Journey of a Founder: Series B to Series C—Scaling Challenges and Leadership Imperatives

Hi there - I'm a startup fractional COO who works hip to hip with founders as their operating partner. I amplify founder contributions by serving as a thought partner and assuming critical and delegable growth and operations responsibilities, particularly for companies in the $1 to $10 million revenue range. Over 20+ years, I have worked on dozens of startups (Synervoz, Feldspar, Axiom, Spartan, IAN), helping build one industry-transforming business to exceed $100M in revenue and a second to (so far) nearly reach that very rare milestone.

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In case you missed my first blog post on the messy middle between Series A and B, in this follow-up, we zoom in on what it takes to survive and scale between Series B and C, when expectations shift, systems strain, and leadership is under the microscope.

Jimmy Malik and I hosted this second roundtable in our Journey of a Founder series in collaboration with the Operators Guild (OG), where we're both members. Our guest co-founders (and fellow OGers) were Alice Nawful, of Notabene, and Justin Etkin, of Tropic.

I summarize the top insights for you here.

We don't cover everything, but we cover a lot. Enjoy.

Introduction

Scaling a startup from Series A to Series C is full of tough choices, shifting priorities, and relentless tests of leadership. What worked at Series A can fall apart at Series B or later in the face of increasing demands for growth, structure, and disciplined execution.

This post breaks down what it feels like, critical areas to focus on, and lessons every operator can apply. These insights aren't just for venture-backed companies either; they're relevant if you're the founder of a growing business that needs to evolve from scrappy, founder-led leadership to making major leaps in performance.

(This is Part 2. If you missed Part 1 on Series A → B, read it here.)

What Series B to Series C Feels Like

Series B is another test, a different kind of proving ground. The scrappiness that got your startup from zero to Series A, or your high-growth business to substantial annual revenue, is no longer enough.

You're not proving the business can work anymore; you're proving it can scale and operate reliably and efficiently without running off the rails. You need to do this with rigor without sacrificing speed. The stakes rise as customer numbers and expectations increase and the number of team members swells. If you have a Board of Directors or investors, they're demanding proof you're on top of things at a whole different level.

This isn't easy, in large part because the practices, habits, and ways of working that served the company so well through Series A may be becoming liabilities at Series B, which can feel disorienting. Being creative and scrappy isn't always enough anymore. Sustainable process-building feels different.

Leadership issues and people management are more stressful than ever. Delegating significant responsibilities to new leaders is an emotional test. Unnerving. Functional leaders are popping up and (hopefully) stepping up. Trusting and supporting new leaders while holding them to high standards is a delicate balance. Meanwhile, existing and new team members may be nursing bruised egos if they were passed over for a new senior role or managed, or they don’t get the exact title they were expecting.

For the first time, company operations take center stage, and ops is in the hot seat. Can they handle increasing complexity, rising expectations, and higher volume? Operational issues can snowball into an avalanche. Some teams are entering the Series B phase with weak systems that need upgrading. Others arrive with no real systems at all, having punted on operational investments after Series A. For the latter, it can be a brutal awakening.

Unexpected challenges arise at this stage, too. It could be growth concerns, team misalignment, or broken systems. Things that can create friction or stall progress. The issues may be different from Series A, but they are just as critical to overcome.

Finally, resource management is still in sharp focus. It's not just about growth. More parts of the business demand investment. So you need to decide what to invest in and when across the company to optimize revenue and keep the business humming. You can't succeed on the growth front if the rest of the system seizes.

Read also: Overlooked Traits of Successful Startup CEOs

Top Imperatives

• Series B demands a shift: from chasing growth at all costs to building repeatable, sustainable growth that can scale without breaking the business. Companies can't simply continue doing what worked before; they must evolve their DNA to meet new demands. Embrace this reality.

• Be deliberate about who belongs at the decision-making table with the CEO and COO. Your operational rhythm, how your team communicates, aligns (or not), and executes, will be tested hard. Scrutinize it for fractures. Line up the functions and teams behind this group.

• Understand that you're building complete functions now. Structure and build a world-class team from the existing bench and new hires, believing in people, but not overbelieving, and drawing in newcomers who help, not hurt. You may need to correct Series A missteps. Some of your early stars may struggle in this new version of the company. They haven't failed, but needs have changed.

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As founder and CEO, you've been out of the weeds for a while by now. Your COO has also begun to pivot in their role, and this will continue. They need to be more focused on prioritization, alignment, and accountability. They're no longer the single source of truth or the person closest to every operational detail.

