When startup founders begin their journey they are in for a plethora of noes. When you have nothing but an idea, most people will give it little value. As you begin to build something that actually works you’ll constantly get a no from investors, potential employees and perhaps your parents and loved ones.
A no can take many forms. It can be a mother saying lovingly “Are you sure about that? Wouldn’t it be better to stay at that nice job with a large company that pays well?” or it could be an investor saying something like: “I don’t see a market for this” or “Let’s stay in touch”.
Most founders experience 99% of the answer no in the early days. To be fair, most startups fail so those nosayers are usually correct.
However, some startups are able to get to the next level. They put a real product into the market and get customers to pay for it. They convince some early investors to give them investment capital. They learn how to better communicate their business to potential stakeholders.
As these founders gain scale and build real growth businesses they start to acquire yeses.
A yes can be an investor agreeing to give you capital. It can be a top tier employee who leaves a well paying job to join your company. It can be a large customer deciding to buy your product instead of the one made by a much larger company.
This is commonly the stage where startups join the Accelerating Asia program and it begins to present a problem.
As the founder crests the wave of noes and begins to accumulate yeses some of the yesses can begin to overwhelm the founder and take up too much of their time. Founders at this stage are at risk of hurting their business if they don’t learn how to say no themselves.
Founders are often pitching their business to anyone and everyone at the early stage. But as your company matures and becomes more attractive the founder should begin to apply a filter to uses of their resources.
Only meet with potential investors who are likely to invest and/or add other value such as referrals. Only join pitch events that are convenient and likey to add measurable value to your business. Only join an accelerator or other program that is a good fit for your business and has a reputation for quality. Failing to recognise when you are at this stage will result in major inefficiencies that will slow down your progress and stress out your team.
One of the best founders who went through our program was pitching everyone and everyone, joining all sorts of random pitch competitions all around the world trying to secure funding. At one point they won a pitch competition with a monetary award, but that required them to move their business to Buffalo, New York... what!?! How does this make any sense? Why even waste your time on an event like this which usually requires hours of preparation. Nothing against Buffalo (great wings), but startups in our Singapore accelerator probably aren’t a good fit for moving there.
This also applies to customers. In the early days, founders will often take any customer that will pay them. This is problematic for its own reasons even from day 1, but it's definitely problematic as you scale.
You need to profile a potential customer and ensure there is a good fit. Otherwise, they will likely churn out fairly quickly and mess up your CAC/CLTV ratio, not to mention bad fit customers often take more customer service resources and are less likely to refer others (organic growth).
Find out who your super users are and go get more of those. Learn how to say no to customers who aren’t a good fit. This is especially important if you have a higher CAC and/or longer sales cycle. Growth efficiency is incredibly important to a startup’s success and investors will be checking that you understand how to do that.
Learn how to say no for your company’s sake and for your own sanity :)
Our Co-Founder and General Partner Craig Bristol Dixon is a startup founder himself (with an exit). He works closely with Founders in our portfolio to fundraise, scale and growth their companies.
Accelerating Asia invests up to US$250k into eligible startups joining the flagship 100-day program for Pre-Series A startups delivering access to investors, tailored 1-1 support and a network of fellow founders. Find out more about our flagship program here and how we invest.
Accelerating Asia invests in startups with scalable technology solutions and revenue generating business models that combine purpose with profit.
In making an investment decision, investors must rely on their own examination of startups and the terms of the investment including the merits and risks involved. Prospective investors should not construe this content as legal, tax, investment, financial or accounting advice.
