Over the last 30 years I have worked as a sales executive leader, general manager and now CEO for early stage companies at different degrees of growth. Early stage companies are my passion. While there is risk the rewards can be much higher! You can be recognized by name rather than number. Your individual contribution can have a significant material impact on the business and make you feel good about making a difference. Many start-ups enable you to ride the new wave of technology and innovation, to trail blaze, be the first to market and lead the way. It can be very exiting working for an early stage company. All successful technology companies need to start somewhere and it is fantastic to join them at the ground level. Last year alone over 30 technology companies filed an IPO and many more were acquired yielding high returns for all, as a result of a successful liquidity event. The feeling of building something great, the joy associated with success and the monetary outcome can be extremely rewarding. If an entrepreneurial spirit is in your DNA, much like it is in mine, you will live the start-up dream, continue to learn, grow from your failure(s), iterate and take the time to share some insight. My mottos are “Never stop learning,” and “Always give back.”
Technology field sales candidates who research our agency often consult with us about early stage companies, and seek insight on what to look for with the business model and the latest technology trends. There isn’t a one size fits all for a technology company’s path to success, nor is there a crystal ball or magic formula that one can subscribe to. There are however some leading indicators, call them tips, which can help to mitigate risk during a candidate’s assessment process. Here are some tips that have helped guide me, and are based on my own personal experience and journey.
- Consider whether the start-up helps to solve a real time business challenge that is of burning importance to the customer today. This can be done with innovation that is in a new category or innovation disrupting a category. If the answer is yes, check this box and find out about their differentiation and competition. Are they delighting their customers with their solutions? When they lose business, why do they lose? Look for examples of how the company has used failure to iterate and grow.
- If the company is creating a new market category then there will be a lot of evangelizing by all members of the team. This can impact your bank account as sales cycles are generally longer while a company tests and retests its go-to-market strategy. Consider the following in your decision. Does the company’s compensation plan allow for you to alpha and beta test their go-to-market strategy with prospects, Engineering, Product Management and Marketing while at the same time making a healthy living? Does everyone have some level of accountability to deliver (and not just sales)? Is there skin in the game by all? It is too easy during failed go-to-market (GTM) strategies to use the Sales team, as the scapegoat. Successful go-to-market strategies involve a collaborative team where everyone is selling, not just Sales.
- Are they selling to companies who will pay a premium for a unique offering that are willing to move quickly? Understanding the budgeting process within a company, and finding a way to attach value to an existing line item on a budget, can increase awareness and accelerate the delivery of value to your customer and company. Consider the business model for the markets you are targeting. Does the business plan support SMB and F1000 if both happen to be your target markets?
- Discuss the marketing plan and gain insight into who is managing it. Sales and marketing go hand in hand. Marketing leadership with a solid plan and a track record of performance is really important. How active is the company’s social media engagement? Check their presence on Twitter, LinkedIn, in TechCrunch, Inc, Forbes, Wired, etc? Can you find their executives on panels, quoted in articles, on YouTube? And, how are they represented? Do they think differently and outwit the competition? How innovative are they?
- Check out which venture firms (if any) fund them. Investigate where they are from a funding perspective, and consider the success of the venture capital firm. Ask what their burn rate is, and how frugal they are. At a startup, frugality can be a good thing – -especially when a company spends only based on its highest priorities to maximize profitability..
- Has the leadership team led successful initiatives like this in the past? Is the leadership team the smartest in its class? An A-level Founder attracts an A-level team. So one could point to Facebook on this. Mark Zuckerberg is an excellent example of someone who has surrounded himself with an experienced leadership team. He is brilliant in in a ton of areas, and yet recognizes that all aspects of the business require experience and know how. The entire executive class and pedigree is important.
- Look into age of company and rounds of financing. Many companies go beyond series C today. Venture capital firms are fantastic advisors, and for the most part patient in guiding the companies’ growth. That being said, at some point in time they want to recover their investment. In Silicon Valley, if the company has been around for 10+ years and still has venture capital investment dollars, make sure you understand their strategy for a successful exit.
- Remember that great companies are built by great people and not just great technologies. Look at things holistically. A start up’s plan to exit on a patented product without solid leadership that builds the business model to support the successful delivery of the product combined with successful deployment with your customers, could mean you are out of a job.
- Is the culture right for you? Are you considered scrappy, a trail-blazer and able to lead the way without a roadmap? Many start-ups require this. They also require flexibility and patience as you work cooperatively to figure things out.
Hope this helps you and feel free to connect with us on LinkedIn or join us on Twitter.