Layers of leadership and cross-functional dependencies can create bottlenecks. You need to deliberately balance speed with alignment. Too much time spent on getting alignment, and decisions stall; too little, and the organization fails to make progress on what it’s decided.

Just as you were in the prior period, be honest about who fits in, and make the tough calls when they don't (with care and consideration). Putting the wrong people into the wrong roles may not cost you the business at this point, but it will come at a cost.

Read also: When Top Performance Becomes a Hiding Place

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• Triage broken processes and then revamp, rebuild, or build. Did you invest, soon enough, after your Series A, in critical systems you need now? Series B is when cracks stop being theoretical and start costing you real time and money. Avoid crashing out completely. Remember you're building for today and tomorrow.

• Lean into data-informed decisions, but don't lose your agile instincts. The new systems and processes you're implementing are generating a vast amount of data. You need that to get your arms around what's happening with a business of this size, but don't let it drag you down; remember that you still need to be moving quickly.

Read also: How Startups Can Make the Best Use of Lawyers

Finally, be prepared for Board expectations shift from a grand narrative delivered by the founder to hard metrics during this period. You can't just tell the story anymore. You have to show measurable, data-backed results. The Board will be looking more carefully than ever at those gorgeous financials prepared by your first, top-notch VP of Finance. Resource decisions are about growth and efficiency now. Can you show that you are scaling without overspending?

If you're strategizing your next phase of growth at your founder-led business, I'd love to discuss your plans.

Read Part 1: Series A Is a Reckoning: Operator Imperatives for Getting to Series B

Journey of a Founder: Series A Is a Reckoning—Operator Imperatives for Getting to Series B

Hi there - I'm a startup fractional COO who works hip to hip with founders as their operating partner. I amplify founder contributions by serving as a thought partner and assuming critical and delegable growth and operations responsibilities, particularly for companies in the $1 to $10 million revenue range. Over 20+ years, I have worked on dozens of startups (Synervoz, Feldspar, Axiom, Spartan, IAN), helping build one industry-transforming business to exceed $100M in revenue and a second to (so far) nearly reach that very rare milestone.

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Jimmy Malik and I hosted this second roundtable in our Journey of a Founder series in collaboration with the Operators Guild (OG), where we're both members. Our guest co-founders (and fellow OGers) were Alice Nawful, of Notabene, and Justin Etkin, of Tropic.

The roundtable video recording isn't available publicly; however, I have summarized some of the top insights for you here. I also recommend checking out the OG if you're a company founder, co-founder, or operator at a high-growth business looking for a like-minded community of peers.

We don't cover everything you need to know to run a business, but we cover a lot of ground. Enjoy.

Introduction

Scaling a startup from Series A to Series C is full of tough choices, shifting priorities, and relentless tests of leadership. What worked at Series A can fall apart at Series B, or later, in the face of increasing demands for growth, structure, and disciplined execution.

This post breaks down what it feels like, critical areas to focus on, and lessons every operator can apply. These insights aren't just for venture-backed companies either; they're relevant if you're the founder of a growing business that needs to evolve from scrappy, founder-led leadership to making major leaps in performance.

(This is Part 1. If you're looking for Part 2 on Series B → C, read it here.)

What Series A to Series B Feels Like

You've shown notable progress with the business. However, it's not yet clear you're on a reliably upward trajectory. There's going to be a lot more fight before you can declare victory (or defeat). Founder-financed companies often find themselves in a similar spot after they've proven their business works when there's potential and the path forward isn't obvious.

I see this period as a reckoning.

The basics that got you here still matter: understanding customers, testing assumptions, making thoughtful decisions, hiring smartly. Capital in the bank doesn't change that; if anything, it raises the bar. What are you going to do with that money?

At the same time, the work itself shifts. The breadth of problems, the pace of decisions, and the complexity of the business all spike. One hour, you're deep in the weeds fixing a broken operational process; the next, you're selling a senior leader you want to hire on your vision. This context switching is relentless. And because the data you wish you had doesn't exist yet, you need to rely on gut feel over hard knowledge more than you like.

This stage also brings a psychological shift: Trust becomes an increasingly valuable currency. The only way you, the founder, can share the management burden with teammates is if you have trust in them and the way you work together. To reach this point, a high-performing company has likely tapped an operating partner to the CEO, allowing the CEO to promote the company vision and focus on strategy and top initiatives only they can lead. If this hasn't happened yet, and you want the business to continue to move forward in leaps and bounds, it's time.

