Cyberposium-15: Startup Panels - From Powerpoint to Product and Scaling for Growth

Startups - From Powerpoint to Product

At Cyberposium 15 on Saturday, local startup guru Don Dodge, whose positive reputation in the New England startup community was bumped up a few notches after his recent transition from Microsoft to Google, moderated two panels on startup development, initial momentum, and scaling for growth.

Notable Points:

Choosing a co-founder is as much knowing yourself as it is the person(s) you decide to work with. Someone who will compliment your skills, react well under pressure, and ensuring 1 of 2 (or both) of the founding team can architect the product/service is key.

Execution is infinitely more important than "the idea". Don encouraged sharing and spreading good ideas to which the panel echoed "ideas are cheap - they're worth nothing".

Jack Groetzinger, founder of seatgeek.com a prediction/analysis tool for the resale market of sports and concert tickets, says he worked with his partner generating up to 200 ideas before they settled on the one they'd pursue.

Passion behind the "problem" and accepting the inevitable change.  Resisting small tweaks to the model can hurt new startups as founders tend to fear morphing their idea in light of new knowledge and experiences.

Don't lose sight of a top-10 list of concerns to revisit in the future.  Will Google enter this space? Will people actually pay for this service? etc. Keep a formalized approach to these issues to prevent them from resurfacing farther in the future, failing fast, and resisting the "hyper-optimism" fault of most entrepreneurs.

Managing expectations when seeking funding.  Don's pointed out that the same level of choosiness applied to an individual's stock portfolio is magnified in the case of VC's selecting the "funds" they'd like to invest in.

Know thy elevator pitch.  Panel members continually reiterated the need for founders to maintain a strong comfort level with verbalizing exactly what problem the company is attempting to solve, as the pitch will be used not only for seeking capital, but during every interaction with every early customer, employee, media contact, etc.

Scaling For Growth

Since I have a sales background, I found the comments by Mike Tuchen, CEO of Rapid7 very helpful in understanding how young startups scale their sales teams for growth.

The more obvious points Tuchen mentioned surrounded the use of metrics to determine a sales model that has some degree of accuracy in forecasting, by working with the metrics that determine each sale.  Tuchen used an engine as an analogy to describe a selling "machine", that it does not become a solid business unit until it has the mechanical components which govern its outcome.

However, it was some of the critical issues young companies face when going through growth phases that I found most interesting. Too often I learn about young companies who believe taking a young sales force lacking in any repeatable models and believe doubling headcount should mean double (or triple) the sales output and booked revenues.

Tuchen stressed the importance of figuring out exactly how the product is sold, and what makes people buy it, to construct a repeatable model before one can think about increasing sales headcount or disaster is eminent.

Asesssing the risk /reward of the one-off deals which can pull young companies into opposing directions as they chase down "anyone who will say yes".

The courage and forethought to walk away from some of these one-off deals, especially in the early phases, dictates how quickly a company can reach an escape velocity of bringing in revenue.

Tuchen described sales growth models as hinging on the rate of change from the initial distribution of customers might lie (large enterprise, mid market, or small business) and viewing the revenues in either a bar shape, triangle, or inverted triangle shape.  Then imagining where the sales team needs to head, whether it be scale the existing business and just increase it, or move up or downstream and adjust the model slightly.

He also described the importance of labeling early customers as either "target", or "visionary" in order to keep in mind the role they play in the eventual expansion of the product line.

Target customers keep the bills paid, and represent repeatable deals which help the company grow, whereas visionary customers are a required mix, those who push the limits of the product, help forge its future direction, and may be the first source of deals for new products sold to the existing base of customers.

Tuchen's company, Rapid7 provides a suite of threat vulnerability protection products for the mid-market enterprise.



This is part 2 of 3 in a series on Harvard Business School's Cyberposium-15, held on November 21st.  Check out parts 1 and 3 below:

Part 1: Keynote with Jim Basillie, Co-CEO of RIM
Part 3: Keynote Interview with Chad Hurley CEO of YouTube