By Luba Reynolds
Founder and Managing Director of Sales Expand, We in Social Tech mentor
By some estimations up to three quarters of start-ups do not survive beyond one-two-year period. It is a daunting task to run your new enterprise, trying to juggle many things around but can you really afford not to think about strategy before making decisions in your new company. Strategy is often associated with high-profile consulting firms and global enterprises, yet, strategic thinking is what can help start-ups to avoid long-term problems in the future.
So, what is a strategy for an innovative technology company, and what you need to think about?
Strategic decisions are always about long-term future and ability to think ahead, laying down a roadmap for an enterprise development. It breaks down the company vision into structured elements upon those you can execute the future business plans and track the progress.
The major structure elements of any innovative enterprise are Financing/Funding, Product Development, Sales & Marketing and, of course, Team that will execute every element and every stage of a strategy. They are all interconnected.
Let’s look closer at each element of a strategy:
It is obvious, you need funds to run your enterprise. The funding you are raising needs to be aligned to the product development plans and the business plans to market and sell, generating revenue and return on your investment and of course, you need to hire and provide for your team that will execute your ideas. So, what you need to think about:
- Define Milestones for Funding: while raising it, think about next round or exit for your investors;
- Decide what support you want from investor(s) at every stage of funding – different investors have different goals and support level!
- Align funding to your current stage and Business Plan;
- Mix it up! Approach different types of investors;
- Watch Company valuation and think about it as a realistic negotiating tool for investors;
- Be careful with giving away equity! You may need some for the next stage of funding!
2. Product Development
It can be difficult and overwhelming task, even for experienced tech developers, to bring a new product to life. First of all, you need to think about your MVP and a product that customers may start buying. The development effort, of course, should not only be aligned with the company vision but also with available funding you’ve got and the team that manages development process, as well as the product version that can be sellable and allow you, at least, to get a traction on the market, and as a goal, get revenue and some money back on investment for the future development. Here are some product development tips to consider:
- Important: Speed to market and customer acquisition are the top priorities. You will never build an ideal product from the beginning – prioritise product features according to the market and funding available.
- Invest efforts in Product Management resources!
- Watch your funding pot! Align product development goals to the available funds
- Concentrate on MVP and releasing product on the market to get your money back!
3. Sales & Marketing
Many startups underestimate the importance of thinking about sales and marketing of your products from early stages of company development. Yet, Sales is the only company function that brings revenue and return on investment, defining what you can afford at the next stages of development and how your company can be valued at the future investment round. There are many things to consider:
- Be clear about type of customer and your customer needs
- Challenge your customer where it’s possible (a customer may not know about your products yet!)
- Align Marketing to your Customer Type. If you do not have enough customers, change your marketing demand generation approach
- Align Marketing to the Sales approach, decide if you go for B2B, B2C or B2B2C. This will save you some development funds in the future!
Of course, none of the strategic elements can be executed if you do not have a strong performing team. However, you company strategic goals can change within a period of time. Your team structure and resources should align to your current strategic needs. The main thing to consider: give your team a vision of growth and the feeling of building innovative enterprise together, where their hard work, sweat and tears will be rewarded. Here are some things to consider:
- Understand what skills you need at the current stage of your enterprise strategy;
- Research your network & connections you can trust to find resources;
- Don’t ask for maximum, such as the best CTO on the market! Look for those who want to grow together with your company;
- Assess new people based on specific requirements;
- Use other incentives as a part of remuneration package for your team
To recap, your strategy shall be a growing and adoptable to your enterprise challenges. If you company is going through the changes, the strategy needs to accommodate it:
- Define KPIs for the nearest future
- Review all Elements of your strategy periodically (quarterly, semi-annually) to see what you may need to change
- Remember to connect all elements: Funding, Product, Sales, Marketing and Team. Problems in one place can affect other places’ and
- Remember to think about your Growth Plans.
If you can learn how to balance these elements, you’ll see growth as a bright light at the end of a tunnel of hard work you do to succeed with your Social Tech enterprise!
Happy Growth to you!
Luba Reynolds is a Founder and a Managing Director of Sales Expand, with over 20 years of experience across Management Consulting Project Management, Sales, Product Management, M&A, Training and Recruitment.
Need support reviewing your strategy or help with specific strategic growth elements? Sales Expand has successfully supported some innovative companies in AI, IoT, Analytics and Big Data, provided growth strategy for well-known tech brands, innovative startups/scaleups, as well as government organisations supporting tech initiatives. They also provide training, workshops and coaching, growth academy and mentoring for innovative tech enterprises.
Contact Luba Reynolds at firstname.lastname@example.org; 077 64 23 5491