In the midst of what many have dubbed “The Great Resignation,” many employers are struggling to fill job openings. According to one report, approximately 72 percent of recruiters are struggling to find relevant candidates. And startups in particular are seeing hiring delays. According to another report, it takes an average of six months to hire someone for a startup.

Fixing this issue isn’t easy. According to entrepreneur Gary Bolles, standard recruitment strategies are ill-equipped to handle the future of work. He says traditional recruitment pipelines are highly dependent upon poorly designed processes that usually don’t benefit the hirer or the worker. Instead, he says startups should focus on expanding their network. 

“What you’d love to have is a magic wand capacity that gives you access to a broad network of people,” Bolles says. “You want a high functioning network with a range of different people who can all solve a wide variety of different kinds of problems.”

Bolles is the author of “The Next Rules of Work”, a book that helps leaders understand why traditional notions about work inhibit their ability to address new problems. On Jan. 13, 2022, Bolles hosted a webinar for Founders Network members where he provided pandemic-era strategies for hiring and growing people.

“Instead of thinking in terms of metrics or some numbers or targets that we need to hit, we need to design systems from scratch.”
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To learn more about pandemic-era strategies for hiring and growing people, see if you qualify for membership and check out the webinar from January 13.

DE&I recruiting

Each year, Silicon Valley Bank releases the results of a survey of startup founders around the world. In the most recent report, Silicon Valley Bank asked startups in the U.S., U.K. and Canada about the ethnic and racial minorities in their C-suites and on their board. According to the report, less than half of the companies had at least one member of their leadership teams who was ethnically or racially diverse. The same was true for the number of women in the C-suite and on boards.

While statistics like this illustrate diversity, equity and inclusion issues in the startup world, changing the status quo is more than a numbers game. In order to address DE&I in hiring, organizations often tack metrics on to their recruiting processes. However, according to Bolles, DE&I initiatives must be more than an afterthought.

“We need a mindset shift,” Bolles says. “Instead of thinking in terms of metrics or some numbers or targets that we need to hit, we need to design systems from scratch. We need  DE&I to happen automatically as opposed to a set of mechanics that we try to tack on to our recruiting processes.”

“ATSs are a mechanical approach to old rules processes.”
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The role of tech

Companies are increasingly turning to technologies like artificial intelligence to revamp their hiring processes. However, Bolles says AI can exacerbate recruitment issues because it often relies on historical data sets that are biased. Bolles is also critical of applicant tracking systems because he says they rely on outdated processes.

A recent study found that ATSs are contributing to hiring issues and preventing employers from filling open positions. According to the report, 88 percent of employers say qualified candidates are vetted out of the hiring process because they do not match the exact criteria in job descriptions. The report indicates that outdated metrics and software systems are causing employers to overlook overqualified candidates, resulting in approximately 27 million hidden workers in the U.S. 

“ATSs are a mechanical approach to old rules processes. That’s a model that works sometimes for some hirers, for some applicants, and for some work roles and for the most part doesn’t work very effectively for many,” Bolles says. “None of that means you shouldn’t have good data. You should have good data. You should be able to track information about the people in your sphere. But only focusing on this narrow slice is a miss for everyone.” 

“You have to be extra careful and extra sensitive about not creating systems that are just going to get you people that look like you.”
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Hiring in the pandemic era

The pandemic hasn’t just prompted employees everywhere to rethink their jobs. It’s also forcing employers to rethink how they work and how they hire. Remote work is more popular than ever and as COVID-19 continues to force some to work remotely for safety reasons, startups are having to change the way they do business.  

Part of this global shift to remote operations  involves a more virtual hiring process than ever before. More and more companies are increasingly turning to video interviews to fill open positions, but researchers are already detecting issues employers should be cognizant of.  According to one study, video conferencing for job interviews disadvantages both employers and candidates. Additionally, according to Bolles, video interviews can have unintended consequences in terms of bias. 

“I know that we have to do these things in a virtual world. But there are a whole bunch of aspects of video interviews that are biased against a wide range of applicants, especially people with diverse backgrounds and without the kind of exposure to these processes that gives them very low chances for success,” Bolles says. “You have to be extra careful and extra sensitive about not creating systems that are just going to get you people that look like you.”

Want to learn more about pandemic-era recruitment strategies? In his webinar Bolles covered:

• How work changed in “the Great Reset” of the global pandemic
• How these changes have affected founders and startups
• What founders need to do differently to effectively hire and develop workers
• What founders need to know about skills to grow their company

To learn more about pandemic-era strategies for hiring and growing people, see if you qualify for membership and check out the webinar from January 13.

“I think it’s important for teams to disengage from the grind, to compete and create together in a totally immersive way that has nothing to do with their usual schedule. It ends up leading to being more productive at work,” he says.

Welch will be bringing some of his most innovative team-building activities to fnSummit, where he’ll also be sharing his thoughts on how to encourage creativity and build community among founders and staff. 