Likely, you're gearing up to hire for other roles, too. In addition to filling staff roles to keep up with growth, you may be bringing on more experienced people who know more than you do in their area of expertise. That's the point. But it can still feel jarring when you're ready to make your first full-time finance hire, for instance, and you realize how much more they know than you do. It's humbling.

Meanwhile, your operational foundation gets stress-tested: finance, legal, HR, and other business ops. Building operations to date has been iterative, making trade-offs and putting together "good enough" processes to serve your current and near-term future needs. Systems or processes you justifiably deprioritized before might cost you time, money, and goodwill now. You may need to revamp what you had prioritized and put into place earlier, and quickly catch up on things you ignored or hacked together … or risk dragging down the business.

In this period, as well, unexpected and hairy challenges lurk. Every company has its version. The business is not entirely settled. You're confronting unknowns as well as potentially disruptive events in the external environment, like a shift in market demand. There's always something material still to figure out.

• Was product‑market fit (PMF) real or a fleeting bump?

• Is the market big enough to support your scale objectives, or you we about to hit a wall?

• Are you ready for the larger customers and new segments you’re chasing?

One thing that's not unique to this period is the careful decision-making required around how to use your resources: Remember that cash in the bank? For a venture-backed concern, this is your latest round. For a high-growth business, it's your accumulated war chest. You'll need to make deliberate decisions between extending runway, investing in critical infrastructure, and accelerating growth.

Series A is about continuing to refine the business and building certainty while everything—your business model, your market, your product, your processes, your team, and you—is being stress‑tested. It's exciting. It's demanding. It's a trial that you need to survive to build and sustain a successful business that has a big impact on the world.

Read also: Journey of a Founder: A Startup Story

Top Imperatives

• Remain customer-focused and dialed into the problem you solve for them. Stay curious. Treat PMF as a moving target. There may be a difference between the early signs of PMF (what gets you to a Series A) and the durable, scalable PMF you need to reach Series B and beyond.

• Shift your time, as founder, from the early days, when you did it all. Ideally, you did that before now. Less time in the weeds, more big-picture leadership. You can't solve every problem.

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As the founder, you need to reduce your information advantage by spreading what you know among the team. (It can feel scary.) The quality of your operational rhythm dictates how comfortable you may be staying out of the weeds. Bi-directional processes giving all parties the information they need will tell the founder where the team is headed. If that's the right direction, you'll be able to focus confidently on your uniue founder’s agenda. Low trust resulting from poor hires or operational deficiencies is often what leads to micromanagement. When this is all working perfectly, it can still feel stressful, since you aren't as close to the details of the business anymore.

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• Accept that your team is in a period of flux. You still need standout generalists, and you're also bringing on subject matter experts and possibly introducing different levels of seniority. It's going to get a bit messy. Don't let your ego get in the way of hiring people who outclass you. Be careful: It's tempting to over-title early hires or promote generalists too quickly.

Read also: Why Startup Founders Need Thinker-Doers for Their Teams

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The company may be transforming itself every six months. Don't let your leadership approach or the team fall behind. Pick a frequency (quarterly, for example) and conduct a holistic check-in on the current business needs and how you and your team is aligned.

• What's working well?

• What's not working?

• What's missing?

• Who can step in or step it up?

• How do you fill the gaps?

Suppose someone isn’t scaling to match business needs. They may need additional support, or if the situation can’t be improved, you may need to n that case, acting sooner may feel uncomfortable than later, but it may be the right move.

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• Prioritize like your life depends on it. The team can't do everything that needs to be done either. Be explicit about what matters most right now. Consciously pick what you're going to knock out of the park, what's going to get midling attention, and what's less important. Be explicit about it. Decide how to sequence initiatives.

  Keep ops lightweight but strong enough not to break. The startup debt that hurts the most isn't always engineering. It may be in finance, customer success, or another area. Stay alert. Invest in the key areas. Expect many of the ways you do things now will break, and you'll need to patch them up or replace them later.

Read also: Defining our Terms: What is a Fractional Leader Anyway?

Finally, avoid this misstep: Growth is the ultimate imperative, but so is avoiding an existential crisis originating from the failure of the company's operations. Ask yourself: What do we need to be working on today that might not have an immediate impact but will be critical soon? Some improvements have long lead times. Plan the rebuild before events make change a crisis or impossible.

If you're in this stretch of business building (i.e., wrestling with growth, hiring, patchingor rewiting operations), I'm always up for a conversation.

