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)

How to win with corporates

I have always held a strong belief in the outsize value of strategic partnerships. And I must confess it has been a frustrating pain to be part of and watch a lot of good intentions end in absolutely nothing.

I am by no means alone with that experience. In fact I think it’s fair to say that it’s more the rule than the exception that these partnerships between corporates and startups don’t work. The excitement at signing is almost inversely related to the feeling of frustration and banging your head against the wall, once the partnership has to be implemented to start delivering on all the promises.

But it can be done. One startup, I have worked with over the last few months, has managed to get to a winning formula, and I thought I wanted to take this opportunity to share some of my learnings from it in the hope that you might use them to improve your own prospects with getting a great return on your strategic partnerships.

The first thing to consider is whether or not what you’re doing solves a real pain that the corporate has. Yes, we all know that big corporations can struggle with innovation, but that’s not where the real potential lies. Due to the law of big numbers, it makes much more of a dent in the corporate structure, if you can help them sell more or what they are already selling.

In essence that means that if you have something that makes the corporates product better in itself or provides leads for more sales of their existing product by giving their sales people cloud cover to reengage with their customers with something new and exciting, you could have something that is very valuable to a strategic partnership. But you need to have it mapped out beforehand in order to put yourself in the strongest possible position for identifying the right partner and do the hard negotiations.

If you succeed in coming up with a partnership, the hard work truly starts. A lot of startups mistakenly think that it’s all about teaching the corporate to adapt to their more lean and efficient way of doing things, but I honestly don’t think that’s the case. What I see working is in fact more the opposite; that the more you can factor in how they work in your own process and be open, transparent and accountable about it, the easier it will be for the corporate to integrate you and your product in their offering – which is essentially the only recipe for commercial success with a corporate.

Finally, you need to ensure that incentives are aligned. No matter what the corporate might tell you, its a matter of fact that they are ruled by objectives. That also means that key stakeholders bonus plans are tied to objectives, and they will do whatever they can to succeed with those in order to get bonuses and promotions. Nothing else will really be touched. So be damn sure you understand their objectives, their KPIs and bonus targets, and do whatever you can to slot into that in the simplest possible way. Make it super easy for them to engage – the less they have to think about it the better – and you’ll be in a good position to achieve success.

Does all of the above mean that you always need to dance to the corporates tune? Well, if you want to succeed with a strategic partnership centered around marketing and sales with a big corporate, I think the answer is yes. The balance of power isn’t in your favor, and the only thing you get from insisting you’re equals is…nothing. Then it’s much better to just eat humble pie, focus on the end goal of making things work and making a solid profit. And then stick to the formula.

That should enable you to consider frustrations over failed strategic partnerships a thing of the past.

(Photo by krakenimages on Unsplash)

Moving aside

The other day I met a startup founder, who had been struggling getting his business of the ground as a business for the past couple of years. Despite claiming the ambition of millions of users worldwide, he had only reached a couple of thousand within the first couple of years.

While there is always reason to celebrate great knowledgable people for taking the plunge to pursue their passion and their dreams and turn both into a startup, there are also times when you need to step back and take a more sombre look;

This particular startup was in reality nowhere. In order to have any prospects of success, they needed to step back, look at their core assets and find ways to build a revenue stream around those. Not out of curiosity. But out of necessity.

And yet the founder resisted. While claiming to be open to change, he was still very much set around the same set of assumptions that had brought him and his colleagues so little over the past couple of years. When I asked him what in their performance so far he thought mandated to continue approaching things the same way, he didn’t really give an answer, and I totally understand why: There was no real good answer.

The founder was faced with a ton of challenges, but what also become apparent to me is that he was at the center of a lot of them. And that maybe the best prospects of success for him and his startup was for him to find someone with a pair of fresh eyes and the right capabilities in terms of building the business, and then step back to another more product related role for himself.

He sort of agreed. Until he didn’t the next second. And we could have continued that way for ages.

While I completely understand that it can feel totally wrong to think in terms of finding someone better to replace you in a key role – and especially in a startup you founded – I think there are times, where it’s truly the best solution for all parties concerned. If you believe that the most important thing is to build a thriving business, personal considerations should matter less.

For myself I have always believed that building winning teams is about looking at the challenges facing you and then go about trying to recruit someone much better than yourself to help you overcome those challenges and move on to the next level with the business.

