StartUp Founders: Your Unfair Share of the Upswing
Alone we can do so little; together we can do so much.
Helen Keller
Dear Reader,
2023 was brutal for StartUp Founders. A year of customers recalibrating seats, pivoting to suites, and expensive capital. In 2024, we shift from survival mode to placing bets that give you an unfair advantage. (𝕏 Tweet This)
TLDR: 2024 will be about Partnerships & Nearbound strategy. It’s about leveraging someone else’s voice, one your prospect trusts, to distribute your message further and faster. It’s literally a cheat code, your unfair advantage, give me four minutes to prove it.
LAST WEEK:
StartUp Founders: The 1%’ers Embrace Ikigai: How do you sustain the fire when the adrenaline wears off? You HAVE to love (or learn to love) the journey, the game of growth, more than the perceived destination.
LETS GET INTO IT:
The recalibration is still happening, a mix of macroeconomics and geopolitical climate, with fewer bets being placed. The upswing is coming back, as it always does. Use this time to prepare your bets.
If you know what it means to be default alive, you know your zero-cash day, you know (ish) your core objective, you have updated your lean canvas, then whether you are in the idea stage or Series A, this strategy works 100% of the time.
IRR: Every Founder Fakes It
Internal Rate of Return (IRR) – every founder does IRR based on gut instincts for longer than they should. That’s not totally wrong; you need to throw ideas around, test, try, iterate, and double down on what works. It just cannot be 100% of your capital allocation, where capital for most StartUps is actually time. Ergo, where do you invest your hours for maximum impact?
IRR isn’t just a CFO metric, it’s a meeting your objectives metric. It’s the number that lets you know the best way to get there, a mix of quant data and founder gut. It’s a 360 strategy across your entire organization, to compare every opportunity equally.
Choose whether IRR is measured in cash or time and then choose a singular, quantifiable objective, be it revenue, users, retention, valuation, margin, or efficiency. Don’t measure different teams or initiatives against different goals. If your objective is ROI (cash return), beating the bank’s 5% becomes your baseline. Finally, decide your IRR timeline: is this a 90-day survival sprint, or can you give projects a 12-month run?
Three Common StartUp IRR Failures:
- Engineering vs. Sales: Hiring another engineer is what you want to do, but against the ‘revenue’ metric hiring a salesperson is likely the greater IRR. Product enhancements don’t always lead to more sales, sales people do.
- Feature Parity vs. 10x Feature: Adding a demanded feature might keep you in line with competitors, but developing a 10x market-disrupting feature will provide a higher IRR by setting you apart (differentiation), rather than just keeping parity with existing solutions.
- Content Investment: Creating high-quality SEO driven content is a time-consuming effort with delayed returns. Yet, high-value, well researched, SEO driven pieces, will yield insane IRR over time (inbound!!), easily outpacing short-term returns.
Evaluate your choices, against all others in your organization, what use of time or money delivers the highest return. Don’t cheat.
Partnerships: The Unspoken Force Multiplier
AI is clearly perfecting outbound cold personalization, emails, follow-ups, and cadences, it will beat out a good BDR pretty soon. Traditional unsolicited cold outreach therefore is racing to zero. The future? PLG (Product-Led Growth) with 10x features, Inbound with quality content, and the focus of today.. Partners & Ecosystems.
It’s why Microsoft will ultimately beat AWS in the cloud wars. They have perfected the partner strategy, they own the last mile to the customer, it’s that simple.
You probably underestimate your readiness for partnerships. You think you need full PMF, perfected sales motions, or the financial muscle, but that’s a misconception.
Partnerships are more than transactional sales (finding a reseller); they’re about expanding your presence and getting your solution into broader conversations, even if you’re a day-one solution.
The Mic is Yours: Seizing the Partnership Opportunity
When I introduce you to someone otherwise unreachable, I’m lending you a voice on my trusted microphone to someone. This is the essence of partnerships – getting your voice, your product on the mic that the customer listens to.
Your solid product is not earned trust, it’s the start of the journey, aka the sales cycle. The only way to accelerate this, is to enter with someone who already has the earned trust, who thinks to bring you into the opportunity. You cannot win deals you didn’t know existed. Partners exponentially increase your surface area.
Your competition is betting you under-estimate the opportunity here.
Your 2024 Blueprint: The Unfair Advantage
The mission for 2024 is to build a plan to explore partnerships that go beyond transactional sales. People that will give you deeper market insights, deeper access to customers, deeper everything, exponentially carry you further, faster, if you invest in them.
Transactional Partnerships: Who could champion your solution, who is already inside your prospects account? Who stands to gain from reselling, implementing, or advising on your product? You may not land a reseller deal with Accenture today, but smaller SIs and individual consultants are urgently exploring ways to drive accretive revenue or put their bench to work. Start the conversations.
Global Expansion: In today’s flat (not tin foil hat) world, overseas partners are game-changing. Someone, somewhere that would like to sell or implement or support your solution in their country lets you sell into territories without building a team. Where is your competitor not. Focus there.
Engaging with the Ecosystem: Advisors, analysts, influencers, thought leaders – your stack should be full with these connections. Them just knowing you exist, they’re potential amplifiers of your message and they might not be champions, but if the problem you solve ever comes up, they might just remember you, and over time they might become a supporter.
Think tactically. Start those conversations. Use a CRM to remind you of those touch points. Have a mailing list to send out great updates to people of impact.
Capital will become cheap again, and when it does, show you need growth capital not survival capital.
API First: The Key Partner Pillar
As you gear up for partnerships, remember to build API-first and configuration over customization. This allows you or anyone else to build, integrate or extend your solution. It leaves the door open to anything and is the key to adaptability.
These are the pillars that support your growth and potential partnerships, even if other parts of your company are still catching up. Don’t underestimate tools like Zapier, a powerful cheat code in automating tasks (and even features) you might not have the bandwidth to build out.
Need some help designing and executing your partner plan? You are welcome to grab some time with me.
FYI, I’m a partner on your journey.
— James