Burn baby burn
Congratulations! You've gotten investment for your startup, business or huge internal project. You have money to spend! Everyone has a lot of ideas for how you can spend it. Just ask all the MDRs in my inbox.
Most founders struggle with spending their money right. When I look back now at how we used cash in Textio's first few years, there are several things I'd do differently. I wish someone had told me this stuff in 2017.
We paid for this stuff, but I wish we hadn't
Conference sponsorships without metrics involved
You know those conferences that everyone goes to? Every industry's got 'em. Naturally, you plan to go as well. You spend $10K or $50K or $100K on a sponsorship to get a prime booth location. Six months later, you can't point to any impact the conference had on your business. You wish you had that money back.
If you're gonna cash out on an event, have a plan with accountable performance tracking to know whether the spend was worth it: qualified leads added to pipeline, candidates added to your hiring funnel, business development opportunities closed, media engagements -- whatever it is, pick it, name it, measure it, and build your entire event plan around achieving it.
If the event doesn't deliver, don't spend money on it again. It doesn't matter if everyone else is doing it. Let them waste their money.
Ad spend before you understand your unit economics
You know what's a better investment than most ads? Taking your cash, dumping a pile of kerosene on it, and lighting a match. At least the literal fire is interesting to watch.
In truth, Textio didn't spend money on ads early on; we knew not to do this before we had product-market fit. But a few years in, in pursuit of sales pipeline, we ran some ad experiments that looked pretty good in terms of initial engagement. Unfortunately, they mostly yielded junk leads that didn't convert to customers.
The cost was even worse than just the money spent on the ads themselves. These leads took time from our sales team that they could have spent finding people who were more likely to become customers.
It is amazing to me how many founders I work with waste money on ads before understanding their unit economics. Don't do this.
Hiring consultants without a clear brief
Specialized consultants can add tremendous value to a resource-strapped startup that is trying not to bloat headcount. If you're not deep in finance, getting an FP&A expert to help stand up your first model can make a lot of sense. If you're writing lots of content, getting a great copywriting consultant who works fast is quite sensible.
But Textio's history is littered with consultants we didn't need to hire. The video agency we hired without giving them a clear brief of what we wanted, which meant all their work was unusable. The culture consultants who asked employees unstructured questions with no specific learning goals in mind, which meant that employees shared a bunch of feedback that there was no plan to address. The PR agency who helped me lose access to LinkedIn in the middle of a major sales event. (Yep, that happened.)
The consultants might have been able to do great work in theory, but you can't get great work from someone if you're not prescriptive about what you want them to produce. Cash fire.
On the other hand, we didn't pay for this stuff soon enough
The goal is not to avoid spending money. The goal is to spend money on things that measurably drive your business forward, and we invested in several things that proved to be major accelerators. In these cases I wish we'd spent more or spent sooner.
Game-changing advisors
Advisors have been a mixed bag for me. On more than one occasion, we gave someone meaningful equity in Textio, but we didn't get a contribution that was worth what we gave them. Sometimes we didn't ask them to do enough. Other times, we selected advisors who were just not committed.
But we did have two legitimately trajectory-changing advisors, and their approach defined what I try to bring to companies that I advise today. They hustled for us like they were on our core team.
Pete Kazanjy brought experience and a point of view on how to build an early-stage sales engine that we just didn't have. He had real lived experience as a founder building a sales engine. He gave me feedback on our sales deck, helped build our sales comp model, introduced me to critical early sales hires, interviewed candidates, and so much more.
Mallun Yen was deep in IP law, and we got to know her as we were thinking through our patent strategy. Very quickly, her input for us evolved beyond that. To this day, Mallun has introduced Textio to more people who have gone on to become Textio customers than anyone outside our core operating team -- and the margin isn't even close. Which is why eventually we brought her on as an investor, not just an advisor.
Both of these people spent several hours a month working for Textio. They were well worth every penny of the equity we gave them. Game-changing advisors are massive accelerators. I wish we'd invested in more of them.
Getting a great coach
Full disclosure: Since I'm coaching quite a few founders now, this is me talking my book of business. But I started doing this work specifically because of the huge positive impact that my own coach Carole Robin has had on Textio's growth, and my own, in our years working together.
I can point to a clear before / after inflection point in my leadership skills when I started working with Carole. I wish I'd worked with a coach who pushed me sooner, and I'm grateful that I met Carole when I did.
More time on the ground with customers
I felt like I lived on airplanes when I was Textio's CEO. Every couple of weeks I was jetting off somewhere. Yet looking back, as often as I was on the road, I wasn't always prioritizing the trips I should have been taking.
Hands down, the most valuable thing I ever did as CEO was visiting individual customers on site, in their offices. Talking to them about their experiences. Seeing how they used our products. At dinner, with groups of different customers all together, asking open-ended questions to learn their perspectives.
Every one of these interactions had fast, non-incremental impact on our product direction, customer support offerings, messaging, and revenue. I wish we had spent 10x as much on this as we did.
What do you think?
Thanks for reading!
Kieran
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