Business as usual for advisors whose practices are already primarily remote
April 8, 2020
As seasoned advisors to early-stage startups, we have spent the past few weeks working long days helping advisee teams and adjusting our business to work through the coronavirus pandemic. On top of managing client engagements through a difficult market, we have adjusted our startup advisory practice to optimize operations for working remotely. Here are some thoughts on what we’ve been advising our startup clients as we move towards a new normal.
Right now, prioritize customer retention.
Businesses are now being impacted in unprecedented ways that are difficult to predict, and this will likely continue for months. Some businesses are scrambling to survive, while other businesses are experiencing overwhelming demand for their products and services.
If your business has revenue, our advice is to focus on the retention of those customers. Now is the time to understand what your customers need to be happy to continue to pay. We often work with our advisee startups on pre-MVP and early releases focused on user experience and technology architecture. In the current market conditions for SaaS startups with paying customers, we are prioritizing our recommendations that drive customer retention and how the user experience can contribute to satisfying this goal. We are advising teams to take a laser-focused look at how they can remove friction points in the user experience that are driving customers away. We also assume attention will swing back towards a balance with customer acquisition once things return to normal.
In addition to focusing on retaining paying customers, if your company is close to becoming cash flow positive do whatever it takes to achieve that goal. This could open up doors later on. We are seeing a new focus among early-stage investors looking closely at investing in companies that are cash-flow positive and we expect this trend to continue.
Hunker down and focus on product.
Advisors are typically participants in early-stage ventures because they bring unique experience that may be difficult to hire or unavailable at that point in the company’s lifecycle. We suggest teams now optimize the use of advisor time on high priority work on developing and enhancing their product offerings. Our advisory work is now conducted completely remotely and we use cloud-based tools such as GSuite for delivering written recommendations and analysis, Google Slides for design concepts and mockups and JIRA for stories. Between formal advisory meetings we prepare written pre-meeting recommendations in an active (editable) Google Doc – we call it a “working recommendations document” – which we share with teams, tagging people for whom we have specific questions. We also actively update this working document between advisor meetings so that our feedback is always up to date. We find this approach saves time by reducing the need for additional advisory meetings and phone calls and lets us be very efficient during our advisory meetings.
With the shift of communication now towards online, we advise putting focus on high quality written communication and product development artifacts. From our experience in remote collaboration scenarios with product and engineering teams we have seen this attention to clear writing lead to better product outcomes.
For the moment, shift from growth to optimization.
Under normal conditions, companies prioritize time to market and growth over efficiencies – working relentlessly on adding new features to their offerings. In the current climate, it is wise to shift the balance from growth to optimization, towards driving efficiencies given the overall market slowdown. We see this time as an opportunity for teams to focus on solving hard issues now that might be challenging to deal with later under typical market conditions.
With one stealth startup working on a SaaS platform, our advice includes taking time now to invest in making performance improvements during a lull before initial PoC deals are signed. During usual business conditions, solving performance and efficiency issues are often not given high priority but for new Saas companies, the performance of the user experience has a critical impact on perceived quality by end-users and those who make purchasing decisions. Simply stated, the user experience is the brand.
Karen Donoghue and Craig Newell are Principals at HumanLogic. Karen is currently an advisor to Turivius, SecurityScorecard and a stealth startup in the automation space. For more information on HumanLogic’s practice visit AngelList.