The cloud has provided the ultimate platform for any entrepreneur anywhere in the world to build something cool - their baby. And as entrepreneurs by our very nature we are optimistic. If you're an entrepreneur and you're not optimistic, that's a different conversation, you have a problem day one.
So you have this great idea to build a beautiful baby, you and your best friends write some code, it's looking great and you get a customer or two (those customers are most likely friends or very early adopters) - outstanding - I have the most beautiful baby in the world! And maybe along that path you got some friends and family funding to pay a bill or two. You are now thinking big bucks - we're the next Facebook or Google or.....! Ok, it's time take it to the next level. Here is where the business starts....or does it? I have the most beautiful baby in the world and I have 6 customers to prove it so let's put our foot squarely on the gas and get lots of customers and MRR (Monthly Recurring Revenue). And we're going to do this by hiring marketing and sales folks - remember - everyone is going to love our beautiful baby (or will they?). And guess what - your baby isn't very beautiful in the eys of your prospects and sales aren't going as expected. OOOPPPSSS.
Time and time again I see that scenario play out. A beautiful baby in the eyes of the founders and a small handful of customers and everyone now think sales and marketing is just going to happen.....it doesn't. It's very hard and usually very expensive. You need to be very careful and prudent most especially when it comes to bringing to market a recurring revenue cloud solution - remember when you get deals you will get paid a little bit every month. Your Cost of Customer (COC) acquisition must align in some reasonable manner with your MRR. The old days of putting your foot on the gas and eventually getting a $100K deal to cover your COC are gone. Some quick food for thought,
- Put a huge amount of emphasis on ensuring you have the most compelling value prop as possible ( beautiful baby) with some solid proof.
- Target some very specific customer segments and the buyers and influencers (personas) and don't play the numbers game trying to be everything to everyone.
- Please do not go out and hire sales and marketing too early. And when you do please understand that this world has changed. The buyer now controls the sales process: awareness - consideration - decision. So having them find you vs. you trying to find a needle in a haystack is paramount. Also, remember a traditional "you find them" model is simply too expensive - you'll run out of cash. You'll need to attract your target personas, educate and nurture them and they'll buy when THEY are ready.
Yes it's exciting when you have a beautiful baby and you want to show everyone or when your investors now say "it's time to scale this business" - but please keep your feet on the ground (and not in the clouds)!
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