Friendly Customers

• Build a Design Partnership Program where you formalize the relationship with your lead customers.
  

• Review development progress.
• Give them confidence in your company.
• Make sure you set & meet expectations.
• Add a healthy buffer to your dates.
• Understand how your product fits into your customer's environment
• Understand customer's business case. 
  
• Collect feedback on feature roadmap tradeoffs
• Listen more than you talk.  Ask lots of probing questions. 
  
• Prove your competence/credibility in your actions, not in your words.
• Review your product's user interface
• NDA in place to protect both sides
• Regular (typically monthly) meetings.
• Target up to 4 Design Partners
• Ensure it's a win-win for you and your customers in that the customer learns from your industry expertise and benefits from your contacts and domain know-how.
• It's never too early to engage.  But set expectations on what stage you're at.
• Example:  OctigaBay built a supercomputer.  Early in our design process, we took our initial plans to one of the foremost thought-leaders in the industry, a particularly demanding customer.  It was a very uncomfortable meeting where he ripped the product apart.  He quickly identified several significant design issues that showed just how naive we were.  Fortunately, it was early enough in our design process, that we had time to react quickly.  We took his input into account in our redesign and continued to keep him abreast of our progress.  He ended up being a strong champion for the company and his endorsement gave us enormous credibility in the industry.
  

Industry Consultants

• How consultants work:
  

• They get regular briefings from across the industry .
• They make their money on their knowledge, contacts and brand name.
• They write blogs, articles and collateral.
• They validate your solution.
• They give you early warning into where your competitors are.
• They can help you refine your pitch and strengthen your value proposition.
• They can assist with the economic analysis  (customer  payback).
• They can tell you where your problems are, giving you time to fix them before launching.   
• They saves a potentially embarrassing experience with media during the launch interviews.
  
• An endorsement from a highly recognized consultant/analyst/blogger can give you huge credibility with VCs, customers and the media.
• At the appropriate time, they can start to seed the market with articles/blogs on the issue and trend pieces forshadowing products such as yours.  (Consultants like this because it makes them look like thought leaders).
• They can act as media references when you launch.
• Initial telephone or screen share briefing (1 hour) is usually free.   
• At the end of the call, consider what kind of a relationship you'd like to have (if any).
• Select someone who is challenging and can point out holes and help fill them.   
• Don't select the kind and gentle consultant.   
• Discuss engagement in followup emails (don't eat into your 1 hour free time).
• Don't be afraid to brief a few consultants before selecting which one(s) you'd like to deal with.
• Example:  In the early days of Abatis, we would give presentations to customers and at the end of the meeting, they responded with a blank expression.  Struggling with their obvious ignorance, we hired an industry consultant.  He flew to our office for the day at great expense.  15 minutes into the presentation, he stopped us and said "Do you guys have any idea what you have here?  You have the solution to every CEO's nightmares - but you're pitching it all wrong."  We then spent the next 6 weeks internally refining the pitch and working with a graphic design firm to polish it.  We tested it out on the consultant and refined it with our PR firm's critique.  In the end, we left every media briefing with complements on our presentation.  We won numerous prestigious industry awards.  We would conduct phone briefings with senior executives and within 20 minutes, we'd be invited to participate in face-to-face meetings to discuss how our products could fit into their network.  It took enormous time and effort, but it paid off!

Role of VCs

• At the risk of upsetting some VCs...
• Don't go to VCs unless you have to and unless you've got an established relationship with them.
• VCs can point out holes in your plan and help you refine your business plan. 
  
• For example, they highlighted the cost of building an effective direct sales force which wasn't properly accounted for in our financial plans.
• Another VC introduced us to key consultants and industry experts - one of whom ended up joining our board which gave us considerable credibility.
  
• VCs love to be educated and to keep abreast of businesses, spaces, technology. 
  
• Once you brief VCs, you can assume your business plan will be shared with competitors.
• This isn't true for all VCs, by any means.  It's tough to know who to trust as there are some bad apples that spoil the barrel.
  
• There are several examples in my past where we've briefed VCs and later found elements of our strategy appear in their investee plans.  In at least one case, we believe that a business was started specifically to replicate our plan.  
• Of course, you can't get funded without being completely open with a VC.  Don't try to spin things.  Don't overstate things.  Be credible and of the highest integrity.  This is a marriage you're getting in to. 
  
• VCs are not always right so take their feedback with a grain of salt.
• VCs will rarely say they're not interested in investing.  They will typically leave the door open for you to come back at a later date.  That doesn't mean they like your business and want to invest. 
  
• VCs care about risk.
• Technical risk.  Do you (or when will you) have proven and unique technology?
• Market risk. Do you (or when will you) have happy, paying customers?
• Management risk. Do you have good leadership?  High integrity? Key expertise?  It's okay to have holes as long as you have reason to believe that the holes can be filled with the right expertise. 
  
• Financial risk. What is your time to profit, time to revenue, total spend to revenue, total spend to profit?  Why are your forecasts reasonable?  What are the top 3 risks and what impact will they have on your financials?