More Overlooked Traits of Successful Startup CEOs
Last month, I highlighted six under-recognized traits of successful startup CEOs (entrepreneurs, founders) and detailed three in my blog. This week, I cover the next three, including what I mean when I say, “Focus on discovering what is right versus being right--quickly.”
Part 2
This two-part post is about about critical, often-overlooked traits of startup CEOs (also, entrepreneurs, founders).
In the first post, I wrote how possessing the first three characteristics below is important but not enough to improve your odds of building a successful business.
Creativity and vision.
Passion for the product.
Leadership skills.
Perseverance.
Risk-taking.
Speed.
The following three traits—perseverance, risk-taking and speed—are also commonly associated with startup leaders. Reasonably so, but you must reconsider and expand your understanding of these ideas to be at your entrepreneurial best.
Sometimes, hard work doesn’t get you anywhere.
Challenges and hardships on the entrepreneurial path are inevitable. You do need to be strong and stick with it. Building a startup is an exercise full of uncertainty.
During the Build phase of a startup, there are many unknowns before you achieve product-market fit and solidify your business model. You have a hunch about what might work, but you don’t know with certainty how to reach the desired outcome. You may have it right, sort of right or completely wrong. Blind dedication to an early hypothesis may get you nowhere.
Rather, you must be resolute and simultaneously open to the possibility that the path forward differs from what you think. Successful startup teams are experts at making unknowns known and reducing uncertainty. In the fastest learning loops possible, figure out what you need to know to solidify your business model. Focus on discovering what is right versus being right—quickly.
Get comfortable with uncertainty over taking huge risks.
You need to be comfortable with some risk if you are building a venture-backed startup or bootstrapped business with similar ambitions. You are taking on a mission into the unknown with many uncertainties after all. So you need to be okay with all that.
But successful entrepreneurship isn’t about gambling or making a single guess, chancing you have it right, and it will all work out.
Entrepreneurs must have a temperament that tolerates uncertainty and a drive to minimize risk—not take risks. Minimize risk by becoming a learning expert. Figure out what isn’t working, what might work and test it out. Another way to reduce risk is to carefully steward your resources by raising the capital you need, acquiring early customers and managing how you spend what you bring in. Give yourself and the team as many at-bats (i.e., as much time to learn) as possible.
Make time for what doesn’t seem necessary.
When you ignore or shortchange (or are bad at) the people side of your business, you’ll reduce the odds of your startup succeeding. If the team breaks down, all could be lost. If you succeed, you’ll either create a place where people hate to work or need to spend a lot of time and money later to fix a mess.
Instead, consider the organization a top priority or even your “first product.”
Culture results naturally from what we prioritize and how we do what we do every day. Build the organization daily by simply behaving the way you want the team to act. Be today the way you want the business to be tomorrow. Remember the four Cs to start if you’re unsure how to do this. (I added one C to Edgar Schien’s original three). Be curious, caring and committed when interacting with others, and be competent in your work. You’ll create a trusting environment where people want to work that will become self-sustaining.
Overlooked Traits of Successful Startup CEOs
To build a successful startup is hard. Worth it, but hard. It takes a rare combination of skills and abilities. However, we must expand and add some nuance to the traits we commonly associate with startup CEOs and founders.
Part 1
Photo by Dima Valkov from Pexels.
Startup CEOs are incredible—superhuman when at their best.
Building a successful and sustainable business is rare; creating one that also scales to the 10s of millions of dollars in revenue is a feat; building an organization where people thrive and love to work too, well, that’s a hat trick. What’s more, as CEO, you put your integrity on the line in persuading others to join you in this challenging task--when there’s no sure way to ensure the desired outcome.
People often highlight as top traits of startup CEOs (also, entrepreneurs and founders) things like:
Creativity and vision. Yes.
Passion for the product. Yep.
Leadership skills. No doubt.
Perseverance. For sure.
Risk taking. Has to be.
Speed. Of course.
