How to Go To Market when the market is closed; and other lessons learned as a start-up CEO during COVID.

My official first-day as CEO of Allure Security was the same day Governor Charlie Baker shut down the state of Massachusetts.

I expected my first email to the team to be one of celebration and encouragement. Instead, I let the team know the office was closed. 

I anticipated that our first meetings with VCs would result in investment, but instead, we were met with never before seen levels of caution (mixed in with plenty of enthusiasm for our team and the problem we are solving). 

I imagined that the few early-stage sales conversations Allure had going would quickly close and convert into paying customers - and that we’d be able to partner quickly and effectively with a few larger security businesses and get some instant GTM momentum.

I had not imagined a global pandemic. I knew the risk was looming, but after SARS and MERS and Ebola, I trusted that the global public health system would figure it out. 

I was wrong about just about everything. Which, in hindsight, set me up with a whole bunch of incredibly valuable learning experiences. I share them in the hopes of helping others. Those who are preparing to embark on the same journey who need the advice. And those who took the leap around the same time I did - who may take comfort in the fact that they are not alone in their experiences (or maybe you have some advice for me). 

Working remotely, works. Differently.

Everything was happening with a remote workforce - and not just my own - everyone else’s too. Investors all working remotely. Prospects all working remotely. Potential partners all working remotely. I’m a relationship builder. But all the old ways of relationship-building (my ways) got tossed out the window.

The team spent a little less time spent commuting each week, and spent a lot more time in online meetings. We all had a little more personal free time to fill. I saw too much work creeping into that time. It got easier to do work but harder to connect.

My team started having get-togethers on my front lawn. We pick a day with great weather. I cook BBQ (proper low and slow style), Lucille cooks something delicious, the team brings deserts, and we enjoy a leisurely meal together while we chat about work, family, and whatever else - from a safe distance. 

Throughout this period our developers have been super productive - and as a small group have managed to keep our tight-knit culture - but it took work from everyone to stay connected. Building and maintaining culture is a challenge that has always required ongoing vigilance. 

For a culture to survive in this time of forced separation, you really have to double down on communication. Get everyone together regularly. Listen to their concerns. Answer their questions transparently. Remind them of who you are as a team and what you stand for. And now more than ever, be sure to take time to recognize how and why each individual’s work matters. 

Building a Go To Market when the Market is basically Closed.

It’s unlikely that trade show floors will be packed again anytime soon - or that prospects will begin welcoming vendors back on their campuses to demonstrate our products. That means we need to perfect the art of prospecting, selling, and ultimately closing business entirely online - and perhaps without any human interaction. That doesn’t just happen by itself - it takes a real dedicated effort to change and an openness to new and very different approaches to making connections and building relationships.

Get out of your comfort zone and start experimenting with new ways to connect with potential customers. Pay close attention to what’s working and what isn’t - your sense about what should work should not be what guides you - let your results guide your next steps.

VCs are making bigger, safer investments. Smaller riskier ones, not so much.

I’ve seen Investors become much more conservative. They tell me they anticipate economic recovery will take up to two years and their investment strategy shows it. Firms began requiring a level of market validation - in the form of sales/revenue - that I’ve never seen at the seed stage before. Some VCs even require that startups are raising a full 2-years of cash runway for them to participate - at the seed round - even when the product is ready for sale. That’s risk aversion if I’ve ever seen it. 

I had so many great conversations with so many VCs. They were almost universally excited about what we’re working on, and almost universally not ready to join us until we have more sales, more customers, more revenue. We were challenged for real, with funds quickly running dry and no new funding sources emerging.

The SBA PPP Loan was a lifeline for Allure. I spent an enormous amount of time educating myself on the requirements and restrictions. I spoke with bank after bank after bank. With tremendous help from Allure’s early investors, we were able to secure a PPP loan that covered our payroll for a critical 2 months, buying us enough time to close a few deals and stay afloat. 

Look for support from your early investors. For me, it was the folks that had just recruited me to come in and run the company wanted to see me succeed. For you, think about the people that have been along for the ride from as early as possible. Their intimate familiarity with you and your business make a big difference in getting investment. Focus on getting some customers in the bag, and then work with them to get additional funding for the company. Show your commitment by investing right alongside them - adding your own funds if you can, or working for minimal comp until the business grows. Keep it lean, be aggressive, make sure you have the right team, and...

Spend wisely. You really have no choice.

Perhaps there is always more investment money out there - but the time it takes to execute a fundraising process is significant and can really make it tough to run the other aspects of the business. Make your funds last. Don’t spend on foolishness. In the words of my wise friend Paul Paget (CEO of NormShield these days): “Learn to treat nickels like manhole covers.”

What’s next

We’re going to solve the problem we set out to overcome: put an end to phishing attacks that target and often victimize consumers - folks like me and you and uncle Leo. 

The pandemic pushed us all more online. What most of us view as a convenient, safe way to be entertained and purchase toilet paper, fraudsters and phishers see us as prey and our online time as an opportunity. 

Online businesses -- your online business -- is being exploited more than ever. And that means diminished trust among everyone, even your customers. With resources constrained, and all sorts of work from home enablement in flight, how can you solve emerging problems let alone fight fraud or protect your customers? 

So, I’ve learned a lot. I’ve learned to hold my team close. I’ve learned new ways to connect. I’ve learned to do more with less. I’ve learned that perseverance is the fine line between success and failure. And I’ve learned to do for others first, to pay it forward, and that kindness can be contagious. 

Take the opportunity during this difficult time to learn. Just don’t let the lesson you learn be that you should have protected your business.