For that reason I have always tried to recruit the best and brightest and get someone who could not only challenge me and my thinking but also contribute to some vastly improved results within their areas of expertise. I think it’s wise for founders to think in those terms too.

The last thing anybody needs in any company whether it being a corporate and a startup is someone at the top with the ambition of always being the smartest person in the room, no matter what. Yes, that person might be brilliant and truly the smartest person, but in most instances – and my experience – there are quite a few even smarter people out there, we should instead be looking to recruit, onboard, get to work and start generating successes with.

Having this unbiased view of your own role can help you build the team that builds the great business together with you. If your too stuck on your own ego to realize that, you risk ending up becoming a founder who will look back and reflect on what potentially could have been but never materialized because you failed to make the right decision and move over to provide room for other great people.

(Photo by Greg Shield on Unsplash)

Join me in helping startups

One of the things, I find most pleasure in, is helping others succeed with their ideas and ventures. It’s a big part of the reason, why I joined People Ventures in the first place, as a core part of our DNA is helping the founders, we invest in, in very hands on ways moving their companies fast forward.

Because I like to help and see other great people help likeminded great people achieve great things, I have kicked-off a small experiment:

I have launched a Slack community for people with an interest in and passion for helping startups succeed. Here we chat and help each other out, because we care. We are people with ideas, founders, corporate profiles and investors all trying to chip in the best we can.

If you’re into helping others become greater than they already are, join today using this link and introduce yourself.

The only thing we ask is that you make a commitment to being open, accessible and active.

Many thanks for your participation and help. It’s so much appreciated.

(Photo by Stephen Phillips – Hostreviews.co.uk on Unsplash)

Making the vision operational

You start out with a vision. You fight to develop your product. You ship. And you get so caught up by day-to-day operations and fixing things that you don’t have time to think about the vision or – more importantly – put initiatives in place for the longer term that will ensure you continue driving towards it.

Does it sound familiar? When I look around, I see it happening a lot.

And I can understand why that is. Having a product in market with real customers using it is just completely different from being in R&D mode. And getting the revenue in from customers who are happy users of your product, because you listen and service them well, just feel like the ultimate validation of what you set out to do – even if you’re only just establishing a beachhead.

Getting stuck can be so easy. One day after another passes, where you’re in operations mode trying to fix things, optimize and move a couple of steps forward in the process. But you are essentially stuck. Because you’re potentially neglecting the very initiatives that are going to enable you to push even further, grow to the next level and drive the value of the business up.

I would argue that if you are in this situation, it is more or less a miracle if you end up anywhere near realizing the vision, you set out with. Or more importantly: Capture the value you could have captured, if you had been able to run a tight ship, constantly moving forward and upwards.

Don’t count on miracles to happen. Instead invest the time in ensuring you both have a day-to-day operational side and a longer term strategic side working on the next important projects crucial to the growth of your business. In my opinion that’s the best insurance policy you can take out on your startup becoming truly successful.

Of course the obvious question is what it takes in order to maintain a balanced approach and ensure you succeed on a broad spectrum? Well, I have a few ideas and suggestions.

First of all make a conscious decision to set out a portion of your time as founder to only think about and work on projects that are longer term (+6 months) but crucial to the growth of your business. How much you should set aside varies and is up to you, but I would suggest at least one full day per week. That will get you started.

Next up, drill down on your vision and build your product and business roadmap based on that. Start out with the vision and define a strategy that will provide you with a blueprint for what needs to happen in order for the vision to be able to come true.

When you have the strategy, define which role your product(s) is going to play in order to make the strategy succeed. It will not be the only thing that matters, as execution and GTM plays also play pivotal roles in ensuring success. But the ongoing development of your product(s) and the leaps you can generate through making the right product bets are critical.

What does your product need to be in order to deliver on the strategy and ultimately the vision? What does that imply when it comes to the roadmap? When do you do what? In what order? What are the goals you will setup to monitor, whether your successful with your product or not? How will you remedy mistakes and get on the right patch again? Etc etc.

Make a complete drill-down on what your product strategy and roadmap needs to be in order to deliver on the vision. And make a conscious decision to stick to the plan in the sense that you prioritize ideas, feature requests etc that supports the roadmap, the overall strategy and the vision as much as you can.