I agree, and I firmly believe there are other related traits that are as (or more) essential to startup CEOs and founding teams who want to succeed.
In this blog post, I cover why the first three items above are important but not enough. See next week’s blog post for a discussion of the final three.
Being visionary and creative means looking backward.
Creativity involves combining different ideas floating around our heads into something new (IdeaFlow), and building a new business is as much about the current day and the past as a vision for the future. Startup CEOs need to be experts at using what you already know and looking backward.
Computer scientist Kenneth Stanley uses the analogy of “stepping stones” when discussing breakthrough innovation.
The successful entrepreneur sees what is about to be possible in the world based on what’s already happened and what’s emerging right now. You see when one missing stone (an emerging social phenomenon or technology, for example) is just appearing, which will enable you to create something for the very first time. I imagine a river with two banks. The stepping stones help us hop, from stone to stone, from one bank to the other. The startup “visionary” sees the constellation of stones snap into place that allows us to build a new-to-the-world, high-impact product and business.
The product is important but secondary.
As a CEO, founder, entrepreneur, you need to be passionate about your business idea and product, and you need to commit to another ideal. You need to be dedicated to understanding the problem that your product solves in your customers’ lives. You need to become the absolute expert in the particular struggling situation that leads a large number of people to seek a better way to get something meaningful done in their lives.
This focus on the problem—over the product—serves as a true north that keeps your business focused early on and avoids straying later. The insights from deeply understanding the problem will make all your other decisions—about what to prioritize in the product roadmap, which go-to-market channels you should pursue, how to talk about the product in sales meetings or marketing, and so much more—obvious. It’s a gift that keeps giving.
Leadership isn’t about being the only star.
Of course, a startup CEO is ultimately responsible for the business. This does not mean you need to do all of the work. Early on, one of your most urgent jobs is showing traction with customers, or once you’ve gotten traction, scaling up.
You should prioritize and focus on the work that only you can do, and if that takes up all of your time, you need to get help with the rest. You need to tap into the ingenuity of other human beings you trust.
I’m not talking about you assigning work and telling people how to do what they are tasked with. I’m talking about delegation where you share the outcome you seek and allow your teammate to choose a path to that destination. This may still require and involve a ton of communication and collaboration across the organization, which is completely fine. You need your team.
Read part 2 here.
50 Top Apps, SaaS Solutions, Services and Sites for Startups
Startup CEOs and founders are very demanding when it comes to the tech they use to run their businesses. They have high expectations. They should, too. See how this list of apps, SaaS solutions, services, and sites lines up with your tech stack and hopefully get some new ideas for what to add or switch. Updated May 2, 2024.
Photo by Magda Ehlers from Pexels.
Updated May 2, 2024.
What started as a list of 50 startup products has grown well past that figure, and I’d love to keep adding to it.
I personally don’t find those lists or infographics of every possible product option for a problem I have super useful. I don’t need another time-sucking To Do, to evaluate all of the choices. I want to know what’s a reasonably safe bet, get started with it and turn back to the business of growing my company.
This list is biased toward Seed to Series A companies because that’s where I spend most of my time, although it also includes some products for brand-new companies (drawn from the venture studio work I do). With regard to each product on the list, I've either used it, and I recommend it, or someone I know and trust has used it, and they recommended it to me. That said, feedback is invited—if you feel like something should be added, or if you have used one of the products and had a negative experience. Email me and let me know.
If you ever need referrals to startup attorneys, message me to chat. As a former lawyer and former General Manager at legal startup Axiom, I know tons of incredible lawyers across specialties and fields, including top-notch solo practitioners as well as members of AmLaw 100 firms like Morrison & Foerster and Perkins Coie, regional players and startup boutiques.
I don’t mention project management tools (e.g., Asana, ClickUp, Monday, Trello) because everyone seems to have a favorite, and they all seem reasonably decent. I use Trello for my personal task tracking. I wouldn’t spin too long trying to ascertain which one of them is “best.”
