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Business Planning Feed

  • Total Posts: 11
  • Total Subscribers: 463
  • 7 min read

How to Think about Intentionality and Revenue

This year has been off to a big start with some major changes happening in the market. And so it happens, startups are sitting in the splash zone. I had the opportunity to discuss with George Arabian, Managing Partner from [Steelhead Ventures](www.steelheadvc.com/) about the new state of the market and what that means for startups that need to think about revenue. Steelhead is an early stage MicroVC fund that invests at the seed stage often when initial product market fit is reached and revenues are either just beginning or are in the early stage of scaling. With a founder centric lens, they like to look below the surface of what makes that founder tick and if that founder has a vision to get to market. 

![George Arabian](http://s24.postimg.org/wfm018rqt/GA_post.png)

With his background in scaling companies (3 IPOs, 2 exits), George Arabian joins founders at their earliest stages, before many have yet to go through the difficult process of scaling. From the early days of Wi-Fi to Web 1.0 and mobile , he has been instrumental in working with founders to scale both domestically and Internationally.. 

George and I discussed what the changes in the market in 2016 would mean for early stage companies. Despite some public market corrections, funds are still flush with cash. The end result is that there is a clear trend that the (investment) world is getting more results oriented.

George wants to see companies really assess their priorities and implement intentional processes for success. “What early stage companies need to understand the most right now is the type of discipline that goes into growth and revenue. It’s not that many of the companies don’t want to focus on this, but the truth is that there are tremendously rigorous processes that goes into making this [discipline in growth] happen. Previously, there was this expectation that money will be there as long as you get the product right. Over the last two years in particular, we have not seen this amount of capital inflow in a long time at the early stage. Given the flow of capital that many start-ups have been able to have access to [in the past year], assuming start-ups will continue to get access to capital is incorrect.” 

George further describes: “It’s a slow evolution, but we need to be focusing on processes for sustained revenue growth and customer acquisition. One principle [Steelhead] champions is to be intentional about what to do and what not to do. And often times, the critical decision is what NOT to do at the early stage.”

#Well, what does good discipline in growth look like?

##1.	Data Driven Understanding 
In order to reach a state of sustain revenue, it is imperative to focus on rapidly testing and LEARNINGS from multiple digital channels in order to collect data that drive insights into your what is converting your customers from prospects to buyers. The key is to establish infrastructure that allows you to rapid test channels, messaging, content/landing pages, direct sales outreach etc. as well as paid media like Facebook, Twitter, email drip campaigns, so that you learn by DOING, not what your think you know so you can discover what is working that you might not have known or assumed previously. 

##2.	Death to Traditional Silos 
George brings up the critical point that companies need to move away from traditional silos of revenue: sales and marketing, social media vs. paid media etc. There needs to be a heavy emphasis on reducing silos and putting together a high-level execution strategy around a solid understanding of revenue. And this means using data and non-traditional organizational structure to get a detailed understanding of a “Day in the Life” of your buyer/customer. Specifically, two frameworks:

  * A.	**The Customer Buying Process** – what are the specific steps in your customer buying process – what does that cycle look like?

  * B.	**Your Buyer Profile or Persona** – Understand a day in the life of your targeted buyer(s), What do they do from the moment that get up to the moment they go to sleep – what are the pains, concerns, joys, where do they get their information etc. 

Today, things have changed so quickly- with the advancement of marketing automation and data analytics, the capabilities to rapidly track campaigns results in real time offers unprecedented ability to rapidly learn and ADJUST your revenue efforts and channels. These tools when combined with a revenue strategy that is not tied to one silo (sales, social etc.) has a resounding effect for effective revenue growth and channel building. 

##3.	Intentionality 
George hammers the point home that founders MUST be intentional when rolling out their revenue plan. Once signals for product market fit are clear, a well thought out revenue plan is a critical function of growth. You must be clear on what customers you will take, but more importantly, what customers you WON’T. 

