"Slow-to-market" wins the race in times of "growth at all costs"

Grow like Slack. Disrupt like Uber.

First of all Slack didn't find product market fit in one board meeting, but we don't see the real process. Secondly, Uber didn't take off overnight, but many of us have that impression.
 
Now, no shade to Uber, but didn't they hit a scandal or two internationally? They were banned, even if later pardoned, in London. Uber was relying on European tax havens to finance itself. That's not a business plan we should all be emulating.

But still: "B2B tech companies tend to want founders to grow as fast as Uber and Slack," Scott Stouffer, CEO and Founder of scaleMatters, told me.

The investor community understands that winning in a potentially huge market is so valuable that they're not worried about near-term inefficiencies. "We have to go fast to do the landgrab, to become what Gong is to the conversation intelligence market," says Scott.

The African proverb "go fast or go far" is irrelevant for go-to-market.

Time horizons have changed drastically since 2020, and it's not all pinned on the pandemic.

In 2019, 18-24 months would have sounded like a reasonable launch timeframe. Now, go-to-market plans past 6 months are scaring off investors. Or worse, they think you're a lazy founder.

My source is investor meetings I've sat in on or occupied an advisory role. Trust me, "acceptable" timelines have shrunk beyond belief.

Venture capital (VC) funds put the need for faster go-to-market strategy down to the global economic recession (which might be refreshed again in 2023 if you consider The Economist a reputable source).

So while we all clamor for market share in what sounds like a "shrinking market" how seriously should we take recession talk by investors? Are they merely encouraging us to go big or go home, or is the ongoing discussion of spend cutting doing more damage than good to already on-the-edge founders?

Is recession talk in the US VC community just fear-mongering?

I for one was reading endless articles on how much dry powder there was in 2020, in spite of the pandemic. So you could be excused for thinking the recession talk is hyperbole.

First, I'd say we need to think about where the money comes from.

Scott explains that VCs tap into, "large university endowments, state employee pension funds, to name a couple. Those organizations have to maintain a portfolio distribution; 3% might be set aside for high-risk investments like VC and real estate."

So when the public markets tank, their portfolio becomes unbalanced: "For VCs, the existing dry powder dries up."

This is why VCs are concerned and telling companies they need to cut expenses.

Why is rushing founders to market problematic?

You could attribute the revolving door that CMOs and sales leaders face to cost-cutting.

No CFO will face a 6-month timeframe in which they're expected to turn a company around, like a VP of Sales. They feel the need to make their numbers every month, which leads to rushed decisions.

However, there's a pull factor: Growth teams are pushed out by fear of spending or tightening belts, but they are hired out of FOMO: Fear of missing out.

Founders are rushed to find product market fit, leading to mistakes, leading to bad go-to-market plans, and fewer successful startups on the VC docket.

In turn: VCs lose faith. VCs push other founders harder...

See where I'm going with this?

The solution: Steady wins the go-to-market race

I'm not advocating for Slow-To-Market! I'm saying:

• Tactical target setting should be a bigger part of startups' growth plans.

• VCs should be advocating for stability before speed.

• Execution needs to be underpinned by good data.

More on that last point here if you're at this stage in your startup growth.

It's tough to find product market fit. Time, data collection, and wisdom all need to work together for startups to succeed.

Unpopular opinion? Maybe. But steady wins the race.