“I think it's important for teams to disengage from the grind, to compete and create together in a totally immersive way that has nothing to do with their usual schedule.” - @tysmysterytours
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Stepping into the unknown

Welch found his calling organically. Although trained as an aerospace engineer, he has always had a knack for planning activities. “My friends joke that I must be a ‘herding breed.’ When I’m traveling in a foreign country and I see people that seem a little lost, I’ll just say: “Let’s do something!.” 

To celebrate turning 30, he threw his first “mystery tour,” in which people came together to participate in group activities without knowing what was planned. It was such a success that he decided to bring the concept to companies and organizations, a venture that has proved highly successful. 

The sense of stepping into the unknown is a crucial aspect of his events. “The mystery part makes everyone more open minded. They go on this adventure together and they achieve things, and it brings a different sense of bonding,” says Welch.

“People just enter this shared space. It’s kind of like meditation in that the mind fully focuses on something different. Suddenly, they’re competing and interacting in new ways.” - @tysmysterytours
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What to expect at fnSummit: Building forts and old-school lawn games

Some of Welch’s clients ask for a competitive activity, while others want to work on collaborating on a project or just relaxing together. At the upcoming fnSummit, he’ll be offering some great options, including one his most popular activities – fort battles. This competitive game involves teams constructing large forts out of cardboard boxes that fit together like Lego and then mounting an offense and defense to protect their forts, all while playing dodgeball. 

“It’s a very strategic game and quite a good workout too. I’m just always amazed at how it brings out this youthful, fun spirit in everyone of any age or background,” says Welch.

For those who prefer a more creative vibe, Tyler’s Tours also offers a much-loved mini-golf-design activity. Teams are given “a crazy number of supplies,” and are asked to design and build the mini golf hole of their dreams, after which the entire group plays the whole course. 

‘It’s insane to see the level of creativity that comes out. I thought at one point I’d seen it all, but every time we do this activity with a group, people surprise me with new designs. Going through the whole creative cycle, from start to finish, really bonds people,” he says, adding that he’ll also offer a variety of lawn games and activities at fnSummit, aimed at those who prefer to dabble in group interactions.The lawn games are good old-school casual fun that allow for social bonding and light competition

“Most startups are used to doing happy hours, bowling or ping pong in the city. But mystery tours bring excitement. CEOs ask me: When are you coming back? That’s what I hope to bring to fnSummit.” - @tysmysterytours
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Creating a shared space for innovation

Whatever they choose to do, Welch is preparing the ground for people to let go of their everyday work mode, relax and have fun. 

“People just enter this shared space. It’s kind of like meditation in that the mind fully focuses on something different. Suddenly, they’re competing and interacting in new ways,” he explains. 

“Most startups are used to doing happy hours, bowling or ping pong in the city. But mystery tours bring excitement. CEOs ask me: When are you coming back? That’s what I hope to bring to fnSummit,” he says.  

fnSummit, taking place from October 13-15, 2021, is an annual event where founders, investors and partners come together to explore the theme of growth. Located in a beautiful resort in California’s Carmel Valley, the event will offer participants a chance to network, share ideas and enjoy a variety of recreational and team-building activities.

Your goals as an entrepreneur are not always clear. They may be centered on making a profit, which means a lot of decisions need to be made on prioritization. But your goals as an entrepreneur should also be centered on building a brand that can deviate from a script, and consider alternatives. 

“Real estate is a relationship business and at a time when most of our relationships exist through screens, it is more important than ever to have a tool that can enhance those interactions.” - @foundersnetwork
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Julie Leonhardt, co-founder and CEO of Vuse, believes that her understanding of the real estate industry, combined with her listening to the pain points of the agents with whom she speaks on a daily basis, has allowed her to create the perfect tool for the agents’ toolkit. Vuse is a mobile platform that enables real estate professionals to create and share captivating, pro-quality videos on the go. Her former life as the COO of Sotheby’s International Realty Affiliates, Inc. and the SVP of Affiliate Services and Head of Operations, EMERIA region, for Christie’s International Real Estate, and her partnership with award-winning filmmaker, Leanna Creel, creates the perfect team to build a product that the real estate market really needs right now.  

“Launching in March 2020 was definitely a risk,” Leonhardt explains. “However, once everyone realized that COVID was not going to be a minor blip on our year, my phone and email were blowing up with agents begging for Vuse. Vuse combines my real estate background with my co-founder, Leanna’s, amazing filmmaking acumen to create a product that is uniquely designed for agents. Real estate is a relationship business and at a time when most of our relationships exist through screens, it is more important than ever to have a tool that can enhance those interactions. ”

“Are you able to pivot where the industry is pushing you? That is so key to product nimbleness. You may not be able to find full market fit right away. Some companies may have to do a few degrees shift as the market changes so they…
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Vamshi Gunukula, COO of DirectShifts, didn’t have to search hard to find the opportunity in the global pandemic. His team found itself in the middle of the moment. DirectShifts is a tech-enabled staffing platform that matches clinicians with employers. As the need for qualified medical professionals grew, his team pivoted toward helping hospitals and clinicians source from a variety of locations. They also focused on sourcing more specialties.

