook.

It’s will probably be the closest thing we ever get to Zuckerberg admitting guilt. Which of course he will never (see any reason to) do in the real world.

Second, the comparisons with Googles name change is some way off, IMHO. When Google changed into Alphabet it was basically for two reasons:

The original founders Sergey and Larry had pretty much lost interest in search and were looking to pursue other interests. And, more importantly, Google was doing so many different projects that had nothing to do with their core business that they probably needed an entire alphabet to keep track of them all.

Facebook – sorry, Meta – doesn’t have this. For all the existence of different apps, it’s still very much a social media company across software as well as hardware. Even though Mark Zuckerberg is dappling a bit on the side with other projects through foundations etc., it’s not like Meta is about to cure cancer.

Some would argue that Meta is much rather a collection of cancers than any kind of step towards a cure, but I digress.

No, there is a much more compelling reason for Zuckerberg to dip into the met averse in order to keep his collection of apps on a path of growth and prosperity:

The ownership of the operating systems and the platforms that come with them.

Facebook in its old form had grown way too dependent on other peoples OS’s and platforms being it Apple iOS, Google Android or whatever.

Normally that wouldn’t be a problem, because when you’re huge, you hold both sway and leverage within the ecosystem. But to Facebook it has been for the sheer reason that even though Facebook is huge, the OS owners are bigger and more powerful.

And – add to that – pretty pissed with how Facebook operates.

Example? Apples decision to limit apps ability to track users for advertising on iOS.

I could image Facebook has been the single biggest driver for the decision by Apple to roll that out. And on the other side, I could also imagine that that very move has been the biggest motivation for Mark Zuckerberg to go big on the metaverse and do the whole rebranding exercise to Meta right now.

He simply needs to build and own his own OS and be independent of the other OS owners.

So I think this is the light Meta and the bet on the metaverse should be seen; it’s Mark Zuckerberg big bet on creating a brand new form of operating system that he hopes will disrupt and replace and others, so he will be able to have to last laugh.

His biggest asset? The huge user base. If he can convert the users of the many Facebook apps into the univer…sorry, metaverse…he will have won.

Of course the biggest challenge that he will face in doing so, is the lousy history he has with many of the same users, who he through his failed stewardship of Facebook has failed time and time again.

Will they place their faith on more of the same, more immersed, potentially more powerful?

I seriously doubt it. But it’s pretty much the only big bet he can make.

(Photo by Dima Solomin on Unsplash)

Recruit by objective

Too many startups are still looking towards other startups and their org charts, when they recruit to expand their teams.

While there is of course something to be said about having someone on point to fill the various operational roles in the startup and ensure smooth operations, navigating by org chart is typically a pretty poor way of ensuring that you reach your overall objectives.

What you should be looking to do instead is to staff by objective;

Figure out what the key objectives for your startup is and ensure that you have the right people with the right skills and experience in place to make a success out of them. If that entails restructuring your team and who’s in it, maybe that’s a thought worth having.

When you try to recruit, figure out who you need to have in the team, and who would be nice to have. Recruit the must haves to form the core, and supplement these with contractors or freelancers, who can make an important contribution for a while until they are on to other projects.

That way you can get the best from both worlds, and you won’t get stuck being dragged along by an irrelevant org chart.

(Photo by Magnet.me on Unsplash)

Bad market feedback

One of the hardest things for many startups is dealing with bad market feedback; the sense that what you have been trying to bring to the world just isn’t being that well received at all.

It is the flipside of doing market testing and validation. While obviously the right thing to do, we always go into a test in the hope that results will be good and support our hypothesis. Yet, many times it just won’t happen.

What to do then?

Obviously the answer is not not to do any testing. That’s just stupid; it won’t make the bad feedback go away – it will just present itself way later when you have put a lot more energy and ressources into a product that ultimately might be failing.

The answer of course is to (1) learn to deal with bad market feedback and (2) think about how you deal with particular feedback based on what it is that you’re testing.

The best way to deal with bad market feedback is to remember that the market and the customers are always right. If you get bad feedback it is a sign that something in what you’re doing is off; the wrong approach, the wrong customer segment, maybe even the wrong product.

You get the feedback, internalize it, redo and come back much stronger. And you understand and accept that there are no points for insisting you’re right and the market is wrong. None.

On the second point, you can grade how you do testing and work with bad market feedback. While it of course sucks to get very bad feedback for your product as such, getting bad market feedback for an outlier idea or approach is actually really, really valuable.

Let’s assume that you have been playing with an idea of getting a sub-set of your feature set earlier to market in order to start generating revenue. It’s not entirely ‘on strategy’ when you look at your vision, but you want to start generating revenue as soon as possible.

Should you do that? Or should you stay the original course?

Test it.

If you get bad market feedback from testing that outlier approach, you will have learned that (a) clearly your idea is not going to be a runaway hit and (b) maybe the opportunity you saw to get an early product out and essentially diversify is a bad one and will only take away focus and ressources from your main effort. If that is the case, you will be happy that the bad market feedback has helped you and your team dodge a future bullet.

So, in summary, bad market feedback can be extremely good and valuable feedback, as it can help you focus on what’s really important and utilize your ressources in the best possible way. So make sure you don’t get distracted on a personal level and take it in as a defeat that leaves you stuck in f***.

It’s not.

(Photo by Jon Tyson 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)