Developing a business process for your startup
It is not all about the product, it is also about the plan.
In the early stages of building a company, founders obsess over product. They grind away at building something that someone might pay for. It is easy to see why founders stay fixated on product and customers and growth that is associated with that, that is where the core value is, but a business is more than just a product.
Too often founders think that fixing their product will fix sales problems or something else. They look at fundraising as a way to solve their early problems. What is often heard is “if I could get a few more developers to work on this, it would solve a customer's problems and our sales would grow.”
They often seek funding to fix product problems. They usually do this without looking at their business but instead looking at their product. Sometimes they get small amounts of money, throw it at the problem, and it doesn’t fix it. They don’t know why. Find more money… This cycle can go on for a while.
Founders blame the lack of investment for their stage (admittedly there isn’t a lot more early stage money despite what people think) when they haven’t developed a thing that people can invest in or at least demonstrated the ability to develop it in the future.
You need a plan. The plan then develops a process. That process represents your business. Eventually, that process is a collection of business models that are reproducible.
The plan starts off simple.
How many people are going to talk to and how long does it take those people to convert to sales?
How long until you run out of money?
Then as you start to understand how long it takes to see the results of your work, the plan focuses on more stuff that includes tracking and accountability.
How many people have you talked to? Weekly/Monthly.
How many customers do you have (new and recurring)? Weekly/Monthly.
How many people are going to talk to and how long does it take those people to convert to sales?
How long until you run out of money?
As you go you start to expand each item and document the processes (and time) it takes to achieve things.
In building the plan you build your business. You develop a deeper understanding of your product, its value, and the opportunity. You can then explain what you are doing in a way that is deeper than any pitch deck. But be mindful, complexity is not going to help you here.
Complexity (in sales) is expensive. It takes up brain cycles and makes a repeatable model fragile. While you develop a plan for your product try to avoid special cases, complex requirements, and many steps that are dependent on one another.
The goal is to make your business something you can add people to (inputs) and have a clear understanding of what they will do (outputs). It won’t be the forever plan. It is the plan to get you to the next set of important milestones (usually tied to fundraising). In the early days the plan and process will be heavily focused on product and finding growth. As you grow, that changes. It evolves.
The process is what people invest in. The product is an output of the process.
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