“We diversified because we saw the market needed it,” Gunukula said. “We always create our product with a vision to serve certain aspects of the industry. But the industry will push you laterally. Are you able to pivot where the industry is pushing you? That is so key to product nimbleness. You may not be able to find full market fit right away. Some companies may have to do a few degrees shift as the market changes so they find their sweet spot.”

“This was an extension of my passion, but also very much trying to solve a problem. And as it turns out, it was a problem that basically every single traveler in the world has experienced or will experience some time in the future…
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Zephyr Seat is geared toward the air traveler who in this new normal seeks more private space, among other benefits. The Zephyr Seat would allow airlines to provide double-decker. lie-flat seating in a 2-4-2 configuration. CEO Jeffrey O’Neill, a frequent traveler and designer, came up with the idea after seeking a way to get some good sleep on a very long flight from at the economy price point.

“This was an extension of my passion, but also very much trying to solve a problem,” O’Neill shared with allplane.tv. “And as it turns out, it was a problem that basically every single traveler in the world has experienced or will experience some time in the future when they travel again.”

While O’Neill’s idea was born well before the pandemic in 2017, it arrives at the right time,  just travelers would appreciate isolation and social distancing. It’s poised to be a significant disrupter in the travel industry, should airlines adopt it. At this stage, the Zephyr Seat team is still hunting for the first taker. 

Hear more about how these founders are moving their products forward by joining our Product Panel on August 24. Sign up to join us in this FREE event and find out if you qualify for full membership and get insights on:

• How to pivot where the industry is pushing you with product nimbleness
• Why you should sell your meaning, not just your product
• How to extend passion to propose a solution
• Attract the attention of customers through experiences 
• It’s not about products, it’s about unmet needs

Coaches can be game-changing for some founders. Similar to how a professional tennis player works with a range of coaches to polish different areas of their game (from serving to mental toughness), leaders benefit from expert coaching in areas ranging from communication to mindset to decision-making, and more.

But, with the glut of new coaches entering the field and promoting their services–who is the right coach for you? And, how do you know you’re investing your time and money well? 

Here is the rub–the very reason most founders seek a coach–to address blindspots–is the same thing that makes it hard to find the right coach–we don’t know what we need to maximize our growth. 

“The very reason most founders seek a coach--to address blindspots--is the same thing that makes it hard to find the right person--we can't always see on our own what changes will have the biggest impact on our growth.” -…
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Here are 5 tips for founders looking to hire a coach for the first time:

1. Understand your WHY.

Even if your biggest leadership edge is a blindspot that you can’t fully see or articulate, it helps to enter into the coach search process with clear goals in mind.

Are you struggling with low energy and burnout? Are you running into arguments with your co-founders? Are you struggling to prioritize and tackle hard issues?

In the modern world of coaching, there are coaches who specialize in everything, from breath and bodywork (ideal for imposter syndrome and other issues) to conflict and communication. Getting a sense of what you’re looking for will make you sure you get a lot of value out of your coaching engagement.

Here are some of the most common reasons I see founders hiring coaches:

• Experiencing lower than average confidence (or imposter syndrome).
• Feeling burnt out.
• Intractable infighting with co-founders and senior leaders.
• Lacking emotional resilience (feeling anxious, stressed, or hurt more often than you’d like).
• Awareness of a blindspot (such as being overly aggressive or a poor communicator).
• Hitting a plateau.

2. Coaches are not advisors.

One general piece of advice I recommend is not to hire a coach until after you get your first round of funding. Typically pre-funding founders are more focused on getting to product market fit, developing your business model and more. Many of the above issues may be present, but few people have the time or resources to invest in them at this stage–when the goal is making it to the next phase of your company.

This is not a hard and fast rule and I have seen many founders benefit from burnout support pre-funding and co-founder communication work and role conversations, pre-funding.

“One of the best ways to assess if a coach is a good fit is to ask them what frameworks have used for their own growth and what results they have seen from that work.” - @NathanParcells
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3. Quality is paramount.

Excellent coaches can be a game-changer in your growth trajectory and life. Mediocre coaches will waste your time and can even be harmful to your growth.

While referrals can help, one of the best ways to assess if a coach is good is to ask them what frameworks they use and how those frameworks have helped them grow?

Coaches who don’t practice what they preach are less likely to understand the nuances of how to help you and this is a red flag overall. 

4. Consider rotating coaches.

Similar to how many athletes change coaches (some to focus on different aspects of their game and some to bring new energy or life into their coaching relationship) I think this can be a powerful approach for founders too.

