🚦 3-2-1 Traction: raising money in a down market
Also in this issue: avoiding long-negotiated deals; a return to basics; writing high-quality ChatGPT prompts; and the evolving role of founders.
Hey friend 👋
I’m back in a new week with a new issue. This is 3-2-1 Traction — 3 big ideas from me, 2 quotes from others, and 1 question to help you focus in your startup journey.
Let’s go 👇
3 ideas from me
one: raising money in a down market.
Cash is harder now, and every founder I talk to has the same problem.
And the situation started out pretty grim: only 1 in 2000 companies successfully raised venture capital in 2021. That’s 0.05%. 😳
The way to stand out in a down market? Simple:
Scope the MVP toward urgency;
Focus on a crazy-efficient sales strategy;
Perfect the pitch.
That’s not different than yesterday… it’s just no longer forgivable.
two: avoid long, negotiated deals with BigCo’s.
A quick no is better than a long yes. Don’t put all your eggs in one basket.
There are any number of clichés that should caution against it, but far too many startup founders burn their runway chasing big fish with long odds and even longer sales cycles.
If at all possible, avoid long negotiated deals with big customers for as long as you can.
Small, hungry customers close deals much faster.
three: you’re not just a small version of a BigCo.
Every once in a while, I like to return to basics.
As Steve Blank said: startups organisations in search of a business model.
Large companies use the massive data set of established products sold to existing customers in large markets to hypothesise about their future offerings.
Startups… have none of those things. The work is to find, validate, and sell to the right customer. Once you find the thing that works, you’re no longer a startup.
And all that’s left is scale.
2 quotes from others
Startup Studio expert Max Pog on the future evolution of the startup founder:
Entrepreneurship will be dissected, and startup studios will partly substitute founders. 150 years ago, management was seen as an art, but now it's nothing more than a routine job, the same way technology entrepreneurship is concerned today as an art.
AI Evolution’s infographic on ChatGPT prompt engineering:
1 question for you
What is the weakest part of your sales or growth strategy? What are the key assumptions that you can challenge?
Leave a comment and let me know!
— jdm