Navigating some hard initial steps when you are starting out
Last week I had some interesting events. For the past 3 years, I have been an advisor at Berkeley’s Skydeck, an accelerator program. This is similar to the Y Combinator. And since my experience is B2B, I act as advisor for Enterprise SAAS startups.
Each year there are three cohorts. Each cohort is about 30 companies in various sectors, majority in Enterprise SAAS. These 30 companies are selected from about 2000 applicants. I have also been part of the selection committee where we get to decide in 15 minutes if someone is worth a shot or not.
Last week, I gave two presentations to the startup founders. My topics were Competitive Analysis and Marketing Sizing.
These were my key takeaways from the two presentations.
These aren’t just slides for your investor decks.
They’re meant to pressure test your assumptions.
On Competitive Analysis:
Start by defining your market segment, persona, and use case.
Only then identify your top 3-4 competitors, direct or indirect.
Think of it like sports: know your opponents before you plan your strategy.
Understand who you’re up against and then analyze them.
Use this analysis to pinpoint your differentiation and positioning opportunities. It’s not just about comparing features.
My presentation was largely based on the following two articles.
On Market Sizing:
Don’t get hung up on absolute numbers.
Focus on nailing your assumptions about the market, persona, and use case.
Identify who truly benefits from your value proposition.
Once that’s clear, the numbers will be more believable.
Avoid lazy market sizing.
“If someone says ‘The market is huuuuge, we conservatively estimate 1% share,’ I am out.” – Mark Cuban, on Shark Tank.
I even played Mark Cubans YouTube short.
Next week, I will write about market sizing in details. I’ll share why we do it, the techniques, caveats and sources of data.
Last Friday, we had a Special Interest Group round tables at Skydeck. I facilitated one of the Enterprise tracks.
Each startup gets to discuss their common challenges.
These bright founders are solving some interesting problems for enterprises, almost all with AI.
But they all had some common challenges.
AI or no AI, some realities for startups will always remain.
- - Picking the right segment and use case
- - Where to find early customers and how to attract them
- - How to manage product priorities
- - Handling POCs with early customers
- - When to discuss pricing
- - Managing your own biases
The first topic on picking the right segment is always a tough one.
Most startups have a big enterprise and SMB customer as very early POC clients.
The dilemma is where to focus GTM.
Large enterprise is good ACV but high touch sales with long and unpredictable sales cycle.
SMB is small ACV but requires faster execution, time to value, onboarding in a highly scalable way and low touch sale.
No right answer here. Only customer discovery can tell you the right path.
Goal is to find the segment that can get you the fastest path to repeatable revenue. (assuming you need revenue i.e traction :-). You always want to be in a niche that is standardized This makes your product roadmap clear and your GTM motion repeatable. Otherwise you spread yourself thin.
The nature of your product and business model is also a factor on how you approach your GTM. This is a fantastic article by Mark Leslie, former CEO of Veritas. Mark talks about marketing led vs sales led motions and when to use which.
Finally, a high schooler in Los Gatos reached out and invited me to judge startup pitches in their entrepreneurial club. About 6 high schoolers presented their interesting pitches. It was fun to watch them make a case for their product. They were quite well prepared with a fairly standard pitch deck.
Two stood out.
One kids idea was to replace all price tags in stores with a digital display that can be controlled centrally. He had seen this concept in Japan, and thought this could be valuable in the USA. I pointed out his biggest risk is converting from the paper based price tags.
His value prop seemed to me – easier to change pricing without humans, Allow demand based pricing on the fly. So I suggested he lead with the value pitch. This is a solution that will require significant education to the market. Stores have been used to paper tags for decades.
The second startup was something even I’d buy. Shoe laces that don’t undo on their own. This is a big problem for most shoes. Existing solutions to keep the lace manageable are quite cumbersome. His ideas was convering the laces with a new type of “velcro-ish” material and also have a unique shape that will prevent sliding.
What I liked in this presentation was that he started with a story about his friend, Michael, who fell because his laces came undone while playing tennis. When you start your presentation with a story, it connects the audience. Most of us have had problems with shoe laces. When you connect on the problem statement, your solution starts to become more believable. And also this kid was very knowledgeable about materials and competition.
My concluding talk to them was –
1. Know your subject and domain really well
- Make sure you clarify your segment and persona, and what use case is being solved
- Understand the value you are bringing to the customer. It might not be so obvious.
A fruitful week meeting energetic entrepreneurs.