Each coach has a specialty, so when you work with different coaches you can 80/20 their best insights. In addition, if you find a coach you love where the trust established means you keep growing together, you can continue that engagement if you want.

Time-boxing the initial engagement to 3-4 months can help make hiring a coach feel less intimidating.

“Similar to how many athletes change coaches (to focus on different aspects of their game) this can be a powerful approach for founders--spending 4-6 months with a communication coach, then an embodiment coach, a leadership coach,…
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5. Commit

If you’ve had sample sessions with 2-3 coaches and found someone you like but are on the fence, I recommend going for it.

It’s worth it just to see what you get from the coaching relationship and to learn how you show up to an engagement like that.

Furthermore, the biggest impacts from working with a stellar coach come 2-3 months into the relationship once trust has been established. You don’t want to be on the fence the entire time so it’s best to commit for a period than re-assess when that period wraps up.

You should definitely be getting value throughout the engagement (and on every call with your coach) and you should end the engagement if it’s not the right fit, but in the end, there is power to committing and seeing where the process takes you.

Bio:

Nathan Parcells is an Executive Coach and Co-Founder Communication expert at Sharpend Coaching. Nathan also leads group coaching for founders on “Risk-Taking and Vulnerability.” Previously Nathan co-founded and led marketing at Looksharp. Outside of work, Nathan is an avid mountaineer, writer, and adventurer.

It’s often said that startup investors make decisions partly on the strength of a team. It takes strong talent people to build a great company — and for that reason, staffing decisions are some of the most consequential choices a founder can make.

Max Shapiro, founder and CEO of PeopleConnect, has been helping startups to land top talent for 20 years. In the wake of the dot-com bust of 2001, Shapiro created a unique recruiting model called Employees Without Paychecks that enables cash-strapped startups to pay in equity before raising capital. Over the years, he’s seen firsthand what it takes to build a successful startup team, and shares his insights with Founders Network. 

Firstly, it’s a mistake for founders to lean on a limited personal network to find and recruit talent in the early stages. Register to Max’s full webinar and see if you qualify for membership to Founders Network and get tips on:

• Sourcing a Talent Pool
• Working with Agencies
• Optimizing for Experience
• Asking the Right Questions
• Building a Team

“Most startup entrepreneurs don’t have the time or expertise or experience to find candidates.” - @Max_PplConnect
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“Most startup entrepreneurs don’t have the time or expertise or experience to find candidates,” Shapiro says. “But relying on friends, family or advisors for referrals naturally produces a much more smaller pool of candidates.” 

“When you’re working with an agency, like PeopleConnect, we’ve put together a list of 150 people, interview 20 of them, and present three well-qualified candidates within three weeks. Our universe is much larger,” he adds.

“There are a few characteristics that startup founders should be looking for in a candidate,” Shapiro explains. Prior experience working at a startup tends to be extremely helpful — those candidates are used to an environment that often demands long hours, versatility, and the ability to wear many different hats to get the job done. 

“The most important thing is you have to hire people with startup experience.” - @Max_PplConnect
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“You may be the product person, but you might be helping out in sales or marketing or making coffee. If you’re not used to that, it’s hard to make that adjustment,” Shapiro says. “The most important thing is you have to hire people with startup experience.”

Still, a resume can only tell you so much about a person. Other traits that tend to correlate with startup success are optimism, a team mentality, and the ability to maintain discipline even in challenging circumstances. A smart CEO or hiring manager knows how to ask the right questions to suss out what makes a person tick, and how well they’re likely to perform at your startup.

“You know you’re working at a startup when you’ve worked a 40 hour week, and it’s lunch on Wednesday,” Shapiro says. “I’ve seen mistakes made by startups when they hire people that don’t have startup experience.”

Asking open-ended questions — such as a simple “tell me about yourself,” or prompting them to discuss what they most enjoyed in school — is one way to learn about a candidate’s life and how they approach work. Even asking questions about their early life experiences can better reveal what challenges or adversities they’ve had to overcome, and how they learned to do it. Extracurricular activities that may not show up on a resume can also be revealing: Participation and success in team sports, or other group activities, that require collaboration and team building are a signal that a candidate can work well with others to overcome problems. 

“Team activities are a good indicator of the ability to work hard, have discipline, and work with other people.” - @Max_PplConnect
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“Team activities are a good indicator of the ability to work hard, have discipline, and work with other people,” he says. “For example, a college athlete who has gotten a scholarship shows they’ve been part of a team and can handle a lot of pressure.” 

Other illuminating questions include asking candidates to rate how lucky they consider themselves to be as a measure of optimism: “You have to get someone who is upbeat, positive, and has high energy,” Shapiro says. 

Above all, your startup’s recruitment process needs to be organized, methodical and uniform for every candidate — which is why the assistance of an agency like PeopleConnect is often so essential for the busy founder. 