Read Part 2: Series B to Series C—Scaling Challenges and Leadership Imperatives

Navigating Startup Fundraising: Insights from an Experienced COO

Listen to the podcast version of this blog post, an AI experiment.

Photo by Karolina Kaboompics from Pexels.

Welcome - I'm John Gauch, a consultant with extensive experience in business operations and growth. I specialize in helping startups implement strategies effectively in both areas. As a hands-on fractional COO, I work with founders and CEOs through each step of the process, tailoring solutions to fit your unique needs and objectives.

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Fundraising is a pivotal moment in the startup journey, often determining the trajectory of its growth and success. In today's competitive landscape, securing the right investment at the right time can be the difference between scaling or stagnating. Strategic fundraising is not just about acquiring capital; it's about aligning your funding strategy with your long-term vision and ensuring you attract investors who share your values and can provide more than just financial support.

This guide will cover all the basics. I will share insights and strategies that have proven effective in navigating the startup fundraising landscape.

Understanding the Fundraising Landscape

Navigating fundraising can be daunting, especially for first-time founders. The first step is understanding the various types of funding available, each with advantages and challenges.

Angel Investing: Angel investors are typically high-net-worth individuals who provide early-stage funding in exchange for equity. They often bring valuable mentorship and connections.

Venture Capital: Venture capital (VC) firms invest sums in exchange for equity, often at later stages of development. They may provide extensive resources and support and come with high expectations for growth, and VCs may demand considerable control over the company.

Crowdfunding: Platforms like Kickstarter and Indiegogo allow startups to raise small amounts of money from a large number of people. This method can generate buzz and validate market demand but can be time-consuming to manage and may not provide substantial funds.

Initial Public Offerings (IPOs): Going public is a way to raise significant capital by selling shares to the public. This is an option for more mature companies with a proven track record. It provides a large influx of cash but comes with regulatory scrutiny and the pressure to meet quarterly earnings expectations.

Crafting a Fundraising Strategy

A well-crafted fundraising strategy is essential to attract the right investors and secure the necessary funds. Here are key components to consider:

1. Set Clear Goals: Define what you aim to achieve with the funds. Whether scaling operations, developing new product features, or expanding into new markets, having clear objectives will inform your strategy and appeal to investors.

2. Identify Potential Investors: Research and target investors who have a track record of investing in your industry and stage of development. Platforms like Crunchbase and AngelList can help identify potential investors.

3. Create a Timeline: Fundraising is a time-consuming process. Develop a timeline that includes preparing materials, pitching to investors, and closing. Starting early with networking conversations allows you to build relationships and refine your pitch.

4. Prepare Your Team: Ensure you have the resources you need and that your team is aligned with your fundraising goals and ready to support the process. This includes preparing critical financial and operational documents, anticipating potential investor questions, and determining how you will execute the investment transaction.

By setting goals, identifying the right investors, creating a detailed timeline, and preparing your team, you can develop a robust fundraising strategy that increases your chances of success.

Read also: Key Strategies for Business Growth: 10 Steps to Expand and Thrive

Developing a Compelling Pitch

Your pitch is your opportunity to convince investors of your startup's potential. A compelling pitch combines clear communication with a strong narrative highlighting your vision and value proposition.

Key Elements of a Pitch Deck:

• Clearly articulate the problem your startup solves for people in a particular struggling situation, how your product or service addresses it, and how your solution compares to existing alternatives.

• Provide data on the size and growth potential of your market 

• Explain how your startup makes money and your strategy for scaling.

• Showcase any milestones, customer growth, or partnerships that show traction or validate the business.

• Present your financial projections and funding requirements.

• Highlight the expertise and experience of your team members.

Use storytelling to make your pitch more accessible and memorable. Investors are more likely to invest in a compelling narrative that resonates with them emotionally.

Rehearse your pitch multiple times until you can deliver it confidently and answer likely questions your audience may ask.

A well-structured pitch that clearly communicates your vision and potential can significantly increase your chances of securing funding. Don’t make the fundraising journey harder on yourself by shortchanging this step.

Read also: Estimating Product Market Opportunity

Building Investor Relationships

Building strong relationships with investors is critical to successful fundraising. I encourage you to invest in and nurture these relationships long before you need to raise funds. Networking is vital—attend industry events, join startup communities, and leverage platforms like LinkedIn to connect with potential investors. Building relationships through mutual connections can lead to warm introductions, which are more effective than cold outreach.

