What to do when investors want you to have psychic powers
“The best laid plans of Mice and Men do oft go awry” — Robert Burns
You may not remember what inspired John Steinbeck to name his book Of Mice and Men, and it’s even less likely that you remember the Scottish poet, Robert Burns, that coined the saying, but the sentiment is universal. Even when you plan things out, something is bound to go wrong.
Does this mean we should stop planning and just leave everything up to chance? Of course not! It just means that you, as an entrepreneur, have to be flexible and be willing to make a plan 2.0. It’s this magical ability to see into the future that investors want to see.
Don’t worry most of us don’t have a fifth sense either.
But you can trick them into thinking that you can by foreseeing and mitigating any possible risk.
Before you can stop catastrophe from happening, you have to be able to tell someone (an investor, an accelerator program, etc.) how you’re planning on launching your business through your Go To Market Strategy.
Your Go to Market Strategy is a blueprint of how you plan to get your product or service to your customer. Think of it as an EXTREMELY condensed version of your business plan, but it’s completely focused on the first version of your product or service. Don’t get ahead of yourself and start planning GeniusInvention 2.0. Make sure that you can explain the following:
· What is the first version of your product/service?
· What is the first customer segment you’ll be selling your product/service to?
· How and where do you plan to sell your product/service?
You may be thinking: “But shouldn’t I tell an investor where I see my product going?” Yes, you should, but not yet. You need to be able to show that you have a plan of action for how you’re going to sell and distribute your first version before the second one can be discussed. Don’t put the cart before the horse.
Not only will you get ahead of yourself and possibly fail at selling one product; your potential investor will doubt your ability to actually take a product to market, which probably means they don’t invest in you.
Ok, you’ve got your plan, and now you’re probably wondering how do I get these psychic powers she was talking about?!
Well it’s not really powers, it’s more a bit of a cheat sheet on possible problems that can pop up. With some brainstorming and creativity, you’ll become a pro at identifying possible risks and coming up with contingency plans for if they happen. Here are a couple of the stumbling blocks you can come across!
· Market Risk: There’s always the possibility that you launch your product… and you don’t end up selling the 50 boxes a week you expected. Where do you go from here? It’s back to the drawing board! There’s 4 circular steps that you should take with products. Release them into the market place. Observe how customers react to your product. Improve your product based on what you see (people find it a bit clunky? Awesome let’s see how we can slim it down). Repeat the cycle again.
· Financial Risk: This is one of the scariest ones for most entrepreneurs. What if you start running out of money? Or what if you aren’t getting the investment you were hoping or counting on? There’s a couple things that you can do to help lessen this problem. First of all start early, which will give you more leeway with bumps along the road. Make sure to plan ahead so you know what to expect. Always have a backup plan i.e. if we have enough funding we can do a huge system overhaul, but if we’re short on cash we can focus on improving feature X, which is the most important to customers.
· People Risk: This one is pretty unpredictable. If you’re working at a startup and you have employees… their behavior is impossible to control. What do you do if your front-end developer quits a week before your landing page is supposed to go live? Usually employee issues don’t appear out of the blue, which is why communication is KING 👑 when trying to stop these issues. Be as clear and transparent as possible about deadlines, and expectations. Give deadlines early on, and make sure to get as much as you can in writing so there’s no disputes later on of “he said she said.”
Okay, so you have your plan, and you’ve picked out possible issues and how to solve them, but how do you know if your plan is working? How can you tell if your product is successful?
But what makes a good goal?
They have to be:
Specific — While it’s great to have a general goal of being the next Facebook, for investors to measure success you have to be a bit more specific. Do you want to double the amount purchased from one year to the next? Maybe you want to increase your website traffic by 10%. Both of these goals are pretty specific which makes figuring out if you reached them much easier than a broader goal.
Measurable — Make sure it’s a goal that you can measure easily. Increasing your sales is a measurable goal. Increasing the number of companies using your software is easily measurable. Something like making people happy is much more difficult to measure.
Achievable — Be honest with yourself. Is this something that you can achieve in the time you have? Overhauling your website in a week might be a stretch. However, redesigning a portion is a more accessible goal.
Realistic — Once again, honesty is the best policy. If you goal is to outperform Google in the next month, you may be disappointed. Not because your product isn’t awesome, but Google is a big company with which to compare yourself. There’s no sense in setting goals you know you can’t achieve especially when thinking in the short-term.
Time-Frame — Anything is possible without a time limit. Someday you’d like your company to be the #1 most searched company in your industry, which is an awesome goal. But it’s good to have a time-limit with which to work for more immediate goals.
Okay, goals have been set! You’ve made sure that they’re SMARTgoals. But the question now is…. how do I measure if I’m reaching my goals?
This is where KPI’s come in.
You may be asking what are KPIs?
KPI’s are Key Performance Indicators, which are pretty much numbers you measure in order to see if your goals are being met. These can be things such as number of users per day, or number of products bought this month versus last month.
Investors know that shit happens. No one is expecting you to launch your product with no setbacks or problems. That’s completely unrealistic. All they want to know is that you can confront problems when they occur and deal with them quickly. They want to know that you have a plan B, C, D, and E for when things go wrong. A strong Go-To-Market Strategy will help you prove your ability to foresee possible difficulties and adjust accordingly.
If you want help creating a Go-To-Market strategy check us out. If you have no clue where to start we can also help! Don’t worry we’ve all been there. Try our free trial or shoot us an email at firstname.lastname@example.org and we’ll help you figure out what kind of help you need.