Again, if your choice of a new web app (etc.) to add to your startup’s tech stack is not going to make or break your business, don’t over-index on it. Do some quick research. Get together a couple or a few ideas. Do a brief analysis and review. Pick one and turn back to the activities that are going to be far more impactful on your organization and its success.
That’s the benefit of having a list like this. I hope it helps.
50 Top Startup Tools
| Product | Description | Other Options | |
|---|---|---|---|
| 1Password | Password management and security | ||
| Airtable | Collaborative work management | ||
| Amazon AWS | Cloud computing | ||
| Arc Tech | Treasury services | ||
| Bill.com | Billing and financial automation | ||
| Brandpad | Brand development and management | ||
| Brixx | Financial forecasting and planning software | ||
| Carta | Equity management and valuation, but watch the latest news about them | Pulley | |
| ChatGPT | AI platform to help with a little bit of everything | ||
| Clay | Lead research and enrichment | Apollo | |
| Clerky | Legal and compliance solutions (company setup) | ||
| Clockify | Time tracking | ||
| DailyBot | Slack stand-ups | ||
| Deel | Global payroll and compliance. Deel is an EOR | ||
| DocSend | Document sharing and tracking (for a fundraising, DocSend + Dropbox or Google Drive + Google Sheets for tracking) | ||
| Docusign | Electronic contracts | ||
| Expensify | Expense management and tracking | Tentative: Float (Canada) | |
| Figma | Design and prototyping | ||
| Flowster | Workflow automation and processes | ||
| Freshworks | Customer engagement and support software | Zendesk | |
| GitHub | Software Engineering version control and collaborative software | ||
| Google Analytics | Website analysis | Hotjar | |
| Google Workspace | Collaboration and productivity tools (email, storage, etc.) | Dropbox (storage only) | |
| Grammarly | Communication assistant including AI support | ||
| Greenhouse | Recruiting and applicant tracking | Breezy | Recruitee |
| Gusto | Payroll, benefits, and HR services. Rippling has a PEO option | Humi (Canada) | Rippling (US and Canada) |
| Hubspot | Customer relations management (CRM) | ||
| Indinero | Bookkeeping service. The Bench recommendation is tentative | Bench | |
| Intercom | Customer messaging and support | ||
| Jenkins | Open-source automation server for continuous integration and delivery (CI/CD) | ||
| Gusto | Payroll, benefits, and HR services | Humi (Canada) | Rippling |
| Linear | Issue tracking and project management | ||
| Loom | Video messaging | ||
| Mercury | Banking for startups and businesses. Consider Mercury credit card too | Bluevine | |
| Microsoft Azure | Cloud computing platform | ||
| Microsoft 365 | Productivity apps (still use them as good as Google is) | ||
| Miro | Online collaborative whiteboard | Excalidraw | |
| NeverBounce | Collaborative workspace for your organization | ||
| Notion | Collaborative workspace for your organization | ||
| Okta | Identity and access management | ||
| PaperStreet | Investor updates | ||
| Pave | Compensation information for startups | ||
| PitchBook | Data and research for private investments | ||
| Quickbooks | Cloud accounting software. Also hearing increasingly about Campfire in this category | Xero | |
| Ramp | Corporate card and services. Brex may not be an option for smaller startups | American Express | Brex |
| Segment | Customer data platform | ||
| Secureframe | Compliance and security automation | ||
| Slack | Team messaging | ||
| Stripe | Online payment processing and business tools | ||
| Supernormal | AI tool for meetings | ||
| User Interviews | Customer research | ||
| Vouch | Business insurance | Zen Insurance (Canada) | FounderShield |
| Voxer | Team audio messaging | ||
| Webflow | Website design and development | ||
| WeWork | Co-working (in bankruptcy but still operating) | ||
| Wise | Foreign exchange | ||
| Yubico | Hardware security keys | ||
| Zoom | Video conferencing |
While the companies aren’t vetted, another interesting place to search for potentially valuable services is the Y Combinator community of companies.