“The recruitment process needs to be organized and the same for everyone; you need a level playing field to evaluate candidates.” - @Max_PplConnect
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“The recruitment process needs to be organized and the same for everyone; you have to put everyone through the same process and have a level playing field to evaluate candidates,” says Shapiro.

You’re a founder with a team, a product, a market and a bit of sales traction. You’re looking to grow — and there are several important steps founders must take to prepare for this stage of the journey. 

That’s according to Rashmi Gopinath, General Partner at B Capital Group. At B Capital Group, Gopinath manages equity investments in venture and growth-stage startups that have achieved customer traction, and shares her insights with Founders Network. 

“At the growth stage, most of the core product and market risks have been de-risked,” she said. “Product-market fit has been identified, sales motion starts to get figured out, the pricing of the product gets defined, and you’re differentiated from other vendors in the landscape.”

If you’re looking to raise a Series B and beyond, register for Rashmi’s growth webinar and see if you qualify for membership to Founders Network and get insights on: 

• Key Growth Milestones
• Hitting Your Metrics
• Staffing for Growth
• Planning Your Expansion
• Identifying Profit Goals

The growth phase

The growth phase comes with differing demands, milestones and expectations. At this stage, investors will scrutinize metrics that paint a picture of efficient and scalable top-line growth: Customer acquisition costs, sales efficiency numbers, burn rate and others come into focus. Prospective investors want to see that you can grow sustainably, and ultimately drive profits. “A typical, healthy SaaS business should be showing gross margins in the mid-70s to high 80s at this point, LTV:CAC ratios of 3 or better, net retention percentages at 120% or better, <12 months to recover CAC,” Gopinath explains. Startup management teams must be able to show a  pathway to profitability. 

“One thing that the current pandemic and market downturns have taught us is that ‘growth at all costs’ is not going to be looked at as favorably anymore.” - @GopinathRashmi
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“One thing that the current pandemic and market downturns have taught us is that ‘growth at all costs’ is not going to be looked at as favorably anymore,” Gopinath says. “Investors want to make sure that companies can show a path to profitability and focus on strong underlying business metrics.” 

“Investors want to make sure that companies can show a path to profitability and focus on strong underlying business metrics.” - @GopinathRashmi
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The team

As your startup evolves, so does your team. And it is very important to have the right leadership in place to steer your business through its next stage of growth. Ideally, your management team includes star performers with specific and relevant experience in high-growth environments. 

“This is the time when founders should think about upgrading their management teams to ensure they are well-staffed with people who have the right experience of scaling and growing companies,” she says. “For example, a head of sales is most likely someone who has had experience in the same or adjacent sector, and has grown sales from $20 million to $200 million+.” Likewise, in other key roles like marketing or product management, having C-level leaders with specific expertise in helping to scale companies will instill more confidence in your ability to execute, and drive smart strategic decisions. 

“Within the core team DNA, it’s a very different skill set that’s needed for growth, so this is a time when the management team starts to evolve.” - @GopinathRashmi
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“Within the core team DNA, it’s a very different skill set that’s needed for growth, so this is a time when the management team starts to evolve as well,” she adds. 

Startup founders must be prepared to make a lot of critical strategic choices at the growth stage as well, and having the right team in place helps to facilitate and guide decision-making on when, where and how to expand. 

During this stage, startup founders and their core team should be planning where the next phase of growth is going to come from, whether through strategic and channel partnerships or otherwise. Important build/buy/partner decisions are made during this stage. Growth strategies can include expansion beyond your core geographies and into new markets like Europe and Asia. It could also mean partnering up with larger enterprises for strategic growth investment, access to different markets, or other valuable business connections. 

“How do you grow and expand from your current customer base? Do you want to expand your business to a new geography, develop a distribution or channel network, launch new products in adjacent spaces, or acquire other companies to drive inorganic growth?” Gopinath says.

“A lot of important decisions come up during this period. A lot of it starts with having best-in-class people on your team, and the right set of investors and advisors.” - @GopinathRashmi
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“There are a lot of important decisions that come up during this period. A lot of it starts with having best-in-class people on your team and the right set of investors and advisors to help navigate through scaling challenges to drive exponential growth.”

Register for Ilker’s full webinar and get actionable advice on: 

• Defining the Problem Well, Before Scale
• Building A+ Team and Board
• Setting Up the Right Culture
• Must-haves of Fundraising
• The Exit Road

Particularly for first-time founders, there are significant risks and unknowns in launching a startup, and some of the best resources you’ll find are other founders who have been through the process. 

Ilker Koksal is a serial entrepreneur, having most recently co-founded Botanalytics, a conversational analytics startup that raised $1.3 million. He’s also an advisor and investor to several startups, a fellow at Founders Network, and author of Founder’s FAQ, a guidebook to a founders’ startup journey.

