Emerge from the weeds
‘Are we all in the weeds right now?’. This opening question sent shockwaves round the audience. Nearly everyone is culpable of meandering away from their point of focus, paying attention to the shiny opportunities but not the gritty, often tough, delineated course to achieving their vision. Many SaaS businesses are too quick to dismiss the importance of understanding their market & its size. Ignoring the market is often symptomatic of lacking a value proposition that overcomes a market problem. Uncomfortable it may be, but if we don’t emerge from the weeds early on in the life of a business, we may become inextricably tangled.
Having thousands of free users is a coup…up to a point. But without evidence of how the conversion from free users to monetisable assets will take place, investors’ belief in your business will be stunted. Recently start up focus has shifted from revenue to growth, where hiring copious sales people is prioritised over hiring developers, and pitches are led without any tech demos. Investors are subsequently inundated with empty promises lacking engagement metrics. Now they have reached a point of “free user” fatigue and are increasingly seeking tangible evidence of potential revenue, an injection of rigour to the business ambition.
Go slow to go fast
Fast rise, faster fall – this is not always the case for businesses but increasing investors are looking at business who are raising as late as possible. This ensures a readiness to grow. Do proper testing, start small and do not stifle your progress by failing to challenge your product and business. This way, your first round of investment will be met with fire in your belly to sprint on your 9-12 month runway. Many businesses who raise far before the necessity arises become complacent leading to an early downfall. Therefore, it is also essential to gain investment that is appropriate for your stage so you are not hindered in receiving further investment. In a sector that is dominated by a long sales cycle, super-hyped firms will not succeed: steady growth will trump the J curve.