When Don’t You Need a Fractional COO Like Me
It’s usually a bad sign if a product claims that it can do everything for everyone. Swiss Army Knives aren’t really great knives at all, but they do have a Job to be Done—they make great gifts even if they’re barely ever used afterward. I try not to fall into this trap. This blog posts lays out some of the signs that you don’t need the help of a fractional COO at all.
Photo by Linda Eller-Shein from Pexels.
There is no right or wrong reason to want to build a business. Maybe it’s a creative outlet for one person. Someone else might be obsessed with solving a nagging problem they observed out in the world. Perhaps a third person never fit into a traditional corporate job and has a ton to offer in a role and company of their own making.
Business building is about changing the future.
A successful new business makes the world different than it is today, and I’ll be a match for anyone who aspires to have a huge positive impact on the lives of their customers and stakeholders.
This brief post is not about all that. It’s about when it might not make sense to work together formally, even if we are a match regarding outlook and values. You can still try me, but I may not be a fit in either of these two situations.
Situation One
You’ve got all the right team members with the right skills and experience in the right roles. You’re not struggling with scaling yourself, and you’re not missing any key capabilities. You have plenty of time to learn what you need to know. You are only spending time on the activities you alone can do. The team has everything else covered.
AND
The organization is learning quickly and efficiently. You have demonstrable evidence you’re onto a compelling new business opportunity (i.e., traction). You have practices and processes to surface the big assumptions and unknowns you need to test or get clarity on to move the business forward. You’re not struggling with team alignment or direction. You are sure about your next moves.
Situation Two
Your team makes you feel superhuman. You’ve eliminated all the significant unknowns relating to the business. Moreover, you’ve built the supporting infrastructure to scale. These efforts are going smoothly. You are making incremental business improvements. You are not making major shifts. You are not feeling out of control. You’re clearly well on your way to building a successful and sustainable business.
If you feel like you fall into Situation One or Situation Two, and there are still aspects of the business or your work life that you want to change, I’m always happy to chat, of course. I’m also glad to be in touch purely for information sharing and networking purposes. Congratulations to you for all that you’ve achieved so far. It is a real feat.
What I Need to Know to Make Investor Referrals
These are the six things I need to know to make investor referrals for CEOs and founding team members when we haven’t worked together before. Answering these six questions is also a valuable shorthand for quickly vetting any new business idea.
Photo by Christina Morillo from Pexels.
I love to be helpful whenever I can be. This is particularly true when it comes to supporting startup CEOs and founding teams. Making introductions is one way I can do that.
The intro could be to someone with expertise in an industry or a specific role (etc.). Sometimes, it's to investors. If I haven't worked with a company, it can be a little challenging to make investor introductions, though.
To address that difficulty, I've summarized the essential information I need to know to introduce a company to investors in situations where I haven't worked with that company for an extended time.
It’s also useful as a shorthand for quickly vetting any new business idea.
There are six questions.
The first question is: What is the problem to be solved? In particular, I want to know whether an unmet or under-met need is arising in people’s lives. I'm looking for something visceral. I sometimes ask people to imagine the first part of a typical Shark Tank pitch, where the entrepreneur describes some hardship they've experienced or observed. People aren’t going to change their ways if they don’t feel a push arising from an uncomfortable situation.
The second question is connected: What are the existing alternatives to solving this problem? Maybe it's a current something that falls short in accomplishing a task. Maybe there isn't a good existing alternative at all, and people are silently struggling--unhappy and unable to progress toward the better future they imagine.
The third question is: When does this situation arise? What's the specific context when this unmet or under-met need shows up? Again, the idea here is to be very specific. Who are the people this happens to? When do they face the situation? What are they doing at that time? Why are they doing it?
You'll notice very little about the product so far, which is by design. Most important is whether you have identified and can describe a compelling problem worth solving. That's what we're trying to understand with these first three questions. Once you've gotten this far, you should tell an in-depth, true story about a struggling situation in which people find themselves.