According to Koksal, the most important initial hurdle is a mental one: Founders must understand very clearly why they’re doing what they’re doing before dedicating precious resources to the project. 

“One of the main challenges is knowing yourself as a founder: Who are you, why are you doing this startup, and what's the purpose of doing this?” - @ilkerkoksal
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“One of the main challenges is knowing yourself as a founder: Who are you, why are you doing this startup, and what’s the purpose of doing this?”, he says. “It’s a huge thing you’ll spend most of your time, energy and capital on, and the most challenging thing is understanding why you’re doing this startup.”

It may sound like a no-brainer, but the answers aren’t always simple. Not every founder is able to “match their own core values to the startup’s values,” Koksal says. And that dissonance can create problems and roadblocks down the road.  Alignment in values ties closely with “problem-solution fit,” Koksal explains — and if you’re clear on both, the easier the path to actually starting up will be. 

Then comes the other hard part: Startup survival. 

There are a series of typical challenges in building a startup: Creating your minimum sellable product and proving out your concept; recruiting a stellar team that adds value and contributes to a flourishing culture; finding your first set of foundational customers; sourcing investors and raising money. 

“In the first place, you need to define your risks, and then you need to define what’s the best possible path for your startup.” - @ilkerkoksal
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“In the first place, you need to define your risks,” Koksal says. “…and then you need to define what’s the best possible path for your startup. That process helps you set up your A+ team, and to evaluate that team constantly.”

For many founders, finding product-market fit is one of the most elusive milestones: It doesn’t matter how innovative your technology is, or how excellent your team is, if there isn’t a big enough market for what you’re hoping to sell. 

“At some point you believe in yourself and you believe in what you’re solving, but you need to get the product-market fit right,” he says. “After that, you can raise a round, you can get A+ team members, and you can sell your product to more customers. That’s the hardest part.”

Once you’ve raised money, putting together a board and figuring out how to best use it are critical to conquering what challenges lie ahead. 

“You have to leverage your board effectively -- to run the business successfully, to get scaled, and establish a really great, sustained culture.” - @ilkerkoksal
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“If one of the VC partners comes to your board, you have to leverage your board effectively — to run the business successfully, to get scaled, and establish a really great, sustained culture to keep things running smoothly.”

Having the right people on your board can also facilitate deals that help your startup to grow and provide a critical boost during key periods. Those board members can also help to navigate you and your executive team through those processes. It’s worthwhile to consider your exit strategies as well — or if you don’t wish to exit, how you’ll build a sustainable and self funded business for the long term. In most cases, some form of an exit is likely — whether it’s a merger, an initial public offering, an acquisition by a much larger company, or a private offering. Whatever the case may be, founders must consider and be prepared for multiple scenarios. 

“There are always ups and downs; it’s a rollercoaster,” Koksal adds. “In the end, you can make a soft landing, you can get acquired by a company, or you can quit the startup. Quitting is also an exit. But: Is it the right time or not? Should I exit the startup now as a soft landing? These are the hard decisions.” 

For SaaS founders, gathering a wealth of data is often the easy part. What’s harder is knowing how to use it. 

Corey Haines is the Head of Growth at Baremetrics, the fast-growing SaaS analytics and insights platform. Having consulted with hundreds of founders on how to best leverage the metrics it provides, Haines shares a few handy shortcuts on how to make the most of the metrics you see and steer your startup in the right direction. 

SaaS metrics are only valuable if you know how to use them. Learn how to slice and dice your metrics and discover where you need to take action.

Check out the full event here as Corey breaks down the most important metrics every SaaS founder needs to master — and tips on how to leverage them — including:

• Monthly Recurring Revenue
• Quick Ratio
• Churn Rate
• Learn Conversion Rate
• Average Revenue Per User

“Analytics are only as useful as what you can take action on.” - @coreyhainesco
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“Analytics are only as useful as what you can take action on,” says Haines. “With many of the metrics, there’s a lot to actually look into so you can figure out what to do with the information.”

In SaaS startups, your most important metrics tend to correspond with different points in the sales funnel, the financial picture of your business, and ways to optimize both. Your MRR, or monthly recurring revenue, is one of the most important focal points of a founder’s dashboard. A related metric, quick ratio, offers a snapshot into the overall health of your balance sheet. 

“The quick ratio basically compares all of your positive MRR inputs to your negative MRR inputs,” Haines explains. “It usually gives you a number of between about 0.5 and 5.0. If you’re at 1.0, that means that your expansion and contraction is basically equal. If you’re below 1.0, that means the business is contracting — and that’s not a good thing.”

From there, you can dig down to try and identify the causes of the quick ratio. 

For a SaaS founder, the churn rate is a metric you’ll want to keep up with constantly. That will tell you how many customers are — and are not — returning to the product, and point to adjustments you may have to make. 

