My Favorite Nuanced Insights From My Conversation with Ryan Denehy, 3X Founder and CEO of Electric.ai.
Some of the most prominent startups are built on a business model/customer insight – versus – technical insight.
There is incredible power in slight iterations of existing processes. All three of my ventures (Electric.ai included) were predicated on a positioning/packaging insight (i.e., customer insight)."Show Me Your Process".
In Customer Discovery, I would ask them to pull up the spreadsheets they spend the most time in -- I wanted to understand what they’re explicitly managing and where the most money is spent – it’s a goldmine in uncovering what’s (1) being measured, (2) understanding if/how it’s growing (i.e., implications).
Be Shameless. If you’re not uncomfortable, you’re doing what everyone else is.
I hated it, but I went door to door, engaging retail owners in strip malls. As an introvert, it felt so weird, but it was far more successful than trying to scale it via spray/pray -- we emailed 245K folks in year 1 with limited/no response.
Founder-led sales is the only way on Day 1.
When you haven't figured it out, it's impossible to delegate. You can’t delegate visioning. And hiring/managing people before visioning is validated is a colossal waste of time.
Pre-PMF it’s about identifying/capturing nuance.
You need to ask a ton of questions about your prospect's business. It’s not about you or your product. It's about the depth of understanding re: their motivations, role, etc. —- For example: ‘What 30% of their job do they hate the most?’
Post-PMF, it’s about identifying a buying signal you can scale with confidence. For example:
Employee count.
Are they growing?
Business model OR who they serve.
Do they have an IT provider?
What systems do you use?
Seed-stage Startups Know Your Time Clock.
If you built an SMB product, be very wary of taking it up-market into the enterprise too soon, thinking you can align with F1000 need AND charge more; this will bankrupt you. If you are targeting Enterprise, you need an Enterprise-ready product. We had a F1000 show interest in us, but had I spent time focusing on them, it would have bankrupted us. We didn't have the timeline to meet their buying process — OR — service team to support this.
Unlocking paid BEFORE freemium.
In today’s market, true validation requires you to show proof of customers. Are you able to extra value (i.e. $$$) AND deliver value. While freemium can be a valid GTM for some, there is far more ambiguity and steps in how to turn a user into a ‘paying user’. It’s a lot harder than it seems.
Ensure a Customer For Every Feature.
Your MVP is your promise to solve the core issue; beware of speculative building.