Now you can answer question 4: What does your product do? The description should detail how the product bridges the current gap between what people are trying to do and what they can achieve now.
Part five follows: How big is this opportunity? Is this a $1 million revenue opp or something much bigger? Ash Murray suggests entrepreneurs start with a back-of-the-envelope calculation and then move onto a more detailed estimation, in each case looking at your annual recurring revenue in month 12 of year 3 after your launch. I like his approach.
I created my own step-by-step guide (originally for a University of Hawaii startup program) that you can find here.
Ideally, you’ll also show the total addressable market size, and how it was determined (hint: it should be based in part on the information you’ve described in questions one to three).
I wrote another blog post about how to do this, which you can find here.
The last question, and it’s often a hard one to answer: Why now? Why could your product only exist now versus a year ago or 10 years ago? There are many intelligent and creative people in the world, and many are struggling to progress in different aspects of their lives. A compelling “why now” answer suggests you’re working on a problem that could only be solved recently. This increases the attractiveness of the idea significantly because it could be a genuine new-to-the-world innovation.
It raises questions if your product could have existed anytime in recent history and hasn't or did but doesn’t now.
Maybe there isn't a problem to solve after all. People have tried and failed, and you’re just the latest making an attempt.
Maybe there's an issue with feasibility. People have tried and failed because the product can’t be built or the business model math doesn’t work.
Maybe the product isn’t differentiated from a bunch of current alternatives. It’s just one more product in a long list of similar products that have been around for a while.
If there’s not a good “why now” answer, it doesn't mean you can't continue to build your business and maybe even thrive, but it suggests it may not be an explosive new opportunity with tons of growth potential.
Could you have discovered an enormous opportunity that others have missed or failed to execute? I suppose so, but in that case, could you explain why that may be.
If I could only ask an entrepreneur one question about their company and product it would probably be this.
Answering these six questions will help ensure your new business is on the right track and help me or anyone else share your message with others.
What's the unmet or undermet problem?
What are the current alternatives that are falling short?
What is the context?
What is the product?
What is the scale of the opportunity?
Why is this idea coming into existence now?
For my covering intro email to investors, I’d also love to highlight the traction you've gotten so far (e.g., notable customer numbers, wrapping up a round, a brand-name investor) and what you’re looking for from the meeting (e.g., a networking meeting to talk about the space you’re operating in or a call to see if they’re interested in participating in a fundraising round). Sot let me know that too. With this information, I can make an informed and meaningful investor introduction that will serve both parties well.
How Startups Can Make the Best Use of Lawyers
No startup wants to get bogged down in legal management. A principled proactive approach can keep your legal house in order and avoid pitfalls that will slow the company down. Apply the framework described in this blog post to strike a balance between cost, speed and quality for legal services.
If you’re spending a ton of time and money on legal management, that’s probably too much. But little to no time or money at all is probably not enough.
In this post I’ll lay out a simple tried-and-true framework startup CEOs and founders can use to help you decide what kind of legal advice and support you need to keep your legal house in order and avoid pitfalls that will slow the company down.
The typical startup requires responsive and informed legal advice and a flexible and lean framework for getting it. I won’t dwell on the first two points. This is not the time to have your uncle who does real estate law draft and negotiate your $8 million Seed-round financing documents. And you’ll go mad waiting to hear back from a sloth-like advisor when the business is not yet breaking even and every second counts. Enough said.
At my prior employer Axiom (a venture-backed innovator in the legal space), we collaborated with the General Counsel of Fortune 500 companies to restructure and reorganize the work of their legal departments. The same basic principles offer an excellent framework for startups that can evolve as the business grows, from the early days through Seed and Series A financings and beyond.
Check out the three-step approach and an example of how you might organize your legal operations.
But first, legal AI is captured in the model under “Alternative Model Providers.” This category captures any alternative to traditional law. Watch this space. There’s no doubt in my mind that legal AI specifically will be moving from the Efficiency category to the Experience category over time. It’s just a question of how fast.
