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Don’t Call Me a Start-up

Dont Call Me a Start Up - How to Position Your Company when you are an early stage companyDon’t call me a start-up. Imagine one of the important devices in your life has a rechargeable battery that had one too many charges and is at the end of it’s life. You are at the end of your rope having to plug it in at every outlet you encounter. On the way home from the office you decide go find the stinking battery. You believe it’s going to be a relatively straight forward exercise. You go to Staples, then Radio Shack, Target finally Wal Mart, nada. You’re forced to drive across town twenty-five minutes, in traffic, to Best Buy.

You find it, get out to the car and can not get the battery in the device soon enough. It’s packed in one of those impossible plastic sealed packages. The one where you try to pry it apart which quickly moves to a rip it apart attitude, then you bite it, no way that’s going to work, it’s built like Fort Knox. You remember you have a pen knife in the console, you feel relieved, whip open the big blade and start to cut it, you slip, the blade hits the top of your thumb, you see blood and then feel a sharp burning sensation. You look down and realize it’s a stitches situation so you put pressure on your thumb somehow while driving yourself to the emergency room.

The nurse takes a look at it and says that thing you hate to hear, “That does not look good. We are going to have to clean it and see if you hit a tendon. Can you move it?”
You move it and feel better.
The nurse says, “We need to test it.”.
You think to yourself, “Shit, I’m not out of the woods yet.”.
She puts pressure on it and tells you to lift it. POP!
Nurse says,”I had hoped that was not the case, but you cut your tendon almost all the way through, the pressure popped it. Better to have it happen now then stitch it and it happen later.You need surgery.”

You’re mind starts to race to analyze the implications of the situation. In the mist of all the logistics of how will you get home, what surgery means etc…you realize that what separates humans from apes, aside from a few more brain cells, is the fifth digit, the thumb. You immediately realize the magnitude of the situation and break out in a cold sweat.

The first thing that comes out of your mouth is, “I need to get a hold of the best hand surgeon in the area.”
The Nurse responds,”Stay here while I see what we can do.”

Fifteen minutes goes by as every thought going through your head is about how if you lose the ability to use one of your thumbs you’re in big trouble. You literally will not be able to pick up anything with that hand, type all that well or do a host of every day things. The nurse walks in, your racing mind is abruptly interpreted as she says she was able to get a hold of a hand surgeon and he said he was willing to come in and repair it tonight if you are willing to wait. You of course agree.

Forty five minutes later in walks a clean cut guy in jeans with a worn out Johns Hopkins sweatshirt and introduces himself. He says, “Don’t worry, you’re in good hands (no pun indented). This is totally fixable and you’ll be 100% after recovery.”  You laugh and feel relieved. He performs the surgery, it’s eight weeks of recovery, and in the end your thumb is as good as new.

Have you been in a similar situation? I bet you have and I bet you did not get into the situation and ask for the “start-up” doctor, you ask for “a doctor” and preferably an “expert” with a lot of experience. You’re trusting someone with something very important to you and your existence.

The term “start-up” was coined in the first dot-com (i.e. 1.0) to represent companies forging in the new frontier of the internet. The term became defined first as companies that grew fast and had wild success, but it’s demise came in the crash of 2001 where it became defined as companies that make a lot of noise and then crash and burn. Since that time the term means different things to different people, but to the public and those not “in” the start up tech world it still evokes thoughts of companies that are here one day and evaporate into thin air the next, or at least have that possibility.

Paul Gram defines a start up company as one that is designed to grow fast. (check a great article he wrote on the topic here: http://paulgraham.com/growth.html.) To tech entrepreneurs and VC’s that read this site, we agree, we get it. Failing while not preferred, is expected to happen and part of the ecosystem of which we live. But, we sell our software and services to people who do not live in the tech ecosystem where awareness about people like Paul Graham, Mark Suster, Doug Leone, Guy Kawasaki, Fred Wilson, Josh Kopelman, Tige Savage, Tech Crunch, Pando Daily or any other tech related person, VC or publication exists. Ask someone outside the tech start up scene who these people are and you get a blank stare.

I believe this translates over into sales and I’ve tested the hypothesis in my own sales meetings. Here is an example how a conversation goes if I introduce our company as a “start up” to one of our enterprise customers:

“Hi, nice to meet you, thanks for taking the call/meeting. We are a startup company based…our product…the ROI is…let’s jump right into a demo.”
I then explain our product and ROI to them and say let’s jump right into a demo.

They respond more often then not with something to the extent, “Interesting, a start up. Have you raised any money? Who are your backers? How long have you been around? How many people work at your company?” After that conversation comes and goes we finally get to point of the whole meeting in the first place, the demo and conversation about how the product can help solve their business challenges.

The demo is on the screen and before I even jump in the conversation gets off track on the company status and not focused on the product we have which kicks ass and can as importantly solve some major business communication/collaboration problems.

Versus this pitch.

“Hi, nice to meet you, thanks for taking the call.  We are a small growing company based…our product…and here is how it can help you…let’s jump right into a demo.”
They respond more often then not with something along the lines of, “Wow that sounds interesting. How do you do x, x, x.” No interruption about the company, the conversation takes the track of talking about our product, the challenges they are having in their business and how it could help them. If there are any questions about the company or our size any red flag about us being small is overshadowed by the value proposition of our product.  Red flags avoided.

If you are a consumer company or enterprise tech company you are most likely working with sensitive data, either at the personal level or company level. The customer is trusting your company with sensitive data or an important process. Who makes you feel comfortable, a start-up surgeon, dentist, lawyer, etc or one that at least presents themselves for success?

What I am talking about here is not what you actually are, want to be or what you call your company in the presence of fellow entrepreneurs, but how you position yourself and how you communicate that to the outside world of customers. When you talk about your company to others it constitutes marketing, when a person tells another about your company they will repeat what you said. That can get to a potential customer and raise red flags off the bat. Grow fast, have fun, make a lot of money but, think about what words you use when talking about your company.

The stories referenced here are true and have been abbreviated for your reading pleasure. I escaped becoming an ape, my thumb works like new to this day.

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