CEOs of emerging growth companies make a lot of assumptions, but many of them turn out not to be true over time and make the CEO feel like an ass when they find out. Here are some of the major ass-creating assumptions that I hear most frequently:
1. “We have a great strategy“- Many CEOs can’t really articulate a solid vision and a well thought out strategy for realizing that vision. For CEOs that can articulate that vision, many have a difficult time describing how their current operating approach aligns with the vision and strategy or how it provides the proof points along the way. If you want to articulate a great strategy, then articulate your
– Aspirations for the company, your
– Business Growth Strategy, your
– Competitive Advantage Strategy, and your
If you are planning an exit in the next couple of years, you could also articulate your exit strategy.
Early stage companies may be so focused on product market fit that they are not in a position to really create a longer-term strategy. However, as you reach the expansion stage you need to stop assuming and set a longer-term course in order to effectively scale up the company.
2. “We don’t have competitors”– Every customer has options relative to purchasing your product, so if you don’t truly understand those options, you are missing the opportunity to both build better products and sell better. Also, if you really don’t have competitors at the expansion-stage, you ought to wonder why others are not entering the market…perhaps it is not as attractive as you think?
3. “Our product is better than the competitors’ products“- Sometimes when CEOs say this, they are saying that they like their features/functions better than the competitors’ products, but “better” can only be evaluated in the minds of customers and prospects.
Customers purchase for many reasons, and different customers purchase for different reasons. Your competitors are in business, so figuring out what attracts which customers to their product vs. your product may help you understand the situations where your product is considered better vs. when your competitors’ products are considered better and put you in a position to do something about it…for example, focus on customer segments where your product is best, emphasize your winning characteristics in sales and marketing, and/or strengthen certain product features.
4. “Our website makes it easy for prospects to understand what we do and take the next step if they are interested“- Frankly, it is a rare event when a website accurately describes what a company really does. Most websites are full of so much blather or are so hard to navigate that it is really difficult to understand what the company really does or who it does it for. Doing some simple usability testing with target prospects could help you uncover opportunities to improve. Getting your website right is the first step to getting all of your marketing right.
5. “Our Salesforce knows how to sell our product“- This is probably the most often wrong assumption in expansion-stage companies. Your sales team probably needs a lot more help than you think, as you probably don’t have a selling system that both works well and one on which you have trained and coached your salespeople. If you are one of the rare companies that has a selling system in place, then you probably have more tenured salespeople that need more training and coaching and newer reps that haven’t been trained. Track a few of your salespeople for a week and you will probably find out that you have a lot of opportunities to improve. Even the best sales teams have issues like this and since your market and product are both changing quickly, continuing to keep the sales team effective is an ongoing initiative.
6. “Our product is really easy to use“- Since everyone says this these days, most people are making the wrong assumption. UX is really important, but how easy are your products to use really? How do you know? Doing some usage analysis, simple usability testing and/or doing some user interviews could help you to find out if your assumption is true (hint: it isn’t).
7. “Our customers are really happy“- This may be true in general, but all of your customers have issues that you could handle better and many of your customers really don’t like you. Even great companies have these characteristics. Start a Net Promoter Score survey and get your product management to uncover what your customers really think so that you don’t sound so silly. If you really understand how happy your customers are, then you also will understand what you need to do to make them happier, and you may also be in a position to figure out what customer segments are not right for your company and which are the best for your company. If you don’t have this understanding, then you are making assumptions that might come back to bite you.
8. “Our employees are really happy“- Again, this may be true in general, but there are particular types of people who will mostly be happy in your environment and others that will hate your environment. Like with customers, figuring out what types of employees are right for you and figuring out how to make those employees’ work life better means that you truly understand your employees’ happiness level. Once you really understand this, it will help you do targeted recruiting and create the right environment for the type of people who are the best fit with your company.
If you have a great understanding of these 8 areas and you aren’t making assumptions, you are probably well on your way to maximizing your chances of success. You can test this, as you should end up with a consistantly high market clarity score if you ask several people across several departments to score you.