Entrepreneurship is nothing if not a challenge. Ask us, and it’s truly the ultimate challenge, one that requires unparalleled levels of strength, creativity, flexibility and conviction – often all at the same time, multiple times a day for years on end. Contrary to what many sources of entrepreneurial advice will tell you, there is no formula to success. You can try to reverse engineer another founder’s playbook or execute another company’s road map, but the reality is that your company’s trajectory is unique.

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That’s a huge part of why we’re devoted to providing Next Coast Ventures portfolio founders with one-on-one support, guidance and resources through our firm’s platform function. As a firm made up of former entrepreneurs and operators, we know how crucial it is to have a source to tap for help. In fact, it can be everything when you’re building a company from the ground up. 

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With that in mind, we created this guide for all founders looking for insight, answers, wisdom and new ideas as they grow and scale. It includes some of our most-read articles over the years to provide you with a well-rounded view on our best advice.

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Leadership

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Board Management Advice for Entrepreneurs: As the CEO of your company, you’re steeped in all kinds of information about your company that your board may not be up-to-date on. Here’s how to get the most out of your next board meeting. 

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Board Management Wisdom from Silicon Valley Legends: What Mike Smerklo learned from Bruce Dunlevie, Bill Campbell, Marc Andreessen and Al Davis about creating, building and managing a world-class board of directors.

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When Board Meetings Don’t Go Perfectly: If your most recent board meeting left you feeling less than perfect, here are reasons you may actually be doing things exactly right.

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Time Management for CEOs: How will you use your most precious resource wisely as you build your company? Read on for time management lessons learned from Mike Smerklo’s time at the helm.

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A Simple Matrix for Solving Time Management Struggles: Use this 2X2 matrix strategy for quick improvements to your time management challenges.

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How to Make Decisions as an Entrepreneur (part 1, part 2, part 3): With hundreds – if not thousands – of decisions cropping up every day, founders need a strategy to cut through the noise and make choices quickly.

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Avoid These Common Career-Sabotaging Pitfalls: Want a long, healthy and productive career? Here are five things to avoid at all costs. 

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Fundraising

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Think Like a Venture Capitalist: Dig into this post for seven steps entrepreneurs can take to significantly increase their chances of raising capital.

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Choosing a Great Capital Partner: All investment is not created equal. Strategies for finding and landing the venture capital relationships that are right for you.

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Investors are from Mars, Entrepreneurs are from Venus: Before you can fundraise, you need to understand who you’re talking to. Read on for insights into the minds – and priorities – of the people on the other side of the table.

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Executive Coaching & Mentorship 

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Founder Insights: The Power of an Executive Coach: Five things to know about executive coaching as a startup founder.

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Mentorship And The Monster Under The Bed: Five lessons on how mentors can help you keep moving forward on your entrepreneurial journey.

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To Avoid An Entrepreneur's Biggest Dealbreaker, Find A Mentor: Why finding a mentor is crucial to entrepreneurial success. 

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Entrepreneurial Mindset & Mental Wellness

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Being Done and Being Okay With It: Done right, entrepreneurs can feel good both about being done with a current startup or role and how the decision was made. 

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Why Entrepreneurs Shouldn’t Be Afraid to Ask for Help: It’s not easy to persist through unprecedented leadership challenges (without losing your mind in the process). The key? Asking for help.

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Sales, Growth & Marketing

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Steps to Hiring a Successful Sales Leader: It’s time for you, dear founder, to hire a sales leader and step aside. Here’s how to do it right.

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5 Things Every Company Must Do Right Now for Customer Retention: Actionable strategies drawn directly from our Portfolio-only event featuring Gainsight CEO Nck Mehta in conversation with Next Coast Ventures Co-Founder and Managing Partner, Mike Smerklo.

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Who Should Customer Success Report To? Here’s an argument for setting up your org chart so Customer Success reports directly to the CEO.

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Entrepreneurship and the False Positives of Early Sales: How to think about your company’s first big sales win and what it means for your future performance.

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Is Your Brand Hard to Find Online? Tips for up-leveling your marketing with quick, simple steps.

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The Role of Transparency in Building a Brand: How one Next Coast Ventures portfolio company leveraged transparency to create a trusted brand.