“I‘d look at lead conversion rate, MRR, churn and average revenue per user, because that’ll kind of give you a full breadth of the funnel,” Haines says. “How well are we turning interested people into customers, and what are we doing with these customers? What is the book of business worth, and how well are we retaining these customers?”

Those fundamental metrics, and a handful of others, will open up insight into where you and your team can improve. Lead conversion rate, for example, may give you a glimpse into how effective your marketing communications are. Baremetrics plugs into Stripe, Braintree, Recurly, Google Play, App Store Connect and a variety of other providers, and breaks down a wide range of metrics: New subscriptions, reactivations, trial conversion rate, cash flow and much more. 

It’s just as easy to get distracted by metrics that appear more important than they are, or that aren’t totally relevant to the currency lifecycle of your SaaS startup. 

“There are a few popular ones that can get sort of overblown or overinflated. One of those is lifetime value,” he adds. “What happens, especially with a SaaS business, is that the metric itself is just a function of your average revenue per customer and your churn rate, both of which are moving numbers. So your lifetime value is going to fluctuate depending on how well each one of those is doing.” 

“Lifetime value is often used to quantify how much your startup should spend on acquiring a customers — but it isn’t always a good reflection of what you should take action on day to day, because it moves so quickly based on a number of inputs. Average revenue per customer weighted against customer acquisition costs is a much more useful metric in many cases,”  according to Haines. 

“If your customer churn is higher than your revenue churn, then you know that it's probably from your smaller accounts or some customers who are paying you less.” - @coreyhainesco
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Ideally, SaaS metrics highlight specific ways of steering your startup towards longer-term gains — if you know how to properly interpret what you’re presented with, and what it means for your customer base. 

“If your customer churn is higher than your revenue churn, then you know that it’s probably from your smaller accounts or some customers who are paying you less,” Haines says. “That can tell you that you have a changing customer base, and that your smaller customers are less fit for the product. But in general, what you want to see is consistent expansion over time.” 

For any startup founder, one of the most important skills to master is the art of the pitch. 

A good presentation can unlock deals and many other opportunities. And yet presentation skills are rarely intuitive: A good pitch requires time, knowledge and feedback to master. 

Nancy Hayes, principal at NKH Group, is a management consultant, executive coach and angel investor who also held executive roles at IBM, at nonprofits, and in higher education. Register at Founders Network for Nancy’s full webinar on presenting to angel investors and venture capitalists. 

Join Nancy for actionable advice on: 

• Crafting Your Presentation
• Tailoring Your Pitch
• Building the Perfect Deck
• Making “the Ask”
• How You’ll Be Graded

“Investors want to see a CEO that they can envision being the CEO of the company as it grows, and attracting a team that will be successful in meeting the goals of the company.” - @nancyhayes
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The CEO of the company

Venture capitalists and angel investors want to see someone they can envision being the CEO of the company as it grows, attracting a team that will be successful in meeting the goals of the company, and someone that we can picture being at meetings with for the next seven to 10 years, responding to challenges in the environment. “In fact, most studies of investors have shown that the number one deciding criteria, although there are many important things, is the team and the CEO,” Hayes explains.

“Most studies of investors have shown that the number one deciding criteria, although there are many important things, is the team and the CEO.” - @nancyhayes
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Projecting confidence and an exciting vision for your startup is only one part of the equation. When pitching to angel investors or venture capitalists, it’s critical to understand your audience. There are notable distinctions between the two sets of investors, how their funds work, and what types of startups they tend to be interested in. And startup founders need to tailor their presentations to the environment: a timed meeting to a busy investor, versus a one-on-one meeting, will have distinct limitations and demands. 

“A common mistake is forgetting that the investor is not a potential customer, but is investing in a company,” Hayes says. “Investors are evaluating the risk-reward profile of an investment, not necessarily the specific features of your product,” Hayes adds. 

“A common mistake is forgetting that the investor is not a potential customer, but is investing in a company.” - @nancyhayes
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The pitch deck

Then there’s the pitch deck. Successful pitch decks will contain a few essential elements that reflect what investors are looking for, according to Hayes, and outline your business plan: Your team, the opportunity you’re pursuing, your product and how it fits into the market, traction to date, revenue model, etc. Nancy shares her formula with Founders Network, as well as pitfalls to avoid, such as relying on too much dense text to get your message across. 

Startup founders should also be aware of how they’re being evaluated. Investors are likely to score presenters on a range of criteria that reflect the content of the pitch, the soundness of your product and strategy, and how well you’re likely to execute your business plan. Ultimately, investors are evaluating the potential to get a sizable return on their investments — another reason why confidence, preparation, and knowing what your audience wants are so important.

Revenue-based financing

For some startups, revenue-based financing can be a great way to fund your growth without giving up any ownership of your business or establishing a long-term relationship with an investor. This works best for companies that already have some revenue, but won’t necessarily grow to the scale that a venture capitalist might expect. Revenue-based financing is commonly pursued by enterprise software startups, or companies with a social mission that will generate some revenue, but not enough to get the attention of many investors. 