The advice George gives to founders considering their first customers is to build a rigorous early adopter profile. Likely, there will need to be strong buying signals and a willingness to take a risk. Evaluating customers against this profile should be baked into one’s sales and marketing efforts. Often times, these customers will self-select themselves with indications of real interest and engagement during a buyer curation process. 

Everyone talks about churn as the primary metric of customer engagement, as well as monthly retention and consistent growth, which matter now more then ever.  This is important once you have an established base of customers and are scaling but George further specifies that in the beginning of the customer acquisition process, it it’s the alignment of a well thought out revenue EXECUTION strategy that is based in a firm understanding of the decision makers you are targeting. This is a key driver of growth in the early stage. Some key questions: a) are your targeted customers responding to your messaging b) are they moving forward in the buying process etc. So being able to tell this story a much more holistic story, around the customer buying process is important to investors. Expectations are quickly rising, that you have a good handle on this as you go for your next round – late series seed/A round. 


George cites **NeoReach** (a Steelhead Ventures and FOUNDER.org portfolio company) as an example of a company that has been intentional about building and continuing to build great processes. [NeoReach](www.neoreach.com) is an influencer marketing company that provides technology for Fortune 1000 brands to run influencer campaigns. George describes, “With [NeoReach’s] focus on satisfying larger brands, rather than a lot of smaller companies, they have been intentional about where they want to go. They have a lot of leads coming in every day, but they have been very intentional in choosing what not to do. They have stayed focus on revenue by catering to larger brands  and they have done a great job of determining this and staying with this strategy as they began to scale.” 

----------

##Takeaway 
 It’s hard to predict the flow of capital and the mood has shifted to real metrics around growth, whether that is revenue or user growth. What will make the difference is the intentionality from the team in driving that growth home.

Now more then ever, founders should be intentional. Know what customers you will not take. Keep a close eye on month over month revenue growth. Break down silos and work on something you love. 

**Learn more about [Steelhead Ventures](http://www.steelheadvc.com).**
**Learn more about [FOUNDER.org](http://www.founder.org).**


  • 1 min read
  • Staff Pick

For Silicon Valley the Hangover Begins

For Silicon Valley, the Hangover Begins

WSJ

Not long ago, employees at Practice Fusion Inc. reveled in the technology boom, munching daily on free healthy food, enjoying "Phenomenal Friday" gatherings and racing around the office on tricycles. Today, the Silicon Valley extravaganza is waning. The San Francisco electronic medical-records company has booted its founding CEO, laid off a quarter of its staff and cut back on projects to save costs.

  • 1 min read

The Truth Behind Getting Startup Exposure

Entrepreneur PJ Leimgruber shares how to really get the word out about your company. Learn his strategies in launching your company with a bang. Get started early in building press relationships and getting exposure. 
  • 3 min read
  • Staff Pick

A Tale of Two Meetings: Why Single Founders are the Exception

Last week I had a call with a CEO I consider a brilliant technologist and a well-rounded leader.   We had much to talk about since he has a lot on his plate right now: an upcoming product release, a major fundraising effort, and some very large customer opportunities.  All of these can be considered full-time activities by themselves, and unfortunately, he does not have a cofounder to share the workload with right now.  Fortunately, though, he recognizes this as suboptimal, and is looking at bringing someone in as a cofounder.  Given what he’s already accomplished, I have no doubt he will be able to join forces with someone just as passionate about the business as he is, and willing to make the same level of sacrifice I’ve seen him make.  In the short-term, though, he does not have someone next to him every day with the same level of responsibility and commitment to help meet the company's milestones. 

