How to Make Sure You're Adding Value

By: Denis Brosnan

A few months into my first software executive job, the leadership team was summoned by our CEO for an emergency meeting. Apparently, he had just gotten taken to the woodshed by our angel investor, who was tired of the cash burn rate exceeding new sales bookings. After we all arrived, our CEO, the quintessential evangelistic tech startup founder, unleashed a verbal barrage, recounting how no one - the investor, our management team and our customers, seemed to get it. We were here to Change the Industry, and we just needed more time, more investment, more luck, etc.?

At that point our CTO had had enough. He stood up, got in the face of our CEO, and said that the problem is not with any of those people - it's you. You're selling professional services engagements instead of a product! Quit telling the customers how wrong they are and start listening to them. Show them that you understand their problem and how our product will help them solve it, enhancing it if necessary. Then we need to offer them pricing and contract terms that make sense and that they can get approved. And we must make the implementation process easier, faster and cheaper and surround the product with a support team that cares about the customer.?

You could have heard a pin drop and then, one-by-one, we all nodded, left the room and got busy.?

In our first issue of the NFO newsletter we surveyed the landscape of FinTech and discussed how just finding where your company fits in is half the battle for a lot of startups. In that stage, a lot of work and investment goes into building the product and generating brand recognition. From there, however, many FinTechs really struggle to get sufficient sales to justify their next tier of funding.?

It's so easy to get caught up in the day-to-day: building the technology, testing and deploying it, recruiting folks to help you with both and, all the while, getting the word out and raising money constantly. As a result, FinTechs often end up running over speed bumps like critical feedback from potential customers. But value is more than just features & functionality, and the best product and the most rigorous sales efforts can be derailed by these concerns, whether real or perceived.?

When you realize your growth is stumped, it's time to call timeout for a quick gut check on your value proposition or, more formally, a Strategy Review and Opportunity Analysis.?

The word strategy often brings to mind consultants, complex frameworks and long- term projects involving lots of white boards or even - in the old days – flipcharts, but it doesn't have to be that way. The important thing is to dedicate time to question your approach in three key areas, and then figure out where to go from there:?

Target Segment Review: How does your Company and your product fit in??

• How is your current core market segment performing, who are the key competitors, and who stands best positioned to benefit from a change in the market condition??
• What are the differentiating features and potential weaknesses of each market participant??
• What is the level of market awareness of your product and its offering set and, of your current consumers, how is the brand perceived??

Product Positioning: How does the product functionality fit with customers’ needs??

• What gaps exist in the current solution set in comparison to the needs of your target customers??
• Which (at most three) new enhancements could be developed to accelerate adoption and/or penetration of the product??
• What adjustments to (and investments in) the organization will be needed to make these pivots??

Dealmaking: What is causing delay or fallout of current business development opportunities??

• How do you and your business development folks describe the core solution set of the product and what feedback are you getting??
• How does your current pricing model, i.e., seat licenses vs. transaction-based vs. subscription compare with how similar products are sold to your core segment? What feedback do you have on how the price and contract terms of your product compares with others in your segment??
• What do your current customers and prospects think of your implementation approach and support model, and your track record for delivery of each??

The analysis is simple - no need for magic, Earth-shattering insights or even offsites - you can probably answer these questions yourself today, and certainly with your help of your management team and financial sponsor. Even if the answers point to strategy adjustments that folks don’t want to hear, there should be some head nods in the group and, hopefully, growth on the horizon.?