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The Dos and Dont’s of Working with the Media: All press is good press…or is it? Important things to keep in mind for startups considering their next PR push.

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At Next Coast Ventures, we are built by entrepreneurs for entrepreneurs. We continue to focus on improving the way we support our founders in their entrepreneurial journey. We heard from our portfolio that beyond day-to-day oversight, a key way to provide support is by engaging the best experts to talk about specific topics. So we are pleased to share the takeaways from our first speaker event of the summer “Customer Success: Retaining Your Customer Base in Challenging Times” with Mike Smerklo and Nick Mehta.

Our Head of Platform, Kaitlyn DeBernardo, is constantly engaging with both our portfolio companies and our expert network to surface high-impact, relevant, content. This event was invite-only to our portfolio but the insights were so strong that we wanted to share them with the entire entrepreneur community. 

We think Mike and Nick were the perfect pair to double-click on the topic. Prior to co-founding Next Coast Ventures, Mike was the CEO of ServiceSource, a leading provider of outsourced inside sales, customer success, and renewals management solutions for enterprises worldwide. Nick is the CEO of Gainsight, which provides companies with insights on scalable, durable growth through product-led, customer-led, and community-led strategies. So Mike and Nick are the OGs of Customer Success (maybe more the “O” than the “G”, but still pretty smart on the topic). With the tech market pull-back and the talk of a possible recession, now seemed like the perfect time to have this discussion - and Nick exceeded expectations!

Takeaways:

1. Customer success is critical. A decade ago, when Gainsight was in its early days, tech companies were only just beginning to invest heavily in customer success alongside sales. Now it’s something you simply can’t afford to ignore.

Fun fact: in 2013 Nick recalls customer success manager roles numbering around one thousand. Today that number has grown to over 300K. What’s more, a company’s customer success is a core topic among its C-suite, at its board meetings and with leading early and late stage investors.

“The move to SaaS and cloud shifted all the power into the customer's hands. [Customer success] went from something that was important to something that was just existential. And now, 100 percent of tech companies have customer success teams,” says Nick.

2. Customer success should be part of the sales process. Making customer success a core part of news users’ experience can make all the difference between a short-term customer testing out your product and one who sticks around over the long term. That’s because customers today are more likely to think of purchasing a SaaS product as an experiment. Unlike subscription-based models of the past (think gym memberships and cable subscriptions, where you’re either locked in for a certain time period or have little alternative choice), today’s SaaS products are typically relatively easy for customers to leave if they aren’t getting value.

Without customer success baked into the recipe, Nick says, “especially for early stage companies, you think it's a sale. [Customers] think it's a pilot. That's the bottom line.”

This reality is fueling an industry trend among early stage startups towards hiring customer success team members early – even before sales. That way, companies have the chance to integrate customer success into the user experience from the beginning. While you can fix a sales problem, it’s far more difficult to course-correct a fundamental disconnect between your product and your users’ perception of the value it’s bringing.

3. There are easy, no-brainer ways to creatively engage customers for customer success at scale. Long before it’s renewal time, keep thinking about new ways your customer success team can connect with customers, answer their questions, solve their problems and help them successfully use your product. The biggest challenge for an early stage startup? Doing this at scale – without hiring tons of new team members. 

A great example is working well at Gainsight, where the customer success team hosts regular office hours, something companies can easily do to engage customers and increase retention. The set up can be simple:

• Schedule a regular virtual meeting using your customers’ favorite platform of choice. 
• Invite them to join, ask questions and get the answers they need to successfully use your product. 
• You can host Office Hours with themes around specific best practices and then open the discussion up to allow customers to get tactical, technical help when they need it.

Other options for scaling customer success without hiring include building product walkthroughs, online communities for your customers or automated guided tours.

4. Customer health is all about D.E.A.R. Determining overall customer health is a key challenge for startups seeking to retain customers and reduce churn. But it can be tricky to assess. Dig in, and it’s easy to find more questions than answers: What matters more, net revenue retention rates (NRR) or net promoter scores (NPS)? How do you incorporate your business results, i.e. sales of your product and customer result from using it, into engagement metrics such as daily average visitors? Is there a recommended way to score overall customer health?  

