Initially published as an article on John Holt’s LinkedIN profile
I’m regularly talking with founders and directors/advisors of (mostly) early-stage companies. One of the challenges around offering a helpful, progressive but also realistic perspective in these conversations is establishing the current state or mode of the organisation.
The answer to many questions or challenges can be very different based on these elements.
That’s why I developed a framework to define this through some simple initial questions generally supportable by data that the company/founder should have in their mind or close to hand. It saves a lot of time and generally adds a level of realism to the discussion that had been absent or lacking in priority previously.
There’s never been a more important time to be realistic about your business mode and to communicate with others around you in the same “language” to make the best decisions possible about the way forward
This realism is important to building a solid approach to critical decision making and your future strategy. I ask these questions and use the modes to be most helpful – not to judge the success of the company or founder.
Many companies of all shapes and sizes have resided in survival mode for many years and then progressed into more sustainable or even scalable territory. Others have experienced rapid scale and then reverted to Survival after significant market changes.
These modes apply to companies of any stage and size irrespective of tenure and previous historical performance because they are pegged against universally relevant metrics and data like cash runway.
This framework is about getting everyone on the same page and starting point around what matters, understand, focusing execution and measuring progress.
Feel free to suggest changes or feedback – I’m constantly refining my view around the core elements of each mode and it’s all my perspective on how to get a robust conversation going with some common language and agreement on the dynamics of the starting point.
First the major headings and questions:
1. Cash – How much cash runway do you have? What are your monthly operating costs?
2. Revenue – What is your current revenue (linked to cost base) and growth rate after customer churn/attrition?
3. Sales – Describe your sales process and resources – sales team (and individual dynamics/effectiveness), sales cycle (current length on average and trend), weighted opportunity pipeline, and win rate
4. Demand Generation – Where do the leads come from and what resources do you have creating demand/metrics around those? This could include prospect pipeline growth, conversion to qualified lead, and associated costs
5. Product/Solution Market Fit (PMF) – Where are you on the PMF curve in terms of the level of customer need serviced by your current version compared to their overall expectation of a total solution. Has or will this customer view of your solution be impacted by their response to C19 positively or negatively?
6. Market Access – What are your market dynamics? (Size of the total addressable market, geographical mix, ideal customer profile etc.)
7. Customer/Market Activity – How has the change in conditions affected your market and customer priority and preference for your solution in the near future?
So here’s the rollup:
There’s no shame, judgement or conclusion around any of these definitions and they are very generic. There may be factors in your business beyond those listed that allow you to feel differently about the mode indicated by the questions and your actual situation.
The whole purpose of sharing this is simply to (hopefully) add some value and perspective to a process which I think many company founders, executives and board members are going through right now challenges around bringing people to the table with a common understanding around the language and state of the business or venture so you can more effectively engage in the debate and discussion around future strategies and options.
PART II – Survival Mode – some perspective from 15 years of engagement