When you get to the point where you have those things in place, you can start enjoying the overview that comes from having a plan and working towards executing it. You will find further enjoyment in the fact that even while you may from time to time toil with fixing bugs or some other operational matter, you’re still by and large working in the right overall distraction. Fixing things doesn’t become the end but just one of many means to an end.

And that’s a huge difference. Also to the ultimate success of your business.

(Photo by Joshua Earle on Unsplash)

Have you got a sales quota?

The thing that truly separates a corporate job from a job at the startup is the chance to have an outsized impact on solving a problem for customers. More often than not the distance between problem, potential solution and the ability to get that solution in front of customers to test out is way short for a startup than for a corporate.

But there is also another thing that separates the two. And it’s one which is directly linked to the above discussion about impact. It is the opportunity to see outsized returns on the investment of time and ressources you put into succeeding.

Having an incentive programme at a startup is pretty normal. It’s a part of the overall compensation and incentive plan in the company, which helps to ensure that the right talent can be attracted and that people stay motivated outside what their immediate role requires of them. But being part of an incentive programme is perhaps not enough. Perhaps we need to take it one step further.

How about we talk about assigning measurable sales targets or quotas outside of the sales team? What would happen if we started putting the same kind of targets on fx product peoples backs as we do with sales? Would that make a difference for the product, it’s ability to delight customers and – following on from that – generate sales? Perhaps it would.

It has always seemed quite odd to me that a lot of startups despite having a shared stated vision and mission seldom follow it up by assigning specific market facing targets but instead confine these to sales. I know that all departments have their own set of internal KPIs they’re working hard to achieve, but since you could easily argue that startup success is impossible without market facing goals, it makes little sense that they are not evenly distributed across the organisation.

Of course sales should always be accountable for turning leads into deals and revenue that can be booked. But sinde the core foundation of sales is the availability of an attractive product that delivers value above and beyond what customers pay for it, it makes perfect sense to assign the same kind of quotas to both product and R&D. After all, we all have a shared interest in becoming a success in the market place.

Naturally, the first couple of arguments against this line of thought is that people outside sales are not exactly motivated by doing sales (hence the reason they chose a different line of work) and they don’t always feel empowered to influence how and under which terms the product is being sold to customers. I have full sympathy for these arguments, but I think there are ways to work around it.

First of all, it should be ensured that whatever sales quota is being assigned outside sales is directly related to the overall vision and mission of the startup. It should not only be about assigning a dollar amount or a number of installs. It should be set up in a way that it encompasses the storytelling about what it is, you’re trying to achieve – big picture style. That way a quota essentially becomes a recurring reminder of what you’re doing, who you’re doing it for, and how you’re progressing towards achieving your ambition.

Second, it should also be ensured that there are boundaries for how sales sell the product. Especially if it’s done through reps. No opportunity for promising customers anything other than what’s already in the product. No opportunity to put extra workload on the teams back at the office for coming up with new features or a new take on a feature just to satisfy an painful customer. Sales has to show some respect here for the team members who have agreed to take on some objectives which don’t come natural to them.

After all it is a team effort, where everybody help each other out, and where there is total transparency about how things are going, and how successful we all are. Wasn’t that what was agreed in the first place, when the startup was founded and the first team members started to join? That you’re in this together in other to succeed with a higher purpose?

Of course it was. Or should be, at least. And viewed from that lens it isn’t awkward to put sales quotas on people outside the sales team. Quite the contrary; it makes total sense in order to ensure the alignment against vision and mission of everybody on the team.

(Photo by Norbert Braun on Unsplash)

Helping university research count

It is always a pleasure when you have the opportunity to go out and share some of the experiences and learnings, you have had, to an audience who need the insights in order to improve their odds of turning ideas into successful startups.

I had such an opportunity the other day, when I visited the Panum Institute at the Faculty of Health and Medical Sciences at University of Copenhagen to talk about how to de-risk your business idea to a group of 60 Nordic researchers and ph.d.-students.

I thoroughly enjoy hanging out with researchers. One of the reasons is that I am deeply fascinated by what they do, how they work and how brilliant they are at coming up with novel discoveries. Part of my fascination is probably also that I know that I will never be in their league, and what is beyond reach somehow fascinates me.

But then there are – luckily – other things I think I am quite knowledgable about. One of those crucial areas is how to bridge the gap from the lab to the market, i.e. how to bring great research to life in the form of products and services that meet a real demand and can thus form the basis for a great business.