Ongoing communication is equally important. Keep potential investors updated on your progress with regular updates on milestones and achievements. Your updates will show that you are making progress and are committed. Transparency is crucial—be honest about your challenges and how you plan to overcome them. Investors appreciate honesty and are more likely to support a founder who is upfront about their business.

Value addition is another critical aspect. Look for investors who can provide more than just capital. Investors with industry expertise, a strong network, and a history of supporting startups can bring value to your business. By focusing on these aspects, you can build strong relationships that support your fundraising efforts.

Preparing for Due Diligence

Due diligence is a thorough examination of your business by potential investors. Being well-prepared can make this process smoother. Start with financial documentation; ensure all financial documents are up-to-date and accurate, including profit and loss statements, balance sheets, and cash flow statements. Legal compliance is also essential. Ensure you’ve protected your intellectual property and the cap table is in good order.

Operational data should be readily available. Be prepared to provide detailed information about your business operations, including customer acquisition costs, lifetime value of customers, and other key performance indicators. Investors will also want to understand your team dynamics and company culture, so be ready to discuss your team structure, roles, and any key hires you plan to make.

Anticipate common questions investors may ask during due diligence, such as questions about your market, competition, business model, and risk factors. One of the most interesting and challenging questions to answer is often, “Why now?” Why could your startup only exist today? By combining thorough preparation with clear communication, you can successfully answer this question and navigate the due diligence process, increasing your chances of securing the funding you seek.

Read also: What I Need to Know to Make Investor Referrals

Negotiating and Closing the Deal

Negotiating with investors is a critical step in the fundraising process. This phase determines the terms of the investment and sets the foundation for your future relationship with investors. It's important to approach negotiations with a clear understanding of your goals and limits.

Start by knowing your worth. Be prepared with solid data and a straightforward narrative about your startup's value and potential. Understanding key terms such as equity, valuation, and dilution is essential. Negotiations should aim for a fair balance between securing necessary funds and maintaining control over your company.

Effective negotiation also involves transparency and flexibility. Be open about your startup's needs and be willing to compromise where appropriate. However, ensure that any agreements align with your long-term vision. Once terms are agreed upon, ensure all details are documented beginning with a term sheet. This will help prevent future misunderstandings and lay the groundwork for a strong partnership.

Related also: 50 Top Apps, SaaS Solutions, Services, and Sites for Startups

Exploring Alternative Funding Options

While traditional funding methods like venture capital and angel investing are well-known, alternative funding options can also provide valuable resources for your startup. These include crowdfunding, grants, and accelerator programs.

Grants:

• Provide funds that do not need to be repaid.

• Attractive due to no equity dilution.

• Often come with strict eligibility requirements and specific usage guidelines.

This would include government-sponsored research and development grants tied to technology innovation.

Accelerators and Incubators:

• Offer funding, mentorship, and resources in exchange for equity.

• Frequently beneficial for early-stage startups.

• Provide support and networking opportunities that can accelerate growth.

I have been a mentor for MassChallenge and Techstars to mention just two programs.

Exploring these alternative funding sources can diversify your funding strategy and provide additional resources to fuel your startup's growth.

Legal Considerations in Fundraising

You will need to navigate the legal landscape when raising funds for your startup. Ensuring compliance with relevant laws and regulations protects your business and builds investor confidence.

Start by creating a solid legal structure for your business. This includes properly incorporating your company and establishing clear agreements among founders. Protect your intellectual property through patents, trademarks, and copyright, as well as confidentiality and IP assignment agreements.

Understand regulations governing the issuance of your equity or other securities to investors. Working with legal professionals specializing in startups can help you navigate these complexities and avoid potential pitfalls. Addressing these legal considerations early ensures a smooth fundraising process and builds a strong foundation for your startup's future.

Read also: How Startups Can Make the Best Use of Lawyers

Post-Investment Relationship Management

Securing investment is challenging, and it is just the beginning. Nobody has ever said that building a successful startup is easy. Managing relationships with your investors effectively is crucial for the continued success of your business.

Maintain Regular Communication

• Provide updates on progress, challenges, and milestones.

• Transparency builds trust and keeps investors engaged.

Leverage Investor Expertise

• Utilize their industry knowledge and connections.

• Seek their advice on strategic decisions and growth opportunities.

Manage Expectations

• Ensure alignment on goals and timelines.

• Regularly review the terms of the investment documents.

Effective post-investment management strengthens investor relationships and provides the support needed for long-term success.

