Strategic repair requires reverse thinking. Here’s how to do that.
Everyone talks about startup strategy. Very few of those people talk about putting strategy to work. Even fewer talk about the results. There’s a reason for that. A lot of startup strategists are just strategists.
I’ve been writing a lot about strategy lately. I don’t expect you to have followed. But if you do read me, you may have noticed that my recent posts have been peppered with talk of business death spirals, inflection points, authenticity issues, and strategic planning vs tactical action.
All of that was real. Furthermore, it’s all shit that every entrepreneur goes through.
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None of those strategic insights were necessarily on par with the invention of fire. I’m just trying to give you some of what I wish I had known early in my career about some of the more unspoken and vague problems I still run into.
Plus, I mean, I just can’t write stuff like “173 Proven Ways To Polish a Pitch Deck.” Tried it. Was awful at it.
Anyway, I wasn’t writing about that strategic stuff for the clicks (pitch deck articles get all the clicks). I was actually living the problem, considering my options, making decisions, and firing up solutions.
And like I said, while a lot of people will freely offer advice, not many of them will give you actual examples of their own advice in action. I can’t blame them. Why potentially give away your business intelligence or break down your own failure and mistakes in public?
Luckily, I have a “practice” startup, one that allows me to share these kinds of insights freely. Teaching Startup is my project to make more and better entrepreneurs by changing the way startup founders and leaders get advice. It’s more mission than business, but I choose to run it like a startup because well, that’s what I do, but also so I can show you what I’m doing instead of just telling you what to do.
And speaking of authenticity, I’ve found that to be a really good way to teach difficult concepts, like what to do when you’re neck deep in a startup lifecycle existential crisis.
So here it is. But keep in mind, this is a high-level first take. I want to get it done in about 1000 words, or else no one will read it. Plenty more where this came from.
Root Cause Analysis Feels Like Ready, Fire, Aim
I needed to get out of a strategic malaise. For the last several months, all my KPIs except for revenue have been falling. Traffic, engagement, conversions, all of it at a standstill.
So revenue is next, right? I figured let’s head that off at the pass.
But before I took any action – before I made any changes to my marketing, positioning, or especially to the product itself, I wanted to find the correct root case. So I imagined my ideal state and worked backwards.
My target state is this: I want my customers to understand that when they engage with my product, it’s not a blog, it’s not a class, it’s not a cult. It’s a tool and a process, intended to distill the best parts of working with an experienced startup advisor, and offer that distilled value affordably for them and sustainably for the business.
I “engaged” with my own product from all angles and use cases. Turns out, the product itself is pretty solid and robust. It does what it should, and truthfully, it creates successful and happy customers. It could be better, sure, but it was clear that my product wasn’t the source of my malaise.
That led me to review the entire prospect funnel – meaning the entire website all the way down to conversion, and all the way up to the first touch marketing. In my case, the majority of first touch is these posts, including the very one you’re reading.
That was the problem. My solid product was hidden behind a wall of marketing word salad and a sloppy prospect experience. So now I knew what to reinvent. And I knew my goal.
But everything was working six months ago. What did I need to change? And how should I change it?
Data Is Your Compass For Where To Pivot
I have tons of data, from website analytics all the way down to granular actions recorded at my website.
I reviewed all of my data – and I spent a lot of time making sure I was working with causation and not correlation. I came up with a number of theories and tested them until I discovered that one of the reasons I was so confused by what I was seeing was because the problems all happened backwards.
- Traffic started to slow in September.
- Conversions started dropping off before that in July.
- Engagement started to stagnate even before that, in March.
That doesn’t make sense, right? It should be that you lose traffic first, then conversions start to drop off, then engagement stagnates. Like a waterfall. That’s what the strategists will tell you, usually accompanied by a picture of a waterfall.
And that’s true, but that’s the sign of one big, fat, ugly problem, usually related to the product itself. What if I didn’t have one big, fat, ugly product problem? What if I just had a series of smaller problems at every point in the funnel on the way to the product itself?
Doing Anything In Reverse Requires Patience
I also have records of almost every pixel of change to my website. Using my analysis of the problem and the records of changes, I wrote up a quick analysis:
- In an effort to expand my market, I had started marketing to a new market segment just before March.
- That was a success! Trials went way up. But the new prospects weren’t used to the product, so engagement started to suffer in March.
- To compensate, I put more product education up front before the trial signup form. To my relief, doing that didn’t slow trial uptake.
- But now, since new prospects were being told what to expect, they weren’t discovering it for themselves, which slowed conversions in July.
- And since I wanted to keep those trials increasing but also keep conversions stable, I took that product education plan all the way out to first touch, which inevitably slowed traffic in September
What’s the lesson here?
It all started with me chasing a new market segment without thinking the customer journey through from the product backwards, like I was doing now. If I had made small changes to the product to accommodate the new market segment, I wouldn’t have made those consecutive misguided steps that kept throwing hurdles in front of all of my customers.
When revenue and progress and growth depend on moving forwards, it’s difficult to put strategy into action, which must be planned an executed from the goal backwards. Strategic growth requires faith, patience, and a lot of work.
When startup strategists talk about working smarter, not harder, this is what they’re talking about. The problem is, it’s not any less work, it’s just smarter work.