Revenue is the new growth! So hack revenue – not growth!
VCs have been talking about ‘profit’ since We/ WeWork’s IPO fell apart in summer 2019, but we’re now hearing the message ‘get revenue’ loud and clear.
VCs telling startups to find revenue means two things
- There isn’t as much VC money as there used to be
- VCs are looking to de-risk investments in volatile markets / uncertain futures and their chosen tool is ‘revenue’
Of course, revenue & profit are different things – generally, profit is low or negative if growth is high – but revenue means that a company can slash costs & flip to modest profit if a market turns bad.
So, how do you build revenue?
Building revenue is something that I help a lot of startups and scaleups to do – so give me a shout if you want help – but here are some tips:
1. Find partnerships – other companies have revenue needs too – if you can help them, you help yourself
2. Focus on customer success – if you can help your existing customers grow, they will buy more of your services
3. Swap the Hackathon for a Sellathon – can you find 3 new customers in the next 24 hours? Try it – it really works!
4. Find smaller customers – corporates aren’t going to buy, and if they do, it will take years not months – so find customers who make quick decisions (often startups)
5. The more complex answer is to refocus your product / service. In other words, coronavirus has forever altered the product / market fit for many companies and we need to rethink the proposition. Part of this ‘rethinking’ is to create quick and small commercial experiments at high speed and ‘learn’. A great way to start this is with The Breakthrough Business Model Canvas or if you are a larger startup, you may need to do some ‘unpicking’ first – so use the Scaleup Canvas to trace back to your original startup product to market fit.
Remember, in a crisis – and running out of cash is the biggest crisis you’ll ever face, we’re all startups! So, treat everything as a test or hypothesis – find the quickest and cheapest way to test the concept and capture the data / results. Then be honest about what those results reveal so you can fashion your next test / hypothesis and go again.
In effect, it is a race against time – can you test enough revenue options to find one that works before the cash runs out!
So don’t delay.