Nick’s recommendation is D.E.A.R, which stands for deployment, engagement, adoption and ROI. Let’s break that down:

• Deployment: a measure of a customer’s use of the product suite, both in terms of the number of features and the frequency of use
• Engagement: a measure of both the frequency and quality of customer conversations
• Adoption: a measure of users adopting your product
• ROI: a measure of your customer’s return on investment and outcomes since using your product

🎧 Listen to Nick talk about D.E.A.R. and why it works 🎧

5. Staying competitive means thinking broadly and automating often. As customer success teams look to drive impact, automation is key to staying competitive. Lean into solutions that will streamline processes while encouraging engagement, including automated email sequences and reminders, product guides and walkthroughs, chat functionality and reporting tools. 

Along with that, Nick says SaaS companies need to think broadly about product, sales, and customer success together as equal drivers of success vs. operating from independent silos. On a practical level, this can look like customer success managers meeting monthly to determine common themes they’re finding in their interactions with customers, then working to uncover why those themes are present. From there, it is much easier to relay the takeaways from customer success to sales and product teams effectively. On that note, automation can come back into play using tools like recording software to share snippets of customer’s feedback directly with relevant teams. “There's no substitute to hearing it in the customer's own voice,” says Nick. 

Want insights from our team and future events like these? We’re planning them for portfolio founders all the time. The best way to get to know us better and follow along: start by subscribing to ATXnology, our quarterly newsletter focused on the pulse of Austin’s startup scene. We’re excited to continue bringing you insightful content from the resources we’re continuously building for founders. If you know an amazing founder who you think needs to know about our approach, send them our way. We’ll be here.

Many thanks to Nick Mehta and the Gainsight team for your participation in this recent portfolio event.

Every entrepreneur dreams of this day:

“We just won the Dell account! This deal is close to $500k in ARR and will bring us close to $1m in ARR. The entire team is celebrating – it is a game-changer for the entire company.” – Startup Founder

When it FINALLY happens, it is a truly levitating experience. Days, weeks, months and years of hard work lead up to this big moment. This big sales win shows that your crazy idea might not just have been so crazy after all. It kick starts your entrepreneur’s mind into imagining: 

Just how much is going to change and how much easier selling your solution will be from now on thanks to this big, early win.   

Finally…finally…finally…you’ve achieved what those lame venture capitalists kept calling “product-market fit.” 

It is all going to be downhill sledding from here.

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Time to celebrate? Absolutely. Get out the champagne, grab your team, take a group photo, kick your feet up on your desk and let it sink in. You did it!

With this big, early win, you wonder: maybe it’s time to change expectations (for the positive) about future sales, rapid growth and more big customer wins?

Entrepreneur, not so fast….

Unfortunately, once you have come back to earth, the hard cold reality is this: you (as the entrepreneur) must now consider what I call the “False Positives” of your first major sales win.  

A false positive in the science community is defined as “a test result which incorrectly indicates that a particular condition or attribute is present.” For startups trying to crack into a market and learn to sell a product or solution, the same definition can be applied to the first few major sales wins.

Yes, absolutely these early wins are tremendous accomplishments. But the real question is whether they are truly repeatable – can you and your team repeat it again and again with less effort each time – or does the win represent a false positive? This question is critical. The answer will direct your time, attention and effort in a way that can make or break your ability to scale your business.

Yes, it is really that important!

So after the champagne is gone, the team has gone home and you have given yourself some time to relax and unwind, you must ask a few questions about the big win. The answers will help determine your next best course of future action: 

1. How many people in the company were involved in the sales process? (Typical start-up answer: “just about everyone”)
2. How involved was the Founder/CEO? (Typical start-up answer: “involved in every part of the sales process”)‍
3. If there was a salesperson involved in the big win, how many resources did she utilize to close the big deal? (Typical start-up answer: “all of them”)‍
4. For the team involved in the deal, how many of them were deeply involved in founding the company and therefore did NOT need training? (Typical start-up answer: “all of them”)‍
5. Did the customer buy a standard off-the-shelf version of your software, or were they promised lots of custom enhancements? (Typical start-up answer: “lots of custom enhancements”)

If you answered the “typical start-up answer” to any of the questions above, you should be concerned about a false positive. 

