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Too often, founders cite their shortened runway as the reason they aren't making the best strategic spend for their startups. This is becoming more common, especially as markets continue to remain on a soft landing course and interest rates remain high. The dilemma is simple: founders don't want to overspend, view their runway as too short, and feel they won't succeed in VCs, crowdfunding campaigns, or other capital raises. Founders know they need to spend money to achieve the success they need, but this is a volatile risk with unclear returns. Given this current dilemma facing countless founders, the question is what are the best decisions to make next.
Related topics: 10 growth strategies every entrepreneur should know
Stop looking at the perceived length of the runway and focus on the strategy
Perceived runway is only what is currently in the bank and, at best, a forecast of what the finances will look like over the next few quarters. It does not take into account future growth, funding breakthroughs and, yes, even disruptions or setbacks.
With so many founders fearful of their perceived short runway, a step back is in order. First, check the MVP (minimum viable product). Is it truly viable in its essential elements? Is your startup a copy of others or is it truly unique? Will the solutions or products offered solve problems, disrupt an industry or help significantly in a way not currently offered in the market? If you're not sure, stop and check your compass with outside resources.
What does the right compass check look like for your startup? Start with a brand assessment by a renowned brand strategist or innovator with proven industry experience. Why? Your short runway issues may simply be the key message, a revised funnel strategy, or better personas of realistic investors or customer base.
What are the best ways to apply the right strategy?
Every startup seeking investors, venture capital, crowdfunding or customers develops some business plans and strategies. If the runway for a funding campaign is too short, the natural tendency is to stop all marketing spending, reduce expenses and create the dilemma that you can't spend to make money, but you can't make money without spending money. This is a false assumption, but it is all too familiar.
How can a founder solve this problem with a strategy and what expenses are necessary given a seemingly limited runway? First, start with the most important elements of your ramp-up strategy:
- Plan ways to become the most famous – not just the best – at what you do.
- Make sure the funnel strategy works and captures incoming inquiries quickly and efficiently.
- Make sure the customer journey process builds on each other to turn customers into advocates for your brand.
First, become the most famous. This doesn't necessarily mean becoming the best. While it doesn't mean offering an inferior product or service, too many get stuck trying to improve or don't promote consistently or properly. On that note, look within. Are you as a founder and your team doing everything they can to leverage the key message strategy? Is that strategy resonating with the right audience? This is so important and so often overlooked. Too many spend too much and do it wrong or are too close to the current message to see blinders.
Start here to fix the perceived short runway. If the core message isn't reaching the right audience, stop everything else, including current spending, and fix the problem immediately. Get outside help from the right strategist who can give you expert and objective advice on course-correcting the core message. Then use that to your advantage and lead with it. A better call-to-action strategy is almost always better than a new product.
Second, make sure the funnel strategy works. When you launch your new product or service as part of your startup, demonstrate how well the funnel works to investors, venture capitalists, or your crowdfunding campaign. If the core message is right but the funnel strategy instills fear because of the perceived short runway, stop and evaluate. It's not enough to generate interest through the message alone; the funnel needs to be as watertight as possible.
If a funnel strategy is already in place and the core messages are working, continually analyze the results. To sell products or services, conduct surveys, collect feedback and respond to reviews and act accordingly. Identify the rate and reasons for customer churn and continuously improve them. Ask customers about feature requests for products or services and use this data to measure and optimize feature affinity. Also, make sure that any changes to public-facing marketing assets, especially websites, social media, PR and email, are consistent with the funnel strategy and do not throw your brand off course.
Third, make sure the customer journey process finds ways to grow itself and turn new and existing customers into advocates for your brand. This starts with creating a nearly seamless journey for customers coming through the funnel. From the basics of making the journey, value proposition and process simple and straightforward, every brand needs to advocate for its customers before a customer advocates for the brand. It only takes one bad experience or perceived lousy experience with no response to turn off a customer and portions of an audience.
Related: 5 ways to create sustainable financing and get your business out of the hole
You took a risk with your startup. Why are you giving up that risk now?
If the strategy is good, trust it. Build on the strategy. A perceived short runway is partly due to disbelief in the strategy, the execution, the team, or the product or service being offered. With the right steps to ensure the core message is right and action-driven, a funnel strategy that targets the right audience and moves that audience toward decision-making, and a customer journey that is as straightforward as possible, success will follow.
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