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Communications or rather the lack of communications are one of those startup things you should fail fast on.
Regular communications are the map to your startup journey and your friends, family, advisors, mentors and (potential) investors are on that journey with you. This group of people wants to help you, now, when you need help much more than you need money. You may not think so, but you need feedback, guidance and advice much more than money. That insurmountable problem you’re facing? – chances are you’re not the first to face it and likely there is someone in your network (or someone who knows someone) who can provide guidance. Free, experienced, informed guidance that will happily be delivered up in an email, call or coffee if you simply share the challenges you’re facing. Guidance that could save you a whole lot of time, energy and money aka the resources you have in very short supply. By helping you and being heard by you, this network will only become more vocal supporters and champions of you and your venture.
Jason Calacanis has written two recent blog posts on why startups need to communicate with investors. My add to his remarks is that these communications are not simply for investors and shouldn’t start the day your venture raises Seed or Series A investment. Not every venture successfully raises or seeks to raise money. Every venture however, needs sales, customers, clients, business leads, revenue. If your plan is to also be one of elite group of early-stage ventures that raises outside investment then regular communications is one way to cultivate those essential VC relationships. Here’s why: your communications are a strong indication of your leadership abilities and people want to back strong leaders. As Mark Suster noted in a blog post discussing startup pitches:
“What is a VC looking for? Above all – the quality & potential of the team. They are also looking for a well-defined market opportunity, evidence of your success to date…”
I noted being “disciplined in your communications” at the start of this post. That simply means you create and send a communication. Regularly. You don’t try to make it a priority, it is your priority. You set a communications schedule and you stick to it through the good, dull and ugly in the life of your venture. That’s right: you stick to it, regardless of how tired you are or how bad the sales have been. As Jason noted, not hearing from you indicates you’re either a poor leader or your venture is dead or dying. Writing the update will be a struggle or a charm some weeks, no different that being an entrepreneur. You present it in a form, tone and style which makes it easy for the recipients to help you. It’s a factual communication, which also conveys your leadership style and company culture. Add some personality for those of us who receive a lot of these types of communications. And use bullet points versus lengthy paragraphs of overwhelming no-one other than your parents are going to read this text.
To get you started, here is a form of an “investor / advisor / mentor / anyone you’ve met to date” update to keep your network excited about and intrigued by your journey.
- Make this form of communication your own! While it is a decent starting template, the communication is to your contacts and must be in your voice.
- BCC all the contacts you send it to. And the BCC list should grow as you meet people and tell them about your venture. The network effect from having more champions of you and your venture is what you are after.
- Send it out regularly (pick a cycle – weekly, biweekly, monthly – day of the week and time and then stick to that schedule).
- Remember behind every email address is a human being with a messy complicated life and their own set of urgencies and priorities.
And I’m going to intentionally repeat a couple of points, since I can’t seem to stress them enough:
You want to bring your network along with you on your startup journey and regular communications is the best way I know to do this. Additionally, you don’t want to be known as the “911 networker” nor do you want to overlook the opportunity to grow a relationship of trust and confidence with the valuable introductions you are making. These emails are a signal to the market (investors, advisors, mentors) on your leadership ability and skills to launch, scale and grow an early stage venture.
And if you don’t believe me (or Jason, Mark or any other investor who stresses the importance of communications), then take it from a founder. Consistent, concise email updates translated into 200,000 users (with no-marketing spend) for travel app, HitList.
Read the whole article on LinkedIn here.