Now, contrast that conversation with a meeting I had today.  Two of the three cofounders of [Shortcut Labs](https://flic.io/) were in town from Stockholm, and stopped by the [FOUNDER.org](www.founder.org) office.  They had a highly successful [Indiegogo campaign](https://www.indiegogo.com/projects/flic-the-wireless-smart-button/#/) last year (and have since successfully delivered the units to their happy backers, I should add) and were updating me on how their flic wireless buttons are now offered at major retailers like Selfridges in London, and Target’s Open House concept store in San Francisco.  When I first met the trio a year and a half ago, I was so excited that they had applied to FOUNDER.org.  I really liked their idea, but what truly stood out for me was that all three cofounders had equally impressive technical backgrounds; they were all articulate; and their skills complemented each other.  We’re used to seeing teams of two strong cofounders, but three is exceptional.  They were all equally committed to building a great product from the get-go, and I believe that having two other like-minded partners has helped each of them through the ups and downs of startup life.  (In fact, the third cofounder was sick and stayed back at the hotel, so the other two handled all their meetings today… if he had been a solo founder, those meetings probably wouldn’t have taken place.) 

It’s no secret that building a company is extremely hard.  The enormity of the task can be daunting to any one person, but when you have another cofounder or two, you’re able to share the physical and mental burden that is part and parcel of the startup experience.  Having a like-minded cofounder helps you divide and conquer to move faster, and keeps you from feeling like you have to make every single big decision alone.

There’s a reason why single founder companies are the rare exception and not the rule at FOUNDER.org.   So if you’re looking to start a company and you're a solo founder, spend some time looking for a cofounder with a complementary skillset.  It may take a while to find the right partner(s), but it will be time well spent.
  • 1 min read

62 Tips From Y Combinator’s Startup Instruction Manual

This is awesome: http://techcrunch.com/gallery/y-combinator-startup-playbook/slide/

Longer version: http://playbook.samaltman.com/
  • 1 min read
  • Staff Pick

Our Secret Society in Silicon Valley

My friend and CEO Kristen Koh Goldstein, CEO of Scalus, recently revealed the secret society of female founders in Silicon Valley.  Guess what?  She didn't give it a name, build a conference around it or try to profit from it.  Kristen is a pragmatist and an entrepreneur.  Instead she elaborated on the fact that female CEOs and founders are just like everyone else - smart, willing and able to help each other when the needs arise. 

[Read more here...](https://www.linkedin.com/pulse/our-secret-society-silicon-valley-kristen-koh-goldstein
)
  • 1 min read
  • Staff Pick

Mapping the IoT Market

[This is a great piece by CB Insights](https://www.cbinsights.com/blog/iot-market-map-and-company-list/?utm_source=CB+Insights+Newsletter&utm_campaign=dbec9f1eac-CorpInnovation_12_15_2015&utm_medium=email&utm_term=0_9dc0513989-dbec9f1eac-87105529) to understand the IoT marketplace.  They cover wearables, connected home, infrastructure and sensors, healthcare, smart utilities, industrial, UAV Drones, connected cars and retail. Obviously there are a ton of companies that aren't mentioned, but the point is more of a framing up of the IoT market.  
  • 1 min read
  • Staff Pick

The Venture Capital Funnel

This article is a must read for everyone who is raising money.  Oh okay for everyone!  Great data on the state of funding rounds in venture capital for young companies.  The whole idea of doing a pro forma fund raising and looking at your five year operating plan cash flow and cap table is what we've been stressing with you.  Realize what you are getting into and the fact that fundraising is a marathon not a sprint and you need to have a plan to get there. 
  • 2 min read
  • Staff Pick

The Importance of Building Credibility as a Startup

###Brian McNeill, co-founder of Stringr, talks about the importance of building credibility with customers as a startup.

"When you speak to these traditional companies and you're trying to sell them a product, they look at you as just a brand new company and so not only are you trying to sell them on the vision and the product that you have in front of them, but also on the stability of your company because they're not going to invest purely because the product is good. They know that there's all the change in management and the buy in you need to obtain and so they need to have a belief that you're going to be around for long enough that it's worth all the investment beyond the financial internally to do so.

