- Build a strong team with direct and relevant reputation. To be clear, names alone don’t matter as much as the relevance of the team members to the challenge facing your business. Example: Selling SAAS to enterprise? Have someone on the team that has a track record of successfully growing revenue within a well known enterprise SAAS startup. As an investor I care who is on your team because it means A) other skilled people are also buying into what you’re doing and B) you have the skills within the team to execute on your plan. The common response here is that good people cost money. This is your first test as a CEO, and it’s one of the most important things to get right. Good people want to be challenged, and they want to win. If you can convince them of this, they will want to join your team, even at little or no pay.
- Learn to articulate your ideas well, have confidence and conviction. The best ideas die on the vine if they are they are poorly communicated. How do you become better at articulating your ideas? Start talking. Get out of your head. Go to networking events and try to speak to 50 people. Listen to how they respond. Iterate on your delivery every time. Keep testing your pitch. If your grandmother doesn’t get it, it’s probably you, not her. Oh and on that note, refrain from sprinkling in jargon words like AI, or blockchain or IoT to make your idea sound cooler. These terms actually mean nothing to the person you’re speaking to and I find the people who truly understand a technology are capable of describing the problem and solution without using jargon. Jargon is actually a negative signal.
- Know your market well and have a narrative on how you expect the market to evolve in 5 years time. If you can’t make the prediction, you probably are focused on the wrong thing. No one expects you to be a fortune teller but having a key insight into how the market will evolve in the 3 to 5 year future is particularly important for early stage investors. Remember early stage investors are betting on a future with almost no quantitative data to confirm it exists yet. Therefore, the key for an early stage investor is to find entrepreneurs who can anticipate how a market will evolve, and predict inflection points that could provide opportunities for markets to be captured.
- Amplify the signal by using top tier accelerators or angel investors to help you spread the word to investors. Track record is one of the strongest signals that exist for early stage investors. If you’ve got a great track record of building and exiting companies, you already exude positive signals, but if this is your first or second company, then getting into an accelerator with a great track record can be almost as powerful. Techstars is one of just a few global accelerators that have invested in more than 2000 startups, and quite a few successful investments have come out of the Techstars portfolio. In fact more than 1 in 20 series A investments in US startups have Techstars on the cap-table. Investors trust the Techstars process to find and grow successful businesses. As an early stage startup, not only can an accelerator like Techstars help you focus on the right things, they can also amplify the positive signals you’re already generating to make sure the best investors in the world are paying attention.
This piece originally appeared on Medium.
Want more entrepreneurship education? Check out the Techstars Entrepreneur’s Toolkit.
The following is a guest post by Kenny Kline, a serial entrepreneur. His ventures are primarily focused on media and digital marketing. You can follow him on Twitter @ThisBeKenny.
Anyone who’s starting a business has no doubt been informed of this scary statistic: More than half of all startups fail to survive past year four. Unless your goal is to get rich in less than four years and then call it quits, it’s important to develop a plan for defying the odds.
The more your business is able to pick up steam in its early years, the greater chance it will have for long-term success. Those businesses that don’t make it past year five? Odds are good they didn’t have a great year one, year two, year three, or year four. So here’s one way to beat the startup odds: Take steps to build momentum right out of the gate. Here are five key strategies for getting started.
Cater to Your Ideal Customer
In the early stages of a startup, it’s easy to focus so much on developing your product or services and making them as impressive as can be that you lose sight of who the product or service is for. But if you want that product or service to appeal to a large enough audience to sustain a viable business, your ideal customer needs to be at the front of your mind during every decision you make.
Work to understand what problem your product or service will help customers solve, any other reasons why your customers might seek you out, and who your ideal customer is in terms of lifestyle, socioeconomic background, and so on. The more you get clear about the kind of customer you’re trying to cultivate, the more clarity you’ll have around how to allocate R&D and marketing resources. It will also help you understand the value your product or service brings to customers’ lives, which can facilitate realistic price setting. (This is why, at my fitness content startup BarBend, we held off on advertising for a long time so we could first learn about our readers and the kind of content they want to see.)
In addition to targeting the right customers, it’s critical to target them in the right way. Make stellar user experiences and customer service core parts of your company’s mission and values, and you’re much more likely to cultivate a loyal customer base.
Cultivate a Talented Team
When you’re bootstrapping a startup, it can be tempting to hire the people who are willing to work for the least amount of money. But this can amount to suicide for a young company. After all, the people pouring their blood, sweat, and tears into the business will play a huge role in whether or not it survives. So reach deep into your pockets and pony up for top talent—even if it means building your team more slowly than you would like. Investing in top talent will also serve you if you end up going the VC funding route, because most VCs are unwilling to invest in a company that lacks an impressive management team.
Create a Roadmap
Few businesses succeed without a clear sense of their goals and a roadmap for achieving them. Even in the early stages of your business, when you aren’t sure exactly what to expect from your efforts, it’s important to set realistic goals and create a game plan for how you’ll accomplish them.
Make this plan as specific as possible: Define your Key Performance Indicators (KPIs), identify realistic deadlines, and collect as much data as you can along the way so you’re able to effectively refine your efforts over time. At a minimum, plan to identify milestones for the next 12 to 18 months across several aspects of your business (e.g. customer acquisition, revenue, product features, service improvements, and so on). Make sure your whole team is on board with these priorities so they don’t fall to the backburner.
Get to Know Your Competitors and Your Industry
If you want to be taken seriously in any market, you need to know your stuff. That means developing a solid understanding of your industry so you’re able to establish yourself as an industry expert and so you’re equipped to capitalize on important trends.
Meanwhile, getting to know your competition will serve dual purposes: It will further enhance your industry knowledge, and it will provide you with a chance to identify opportunities for doing things better. Investigate every aspect of your competitors, from the UI/UX on their website to their customer service practices. Consider why your competitors have made the choices they have and how you might be equipped to do things differently in the pursuit of more satisfied customers.
Focus on Your Strengths.
When you’re just starting a company, there are so many decisions to make. It’s easy to get pulled in a million different directions—and the end result is a total lack of brand cohesion or focus. That’s why it’s important to come up with a set of guidelines that will help you make decisions that are truly in your company’s best long-term interests.
One of the best guidelines out there is to always choose to focus on your strengths. If there’s an opportunity to do something but your team isn’t equipped to do it well, maybe don’t do that thing until you have the appropriate resources in place. If your customer service team is proving highly effective at what they do, consider how you might emphasize great customer relationships in your branding. Bottom line? Pay attention to what your team is doing well, and then figure out how to do more of those things in ways that integrate with your company’s roadmap to success.
Put these five strategies together, and you’ve got yourself a solid game plan for building early-stage momentum and powering past year five and beyond.
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