The punchline is to plan the four actions you need to take when the answer is ‘YES’. Consider this training to reduce surprise and potential confusion that can come from an unexpected ‘YES’.
Planning for rejection, risk and worst-case scenarios is second nature to entrepreneurs. From the moment the first version of a business model is hatched, we are in de-risking mode. Ten steps back for each step forward. It’s a familiar tune. I love this grind and how it forces adaptation and learning.
I also love being told ‘YES’.
There’s nothing better when the grind pays off. Closing a partnership deal, finalising funding rounds, securing that key hire or having a product launch work better than expected makes it all worthwhile.
Founders feel relief and the team embraces the shot of confidence.
What happens next can make a business. Or dramatically stall its momentum.
If a ’YES’ answer is the suck, then go where the suck is
Opher, my good friend and co-founder at AirShr
always used to remind me to ‘go where the suck is’. The essence of this statement is to serve people who like what you do. And we followed that advice but we did so carefully.
In early-stage companies, founders invest a lot of time validating who makes up their actual target customers. In fact, most will tell you that moving from a ‘persona on paper’, or who you think your target customers are, to understanding who they really are is much harder than it sounds. But, you have to start somewhere.
When people start expressing interest by wanting to test and buy what you’re selling, there is a natural inclination to listen more to those people.
And herein lies the cautionary tale: Homogeneous customer groups are not (usually) representative of your total addressable market.
Kickstarter and LinkedIn
There are two interesting examples to illustrate this point.
First, consider Kickstarter
, the world’s largest funding platform for creative projects. While Kickstarter has helped facilitate pledges of more than 4B USD to projects on its platform (of which there have been more than 150,000 successfully funded projects), it is difficult to name 10 household brands that have achieved significant scale from starting on that platform. And while many companies have successfully adopted Kickstarter as their business model (by launching all of their products via Kickstarter), it is hard to scale beyond an early adopter market.
LinkedIn is the second example. As Reid Hoffman described
in his Masters of Scale podcast, the early days of LinkedIn attracted a self-organising group called LinkedIn Open Networkers (or LION’s as they became known). This large and at the time growing group believed that they should be able to connect with anyone on the platform. They also believed that everyone would want to connect with them.
That was obviously not true and the LinkedIn team prevented that from happening. The point is that at the time the signal was so strong that LinkedIn could have gone where the suck was but it would have alienated other users and that would have stalled growth. A potentially terminal move.
So the moral of both of these stories and why you should plan for when the answer is ‘YES’, is that if you don’t, you could find yourself course correcting your company to a false plateau. In other words, and in the absence of other recent wins, founders pursue this win as their new strategy.
Being more circumspect about the ‘YES’
More experienced founders might chalk a ‘YES’ up to a small win and continue with the strategy that was already in place. The thing is that when you look at the strategy of most small startups (less than say 2-3 years old), there isn’t really a strategy to refer to.
And as much as first-time founders won’t want to admit it, ambition and milestones are important, but that’s not a strategy.
So whether you have a clear strategy or you’re still working on it, here’s what I do, and I hope it helps. This applies to pitching for investment, negotiating partnership agreements, hiring new talent, engaging with government or elevating public profile (and there are others):
Whiteboard the known and (have a guess) at the unknown reasons why the other party would say ‘YES. I do this with my co-founders and board members
Detail the items that you think need to be delivered under each scenario. For example, a prospective investor says ‘YES’. If they are now a candidate for ‘lead investor’, what type of information would they need to see in order for them to take on that role and help you close the round. Another example is when an important potential strategic partner says ‘YES’. What information should you have ready in order to accelerate that agreement from a deal into the first value-creating phase?
Estimate how long each deliverable will take to create. This includes what tradeoffs you will need to make because you still have the same number of available resources.
Communicate each scenario and their deliverables to your team. This is an essential step. There are enough unknowns in your business, your team doesn’t need any more unnecessary surprises as I wrote about here
One last thing…
This might fly in the face of ‘faking it till you make it’ and ‘don’t build it until you know someone wants it’ but reframe it like this.
You don’t want to be left looking naive, shocked and bashful when a prospective investor or partner says ‘YES’. And you don’t want to appear rash and impulsive to your team or investors by changing tack whenever a user or customer group says ‘YES’.
Plan out the ‘YES’ scenarios and what would need to be made or delivered under each scenario.
Consider this training to reduce surprise that comes from the unexpected ‘YES’. This doesn’t mean you will lose the relief and euphoria that comes with landing that much-needed decision. It means you will be able to respond with a clear head and create the groundwork for more of the same.