what are startups like? 📈
October 26, 2024
September 01, 2024 | Read Online
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Interacting with executives and board members can be rattling. Especially if you don’t know your metrics.
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If you’ve worked in big tech companies long enough, you’ve probably thought about what it would be like to join a startup.
I’ve held positions in publicly traded, VC-backed, and private equity-held software companies over the course of nearly 25 years. But aside from starting my own boutique consulting firm [1] in 2017, I’ve never been in a true SaaS startup, much less a bootstrapped one.
This is the position I find myself now with Churnkey.
I first joined churnkey as a strategic advisor in August, 2023. Two of the four co-founders live in my town and the company focuses on a market to where I’ve spent the past decade of my career: B2B and B2C SaaS.
When I left higher Logic in late 2023 I took some time off to reflect. I built a course on financial literacy for SaaS leaders (you can get it here), and I took a few interviews for chief customer officer and general manager roles with larger software companies.
But I decided I wasn’t ready for another “corporate” run with a large, remote team. Running a distributed team of 160+ during COVID was an incredible learning experience, but it also took a toll on me personally. I knew I needed a change of pace.
I reached out to the Churnkey guys and we started talking about what it might look like for me to play a bigger role on the team. I decided the time was right to take the plunge into true startup life, so I joined part-time in January and full-time as Chief Operating Officer in April of 2024.
I’m learning a lot about how to scale myself into a small company. Going from organizations of thousands, to hundreds, and now down to a team of 15, I’ve begun to collect some insights along the way.
I thought I’d share some of those with you in case you’re considering a similar career transition.
Ideas are a dime a dozen. Everyone has them, but there are only so many hours in the day and only so many days in the week. Priorities matter. You can’t execute on every idea you have in your head nor can you solve every problem you see[2].
That’s because everything is hands-on and you can’t spread yourself or your team too thin.
In a startup, unlike some more well-established businesses, everyone is busy. Busy building things, selling things, and taking care of customers. If you have an idea that you think is important to the company, it’s on you to do something about it.
It’s easy to want to install processes in a startup, and indeed, you must operationalize little by little. But a little bit of process goes a long way in the early days, and the biggest risk here has nothing to do with efficiency. It has everything to do with effectiveness.
The hardest part of building a product from scratch is finding product market fit. Steve Blank, author of Four Steps to the Epiphany and founder of the lean startup movement, describes product market fit as:
…the stage where a company has successfully identified a target audience, understood their needs, and developed a product that meets those needs effectively. It's the point at which the value proposition of the product aligns with the customer's needs in a way that the market accepts it, leading to increased sales and company growth.
At Churnkey we have found product-market fit. The product was built for specific types of companies which are easily identifiable. Once deployed, it provides predictable, measurable results.
Close behind product-market fit is go-to-market fit; how do we get the product into customers hands on a consistent, repeatable, and predictable basis?
Early in a company’s lifecycle, the founders do most of the selling (after all, who else is there to do it??). But at some point, to scale SaaS, founders have to bring on sales and customer success team members. When founders sell, they dig deep to understand each prospect. They stop at nothing to convert them to paying customers and ensure they onboard and activate successfully. They care intimately about every single one, no matter how much effort is required.
To transition from founder-led to employee-led sales and customer success, you must first emulate the behaviors of the founders. This involves understanding how they think about prospects and customers, how they interact with them, and the steps they follow to pull them through purchase, onboarding, and activation.
Aiming to make these processes efficient before they are understood will get you into trouble. Of course, efficiency isn’t a bad thing. But if you try to scale before you identify the nuances of how founders close deals and drive success, you could drop a lot of opportunities (revenue) on the floor, negatively impacting sales, growth, and ironically, the efficiency (profitability) of the business.
Employees have to learn all the things that made founders effective at closing: the pitch, the product, the demo, the engagement signals, the objections, and the obstacles that customers have to overcome.
Then and only then should you begin to scale that process up. Effectiveness first, efficiency second.