Staying Focused on Long-Term Goals

Amidst the complexities of fundraising, staying focused on your long-term goals is crucial. Fundraising should align with your overall vision and strategy for the company.

Set Clear Milestones

• Define achievable goals and regularly review progress.

• Maintain momentum and alignment within the team.

Avoid Common Pitfalls

• Don't overextend resources or lose sight of your core mission.

• Balance short-term needs with long-term objectives.

Celebrate Achievements

• Recognize and celebrate wins—even the “small” ones.

• Learn from setbacks to improve future strategies.

Maintaining a long-term perspective ensures that fundraising activities support sustainable growth and move your startup closer to its objectives.

Importantly, too, as CEO or founder, you will likely be dedicating a significant amount of time to the fundraising effort. Ensure you have the right team backing you up to keep the business humming. No matter how important the fundraising effort may be, you can’t afford to neglect the business's short-term needs.

Conclusion: A Path to Successful Fundraising

Embarking on the fundraising journey is challenging and rewarding. By understanding funding options, crafting a well-defined strategy, and developing a compelling pitch, you set the foundation for attracting the right investors. Building strong relationships and preparing meticulously for due diligence ensures you are ready to engage with potential backers.

As you navigate the complexities of startup fundraising, remember that each step you take brings you closer to realizing your vision. With strategic planning, transparent communication, and a focus on short-term needs and long-term success, you can improve the odds of securing the investment you need. Use these insights to guide the effort.

If you’re a startup CEO, founder, or entrepreneur and want to chat about fundraising or what you are building, I’d love to connect. Learn about my services and please reach out.

What I Need to Know to Make Investor Referrals

Photo by Christina Morillo from Pexels.

In case this is your first time at the site - I'm John Gauch, a consultant with extensive experience in business operations and growth. I specialize in helping startups implement both strategies effectively. As a fractional COO, I work with founders and CEOs through each step, tailoring solutions to your unique needs and objectives.

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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.

Read also: When Don’t You Need a Fractional COO Like Me

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.

Read also: How to Learn Jobs to be Done

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).

Read also: Estimating Product Market Opportunity

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.

1. What's the unmet or undermet problem?

2. What are the current alternatives that are falling short?

3. What is the context?

4. What is the product?

5. What is the scale of the opportunity?

6. 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.

Read also: Navigating Startup Fundraising: Insights from an Experienced COO

With this information, I can make an informed and meaningful investor introduction that will serve both parties well.

I’m always happy to chat about business building. Please reach out to learn more about my work or just to be and stay in touch.

How Startups Can Make the Best Use of Lawyers

I'm John Gauch, a consultant with extensive experience in business operations and growth. I specialize in helping startups implement both strategies effectively. As a fractional COO, I work with founders and CEOs through each step, tailoring solutions to your unique needs and objectives.

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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.

Read also: Axiom: Discovering the Benefits of Fractional Talent

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.

Legal Services for Startups (embedded) by John Gauch

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.

Read also: Navigating Startup Fundraising: Insights from an Experienced COO

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.

If you ever need referrals to startup attorneys, email 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.

Nothing in this blog is intended to be a substitute for legal advice from an attorney knowledgeable about your unique situation.

How to Learn Jobs to be Done

Photo by Leah Kelley from Pexels.

In case this is your first time visiting - I'm John Gauch, a consultant with extensive experience in business operations and growth planning. I specialize in helping startups implement strategies effectively in both areas. In my work as a fractional COO, I work with founders and CEOs through each step of the process, tailoring solutions to fit your unique needs and objectives.

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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.

Read also: Estimating Product Market Opportunity

To learn all about JTBD, and how do do and use customer interviews, read my series of posts on the topic at Medium.

If you’re a startup CEO or founder, and you feel it would be interesting to chat, I’d love to connect. Learn about my services and please reach out.

This blog post appeared originally on LinkedIn.

Estimating Product Market Opportunity

Photo by Karolina Grabowska from Pexels.

First time here? I'm John Gauch, a consultant with extensive experience in business operations and growth planning. I specialize in helping startups implement strategies effectively in both areas. In my work as a fractional COO, I work with founders and CEOs through each step of the process, tailoring solutions to fit your unique needs and objectives.

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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:

1. the specific problem a product helps customers to solve

2. the situation when that problem arises

3. 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.

Read also: How to Learn Jobs to be Done

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.

If you’re a startup CEO or founder, and you feel it would be interesting to chat, I’d love to connect. Learn about my services and please reach out.

This blog post appeared originally on LinkedIn.