Does your business rely on revenue to fund itself? Of course, it does! Even if it's supplemented by capital from outside sources, your business should always strive to rely on customer revenue to power its operations. If revenue is so important to all businesses, then the 2 most critical objectives in business are retaining existing revenue and adding new revenue. In many startups, however, these critical functions are an afterthought but why?
Companies often become product-centric rather than customer-centric. Particularly with technical founders, the "if you build it, they will come" attitude is pervasive. The truth is that no product sells itself and revenue doesn't grow on trees. Businesses don't get rewarded with revenue for building a cool product. In fact, it's quite opposite. In reality, businesses are rewarded with outside capital for building a cool product and in turn, they are then burdened with the expectation of quickly growing revenue.
So, what's it like to sell for a product-centric organization? Tough. A lack of product-market fit and missed revenue targets are rarely diagnosed as a deficiency in the product. Instead, the sales department becomes the scapegoat for failings in the product. When senior leadership is too close to the product, it blurs their vision of reality in the market.
Think about it, founders and other c-level executives spend months meeting with potential funding sources talking up the product and making promises on how lucrative the company will be in order to raise money. Once they have investors on board, the vision that was pitched needs to become a reality. It can be difficult to make that transition from optimistic potential to reality. Many leaders can have a hard time hearing from folks on the front lines that the utopia that they have pitched for months isn't the reality of the market.
Too often, especially in companies run by technical founders, employees don't want to have tough conversations. Everyone wants to talk about potential, strengths, and positive progress but few want to tackle the honest reality because they may be perceived as pessimists who don't buy into the company vision. This can create a cult-like culture that only endorses compliant employees. The suppression of diversity in thought will be lethal. The worst part is that it creates a self-fulfilling prophecy for those in charge. They think they are always right because they create an echo chamber around them of people who think like them.
This creates a culture of compliance and submissiveness, particularly in the sales department. Sometimes, selling in a product-centric organization can make salespeople feel like they should be seen and not heard. They should only provide good news that validates the vision of the company. When a salesperson mentions a deficiency in the product, it's dismissed as an excuse as to why they can't sell. If numbers aren't hit, it is simply because the sales team is inept.
Truthfully, the companies that embrace the potentially harsh reality of their current situation are the ones who can change their outcome. Maybe serious changes need to be made to the product or maybe they need to pivot and attack a different market segment. Those that only focus on the big picture will ignore the small daily challenges and get frustrated by the lack of progress towards the large strategic goals. Without understanding why progress isn't being made, poor decisions will follow.
Obviously, it can be difficult to look critically at your own product but it's crucial to the longterm growth of the company. Sometimes founders will look at their product through the same lens they look at their children. No one would admit to having an ugly child and the same is true with a management team who won't admit their product has serious deficiencies.