Additional factors to consider:
Account for the complexity and costs of coordinating these legal activities. Theoretically, it might be more effective to split up projects among three tiers of providers, but if that’s going to add a ton of overhead to your operations, you might want to keep it to two.
A single project can be split across multiple categories. For example, you need an immigration visa for a new team member. Your Chief Financial Officer or Chief Operations Officer is comfortable navigating complex regulatory schemes. One of them might prepare the visa application, and then you could have an immigration lawyer review it to make corrections and suggestions.
There are functional and emotional elements to the decisions you make in building your framework. Let’s say you’re the CEO of a post-Series A company. You have several top-tier VCs in your cap table and have blown past the $10M revenue mark. For your bet-the-company matters, you may want to select an AmLaw 100 law firm with startup credentials not only to benefit from their expertise and infrastructure. You may also choose them to benefit from their brand and the imprimatur the firm brings with its counsel and work product.
From the beginning of your company’s life, pay particular attention to company formation, founders’ agreements and equity matters generally; intellectual property (IP); and fundamental regulatory and compliance issues. To take one specific example, having people sign confidentiality and IP assignment agreements is critical. If you neglect ongoing corporate formalities, you might be able to fix that up later, but it will be a nuisance, and it could lead to problems—if you were to issue more equity than you have authorized, for instance. Commercial agreements might fall in any tier of the framework above, depending on your business and the individual transactions, and should be treated accordingly.
There’s always a chance a legal issue can arise that knocks your startup journey off track. Still, a proactive and reasoned approach to handling legal services can optimize the quality and cost of the advice you receive--improving the odds of long-term startup success. Use the illustration above and consult your trusted legal advisor(s) to devise a legal management strategy specific to your company and its lifecycle stage.
Nothing in this blog is intended to be a substitute for legal advice from an attorney knowledgeable about your unique situation.
Axiom: Discovering the Benefits of Fractional Talent
Whoever said we have to hire people in arbitrarily determined long-term, 40-hour-per-week blocks of time? Axiom has been a pioneering innovator in the legal industry and the way we work. Their experience shows the benefits of new work approaches such as bringing on fractional talent that are especially valuable in challenging economic times.
Photo by Fox from Pexels.
I hope anyone dissatisfied with their work—and company leaders everywhere who aren't satisfied with how they and their teams are doing—are exploring the different options available today for bringing talent into an organization.
I didn't know it then, but my path to working as a fractional COO began over 10 years ago when I joined the Benchmark-backed startup Axiom.
Axiom was a pioneering innovator in the legal services industry when I opened the Boston office as General Manager. We offered attorneys—alums of top law schools and leading law firms—a compelling alternative to the daily grind of traditional law firms and the conventional employee-employer relationship (working for a single company full-time).
We offered attorneys a new career option. They could work in-house part-time or full-time:
For one or more companies simultaneously (or “fractionally”).
For one company for a length of time, then another, and so on.
This approach gave them way more control over their lives. Our attorneys learned faster than other in-house lawyers by drawing insights from one client that sparked creative solutions for another. Freed from the sometimes problematic boss-subordinate power dynamic, they could also be more objective and honest than employees often feel they can be.
Attorneys loved it.
Because our attorneys were so busy (working, not idling on the bench), and our operational model was so lean, it was economical for our clients to hire them. Our rates approximated what a company might spend to hire and employ a full-time attorney.
Clients received top-quality support for an economical price. Sometimes our clients had struggled to hire attorneys for full-time positions of the same caliber we provided. Clients could bring on just the right talent for just the right amount of time to close capability and capacity gaps. They didn't have to only hire people in arbitrary long-term, 40-hour-per-week blocks.
Clients were thrilled.
Fast-forward to 2019, and I found myself living and working the Axiom way as a fractional COO.
