WARNING: all this is for self-reference and not really intended for public reading but publishing it anyway.
No one will join your company, invest in your company, buy your product, write about you, or know how to help you if you can’t tell them what you’re doing.
How to use this document?
Make a copy of this document. Remove irrelevant parts(like this section) and questions. Answer the questions or at-least answer how you’d approach it. Save the document somewhere accessible for future reference.
# example
- What is the fuel?
- Do you understand your product?
- Do you understand your product domain?
- Vision statement
- Mission statement
- Values
- Do you have a strategy?
- Marketing strategy
- Growth strategy
- Product strategy
- Monetization strategy
- Sales strategy
- What about branding?
The main purpose of this document is to offload context you have in your mind into written form so that you and others can refer to it later. Don’t get bogged down in planning and analysis so much that it cripples you. You can always come back and improve on it.
What is the fuel?
Before anything else, you need to be aware of what is this that you’re trying to build.
- A side-project that you’re really passionate about?
- Something you want to bootstrap?
- Something you’ll definetly need investor money for?
- Something else?
Have a rough idea about it. I feel it really dictates your entire thinking process and how much effort you’re willing/should put into it. It’s good to be aware of it.
Helpful prompts:
- If another company was working on this idea and not you, what would you think about it? Would you join them? (Y/N)
- Imagine yourself standing in front of your team, investors, family, and friends. You’ve failed, and they’re waiting for you to speak. What will you say? Are you willing to work on this problem given that failure is the default?
Do you understand your product?
- Who are the users? (<=70C)
- What is the essence of their dissatisfaction? If they read this answer, would they say “thanks, I wish I’d thought of putting it that way”? (<=240C)
- What are you building for them? (<=70C)
- Write a tweet from a hypothetical customer explaining the product and how it eliminates their dissatisfaction.
- Write a blog post title for your product launch. Is it surprising? Is it new? Will your target customers want to click on it? Will they want to share the link? Will they still share it the next day? (<=70C)
- Write the first paragraph of your product announcement blog post. Include the product name, an explanation of what the product is, the target market, the main benefit, and the call to action. (<=240C)
- What “metrics of goodness” do your target customers care about? Does your product dominate every available alternative on these metrics? (i.e. what can you do that no one else can do?) (<=240c)
- Is your product as awesome as it could be? Probably not. (Y/N)
Do you understand your product domain?
Even though we write these statements upfront, we can and should iterate on the vision/mission/values along the way. Don’t spend too much time and energy on this initially, but write them. A nice outcome of a defined vision and mission is that it makes decision making easier when in a tie.
A vision is the top of the mountain. The mission is how you get there.
Vision statement
- Traits:
- Describes purpose(What?)
- Egocentric, implicitly answers why “you” do what “you” do. It’s not customer oriented.
- Aspirational/inspiring
- Communicates hope, paints a picture of the future, the impact it’ll make
- A reference to check alignment to when making any decision
- Honest and authentic (wordsmith it later)
- Helpful prompts to think about, when working towards a vision statement:
- What is the most ambitious achievable milestone for your company within a 25 year time horizon?
- Is your product a credible advance toward this milestone?
- What’s the next credible advance toward this milestone? The one after that? The one after that?
- Examples:
- This nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.
- To build a place where people can come to find and discover anything they might want to buy online.
- Rapidly create a world-class Internet company/site for Sales Force Automation.
- Global leadership in providing the software as a service model driven by an enthusiastic and wildly successful customer community, and energized by world-class employees.
Mission statement
- Traits:
- Describes the current direction of the company to every stakeholder.
- Describes what the company will at the moment to move the needle towards the vision.
- Example:
- We fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments.
Values
- Traits:
- These values are needed to achieve the said vision.
- Format:
value:description
, description should be clear so that everyone is clear on what it means to live them.
- Tip:
- The best approach is to make a list of values, then prioritize it.
- Example:
- JFK had a vision about putting man on the moon. He did implicitly mention the values required to achieve said goal. He implicitly mention dedication, discipline, innovation etc.
Do you have a strategy?
Strategy is how you’re going to achieve the mission; a plan of sorts. It’s one thing to say you’re going to plant 10,000 trees than it is to actually plant 10,000 trees, the later is the strategy. Moreover, a given strategy is only valid as long as the playing field remains the same. i.e be ready to change it if required.
Strategy is to execution as design is to coding. The best time to fix software bugs is before you start coding; the best time to fix a bad strategy is before you’ve committed yourself to executing it.
The actual strategy is obviously out of the scope of this document, but try giving a rough outline to the best of your ability in this document. Also feel free to get external help when you feel like. The “I am doing every task myself with no experience at all." can be a bottleneck/limiting factor to your success. Beware of the opportunity cost.
Marketing strategy
When it comes to marketing strategy, there is no cookie cutter approach. It varies heavily on target audience, industry, business to business in the same industry, budget and what routes of advertising you’d like to take etc.
