This article comes from Manash Bhattacharjee’s talk, ‘Becoming a product-based Series-A startup from a solution-based pre-series startup’, check out the full version here.
This article comes from Manash Bhattacharjee’s talk, ‘Becoming a product-based Series-A startup from a solution-based pre-series startup’, check out the full version here.
In the ever-changing and increasingly competitive SaaS landscape, nailing the transition from pre-seed to series A is crucial.
Imagine this: you find yourself at the helm of a pre-seed startup, fueled by equal parts agility and resourcefulness. Armed with a groundbreaking solution, you're poised to disrupt the market.
However, as your startup gains traction and expectations soar, you begin to realize that a momentous shift awaits you—one that will challenge your thinking and redefine your path.
This transition is no small feat, but don’t panic, today I want to share some valuable insights and strategies that will reshape your approach to product-based startups.
But before we dive in, let’s break down our main talking points:
- The shift from pre-seed to series A
- Crafting a solid product strategy
- Building an agile roadmap
- Avoiding waste and maximizing productivity
- Key tips for success
- Final thoughts
First, a little about me, with nearly 2 decades of experience, working globally across a wide range of industries, from digital commerce to healthcare FinTech, I’ve helped many startups through this specific journey, using the transition plan I’ll share today.
Throughout this article, we will unravel the secrets of crafting a robust product strategy, constructing an agile roadmap, and navigating waste reduction. We will explore the power of data-driven decision-making, the significance of fostering a culture of innovation, and the importance of maintaining alignment with your company's vision and objectives.
The shift from pre-seed to series A
Over the years, I've witnessed firsthand the incredible journey startups go through as they transition from pre-seed to Series A, it's truly a pivotal moment that brings about a significant shift in mindset and approach.
When startups are in their early stages, the funding environment is challenging, and with limited resources, they have to find a way to create a concept and drive it with a small customer base. Unlike later-stage startups, they don't have the luxury of extensive pre-seed funding or a large runway for product development and research.
This often leads them to adopt a solution-centric approach, where they focus on building a product that addresses the needs of only a specific customer or a couple of prospects.
However, as startups progress from pre-seed to Series A or Series B, this all changes, and expectations from investors, customers, and advisors begin to shift.
They want to see the startup build products at scale and strive for a Minimum Lovable Product (MLP) rather than a Minimum Viable Product (MVP), which then requires startups to move from a solution-centric mindset to a product-centric one.
Crafting a solid product strategy
So how do start-ups go from that solution-centric approach to a product-centric approach?
To successfully navigate this transition, startups need to establish a strong product strategy that aligns with their overall company strategy. This starts with defining the company's vision, setting clear OKRs (Objectives and Key Results), and translating them into a product vision.
From what I’ve found, many early-stage startups lack an experienced product person who can guide them through this process. As a result, CEOs or CTOs often take on this responsibility, leading to a misalignment between what the company, investors, and customers want.
It's crucial for startups to invest in hiring a VP or Director of Product, or seek consulting expertise to help develop a robust product strategy. Without a clear strategy, development efforts can veer off track and fail to deliver what the company, investors, or customers truly need.
So if we look at it like a journey, you start with the company vision, you start with OKRs, then you lead up with product vision, and only then do you start looking at all those processes.
Building an agile roadmap
Additionally, startups should focus on creating an agile roadmap that effectively communicates their plans to their different stakeholders, including the board, investors, customers, and internal teams.
A framework that I’ve found to be particularly effective is the "now, next, later" roadmap. By dividing the roadmap into stages and creating thematic focuses, you can ensure a coherent and understandable narrative around product development efforts.
So using this roadmap to look at the next 6, 12, and 18 months, you can start identifying where and how you’re investing resources, showing people in a form that is easily understood to show, for example, the capabilities that will help your company improve the usability of your products.
This roadmap again is so important, because by emphasizing the importance of coherence and clarity, it allows you to continue telling your story in a way that is meaningful to your customers, showing you can deliver on their expectations.
Avoiding waste and maximizing productivity
As startups begin to suddenly receive a surge of investment and resources in this scaling-up process, there is a risk of creating a lot of waste in the software development process.
One form of this waste is in the building of extra features or capabilities that customers may not find valuable. Startups should avoid this by prioritizing building features within their roadmap that align with high customer priorities and that validate their impact through revenue, customer experience, or scalability metrics.
It's essential to focus on building what customers want and need, rather than what seems exciting in the moment.
Another form of waste that can be common, is inefficiency caused by excessive context switching and overambitious goal-setting.
Teams can correct this by using tools like JIRA to manage their development processes effectively.
By monitoring metrics such as the number of tickets being addressed by team members and flagging items that are stuck for an extended period, startups can reduce context switching and increase overall productivity.
Key tips for success
- Focus on product-market fit before diving deeper into development
Companies often engage in advisory discussions with customers, especially in the enterprise space, gathering feedback on existing solutions and exploring potential features.
However, achieving product-market fit is easier said than done, as you can’t always predict customer responses. To gain a broader perspective, it's beneficial to engage with multiple customers, assess competitor offerings, and evaluate value propositions.
- Apply Lean methodology to all projects
Cloud infrastructure enables rapid scaling without extensive upfront investment, making it lean. However, it's important to strike a balance between scalability and infrastructure costs.
Efficient decision-making is crucial, considering the future scale and customer pipelines. You should include regular touchpoints between teams to ensure preparedness without unnecessary investment.
- Prioritize listening
While VCs can provide valuable guidance, the recent trend of investing in shiny new technologies suggests that they may not always have the answers. Therefore, listening to customers and prospects becomes paramount for assessing product-market fit.
In the enterprise space, where multiple customers and buying centers are involved, expanding touchpoints beyond the immediate buyer is crucial to gather comprehensive feedback and inform decisions.
Final thoughts
The transition from a pre-seed startup to a Series A product-based company is an exciting and transformative journey that requires a significant mindset shift. Startups must navigate the challenges of shifting from a solution-centric approach to a product-centric mindset.
Creating an agile roadmap and using lean software development principles helps startups communicate their plans effectively and reduce waste.
By focusing on building what truly matters to customers, startups can avoid unnecessary features and maximize their productivity.
As a SaaS professional, understanding these key aspects of the transition process can help you navigate the challenges and seize the opportunities that arise along the way, mastering the startup journey and boosting sustainable future growth.