Everyone in a startup has multiple responsibilities. Churnkey’s customer success leader helps handle support issues as needed, and he also manages key renewals and upgrades. Our engineers handle product support cases. I handle sales as well as partnerships and some marketing tasks. Our CEO has a legal background, so handles contract reviews and manages our finances in parallel to driving product vision and strategy.
We’re all playing zone defense versus man-to-man. Our customers, our teammates, and the business all have needs, everyone—founders and employees alike—flex to get it all done.
Contrast this with bigger companies who have specialists for everything.
My first week at Series E startup, PeopleMatter, back in 2013 I needed to book a trip to see a large customer that was off the rails. I was excited for the early opportunity, and without thinking said, “Great, let’s do this! Now who should I talk to about booking travel?”
“Uhh… Priceline?” my colleague said.
“Oh, right, of course,” I responded sheepishly.
My prior company was publicly traded. We did so much travel that we had two (yes, two!) in-house travel agents who took care of everything. That certainly wouldn’t be the case at a 100-person Series E company.
You get the point. Everyone wears multiple hats.
This one’s big…
Check your ego and be prepared for judgment on merit alone. No matter your seniority.
Most early startup team members don’t care who you worked for previously, how many years of experience you have, or what you achieved before joining the company. Nope. In a startup, even the grizzled veteran’s performance is judged by a jury of peers and subordinates.
There’s nowhere to hide. Even more in a bootstrapped startup which doesn’t offer the trappings and financial cushion of a well-funded, Series A (or later) startup. Everyone’s work is laid bare before their teammates. Everyone’s ideas are equal. Everyone is judged on the merit of ideas and execution.
The best startups foster a culture of relentless focus on the most pressing issues. Attacking problems with a beginner's mind. And only the best work wins because resources are limited and time dictates it. There’s no time for politics and games.
While your prior experiences are valid and interesting, they must be tailored, specifically, to the issues and opportunities at hand. If you walk in with a this-is-how-we-did-it-at-my-last-company mindset, you will miss the mark. Yes, your hard-won experience is valuable, but you must carefully apply it to the situation at hand.
Check your ego at the door. If you can’t take scrutiny from the founders and your early-career colleagues, you need not apply.
One of the first things we worked on when I came to Churnkey was our pricing model. We needed a way to more easily quote pricing to prospects and customers in a clear, concise way as we transitioned from founder-led sales. When we landed on a new model, I was adamant that we roll it out to our pricing page on the website.
The result?
Confusion on the part of our website visitors that impacted our inbound lead flow. The pricing page was too complex and it was constraining our inbound lead flow.
While our pricing page increased confidence in how we quoted our larger prospects, we interrupted the flow of our velocity business. When we reverted back to a simpler pricing overview on our website, inbound lead volume recovered and we were back to the races.
Maybe this is less of a startup issue versus an issue of how changes can affect high-velocity sales models. But the fact you can make changes like this so quickly in a startup is both a blessing and a curse. There are fewer gates to making a change that can break something. On the other hand, making the next change to revert back or simplify is just as easy.
An early mentors gave me the following advice: You’re going to make some mistakes as a leader. But the best thing you can do when you realize that you’ve made a bad decision is to move forward and make another decision.
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By nature, startups foster a culture of experimentation and risk-taking which often lead to innovation and high growth. By contrast, most mature companies skew toward risk-aversion, stability, and incremental growth. These differences impact everything from product development to marketing, sales, and customer success.
For seasoned pros, joining a startup presents an opportunity to break free of corporate drudgery, be a part of something new and special, and yes, even make a little money if things go well. But if you go into it expecting a smaller version of a bigger company, you might be disappointed, or even rejected outright.
Do you dream of making the transition to a startup? If so, best be ready.
Ever made a similar transition? What did you learn?
🤘
[1] My former company Customer Imperative, a SaaS management consulting firm. We also launched the Gain Grow Retain customer success community as part of that venture which we sold in 2020.
[2] If all you see are problems, then a startup probably isn’t the right place for you, period. You have to be able to see the opportunity that exists in an unsolved problem and weigh the results of solving it relative to the other opportunities available to drive growth for the business.
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