Growth in the Downturn: One Impossible Thing at Time
When it comes to growth in light of the recent funding environment, many founders are reacting in one of two extreme ways – either they have totally shut down all growth spending to zero, or they panic and are trying to cover the table of activities.
While zero growth is clearly not the answer for a pre-seed or seed company, panic is also not the answer. To illustrate, here is the text of a recent investor update for a B2C seed stage company about their next 90-120 day plan.
Relaunch public site
News Media Push (Month 1)
TikTok Re-Launch (Month 2)
Instagram Re-Launch (Month 3)
Influencer Programming (Month 4)
Explore other crazy ideas (if you have some, let us know!)
Educational content on YouTube
Paid Google Ads
Paid TikTok + Instagram, + more
At first glance, this may seem great. Some may see this as a team that is industrious and really getting after it. However, there are several concerns:
Volume – This is a massive amount of work that a Series B staffed team would struggle to complete, let alone a seed stage startup trying to find its way. To be honest, there is no way this is all getting done.
Launch = Done - The list suggests completeness is the goal of each item. Said another way, what are the success metrics that merit more investment of the company’s time and treasure as you execute? What’s more, they are even soliciting some ideas from investors – be careful of what you ask for. Measure results, NOT activity.
Predetermined Order – They have already slotted the work for 120 days out. What’s more, they’ve committed that to investors, so now they may feel undue pressure to execute the full stack of activities, regardless of results.
So what’s one to do? How can you structure the balance between doing too much and too little, especially in this environment?
Because I am a nerd, I have always drawn wisdom from Jean-Luc Picard, Captain of the Starship Enterprise, who has seen his share of tough times and sticky situations.
What does this mean to founders when it comes to growth? In short, do less, better. I’ve said this to founders at least a dozen times in the last week, so I thought I’d share how these discussions have gone.
One KPI - This is the heart of Captain Picard’s advice. It’s nearly impossible to build a successful startup in good times, let alone the projected environment. So focus.
I challenge you to pick one and only one KPI to focus on for the next 90 days. If you are focused on customer acquisition, then align your entire team around something like new users. Period. If you are focused on building product depth then focus on converting registered users to daily active users.
A good test if you are there is if you can say what you are not going to focus on for a period and the entire team can both explain it and align their backlogs accordingly.
“One impossible thing at a time.” - J.L. Picard
Free first, then paid – It’s obvious, but it bears reminding us to prioritize free or low-cost growth efforts over paid. Specifically, content, email and text messaging are channels that I see under utilized in this market. Even more, building a solid organic presence is fundamental before launching a paid campaign.
PS: TikTok is ripe for mainstream organic growth. If you have started an account and aren’t posting every week, you are probably missing out.
Results drive a backlog, not a schedule - If you know what you are doing 60 days from now in growth, I would argue you are doing it wrong as a pre-seed/seed company.
It should be impossible to know what you are doing next because you haven’t received results on your growth experiments yet on your one KPI. So build a backlog that gets prioritized regularly based on dispassionate interpretation of your results. Wash, rinse, repeat!
These aren’t new ideas, they are the bedrock of solid lean startup operating principles. However, many new founders come from the era of easily flowing capital and meteoric valuations. This is clearly not the path in the near future, so it may bear being reminded of the impossibility of building a great startup in any time – and try to grow accordingly.
Contact us for more information on how we work with founders.