Last week, I spent some time with a pile of early-stage founders along with some early employees – talking all things building & generating revenue capacity. Surprisingly enough, we talked about the power of transparency.
But then the question, “What should we be transparent about?”
At a 10k foot level, my answer is, “Everything! What you talk about in your internal meetings should be an indication of what you should share with your early-entrant customers.”
You’ve taken what may be the biggest risk of your career to attack this vision. Your time is your biggest asset. Build trust. Spend that time with the prospects that are the best fit, and for goodness sake, LOSE FAST to better learn and hone your focus.
Here are two places to start – two elements to embrace with your prospects – two areas to consider being up-front & transparent about before mutually investing time in one another:
“We are a startup”
Sometimes, prospects don’t want to be first – or one-of-the-first. Air it early. Especially if you’ve got a high-consideration sales cycle (i.e., multiple interactions, consensus purchase).
“Before we get too deep into this, we are just getting started here. We believe and have investors who also believe that this solution is going to make a big impact. That’s why we’re all investing our careers & dollars in it. However, we don’t have a robust client list yet. We’ve received a lot of interest, and the momentum appears to be building, but the proof in the forms of piles of paying clients? Not there. If this is going to influence your decision to go with us, can we address that up-front?”
Hiding this fact, and hoping that either (a) the prospect doesn’t ask, (b) the prospect doesn’t care, or (c) you believe that if you present enough value, they’ll get over it is a fool’s errand.
Would you rather know the answer to this question now, or after you’ve burned 3-6 months of cash while working on this opportunity?
If there’s ever a feeling acquired that indicates you have hidden this detail, even the prospect who doesn’t care about the stage of your business will wonder, “what else are they hiding?” With every interaction, you are either building trust, or eroding it. Establish a strong foundation and play with a lead.
“We are still developing certain key functions of the solution”
Do not get ahead of yourself! Your solution can’t possibly do everything a client needs. It likely never will, but especially at the beginning. If there is a requirement a prospect has that you’re not ready to deliver…or not ready to fully deliver as well as an alternative path for the client (i.e., a competitor), air it early.
“As we’ve been interacting with you, we recognize a key requirement that we’re not quite therewith yet. Can we discuss the priority and timeline of this requirement now?”
At one of the early-stage tech companies I worked with, our reporting was bare-bones. It was disappointing to the prospect when they saw it late in the process, especially when alternative solutions had better reporting. The trust erosion coupled with the emotion of us not having something they wanted made the 5% we didn’t have feel like 95% to the client.
By leading with it, playing your cards face-up, you build trust, qualify in faster, and take that “flaw” off the table by setting proper expectations. Worst case, it’s a deal-breaker.
Would you rather find out now, or after you’ve burned 3-6 months of cash in this opportunity.
Embracing what you don’t have, what you’re giving up, what other options may do better than you – it speeds up decision-making. It builds a relationship on a foundation of trust. It helps you win more often. It helps you to learn. It disarms the alternatives. It hones your firmographic & demographic focus. It buys you time. It buys you the resiliency of having more rope when something does go wrong, which it will.
However, potentially even more valuable, it helps you lose the opportunities you’re going to lose anyway – only faster! That way, you are focusing your precious dollars and time on the opportunities you should win!