Getting in front of researchers to share that knowledge is key, I believe, because there is so much potential in ensuring that top class research gets a real life after the lab.

Today a lot of great research ends up in big corporations, and as such that is fine, because it ensures that the technology gets out there and gets used. But you have to ask yourself, what could happen if more of that research became spinouts in their own right creating new opportunities, new jobs and contributing to economic growth in society? That, to me, is the really exciting part.

For this to happen researchers need help. And a lot of it. When I meet young spinouts as part of the Danish Open Entrepreneurship programme, the spinouts fall into a couple of different buckets.

There are those that are really specialized, deeply techie and so niche, you just know it’s never going to be a company in itself but will most likely be acquired by some bigger corporate as a tech/IP acquisition.

And then there are those, where you immediately get a sense of how it could become a company in its own right with a product speaking clearly to a significant future customer base and with that the opportunity to actually create an impact and solving a problem.

Those are the interesting ones to me. And thus this is where I start to look deeper into the team. And what I see here is most often:

Deeply brilliant and experienced researchers with a big wish to see their research reach the market but with very little realistic idea about how to actually make that happen. Simply because they have never done it before, it’s not what they feel, they should be spending their time on, and – basically – it’s not what they should spend their time on.

This actually produces an interesting paradox. Because I would argue that when we talk about de-risking an idea for a startup, the process and structure you apply to that is actually very akin to the process you use, when you do research: You define a hypothesis, you test it using experiments, and you capture your learnings. And then you repeat, repeat and repeat until you have – hopefully – reached the intended outcome.

So you would argue that of all people, researchers are actually very well equipped to do de-risking for their own startups. Yet, a lot of the researchers struggle with this process. The reasons may wary, but I believe it has a lot to do with the fear of getting a ‘No’; the fear that what you have worked so hard on and been so committed to, will not get the anticipated reaction when you go outside the lab.

For the very same reason this is exactly where its great to get help from someone, who is not only more experienced about doing market research and de-risking but who is also not so personally attached to the research and technology in question. By admitting your own limitations and partnering up with someone to drive the external facing side of the emerging spinout, you may actually get very far with very little.

Why is that? Because the researcher already understands the mechanisms in de-risking, and you thus don’t have to spend time talking through the process and explain the mechanics. You can focus on getting the most critical hypothesis defined, design the experiments and capture the learnings. It can actually become quite an efficient process, and you could argue that only a little more than sheer mentoring for the researcher(s) could get you a long way.

However, mentoring is not enough. An equal commercial partner is needed for the researcher to increase the chances of ultimate startup success. And while getting help on the market de-risking in itself is a huge plus, the right people also bring a few other benefits that are equally important to the chances of success:

First of all, researchers need someone outside their research circle to help determine, when research and technology is ‘good enough’ to start testing. I seldom meet researchers who have a pragmatic view on this – the tendency is always to stay a bit longer in the lab, run yet another experiment, optimize the technology even further etc. In a worst case scenario what that essentially means is you can stay in the lab forever and never get the technology out to use.

Second – and a bit connected to the point above – researchers need someone to help them establish and secure a sense of urgency. While this is not the same thing as wanting to rush things through, it is about helping researchers figuring out how to get to market as quick as possible in order to both gather feedback and learnings from the market but also show investors that the case is on track to be viable.

Of course there are limitations as to what you can launch early, if you fx operate within a regulated industry, but the point is that there are always things you can do to start putting the spinout on the map, and researchers generally need help doing that.

Finally, a partner can help researchers deal with the very real issue that the envisioned outcome is by no means the same as the journey to get there. Too many researchers have the notion that the complex part of turning their research into a product that can be marketed is the actual research.

In fact, it often turns out that getting the product to market and commercializing it is every bit as complex, rocky and bumpy a journey as the research. Partners with experience in taking things to market know this because they have the battle scars themselves to prove it. Researchers don’t – by and large – have this and would thus be well advised to add this experience and expertise to their team early on. If for nothing else then at least for sparring them the pain of experiencing these hardships themselves. And potentially see their startup become an unnecessary casualty in the process.

So in summary, there is a lot of things, ‘business people’ can do to help researchers realize the full potential of their research. The right commercial people are just as important and valuable as materials needed in the lab to perform the actual research. They are each others yin and yang, and together they can achieve the outcome great researchers with a passion for affecting change have:

Making the research count where it’s needed.