I never doubted the approach's benefits when I recruited Axiom attorneys or sold our services to Fortune 500 General Counsels (GCs). Our attorneys and corporate clients talked about the advantages all of the time. Now that I've been working this way for several years, I've experienced the benefits firsthand and know how helpful it is to companies, especially in challenging economic times when bringing on new employees can be an expensive risk.
A ton could be better about work today, and I'm not advocating for throwing away the traditional employment relationship. But it's exhilarating to have been, and to be, a part of the movement innovating work models. I encourage more CEOs and founding teams to explore what Axiom's clients have known for over a decade.
How to Learn Jobs to be Done
Find out how to get started with Jobs to be Done, do your first JTBD interviews, get colleagues on board with the concept, and deepen your outstanding of the framework, methods and tools--to start and grow a business and align a team.
Photo by Leah Kelley from Pexels.
Creating and sustaining a successful business entails doing countless things right. Knowing the Job to be Done (JTBD) of your customers and how your product helps them may not make it easier to start and grow a company, but it will make what you should be doing more obvious--and less subject to guesswork.
Co-architected by Clayton Christensen and Bob Moesta, a "Job to be Done" is the progress someone is trying to make in a struggling situation. Putting the JTBD framework to use effectively requires a commitment to understanding people's lives.
It is less about, "How do I make people want my product?" More about, "How do I make a product people want?"
It is less about, "How do I 'sell' more of my product?" More about, "How do I help people make the progress they are seeking?"
Applying the JTBD framework tells us why people pull your product into their lives, how to communicate with them compellingly, and how to satisfy them after they make a purchase. It can also tell us whether a brand new product idea is likely to work or not. In a May 2012 interview with Horace Dediu, Christensen contemplated: "10 years down the road, people will look back at my research, and they might say this idea of Jobs to be Done is a bigger idea than was 'disruption'," the theory that initially brought Christensen to the business world's attention.
Today, people around the globe put JTBD to use at companies of all sizes across industries.
Not only will applying JTBD and the associated mindset help you grow a business and innovate. When combined with practices and tools such as customer experience mapping and complementary metrics, leaders can articulate a clearer vision, dial in the organization's value proposition, align the team, and develop accountability among team members.
To learn all about JTBD, and how do do and use customer interviews, read my series of posts on the topic at Medium.
This blog post appeared originally on LinkedIn.
Estimating Product Market Opportunity
I often scratch my head trying to understand the market opportunity described in many startup investor presentations. I’m not saying it’s easy to measure by any means, and in this post I lay out an alternative way to to think about and calculate this popular figure.
Photo by Karolina Grabowska from Pexels.
TAM (Total Addressable / Available Market), SAM (Serviceable Available Market) and SOM (Service Obtainable Market) are popular conventions that we all see in investor pitch decks.
TAM can loosely categorize opportunity scale (large, medium, small), for example.
I am really interested in a figure sometimes captured in the SAM or SOM, but this is case by case depending on how people calculate them.
The market opportunity number I like to see is this:
Specifically excluded from the number:
I do not view this as a static figure. We can update it if/as our customer understanding changes. We can also handicap the number to reflect the likely prospects today, versus those experiencing barriers to purchase due to access, cost, skill or time, for instance.
I am not saying this is easy math or we can do it with absolute, scientific precision, but there is a ton of value in just trying. Calculating market opportunity in this way requires understanding:
the specific problem a product helps customers to solve
the situation when that problem arises
the better way customers are seeking
To uncover these often-hidden customer insights, we can use lean approaches, such as interviews, which go beyond what we can learn in a survey or focus group.
What we discover will inform a lot more than a market opportunity number. It will likely inform our strategy, product and marketing approach, helping us to build and scale our businesses.
This blog post appeared originally on LinkedIn.
Defining our Terms: What is a Fractional Leader Anyway?
Many leaders today, across functions, work on a fractional basis, part-time embedded in a team. But let’s take a moment and be super clear on exactly what we’re talking about when it comes to fractional executives, and how the role compares to advisors, mentors, coaches and consultants.
