Sure way to kill a business

What’s a sure way to kill a business? Place big bets based on unverified assumptions and make sure that if any one of those bets turns out to be wrong, you hit the wall.

What is a better strategy?

In the book “Great by choice”, J. Collins and M. Hansen show the concept “Fire bullets, then cannonballs”.

What it means:

1. First, test your assumptions with low calibre, cheaper methods.

2. Once you have found a working model, then scale it, invest more in it.

An example

Wrong order:

• Assume you start getting good growth in sales in your base country;

• From that, you make assumptions (conscious or implied): 1) we have a repeatable sales model; 2) we can now scale this model in other countries;

• Then you hire five salespeople;

• And they fail to deliver the targets;

• You’ve burned through the cash.

Better order, continuing the previous example…

1st bullet: verify you have a repeatable sales model.

• Fully delegate sales in the base country to hired salespeople so that the cofounder-CSO is not making almost any sales, only sales management.

• Through that, learn what you can improve in the repeatable sales model… or realize you don’t have it yet, and then you have the chance to build it without a considerable increase in the burn rate.

2nd bullet: test the ground in the other market

Send your cofounder-CSO (or/and yourself) to the new target country and spend a few months getting to know the people, culture, market, potential clients, their pains and wants. Through that, learn if and how you need to adjust your value proposition and sales model in that country with a relatively small investment.

3rd bullet: verify product-market fit in the new country

Let your CSO make the sales in the new target market for a few months. If he/she succeeds, then you can delegate the sales. If he/she fails, you will have learned that you need to change the value proposition. Otherwise, if sales in the first export market would be done by an employee and would fail - how would you know, where’s the problem - in the salesperson, in the repeatable sales machine, or the new local product-market fit? Again, this is a verification of assumptions with a relatively small investment.

Only then, once you’ve verified you have the repeatable sales model, you understand the new market and have a clear product-market fit in it, then you can more safely start scaling the sales team there.

Crawl, walk, run—the order in which nature has set our evolution. Don’t try to fly* to the sky when you are in the phase of learning to walk.

* Reference to the Fall of Icarus.

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Farhad is the CEO of .Cocoon.

When there is a challenge at the business level .Cocoon Program supports founders:

➝ To find the link between the business challenge and their personalities and personal challenges;

➝ To bring forth personal changes that, as a result, create changes in the business.

Let's talk and see if we can support you to solve your biggest business challenge.