(Photo by Diana Polekhina on Unsplash)

Affecting change hurts

Working at startup takes it toll. Ambitions are running high, ressources are always stretched, a lot of processes are not in place, and getting the right talent to join the mission is super hard. There is absolutely every reason for why days and weeks can feel like an almost eternal struggle. But that’s just the nature of how it is to be building something from nothing.

When you feel the struggle, it’s super important to remember that there is the good kind of struggle and the not so good kind of struggle.

The latter is the internal one, where you struggle because you don’t have 100 % alignment in the team about where you are going with the business, or you have some friction between various functions in the team, because your processes for how to do things are not completely done yet. Yes, it can be super painful, but it is something you work your way through, as you gain experience, figure out what works and what doesn’t and get into a modus operandi of only doing the things you have found out works best and provides the most progress for you.

The former – the external struggle – is the really interesting one. Because while you would think that struggling is inherently a bad thing, you could also argue that in some cases it might actually be an indication that you’re starting to make a dent.

The reason I make this counterintuitive claim is that struggle is an indicator of friction. And friction is an indicator of change taking place. Thus the more you feel the pain, the more you get feedback from the market about your product or service being a different take on the status quo and upsetting people a bit, the more you’re scratching where you need to scratch in order to have an opportunity to affect change and create impact.

Just for clarity, I am not talking about struggling making the product work or getting to product-market fit in the first place as a good thing. Those are still the kinds of struggle, you want to get away from by fixing the underlying causes as soon as possible. But struggle in terms of people noticing what you’re doing, asking critical questions and maybe even giving pushback and fighting you a bit? Absolutely.

Understanding this dynamic is super importent. Because when you do you also understand that there is some friction and pain you need to deal with in a positive way, since it’s something you want in your life as an indicator that you’re moving the needle and creating an impact where it matters.

So with that comes the obvious question: How to you deal with this pain of the struggle in a way that doesn’t end up killing you?

People have been in this position before, and there are plenty of things to learn from them. Some of them have even been in the position, where the pain and risk was much more lethal and where it was truly a matter of life or death in the most concrete terms. Learning from them and how they coped might give some insights into how you can think about this.

One of the most prominent thinkers and examples of how to deal with pain and struggle and not succumb to it comes from the Austrian neurologist, psychiatrist, philosopher and Jew Viktor Frankl. Frankl spent 3 years in Nazi concentration camps, and while there he had an epiphany that afterwards formed the basis for his groundbreaking work:

People may do whatever they want to you. But even in the most gloomy of times, when all seems lost, you still at your core fundamentally control how you let circumstances impact you. You always have the freedom to decide for yourself that you won’t let even the biggest struggles break you.

That’s a super powerful realization coming from someone who would have had all possible reasons for giving up. And it’s a great opportunity to get inspired on how to be resilient and never give up. Stay strong, stay in the fight and prevail in the end.

So, in dealing with pain for the achievement of a later greater good, there is a lot of things you can do yourself by working with how you think, act and react to externalities. But you’re not alone, and you need that kind of enduring mentality to be present in the wider team as well.

This is where the role of the right recruitment comes in. The advice is pretty basic: Focus on recruiting people who share the vision, you have for your startup. People who have the same visualization of what it’s like when you’re there, and you have reached your ambitious goal. People who can feel how that would be like, and desperately want to get to that place. People who are willing and able to fight and see through the struggle(s) to get there, and understand there will be many roadblocks, challenges and issues before achieving success.

Of course it is also crucial that the people you recruit for the team have the right skillsets, but given a choice I would argue that sharing the same set of beliefs and ambition is the most crucial. Because if you get on the track, you’re hoping to get on, you will be challenged again and again by circumstances, and you need team members around you who will stand, fight and win the fight with you. Period.

You can help them along the way by ensuring that you carve up your success metrics into smaller bites, you can achieve within a limited time frame and celebrate, when its time to do so. Those little starts and stops in terms of putting in the hard work, celebrate success and start over again will do you a world of good in ensuring that you keep energy and stamina high, even as the challenges come at you left, right and center.

Just make it a habit to do the work that’s needed to affect meaningful change. Because the results are worth fighting for. Even when the process hurts, and you just want to quit. No success comes without making a real hard effort.

(Photo by GR Stocks on Unsplash)