Contributed by Dinesh Kandanchatha, Managing Director of Macadamian.
Founder — we did it! The check cleared.
It’s the day after the round closes. Though the euphoria is still washing over you, there is a nagging sense of worry tugging at the edges of your exhilaration.
“We did it! We got funded, we are a member of a very special club. But… Now what?”
Only 1-2% of business plans pass through the rigorous process of Venture Capital funding. VCs in the US only fund around 3600 businesses each year, compared to the 600,000+ new companies born annually. Congratulations. You beat the odds.
Time to execute the plan right?
The unspoken secret in the investment community is that many plans are written for the express purpose of funding. Actual execution of that plan will rarely look like the pitch deck you used to get the money. It’s time to revisit that plan and take practical steps toward building your billion dollar business.
There are only 3 things in that plan that matter long term:
- Sales and marketing
- Product development
- Building out your team so you can do 1 and 2
Sales and Marketing
Founder, you are facing probably one of two scenarios: you have a team that needs leads, or, you don’t have a team and you need to build one out to get leads.
If it’s #2, I will talk about how to do that later. If it’s #1, you need to build a selling system at scale — and fast.
It’s tough to optimize or hire sales people if you don’t have leads, so I always recommend that founders start there. Build your pipeline first, then hire a team into it!
To hone in on your ideal customer profile and gain meaningful insight into your audience’s buying signals, you need a sizable sample set of leads. Lead generation through a dedicated lead research team is a fast cost effective way to scale your lead generation program.
Once that profile is built you can start moving qualified prospects through your pipeline to validate your sales engagement methodology. Here, progressive profiling is your friend. As you get a better picture of your ideal customers, go back to your lead generation team and get them to use these insights to refine your prospects. Remember, your investors are expecting you to operate at scale. Grow and grow fast. Because you’re planning to scale quickly, your lead generation partner needs to be able to grow to scale with you. This means hundreds of leads that meet your criteria weekly, not 5 or 10.
If you have decided to invest in product development instead of sales and marketing, you might be lost. That’s not the mission of this post. Sorry.
Having built a few companies and products over the last 15 years, my only recommendation is to have your users validate constantly. It is incredible how much money you can burn on features that are not validated as critical, or even necessary. Macadamian deploys 80+ products a year and has a rigorous commitment to user-testing to ensure that our clients are able to get to their next funding round. User test before you build. Test while you build. Test after you deploy. Then, test some more for good measure.
This is easy right? Hire a recruiter and get the team in place. Or, ask your network?
Funny thing is, most founders hire to fill functional holes. This is a big mistake. You don’t need a VP of Sales. What you need is someone who can build a scalable closing engine in your market — someone who is knowledgeable about the industry and your company-specific challenges.
You don’t need a VP of Marketing either. What you need is a person who can create a lead engine for your product — someone that understands adjacent markets, your buyer profiles, and has done it before!
Sun Microsystems Co-founder and renowned VC, Vinod Khosla, describes the idea of hiring to eliminate risk. Identify your risks, then seek out people that have already met that risk head-on and overcome. For example, if your risk is getting to mid market technical executives in manufacturing, build a list of companies who have sold to that market before. Then identify the individuals who were doing the selling and draw up a formula on how you plan to get to those individuals.
Don’t limit yourself to your industry or market, it’s incredible how disruptive ideas from other industries can create sustainable competitive advantage for your company. Additionally, seeking out talent from other markets often results in a lower cost of acquisition and retention.
Brutal reality check: you don’t have time to do this work yourself!
Figure out your risks, then identify the profile and keywords for the individual who could address that risk. You could use your in-house team or a recruiter to prospect for new talent. But, once you have honed in on your specific criteria, you can also just as effectively use your aforementioned lead generation partner to prospect for potential candidates at scale. You want to look at hundreds of profiles so you can pick the guy or gal that is going to not just overcome “your risk,” but transform your business and the market by solving for it.
Fellow founder, you can’t do this alone. You need a team that can help you find the needle in a haystack, then do it again hundreds and hundreds of times.
If you have experience running research teams, building it in house might be a viable option, otherwise focus your limited resources on the many other challenges in front of you as you scale your business and find the right lead generation partner. I personally use LeadGenius for these types of challenges in several of my companies. I am always eager to share how LeadGenius is helping me disrupt the markets I compete in.
Good luck fellow founder! Your work has just begun.
About The Author
Dinesh Kandanchatha Dinesh is a serial entrepreneur, angel investor, and operator with specialization in start-up and early stage companies. Focusing in sales and marketing, Dinesh has over 15 years of experience in creating enterprise value through sales, product marketing, and sales management.
As Managing Director for Macadamian Technologies, Dinesh drives revenue in the leading software design consultancy in the healthcare market and has stewarded double digit annual growth rates for the firm. Previously, he was the Global Director and GM, Corporate and Enterprise markets for Protus IP Solutions leading a $30M+ business unit in business messaging services and Fax over IP licenses. Protus was acquired in 2010 for $213M by J2 Global communications.
Dinesh is a Top 40-under-40 Award recipient, and has been featured in the Canadian Business Journal’s entrepreneur spotlight. He loves working with entrepreneurs who are passionate about scaling revenue. Reach out if you are interested in brainstorming growth hacks or entrepreneurship is your vocation.