"The world has changed" - I hear this sentence every week at Itineris. "Free cash is gone". I never had the impression cash was free but it's true that raising money was not too much of a hurdle before everything changed on February 24th, 2022.
Time to time, I receive requests to analyze investment opportunities from venture capitals / entrepreneurs, and I also practice angel investing. I've noticed that there is still a considerable amount of money available on the market, albeit at a higher price. Given the current context, I believe it is time to share my top three pieces of advice to help other entrepreneurs navigate this chaotic environment.
Focus on customer revenue
It seems obvious, but I see a lot of founders and entrepreneurs focusing too much on raising funds, while neglecting the opportunity to increase revenue through upselling their customers. At Opinum, we were guilty of this too, until we decided to make a change. We set out to generate just 10% more revenue, but to our surprise, with minimal effort, we were able to increase our revenue by three times that amount. Don’t make the same mistake - prioritize upselling to maximize your business's growth potential. Your customers are the real source of financing and they will appreciate you take care more.
A roadmap focused on the bottom line
I'm a software engineer who eventually became an entrepreneur. Like a lot of tech startup, we love to do engineering stuff. It feels so good to create great products full of cutting-edge technologies. But it also feels terribly wrong. I think that it's crucial to balance R&D with a clear focus on the bottom line. You should focus all this knowledge and energy building features that could:
Time to time, I receive requests to analyze investment opportunities from venture capitals / entrepreneurs, and I also practice angel investing. I've noticed that there is still a considerable amount of money available on the market, albeit at a higher price. Given the current context, I believe it is time to share my top three pieces of advice to help other entrepreneurs navigate this chaotic environment.
Focus on customer revenue
It seems obvious, but I see a lot of founders and entrepreneurs focusing too much on raising funds, while neglecting the opportunity to increase revenue through upselling their customers. At Opinum, we were guilty of this too, until we decided to make a change. We set out to generate just 10% more revenue, but to our surprise, with minimal effort, we were able to increase our revenue by three times that amount. Don’t make the same mistake - prioritize upselling to maximize your business's growth potential. Your customers are the real source of financing and they will appreciate you take care more.
A roadmap focused on the bottom line
I'm a software engineer who eventually became an entrepreneur. Like a lot of tech startup, we love to do engineering stuff. It feels so good to create great products full of cutting-edge technologies. But it also feels terribly wrong. I think that it's crucial to balance R&D with a clear focus on the bottom line. You should focus all this knowledge and energy building features that could:
- Decrease the total cost of ownership (TCO) of your solution. By simplifying your architecture or deployment process, you can generate more margin on every sale and ultimately increase profitability. It can also help you stay competitive by enabling you to offer more cost-effective solutions to your customers.
- Generate more revenue from your customers. By creating new paid options or making your product more compelling to customers, you can increase sales or reduce the sales cycle for your product.
Make your startup's impact sustainable
I believe that it's crucial for any business to take action towards sustainability. The world is constantly changing, and businesses need to be aware of how their operations impact the environment. The effects of climate change are evident and it's only a matter of time before businesses face stricter regulations to protect the environment. Companies that are not prepared for these changes will likely need to adapt to new laws or pay taxes for their negative externalities.
As entrepreneur, no matter your development phase (startup, scale up), you need to take proactive steps towards sustainability. This includes assessing your environmental impact, identifying areas where they can reduce your footprint, and developing strategies to address sustainability concerns. If you're starting a new business or looking to improve your current one, you can make use of tools like my Sustainable Business Canvas to help you reflect on your business's externalities.