Mid program reflections #3 – startup cadence versus agency cadence
16.05, Friday 13 Apr 2018 Link to this post
As I write this it’s Tuesday of week 9 and it’s 8.30am so there are only two of us in the office: me and the founder of one of the startups.
Week 9 marks a change of pace. For the last five weeks, “programming” (that is, meetings and workshops) has been relatively light. The focus has been on “Services”–the strategically-led creative work provided by agency teams that makes this particular startup accelerator different from the others. In addition there are weekly meetings with me that the industry universally and mysteriously calls Office Hours.
The team working on Services has produced fantastic work. It’s spot-on. The feedback has been tremendous. And the Presentations work has already resulted in exciting pitches, radically more easily understood.
Warning: working practice simplification and stereotyping ahead.
The cadence of how startups work:
Do something end-to-end, whether it’s a web product, hardware prototype, or pitch deck. Get it in-front of its eventual users, customers, or consumers. The earlier and uglier the better. Observe feedback. Iterate.
The cadence of how agencies work:
Follow the process and build foundations for the first 80% of the time. Foundations are answers to questions like: what are the values of this brand? To what customer segments should it appeal, targeting what motivations? At what points of the experience of the product or service can these brand values be made evident? Then suddenly the invisible work is completed. For the remainder of the time create highly visible executions–web pages, sales collateral, dashboard wireframes, point of sales communications, guides to words and phrases to use in future marketing.
Both methods are highly effective.
The Services phase of this program poses a challenge. To a startup, agency cadence has pros and cons.
- Pro: the rigorous process forces each startup to better understand itself, its value proposition, and its customers, and gives it language to talk about and iterate all of that
- Pro: the result is a newly professional appearance–essential to be taken seriously by business customers
- Con: the agency cadence can be abstract and hard to grasp. In my Office Hours I make sure we discuss how to use and build on the deliverables
- Con: the agency cadence lacks iteration in the face of true customer feedback
To me this last point is the most serious: no matter how much thought and strategy has gone into it, no work survives contact with the market. An iterative approach is essential.
Yet work that has been over-thought becomes brittle and slow to change.
So the risk of agency work to a startup is that it takes the startup down a dead-end with no way to turn around.
My response is to ensure that the Services phase focuses on amplifying what is already working. Create only where there is traction and proof that customers are responding positively.
Given the above, the question is why run a program that includes agency services supplied to startups? The same can be asked of the Presentations phase. I’ll let you know in another 540 words.
I said there had been a change of pace. Services is winding down; Presentations is winding up.
This four week stretch is about creating a 5 minute pitch deck. There’s assistance with crafting the story, speaker training, and design help to make great-looking slides.
What’s the deck good for? It’s always handy to have an intro that hits all the bases: the what and the why of the product; the business potential and customer traction; the team and roadmap; the secret sauce. This intro, with adjustments, will get used for investor intros, and also to explain the company to partners, customers, and new hires.
A key skill in any pitch, whether you’re a founder or a young designer, is to quickly and uncontroversially explain your idea space, so you can concentrate the discussion on what matters. For example, how to work together. This deck does that job.
Producing the pitch deck in this form does another job, which is to shake out the inconsistencies in the business.
I think of these decks as a narrative versions of the Business Model Canvas. I used to be a skeptic. Surely it doesn’t make sense to outline an entire business in nine boxes on a single sheet of paper? But I’ve become a convert.
The Business Model Canvas is like an electrical wiring diagram but for flows of motivation and money. For example:
- you itemise your customer segments. There’s another box to list how you reach customers. Wire them together. There’s another box for the product value propositions that should appeal to your different customers. Wire them up. Ok, so your product has a particular point of value that should appeal to a particular type of customer… but there’s no way of reaching them? Whoops
- there are costs. There are revenues. Wire them up. Oh so revenue comes in on a per-product-sale basis but costs are on an annual basis? Impedance mismatch, rethink the business
So you draw out the business and look out for gaps or anywhere the gears grind. When I’m starting a new project, I make a quick Business Model Canvas to give me an idea of any dark corners. It’s not everything, but it’s a sketch.
When you run through a pitch deck, ideally it should cover all the same points–but with proof too. Ok so the goal is to sell such-and-such product to such-and-such customer? Well how can that be demonstrated? Ok so the business is dependent on a special technology. Well does that tech exist, and can it be protected? And so on.
In Office Hours over the past two months, I’ve tried to keep in mind each company’s upcoming pitch deck, and I’ve been steering the conversation towards exploring some of the gaps.
I believe that a good pitch (and a good startup website, and good startup sales collateral, and a good introductory paragraph) has got to include belief and desire.
Desire: make your audience see dollar signs in their eyes. Make them want it.
Belief: make this seem inevitable. Show the detail. Build trust.
The sizzle and the steak.
So given my above misgivings, why do this work with the startups? Why not operate like other accelerators, focusing on coaching and pitching?
First–some teams need to plug a design gap. If you help with the right ‘kit of parts’ then it’s a proper leg up.
Second–the process is useful. But you could get the thinking via Office Hours and conversation, right? Why do the additional hands-on strategically-led creative if there’s a risk of compromising the startup’s ability to iterate?
So, for me, the answer can be found on the customer side: some customers, big and small, judge a book by its cover. Even when meeting a startup with crazy new technology, a radical business model, or simply a better mousetrap, they’re put off because the website isn’t professional, the sales deck doesn’t quite express the whole story, or the dashboard looks a bit fiddly.
Big corporates are not monolithic. They are, internally, networks, and these networks resist anything which is hard to understand. Sales material will be passed around behind the scenes to people who are finding out about the startup for the first time. The product will be used be people unfamiliar with startup norms, and seen by people who aren’t trained. An aspirational story will transmit better than a hair-shirt story. Etc.
More than that: an employee of a big corporate who takes the reputational risk of introducing a startup wants to look smart to their colleagues. No matter the quality of the startup’s product, if the benefits are hard to understand or it’s easy to give a kicking, it’s not going to fly.
Corporates want to be innovative. A path to being innovative is to work with startups. But when they meet a startup, they often can’t digest it. So either the corporate has to change. You could push water uphill. Or the startup can change–just a little bit–to accommodate the relationship. A spoonful of sugar helps the medicine go down.
Iterate with the agency cadence, then amplify with the agency cadence.
My feeling is that’s what makes R/GA’s programs different: in the DNA of the organisation is partnering with corporates around innovation.
One last thought. Despite all of this, startups shouldn’t look too professional. The character of the team should still shine through.
Once you take away the product and the revenue model and the technology breakthroughs, the big reason that a person working in a big corp wants to work with a startup is that they love hanging out with startups.
For a few years I’ve run a session at Bethnal Green Ventures about sales and marketing 101. (It’s an incubator for social good startups. Early stage. Great organisation.) I joke about people who work in corporates. I say they have miserable lives. I say they wish they could leave but they have mortgages and school fees and they’re addicted to holidays. Instead they live vicariously by working with startups. So take advantage of it.
It’s a horribly mean thing to say and it’s certainly not the whole truth. But there’s definitely a glamour that mustn’t be washed away. So I’m also paying attention to that, in the Services and Presentations phases.
Anyway. It’s Friday now, somehow. Next week: week 10.