Photo by Andrea Piacquadio from Pexels.
“Fractional” leaders are not new to the world.
It’s a tried and true model for Chief Executive Officers to get the help they need to grow and operate their businesses. There’s still a lot of confusion around the term though, so here are definitions of various business helpers excluding full-time hires, which we all understand well enough presumably.
I’ll start with an “advisor” and end with my definition of a fractional executive or fractional leader.
One thing I want to share first is my bias for working with people—in any category—who properly balance “helping” and “telling.”
Helping happens when someone is curiosity-driven and understands there may be a lot they don’t know about a situation, to start at least. They’re committed to gaining this understanding to see whether and how they might be useful to another person. The reason to use this specific word is because the inquiry itself can help the other person gain greater clarity into what they are wrestling with.
Telling happens when someone is drawing on their expertise or experiences to make an assertion or prescription--a tactical recommendation, for instance.
Here’s a shorthand way to think about it.
Take doctors. When we’re in the diagnostic phase of working with a patient, we are in a “helping” mode. Sometimes, we never leave that conversational stage because we get to a useful insight or discovery that means we don’t need to go any further. We resolve the question at hand! When that doesn’t happen, we proceed to make a diagnosis and “prescribe” a next step. That is “telling.”
I’d be wary of relying on the contributions of someone who begins with telling or moves on to telling very quickly, for no other reason than that they probably don’t know enough to be so prescriptive so fast.
All of the below roles are assumed to report to the CEO or a founder, or at a later-stage company, a senior leader perhaps.
Advisor
An expert in a domain. The relationship could be any length, including indefinite. The commitment is on the order of one hour per week or less on average. Advisors lean toward more telling based on their domain expertise but should still start with helping questions. They don’t do work or follow through on their insights. They are not embedded in the team and don’t manage others.
There is also a flavor of advisors primarily there for branding, marketing and possibly networking purposes.
Mentor
A future version of yourself in one or more dimensions. The relationship could be any length, including indefinite. The commitment is on the order of one hour per month. Mentors share their relevant experiences and still do lots of helping. They don’t do work or follow through on their ideas. They are not embedded in the team and don’t manage others.
Coach
An expert in helping other people learn and grow. The relationship could be any length, including indefinite. The commitment is on the order of one hour per week. They emphasize helping someone think things through and discover new perspectives and options. They might offer recommendations (i.e., telling) with care. They don’t do work or follow through. They are not embedded in the team and don’t manage others.
Consultant
Fractional talent used to be a variant of consulting. Below is the definition of a consultant after carving out fractional talent:
An expert in a domain or domains. The relationship is limited to a project, defined by having a distinct beginning and end; a consultant might string together multiple projects over time. The time commitment varies and might extend to a few individuals if working with a consulting firm. They start with helping before moving on to telling. They execute the project they define but don’t do follow though that is out of scope. They are not embedded in the team but are sometimes co-located, and they don’t manage others.
Fractional Executive / Fractional Leader
The term “fractional” is often reserved for CXO-level roles. A fractional exec can provide the expertise of an advisor and consultant, insights from relevant prior experience like a mentor, and when called for, the thoughtful engagement of a coach.
Fractional talent doesn’t just advise, share experiences, or ask good questions. They roll up their sleeves and do the work that results from insights. And they do that work as an extension of the team, developing knowledge that flows back to the organization. They also can hire, develop and manage team members.
The relationship lasts as long as it’s providing value.
The commitment ranges from a few hours to multiple days and possibly even flexes up to full-time for stints (similar to an “interim” CXO).
The relationship balances helping and telling as new problems and opportunities arise to be addressed.
Finally, successful fractionals have top-notch management and leadership skills. Because they operate like a team member and are spread across different companies, they have exceptional self-management skills too. They are fast learners and have the ability to seamlessly switch between contexts and tasks, necessary attributes to hit the ground running with each new company and project.