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New Chapter! Joining a New Startup – AUTIT

Big news! I’ve joined another early-stage startup here in Atlanta called AUTIT.It’s been almost exactly three years since I started consulting with SalesWise which led to full-time employment in February 2016. But I officially close the SalesWise (and Burner Rocket) chapter in my life today as I officially start with AUTIT.

SalesWise has been a tremendous journey where I learn so much. It’s odd looking back trying to piece together if I learned as much as expected, more, or less? All I can say is that I learned in every aspect of the growth side of business – from marketing to sales to customer success. Though, we did not scale as much as we all hoped, I got to experience real, structured processes to drive growth. I got to create a whole new go-to-market strategy that became its own product and business (that was later sold – Burner Rocket). I spoke to hundreds of sales leaders and their team members and got to understand what made sales leaders successful. I got to understand what they assessed from their sales professionals. I got to work with executives from marketing to customer success. I sat in on Board Meetings and met highly successful entrepreneurs and venture capitalists.

Then again, I got to learn a lot about what did not help drive growth. I learned about misalignment in product positioning as well as the criticality of customer discovery for true pain. I learned the side effects of taking on moderate venture capital early on. I learned the traps of building based on financial proformas from a top-down rather than a bottom-up model. The careful scrutiny of burn rate was more apparent than ever.

And of course, I got to experience growing a completely new idea into a product and into an acquisition with Burner Rocket. I experienced the negotiations processes with some due diligence. Burner Rocket was successful not just for us, but for many of our customers, too. It’s now a checkmark in my many boxes for success.

I could go on and on about the incredible almost-three-year ride at SalesWise, especially talking about the relationships I’ve built and forged. However, it’s important to now translate those lessons learned and continue to forge those relationships to this next chapter at AUTIT.

I will explain how this opportunity came in a future post, but for today, I’m excited about the prospect of blending my diverse experiences into a single entity. AUTIT dramatically reduces inventory costs through data harmonization for the world’s most complex supply chains. Here, I can leverage my experiences in supply chain and consulting as the industry and personas while coupling my technology and startup experience into this new role at AUTIT. Here, I am employee number 7. I will start this journey as a Solutions Architect – building the bridge between product and growth teams. That’s simply the title to get the job requisition passed. However, I will also help handle marketing, product management, account / customer success, and be involved in the sales process. The title is focused, but my role is multi-faceted. Perfect.

It’s a good story on how I came to this day. I’ll save that for another day. For today, cheers for new chapters that continue to build on the story.

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Consulting with Startups – It’s a Capacity Thing

I want to build on last Tuesday’s “The Challenges of Consulting With Startups”. More specifically, I want to stress the reason an early-stage startup brings on an agency or consultancy – it’s capacity.
Capacity is the hired help to augment the team. At SalesWise, our team is vastly experienced in driving success – what to execute and how. What we struggle with is the execution when we have 20 sales calls to make, 4 demos, 2 support tickets, and a kick-off call.
What I’ve found to be ineffective for most consultants is when they come in wanting to do big bang changes and huge strategy sessions. Our environment changes rapidly. We are not ready for big bang changes. We need to execute, learn, iterate.
So if you want to consult with a startup, have an eye on the larger strategy, sure. You have value for early-stage companies in this area. But one of the best ways to implement that strategy is getting “stuck in”. Roll up your sleeves, and take on a more “staff aug” role to understand how we work, what our challenges are, start executing what we need (there’s a reason why we need it yesterday), and then, layer in the strategy as we learn.
We need agility. We need flexibility. We need execution. (That goes for you, too, Mr./ Ms. Consultant.)
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Value Is Fundamental to Driving Traction

Ash Mauryarecently wrote in Entrepreneur an article titled “Traction Is What Investors Are Looking for When You Present Your Plan”. Ash writes that investors are looking for traction, above all other criteria like market opportunity and competitive advantage.
Ash’s definition of traction is:

rate at which a business model captures monetizable value from its users

Before Ash describes the definition of traction, he shares his thoughts on value…
  • Created value > captured value. That is, the value a customer receives is greater than the value the company receives (the customer pays).
  • Captured value ≥ cost (delivering solution). This is simplistically understanding revenue is greater than (or equal to) cost.
  • Created value ≥≥ cost.

This is a pretty simple to understand. For companies looking for investment (well, any company looking to be successful), it’s important to understand traction and all the drivers thereof. As an early-stage startup wiggles and fights its way towards product-market fit (or service-market fit), traction will likely be near-flat. But as the company reaches product-market fit, that traction curve starts to climb fast. Here, focus turns towards customer acquisition, and thus, the sales and marketing machine commences.

Understanding what traction is is important, and just as important is understanding the real value you are creating for your consumers. If you can help your consumers capture great value, then can you start to build traction. Value àtraction. Value does not = traction. That requires some marketing and sales, but value is fundamental.