For example, a super watered down version can be:
(a real one needs to be way more detailed)
- Targeting Audience: ladies 23-27
- Channel: Instagram & Pinterest ads
- Spend: $100 a day
- Creative: suggestions about images and copy
Usually, once you get the ball rolling you should be able to think of 100s of ways to market your company, but the tricky part is prioritization. For better decision making while prioritizing, it is important to analyze what you’ve have done. What worked? What didn’t? Why didn’t it work? What tweaks can you make? Trial, wait, analyze, tweak/ditch activity and try again.
That being said, assuming you’re working on some online business here are some general directions for a marketing strategy. Get creative!
- Targeting: A good marketing strategy typically starts with targeting. You need to know who you’re going after. Do your customers have peak times of year/month/week/day? getting your message out is great but getting people to hear it is the tricky part. Do we need to re-target?
- Goals: Decide on the goals of the marketing strategy should be? Is it drive more traffic to your website, is to increase you Instagram engagement, is it to sell more products?
- Credibility: How are you going to establish expert credibility?
- Community: Do you need to build a community in your niche?
- Content marketing: What kind of content marketing would you do?
- What kind of media you want to deal with?
- Paid media
- Owned media
- Earned media(user generated), can we reuse it for owned media?
- What kind of content would you create?
- Product demos/Product videos
- Articles
- Brochures
- Illustrations
- Answer questions on the web, solve someone’s problem with content. Set up google alerts about relevant topics and post about them.
- How are you going to create positive word of mouth?
- So on.
- What kind of message/CTA would you want to deliver as part of the content? (See also Brand messaging)
- Do we need to use social media? or email marketing works?
- Do we need to use certain tools for social media? eg. Hootsuit.
- Did we check what social media tactics competitors are using?
- Did you check on what you want social media to do for you? Create a buzz? Sell products?
- Should social media content only be entertaining or should it also be educational?
- If you have an website with content, how are you planning to do SEO for it. Remember, SEO is just 1 facet of marketing.
- What kind of media you want to deal with?
- Ads/Campaigns: Going for ads too early is usually an issue, if you plan to placing ads, how are you going to do it?
- Uniqueness: How saturated is it? how much effort needs to go on proving your uniqueness? Are you the only brand in the market with your product?
- Tooling: If you’re planning to use some tool/tracking services etc. This is the place where you specify what you plan to use and why that tool specifically.
Growth strategy
- Calculate market size (See market research)
- Figure out if you are a fly/mice/rabbit/deer/elephant
- Which subset of your target customers are so constrained by the status quo, they’ll welcome a buggy product? (<=140C)
- List your first ten customers. How would you get them?
- Which playbook will you use to get customers after the first ten? (<=240C)
- What would need to be true in 18 months for you to get essentially unlimited cheap capital? How will you achieve that? (<=240C)
- Resources for growth hacks
Product strategy
Non exhaustive list ofcourse.
- Category: What category do you fall into? (We make a ?)
- Core value proposition: What is your product especially good at? (USP, maybe by user type)
- Describe a specific person with a specific problem
- Describe their current best effort to solve their problem
- Describe why it’s still a problem
- Describe how their life gets better, thanks to you
- Architecture/commitment: It achieves this excellence(USP) because
- Certain Ability: You have a certain ability that others don’t?
- Logistics: How do you plan to make the logistics efficient? in-house? use a 3PL?
- Markets and use cases: If you ?, you should buy it.
- Buyer universe: We sell to ?
- Macro Trend: Why now? What’s true about the world that nobody else figured out yet?
- Competition: Who does the competition think as their alternative?
- Competitive strengths: Your stuff is superior wrt alternatives in terms of ?
- Competitive weaknesses: Our stuff is inferior wrt alternatives in terms of ?
- Convert: How are you going to convert competitions customers to yours? How would you lower the barrier?
- Influencer perception: Influencers perceive us as ?
- Investor perception: Investors perceive us as ?
Monetization strategy
Also see timhaines/saas-pricing-resources. Here you basically strategize the sources of revenue.
- What are the primary revenue streams?
- What could be secondary revenue streams?
- Describe what values the customer is getting from making the transaction in each of these streams.
- Put out a rough best effort pricing plan and pricing strategy.
- How much will buyers willingly pay us?
- subscription-based: creating the need to continuously prove their worth.
- one-time: sweet and simple
- so on.
Sales strategy
Sales is important. You strategize your revenue streams in the monetization strategy but sales is what actually brings in the revenue.
- Difficulty of adoption: To use our stuff, what precursor do buyers have? Can we remove this obstacle for the customer?
- Sales process: Our sales cycles are managed and closed on our behalf by?
- Deal-breakers: What is something, that in some accounts will prevent us from winning, almost no matter what?
- How will you build a moat?
What about branding?
So branding is way out of the scope of this document, but brand messaging that helps you understand your offering better.
We need to build brand awareness and brand integrity, so we need a consistent brand message to make sure that the whole company sends out correspondence that is in keeping with the image you want to portray.
What’s the most compelling claim you can make that people will actually find credible?