Here's the idea itself and do they like the vision on the customer side and then there's the team. Are these people that I like to interact with or people that I want to buy from? And then there's sort of that belief in the ability to deliver. Anybody can kind of come in and say that it's the greatest new whiz-bang gadget but is it something that's believable and you've got to sell them on all three in order to get a sale."
  • 4 min read
  • Staff Pick

Four Incredibly Successful Launch Tactics for Lean Startups

*This piece has been originally published in RealBusiness.*

##Four Incredibly Successful Launch Tactics for Lean Startups

**In today’s noisy world, it’s harder than ever to get your startup noticed. This compounded with the fact that many early-stage startups have to get attention without a marketing budget, and the task of launching seems virtually impossible.**

Fortunately, there are some key lean methodologies that can attract significant viewers, press, and sign ups without spending a penny on marketing.

###1) Thought leadership

Establishing yourself as a domain expert drives immeasurable value to your startup. Once you’re considered an expert, it’s much easier to get press, speak at conferences, talk to high-level executives, and see exponential growth.

Simply “establishing yourself” as the expert might seem like a daunting task. Fortunately, as a business owner, you have a very compelling case on why you are actually the expert in the space: You FOUNDED a company that specifically focuses on the industry you want to become an expert in. This is what you will want to play up.

Take the time to invest in building thought leadership and becoming a respected go-to individual in your field.  This means focusing early on sharing your knowledge by giving informative talks, sharing good content, and contributing useful advice.

* Focus on bite-sized tasks that work towards building yourself as a thought leader:
* Speak at meetups and small events in your area.
* Teach a class on Skillshare or General Assembly.
* Write guest blog posts on industry publications.
* Become a moderator or panelist at trade shows and conferences.
* Get in touch with other industry experts and interview them for your company blog.
* Find a relevant podcast and reach out to be a guest host for a show.
 
###2) Pre-sales

Pre sales serve two massive benefits. First, it validates your idea and gets real people talking about your product early and second, it provides revenue that can be used to fast-track a fundraising round or let you focus on your product development without fundraising from investors.

With the tremendous rise of KickStarter and Indiegogo, more and more startups have access to creative ways to get the first batch of product made.

Running a successful pre-sale campaign is more than just putting up a page on your website or Kickstarter. You need to have targeted approach: Line up journalists and bloggers ahead of time, make sure you have enough early adopters ready to support your campaign to give it an early boost, focus on a compelling video that clearly explains your vision, and set reasonable goals.
 
### 3) Getting press

A scattershot approach to press is a fast track to a journalist’s spam folder. Journalists are inundated with pitches, spam, and people asking for coverage. It’s important to understand your vision and have a very clear alternate future distilled down.

Follow a process with the goal of getting your first article published:

* Identify key journalists that write about your space or industry
* Find a mutual connection or key reason to reach out to them. If you don’t have a connection, comment on something recent they wrote about.
* Use a spreadsheet or CRM to keep track of the status of all your relationships.
* Learn how to pitch a journalist: keep your emails short. To tip a journalist over the edge, you can offer them a publish-first exclusive and let them be the first one to cover your launch. 
 
### 4) Leveraging free growth hacks  

Using the viral power of the Internet to spread your idea can launch your startup without spending a penny. There are a ton of strong online communities that have gathered around topics relevant to your business.

The key fact to remember is that in order to get value, you must give value. Don’t simply sign up on communities and post your startup; become a member, answer questions, ask for feedback, and focus on helping others.

Online communities have thousands and millions of people that are constantly looking for good content. You can utilise Q&A sites like Quora, communities like Reddit, niche forums and blogs, or create informational/how-to videos on YouTube. 

In addition to communities, remember that good content often gets shares for free. Think about how many times you’ve read a blog post and sent it to a friend. If you’re having trouble getting your content out to the public, consider finding an influential leader in your space to share your blog post or video.