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The Toughest Questions Suck but Are Oftentimes the Best

Spoke to a friend in an early-stage startup recently who met with a legal team to get advice on some contracts. Apparently, the conversation went a little sour when the lawyer started asking deeper, probing questions regarding financials and the business model.
I say, “sour”, because the mood quickly changed from cordial to combative, and the startup felt they were being attacked. The startup entered the room expecting a review of documents, not an interview. The entrepreneurs felt the lawyers were testing their resolve, preparedness, and “fit” as a client.
As terrible as it may seem to be barraged with tough questions, the lawyer asks great questions about monetization, assumptions around projections, customer/ user acquisition strategy, and the vision. In many ways, the lawyer provides the harsh reality of what startups and entrepreneurs face, especially when entrepreneurs believe raising capital will be “easy”.
Some thoughts:
  • Good partners are those who will not only raise the difficult questions, but will help you to address them.
  • If you’re not ready to answer the tough questions, then you’re not ready to raise funding. Investors WILL CALL YOU OUT.
  • Take a step back from the day-to-day, and assess the strategic to-do’s and milestones you must satisfy.
  • Tough questions… tough challenges… they can be seen as walls never to be overcome, or they can be seen as great opportunities. Up to you which way you address them, if at all.
  • Get savvy with the numbers. Several entrepreneurs and business leaders have advised me in the past, “the best leaders knew their ‘numbers’.”
  • If you don’t have a good answer, it’s okay to say, “I don’t know, but I’ll find out”, and actually follow up. 
  • A business plan can be time-consuming to put together, but can be a great way to structure and think about your business holistically. Consider investing the time to put one together, or in the least, use a One-Page Strategic Plan. Update this intermittently.
  • It’s so important for any relationship, especially in an early-stage company, for each party to assess each other’s fit. Too often, partnerships are started absent of a strong foundation which leads to difficult divorces later. (New employees/ team members included!)

I remember so many people asking my Body Boss cofounders and I if we were thinking about presenting to Shark Tank or asking for funding. I tended to laugh at the questions not just because of the comedy of us being on national television, but because I knew we didn’t have good answers to tough questions.

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Metrics for the Early Stage Startups

My friend, David Vandegrift (Associate at Pritzker Group Venture Capital), just co-wrote a couple articles on SaaS metrics that he and his VC colleagues pay close attention to – Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV).
They highlight the importance of CAC and LTV, specifically, as VCs are looking for sustainable businesses that have shown good handles on burn rate and revenue economics. Gone are the days of “easy millions” for startups with just traction. VCs are wary of bubbles and downturns, and thus, are watching for investments that can weather storms.
CAC and LTV are great metrics to have good handles on, but can be difficult for early stage companies, as noted by the authors. Specifically, lifetimes of customers can be quite short while CAC can be hard to measure as companies iterate their acquisition strategies.
One metric I assess that is less focused on economics is engagement/ retention (i.e. D1, D7, D30). Engagement is a hugely telling figure, especially for early-stage companies. Engagement helps identify the stickiness and value of a product while also providing great insight into features and usage which can help determine direction.
Following engagement, I evaluate churn. Churn is inherently included in LTV, but can be more operational and easier to gauge for customers. I like to review churn, especially, because it measures the value of a product/ service with existing users. It can also underline a “hole in the bucket” issue where strategies to drive new customers can be for naught if existing customers continually exit.
Check out David and Sonia’s post to learn more about CAC and LTV. Then, check out four other metrics (in addition to the two I listed) that are key to success – “8 Metrics from Proper Instrumentation of a Business and Its Product”.
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Two Entrepreneurs Working With Two Devs (Part 2): The Big Consideration of Early Partners

Continuing last Thursday’s post on two entrepreneurs working with two inexperienced developers early on… The devs are experienced programmers, but just as important, they’re inexperienced in early-stage startups.
The problem for entrepreneurs isn’t finding early partners… it’s finding the right partners. Finding partners (of any functional resource) who will fight it out in an early-stage startup to get to product-market fit and beyond is tough.
The entrepreneurs in the presented cases should manage expectations of the dev partners as soon as possible – set expectations the road ahead will be long and tough.
In both cases above, the devs will not work full-time, and they want equity as a discount to cash. The problem is that early-stage startups need iterations to launch, learn, build, and repeat – most will struggle to find meaningful traction before product-market fit which could take 18 months. As that happens, passion and patience will be tested on both sides – the entrepreneurs and the devs. Lack of traction can dishearten anyone, especially those working late into the night on a project but not seeing “meaningful” shifts in customer acquisition, yet.
A recurring piece of advice I’ve heard over the years from mentors (during Body Boss and every business since) is having an operating/ partnership agreement before any partnership moves forward. You can go further in a contract by detailing deliverables and compensation (outright payment, equity, or mix of both). Here, contracts could include incentives for achieving milestones to ensure all parties stay committed to the cause while including opportunities to sever relationships if needed.
To be honest, contracts suck and can be deterrents for some partners. However, they can play critical roles later in light of success and failure. If individuals do want to move forward as partners, they’ll appreciate the importance of contracts.
Early partners are very tricky, and there’s no formula on the right one(s). There’s a mixture of trust, personality, can-get-shit-done attitude, and grit to overcome obstacles – each hard to measure. But if the entrepreneurs above are serious about their ideas, they need to be cautious bringing on inexperienced early partners.
What are some other areas to be cautious of with early partners? How would you qualify and move forward with an early partner?
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