After an informative conference call with leading venture capitalists, sponsored by the National Venture Capital Association, I felt there were some great takeaways worth sharing. The overarching theme was how to respond to and manage startup challenges that are only now starting to emerge in the chilly economic climate of a COVID-19 world.
What are some of the Go-To-Market strategies startups might have to face and adapt to?
Investors want to know that you have sensors out in the market. They want to know that you are listening to the needs of potential clients who want to engage. Since conferences and large gatherings simply are not happening, you’re going to need to find a new way to the top of the sales funnel. You need to get comfortable using Zoom and other meeting software–get GOOD at it; these platforms are quickly becoming part of a new cross-industry standard.
How would I raise a round remotely? Can you build the founder/partner relationship without conventional face-to-face meetings?
Actually, seasoned venture capitalists are anticipating a future of investing without meeting every founder in person. Remember that the trust of the venture capitalist will be earned over time. Make sure you know your domain, develop a reputation for demonstrating customer engagement, and zero in on how your product fits in with the current climate—after all, the focus is going to be on data.
What’s the strategy for a startup that’s not currently in the “need to have” category?
If it’s something that’s nice to have, find your way to the customer that must have it. In this climate, both businesses and customers are going to tighten up and focus on higher value initiatives. Anticipating this truth is of the utmost importance. If the startup team is too lean, and it becomes obvious that this is not the time to go to market, venture capitalists are going to take a pass.
Is it worth it to narrow the pitch to perceived value strictly in the shadow of COVID-19? Or should we continue chasing the big vision?
The focus today is on keeping the company alive during a time of crisis, while continuing to nurture long-term strategies and the “big picture” for future growth. Though right now, today, we’re narrowing our vision to that “one feature” for that specific customer, we’re aware that certain sectors are going to be especially hard-hit. If you’re gunning for that “hard-hit” market, you need to either redirect or hit pause and hunker down. Remember: venture capitalists prefer situational awareness, so you’d better figure out where and how the company is currently positioned.
Are there other ways to make progress right now, other than selling to customers?
Tons of progress can be made. Get out and meet with potential customers, develop a deeper understanding of their needs; where are the gaps? Are you still aligned with your people? Is your mission clear and well-communicated? Repurpose your time for product development so when the thaw comes, you have something special to share. Consider starting a funding round: This could be a prime opportunity to start a seed stage and get a company going. After all, it’s not likely to be a crowded competitive field vying for those same dollars.
Are there other ways to add value to your community when you’re a membership product?
To reiterate one of the most important points from earlier in the discussion: Listen to the needs of your current customers, and service them to the best of your ability. Become of source of assistance, information, and added value to your customer. Also, consider whether there is a solution you can provide to a need that is not usually handled by your product; diversification is almost always possible.