BUSINESS: Winning Meaningful Business and Keeping it (Part Two / Five)

Over the coming weeks, I will be sharing insights and perspectives on selling, executing, and growing within early stage businesses, specifically within the Fintech Industry. I'll be drawing from a depth of experiences and insights gained through various leadership and individual contributor roles within startups. For more details, please see my prior blog on this topic: Business Building Things in Startups: How I Would Do It (Part One)

Introduction

This week, our focus is on "Winning meaningful business and keeping it." For early-stage businesses and startups, specific strategies, anecdotes, and tactics are crucial for establishing and growing successfully. At this stage, fundamental demands such as generating top-line revenue and demonstrating monthly net revenue for valuation and market and investor confidence are paramount. Market dynamics evolve rapidly, with terms like "Path to Profitability" becoming more of a priority recently. 

Below I present some of my key strategies, anecdotes, and tactics I believe vital for early-stage ventures in acquiring and retaining meaningful business. While numerous tactics exist, the ones I'll highlight are, in my experience, among the most critical. Note that we assume our value propositions, MVP, and products are defined, and we focus on the operational elements of taking that to market. Let's go!

Setting up for Success:

• Set up a GTM (Go to Market) strategy from day one and don't silo it; include cross-functional leadership as part of the core GTM team and stakeholder group. Your GTM strategy will ensure that your business partners know what you need to win!

• Know your SAM (Sellable Addressable Market) this is a relatively new one for me but dramatically simplifies the TAM (Total Addressable Market) as an indicator for your financial planning. TAMs are mammoth in size, so breaking them down into SAMs makes the planning more realistic and accurate for your forecasting.

• Set realistic vertical targets and don't bite off more than you can chew! For example, larger enterprise organizations typically hunt for stability and longevity over capability and agility that early-stage businesses offer. Assess how realistic winning their business is before heading down the long road of negotiation.

• Create commission models that spread rewards tied to Winning and Real Revenue, not just ink on a page. This is even more important at an early stage due to client profiles typically being younger and less proven in their relative markets.

• Implement a Dealsdesk! One of the simplest yet critical steps to incorporate within your Sales cycle is the "Dealsdesk." Make sure your cross-functional leadership team has a seat and a voice at the table. The increased deal scrutiny can create a little heat, but the outcome is you weed out deals that do not make sense and prioritize those that do.

• Set realistic sales cycle targets; don't underestimate or set unrealistic targets that your reps will never meet. Set expectations with your stakeholders early and use readily available sales cycle data to educate them on typical cycles based on your target verticals.

Winning Meaningfully:

• Do not race to the bottom; your pricing reflects the value of your product/proposition. It's easy to beat the competition on price, but be wary as it sets an expectation in the market and will hurt your bottom line in the long term.

• Sell with integrity from the start. It's better to lose potential business by being upfront about compatibility than to face the consequences of ‘gaps’ in your offering later on. Often this level of integrity ends up building greater trust in your prospect anyway.

• Sales cycles vary widely across verticals; be wary of larger, more established businesses and long contracting cycles, particularly if you are interfacing with a procurement department and not directly with the sponsor, executive.

• Scrutinize forecasts with a fine-tooth comb, especially for those clients who are early-stage and not yet proven in their particular market. If a prospect is using your services as part of their go-to-market plans, protect yourself with minimums and ensure they have the funding to pay through the contract period.

• Winning enterprise-level deals at the early stage places significant risk on your operations. Winning a larger enterprise deal can be enticing, but be prepared for it to consume a large portion of your business capacity.

• Recognize that big names generate attention but focus on securing a meaningful percentage of their volume or establishing a clear path to getting it as part of the deal. A big name will have the same demands regardless of the revenue share they make for you.

• RFPs can be a significant time suck that impacts GTM and beyond. While they often give good insight into what a business might be looking for, often the investment is not worth the return and are rarely won during the early stage. That's not to say don't go after it, of course, but some you might need to let go.

Executing:

• Speed to Market: Your (TTV) Time to Value is as important as your recurring revenue. Earlier stage contract terms are typically shorter; every month that goes by is lost revenue. Put in place the governance and skilled resources to ensure you don't lose out on your TCV (Total Contract Value).

• Client commitment is key; ensure that your client is aware of what they need to bring to the table to get things up and running. Do this all the way down to the resourcing they plan to allocate for Onboarding and their Operations. Incentivize your clients with reduced implementation fees based on launch time frames.

• Empower your Implementation Managers to be commercially driven: Implementation managers play a crucial role in driving client engagement and trust in your business. By empowering and incentivizing them to focus on commercial objectives, businesses can ensure alignment between client onboarding and revenue growth objectives.

• Account Management joined at the hip at contract signature; while typically account management is focused on ramp and growth starting at ‘Launch,’ this is a myth. Your ramp and growth start from day one of the contract signature. The challenge is not having a large enough team to segment. Do not allow your IMs to step into an account management role.

• Implement lean Account Management processes to ensure your AMs have the ability to build relationships, have a finger on the pulse, and deal with commercial-related activities, i.e., billing milestones pre-Launch.

Keeping & Growing:

• Focus on recurring revenue; one-time fees are short-term wins. Prioritize recurring revenue streams over one-off fees. That is not to say that a hefty one-time fee is not worth charging, especially if it's going to help your bottom line and runway. Your valuation and subsequent ability to raise funds all hinge on your recurring revenue.

• Diversify your revenue from day one; avoid relying too heavily on a small number of high-value clients (whales). Large revenue share over one or two clients leads to longer-term risks surrounding retention and contract renewals. In addition its challenging to prioritize strategies outside of those client relationships.

• Early stage client expectations, the ‘white glove’ effect: Early stage clients know how important they are to you and act accordingly when it comes to how they expect to be treated. Do not believe it will be any other way. The best approach to this is building strong partnerships from day one, meaning more upfront investment

• Clear and concise communication drives client satisfaction: Prioritize the client's experience and satisfaction over all else. Weekly touch points, frameworks for operational issues and paint points are a must. Clients expect a more personal experience from you and that starts with communication!

• Account Management and Revenue Growth: Implement robust tools and processes to facilitate effective account management revenue objectives. This ensures that revenue growth is tracked and accounted for.

Conclusion

During the early stages of a business, certain strategies become absolutely crucial. While a well-established organization may withstand occasional setbacks, early-stage businesses are significantly impacted by getting it wrong. Forming the right team during this pivotal period, particularly with sales leaders who understand the nuances, is paramount. Establishing a culture that balances quality over quantity, focusing on securing real revenue, is essential. Embedding this culture throughout the organization is key. Just winning a deal is not enough; it's the effective go-to-market at speed and growth that determine success.