Navigating Startup Growth in the Next Normal
Tech startup founders are facing another new normal. The fever pitch of growth at all costs is gone. In today's economic climate, you must learn how to scale fast while also being more efficient.
How are your business operations today different from the before times (say, 2021)?
Before, you could get funding over lunch and a pitch deck. Today, it’s months of diligence and even then, investors are loathe to commit (unless you are the hottest latest generative AI company).
Before, you had more time to find your product-market fit, because you raised more money and had more runway. Today, you must go back to basics and actually formulate your hypothesis and test it with the right market before rushing to build your product just to find out it didn't fit the market need.
Before, you could develop new features and bundle them into packages without understanding their value, because you had the money and your customers were spending. Today, you must be more disciplined about connecting product investment to business impact.
Before, you overlooked your gross retention problems because companies could spend all that money they raised and new customers were buying. Today, you will have to build a disciplined account management, success and renewal team.
Before, your challenges with your user conference were COVID related. Today, your challenge is that no one has budget to attend. Instead of making them come to you, you may consider smaller events where you go to them.
Before, you talked about AI in your product. Today, you have to find significant dollars in a tight budget to actually implement AI, but this time with a short leash on driving customer value.
Before, you were OK with output measured in months. Today, you will fall behind if you don’t implement generative AI to reduce output to be delivered in weeks, or even days.
Before, your talent management team could be a bit disorganized. If managers wanted to hire, they could get new requisitions through with minimal review. And your talent team was swamped. Today, you need to invest in a stricter new req process that aligns your revised budget, your priorities, and your open reqs. And you have to do this with a much smaller talent team.
Before, you embraced hiring anywhere and everywhere. Remote work became working from your boat or your beach house. Workers didn’t necessarily work less. But back-office expenses increased as G&A teams tried to manage employment requirements and tax obligations across a suddenly global footprint. And team engagement suffered. Today, you must consider overall efficiency, which includes administration costs, building costs, turnover costs, and the costs of employees who don’t leave, aren’t performing, aren’t engaged, and aren’t being managed.
Before, you didn’t need to think about efficient operations – you could spend what you needed to as long as it drove top line growth. No longer. Today, you need people that actually do their jobs well.
We're all learning how to do more with less and also remembering how to do things well again. People who practice the fundamentals will win in this Next Normal. I’m an admitted Patriot’s fan (both pre and post-Brady), and the best coaching advice out there is the wise and simple words of Bill Belichick. Just “Do your job!”