The right recipe for startup success requires an equal mix of: (i) a good strategy or idea; (ii) powered by an experienced management team that knows how to execute the plan. If you typically have only one of the key ingredients, your startup won’t succeed. And, in terms of ranking these two critical elements, as I have said before, I would rather bet on an A+ team executing a B+ idea, than a B+ team executing an A+ idea. Building startups is really hard, and the team makes the entire difference.
Let’s bring this story to life, and look at two different startup clients that I have worked with at Red Rocket. In these two examples, they were both being powered by first-time CEO’s with limited prior startup experience and they both had equally good ideas in comparable enterprise facing markets.
CASE STUDY #1
In the first example, the client engaged us to help them set a go-to market strategy only, helping them to productize their business and build a sales and marketing plan around growing their customer base. This client believed that once they had the blueprint from the “architect,” that they could fill the role of “general contractor” and build out the “house”, as an analogy. When I told the CEO, the success will come from the execution, and that the team didn’t have the background to properly execute the plan, their quote was “sometimes a batter needs to get up to the plate, and take a swing on their own, without their coach batting for them”.
CASE STUDY #2
In the second example, the client not only engaged us for the go-to-market strategy, but they also said they wanted our help with execution, and asked us to source experienced team members to help them implement the plan. For purposes of this discussion, assume the go-to-market strategies were largely the same as the client in case study #1; the only difference was the experience of the team executing the plan in these two comparable businesses.
A year later, the company in the first case study failed to gain traction with clients. Their immediate instinct was the plan must have been flawed, and they basically unwound the entire plan back to where they started. And, in that rewind, they no longer clearly communicated what the actual strength of their business was, and even worse, repositioned the company in an even more competitive space. Overall, revenues stayed largely flat, and the rocket ship never took off.
As for the second company, they built up $25MM sales pipeline in their first year (a good portion of that converted into sales, understanding they had a long lead time product). The message resonated with the new target clients in new target markets and the company has teed itself up for 3x revenue growth in the next three years.
WHY THE DIFFERENCE?
In case study #2, the client understood their own strengths and weaknesses and wanted to fill in the holes to round out their execution team. And, in that execution team, they were pros in enterprise sales and marketing. They knew it was a long lead time sales cycle (and that sales would not be immediate), they knew which individual roles inside the company the message would best resonate (after testing many departments to see which was most excited), they knew how to nurture these leads in a consultative process, which was required for this product, and they held true to the plan. And, it paid off, big time.
WHAT THIS ALL MEANS FOR YOU?
Take a long look in the mirror, and the mirrors of your fellow team members, and ask yourself this question: have the people around the management table successfully accomplished what we are trying to accomplish in their past roles? If the answer is yes, full steam ahead. If the answer is no, prepare for a lot of headwind and turbulence along the way. The devil is always in the details, and an experienced execution team could be the difference between a strike out and a home run, with exactly the same idea at the plate.
Image credit: CC by Anil Jadhav