“Revenue-based financing is a way of getting financing that does not result in permanent ownership transfer of the company, and it works best for companies that have a potential to grow and be profitable.” - @nancyhayes
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“Revenue-based financing is a way of getting financing that does not result in permanent ownership transfer of the company, and it works best for companies that have a potential to grow and be profitable — but are not going to scale large enough to attract an exit of the company,” Hayes explains. “So what resulted from this is the concept of a loan where I give you $10,000, and you hold back a single digit percent of your revenue each year. And then you use that to start paying me back until I’ve reached a predetermined return. Then the relationship is over.”

Leadership counts, perhaps now more than ever. 

Founders and CEO’s are navigating a period of unprecedented turmoil and change. And oftentimes, the best resources in times of uncertainty are peers who undergo similar challenges. That’s according to Jason Gardner, founder and CEO at leading fintech firm Marqeta, which has raised $528 million since it was founded 9 years ago. As a longtime founder and executive in Silicon Valley, Jason has seen his share of boom-and-bust cycles, and shares his experience at a Founders Network keynote. Register for Jason’s talk here.

“No one knows for sure how long the current recession will last, or what the full trajectory of COVID-19 may be. But founders and CEO’s can take a few steps to ensure they’re making sound decisions in responding to the crisis,” Jason says. 

“There are three areas that I’ve been focusing on as a CEO and founder: Number one is managing the psychology of my organization, and also managing my personal psychology. Because we’re in such uncharted territory, many of us are trying to find our way through what is potentially a significant downturn in the economy,” he says.

Relying on peer networks, like Founders Network, and the expertise of people you trust is pivotal right now, both in terms of gaining knowledge and resources and the psychological benefits of connecting with others in the same boat. 

“You never know what a small investment of time and capital is going to bring back to you. In times like these, your own psychology is really important. You can only lean on friends and family so much — you need to be able to lean on people who understand what you’re going through, who understand what it’s like to start and grow a business and what you’re dealing with on a day to day basis, which in many times can be really difficult.” 

Managing your own psychology isn’t strictly about personal wellness — it can also have major implications for your business, trickling down to your organization in numerous ways.

“Anything you do, whether it's hiring somebody or raising capital, 90% of it is psychological. People are investing in you.” - @jmgards
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“Anything you do, whether it’s hiring somebody or raising capital, 90% of it is psychological. People are investing in you. If you’re a fait accompli and have fire coming out of your eyeballs, they’re going to believe in you and they’re going to want to invest. And then the flip side is true: You might have the best idea in the world, but if you can’t articulate it very well, or if you don’t exude confidence, people simply aren’t going to invest.” 

The link between personal psychology and the health of your startup is especially pronounced in a crisis, when founders need to make decisions — often difficult decisions — very quickly. 

“As a CEO or founder, you're constantly on stage. Your employees, your investors and your customers are going to be listening to you, so you have to be very prepared and very focused.” - @jmgards
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 “As a CEO or founder, you’re constantly on stage. How you operate, how you think, how you speak, what you say: Your employees, your investors and your customers are going to be listening to you, so you have to be very prepared and very focused,” Jason says. 

From an operational perspective, managing losses should be a top priority for founders right now. Founders and CEO’s must be prepared to take decisive action to preserve their runways as long as possible, to pivot where needed, and to generally recalibrate investments for what could be an extended downturn. 

“In the startup world, capital is everything. Controlling your runway, which is how much time you’re going to have before you need to raise your next round, is super important. These are things that you’re in control of now,” Jason says.  

But it isn’t all about battening down the hatches. Founders and CEO’s can use this time to build a stronger, leaner, and more resilient organization — the type of organization that will be able to dominate whatever new environment emerges. 

“I can tell you at Marqeta, we’re spending a lot of time doing strategy right now,” he says. “Obviously the environment has completely changed, so we’re focused on how that will change the business over the next three to five years.” 

“Now is the time to grow and protect the core. And what I mean by that is your customers. The customers that you have are going to be your most important: Check in with them, meet with them, make sure you have a clear understanding…
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“Now is the time to look at your startup and protect the core,” Jason adds. 

“In thinking about the recession, now is the time to grow and protect the core.. and what I mean by that is your customers. The customers that you have are going to be your most important: Check in with them, meet with them, make sure you have a clear understanding of where they’re headed so you can adapt,” he says.

Lots of startups are facing challenges right now — and chances are, many of your customers are too. Now is the time to put the needs of your customers first, which will pay dividends once the economy bounces back. 

“Talk about your product roadmap, talk about your strategy, and make sure that you are in front and center in those discussions,” Jason says. “Be prepared to take on the onslaught of business coming out of this, because budgets will come back and people will want to spend money.”