Two things matter about marketing messages: Do people believe you?, Do they care?. We need to make a marketing argument that’ll make them buy into us. A company might need more than one marketing argument.
So what does it meant to construct a marketing argument?
Argument showing:
- Value: addressing “Why should I care?”
- Differentiation: addressing “Why should I believe you?”
- Credibility: Rests on the whole flow of the story, and is no stronger than the weakest of the layers of the argument.
Example marketing argument
See this for extra information.
- Enterprise IT product (proof-today messaging stack)
- Tangible benefits
- Technical connection
- Features (and perhaps metrics)*
- Persuasive details
- Customer traction or proof-of-concept tests
- Enterprise IT product (sustainable-lead messaging stack)
- Tangible benefits
- Technical connection
- Features (and perhaps metrics)*
- Technical connection
- Fundamental product architecture
- Enterprise IT product (focus and commitment messaging stack)
- Tangible benefits
- Technical connection
- Features (and perhaps metrics)*
- Dedication
- Focus on a specific set of use cases
Primary Goals
Basically, the end goals of marketing communication are:
- Encourage customer organizations to give you money.
- Encourage engineers and other desirable employees to work for you.
- Encourage investors to give you money as well.
In various combinations, those audiences all need to be persuaded that:
- You have and will continue to have desirable product offering
- Customers will buy those offerings in enough quantity for your business to be healthy.
- Your product has a “cool” aspect. Engineers care about that directly, and the rest of your story is easier to sell if there’s a cool hook on which to hang it. (Highly desirable even if not totally necessary).
Additional tips
- Credibility is everything. There should be enough detail behind your stories for them to seem real. You shouldn’t oversell.
- Marketing communications should have both concise and detailed portions.
- Need to be (sufficiently) concise, so as not to bore or scare your prospects before they’re ever engaged.
- Need to be (sufficiently) detailed, so as to be credible.
- You shouldn’t address all audiences. You don’t want to sell to a prospect who’s unlikely to buy.
Business metrics & Jargons
Clear data leads to productive conversations.
Whether we should worry about these metrics is my personal opinions. Also read what is unit economics for a better understanding about how these metrics relate to your business.
Jargons
- Revenue: It is all the money you got from customers who bought your cookies.
- Gross margin: It is Revenues minus all the ingredients you bought for your cookies (flour, milk eggs, I don’t know, I’m not a good cook). It would be even simpler if you bought cookies wholesale and resold them
- Profit margin: It is your Gross margin minus all the other costs, the rent fee for your stand and your wages as a baker.
- ROI: If your total investment was $100, and your profit was $20. RoI is 20%.
- ROE: If your friend has 50% equity in your business($50+$50=$100), and the profit was $20, then the RoE for each of you would be 40%.
Metrics
Investor numbers
- EBITDA
- ITDA(4 expenses) are going to happen regardless of the business function of the company
- It’s typically used to compare similar companies because when you take out interest, tax, and other accounting items like depreciation it allows you to compare their true performance to each other.
- It’s not a great comparison is between dissimilar companies because one company may need a lot of debt to survive and another may need not
- Should we worry about it initially? NO.🚫
Financial metrics
- MRR
- Monthly Recurring Revenue.
- The predictable total revenue generated by your business from all the active subscriptions in a particular month.
- Should we worry about it initially? YES.💚
- ARR
- Annual Recurring Revenue.
- Should we worry about it initially? NO.🚫
- ARPA/ARPU
- Average revenue per account.
- Profitability measure that assesses a company’s revenue per customer account/user.
- There’s some differences between ARPA and ARPU but we need not worry about it now.
- Should we worry about it initially? NO.🚫
- CAC
- Customer Acquisition Costs
- For example, your signup-to-paying conversion rate can be 10% of CAC and other things like adverting might consume 90% of CAC
- Should we worry about it initially? YES.💚
User engagement metrics
- Total user base
- Should we worry about it initially? YES.YES.YES.💚
- Active users
- Should we worry about it initially? YES.YES.YES.💚
- Signups
- Subscriptions(converted signups)
- CLTV/CLV/LTV
- Customer Lifetime value
customer lifetime x gross margin
(extreme watered down, not the only formula)- You want your CLTV to be 3x/4x your CAC
- Should we worry about it initially? NO.🚫
Customer behavior metrics
- Bounce rate
- Customer churn rate
- Time spent on product: If it’s a digital product, what is the average session time etc.
- Web traffic
User satisfaction metrics
- Product quality
- Should we worry about it initially? YES.YES.YES.💚
- NPS (net promoter score)
- Customer satisfaction score (CSAT)
Valuation
I have 0 knowledge about valuation, these are just comments copied from the internet. Take all of the following with a big grain of salt. I had to add this section for completeness sake.
- Early-stage tech valuation is an art not a science. The ‘value’ of something is how much someone is willing to pay for it, it isn’t necessarily tied to anything tangible.
- A Company is usually evaluated before anyone offers to purchase some % of it.
How much do you need to raise at what percentage * how convincing your are = your valuation
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