But here’s the good news: just about every startup experiences similar false positives. The even better news is that, unlike a scientific test, there is a clear playbook to reduce the impact of the false positive. The key is to evaluate your big, early win ASAP. 

Here’s how the early sales win story typically goes:

In the early days of attempting to establish product/market fit (a fancy way to say someone wants to buy what you are selling), a startup must do everything possible to get that first big win. The entire company (even if only a few people) will do whatever it takes to make that happen and bring every resource possible to the fight. 

Great founders are heavily involved in early wins. They call upon Board members, friends, network connections or anybody anywhere who can help make the win happen.  

Sales professionals are granted unlimited access to company resources and the entire team works tirelessly to help. 

Last but not least, because the team is small, just about everyone involved knows the solution or offering cold. In short, all hands on deck do whatever they have to get the “big first win.”

In many cases, this win is a false positive. But why? Because every aspect listed above is really, really hard (maybe impossible) to replicate at scale. 

The company will grow, resources will get constrained, new team members will join and the “all hands on deck” will turn to “the sales team needs to close more deals” or “sales doesn’t understand the product” or maybe even “sales doesn’t know how to sell the product.”

Instead of that outcome, here’s what you want:

You want to continue to grow your startup, but you need to grow differently as you scale. You simply can’t afford to have every big sales win happen the way the first few happened. It is imperative to think quickly about your big, early wins as false positives and then, just as quickly, figure out what to do about it.

This is not bad news. Actually, it’s quite the opposite. You may have false positives hiding out in your early sales wins, but you’ve got proof that someone wants your solution. You are no longer that crazy person with that silly idea. You have achieved the first evidence of product-market fit.

Looking ahead, you’re also learning invaluable information that will help you avoid becoming the next one-it wonder. 

In fact, the false positive might just hold the secret to your success….if you take the time to see it for what it is (and isn’t).

Here are some questions to ask:

1. Which custom features would serve other customers in the market? Customer-specific features aren’t all bad – that’s how you learn what capabilities customers really need.  But it’s critical to determine which ones should become part of the core product and which ones are one-offs that should be avoided in the future.
2. What part of the big win can be replicated without a lot of effort? Things like the solution offering, pitch materials, pricing tools, contracts or clear evidence of your value proposition are easy to scale and replicate.
3. What relationships were critical in the sales process? This is a hard one, but figuring out who the critical decision-makers were and what relationship was required will help you think about future sales relationships and resources to construct. This will help you determine key go-to-market aspects such as buyer personas, ideal customer profile and other scalable processes.
4. What critical knowledge was required for your team to possess? Make a long list of key requirements. This repository of knowledge can start to serve as your training materials for current and future team members.
5. What aspects of the Founder’s persona were essential for the sale? Was it expertise, relationship, industry experience, connections or even the CEO/ Founder title? Break this down and start to consider how this can be scaled by hiring, training, knowledge sharing or sales pipeline and buyers journey processes.
6. What customer gates were critical to advancing the sale? A “gate” is some customer checkpoint you have to pass before the deal can close. An example would be a technology audit by the IT organization, a review of your privacy policy by the legal department, or a presentation to an executive committee. Often these gates will be common across customers and therefore can be proactively added to your sales and marketing processes.

Next, after you do this exercise, take a break. Remember the big win (and don’t forget to make sure the customer actually gets all those things you promised them in the sales process). Take a moment to recognize that you have some time to figure this out.

The first step is to analyze the process clinically and recognize the risk of the false positive. If you do that, you’re already ahead. Too many startups sputter out after one or two big wins and never really figure out why they couldn’t scale the business or repeat that big win. Take the time to examine the process and recognize where false positives (or non-scalable) factors were at play in your big, early wins. Then start to build a plan that takes into account what needs to be replicated – team, knowledge, relationships, processes – you will be well on your way to the next phase of growth.

Author’s Note: A very special thank you to CPO and Co-founder of First Dollar Colin Anawaty and Scott Abel from NCV's Expert Network for their insights and input in this blog post!