Ask anyone who has been there: the task of chasing around investors looking for funding for your startup is an arduous task. Rather than build product or community or that pilot you need to get to the next level, the CEO, marketing VP –and sometimes even the tech guys –– are hanging out in WeWork offices showing investors why this company is the next Big Thing.
Some companies do it for weeks, months and even years. There is a known approach in the startup world, true especially in Israel where people raise less and do more: the second you get funding, you have to start looking for the next round. And this was and has been the culture of startups. Profitability? Who needs it? After we exit, that will be the investors’ job.
But a new wave of reality and optimism is spreading in the wake of lost dreams: the notion that your startup does not need the exhausting and controlling interests of venture capital funding. The latest shift in “normal” is to find a partner or founder who is expert in growth hacking, often from the marketing and sales area, and hire her as a CRO – for Chief Revenue Officer (this article here explains the ideal traits of a CRO). The sole duty of this role is to find ways, creative ways that may veer from the business model, to make money to support the startup right away.
Some entrepreneurs may jeer at this idea thinking, oh well, we need millions to get off the ground, not thousands. But on the impact scale of reality, being able to make money quickly as a team shows you as a team how to work together, and that you have a viable business idea. Getting real-world feedback from customers who pay is invaluable and of course down the line will increase the valuation of your company when investors start chasing you.
The CRO is someone who works between the spheres of sales, marketing and product, and is someone who can rally the team and maybe take them off course for days at a time when certain skillsets are needed. It can be hard to convince the technical founders why income and marketing is essential, but a good team is led by the market and not the other way around.
It is also good for the planet. Read about how CROs can impact the triple bottom line.
This is a common problem in Israel where a large number of startups are founded by technical people coming from the army. We had this problem at my startup where I felt a huge disconnect between what the market needed in the US and what the Israelis knew could work from the army. (That’s me in the above photo where I led everything from being the CEO to heading creative marketing!) There is little regard to or understanding of the market and how it shifts, especially because most startups are working for markets outside of Israel, such as the US, or more recently China or Europe.
For this reason it is best to hire a CRO that can shift between worlds – someone who has a foot on the ground in Israel where you might be based for the meantime, but also who has recent cultural experience and exposure inside your primary market.
While a type of growth hacking job, the CRO is not a tech type who sits in a bunker, but rather a creative type who can communicate easily between worlds, someone who has good intuition and who is aligned with the goals that the CEO sets,
This person should know their way inside banks world, taxation issues, and ways to set up financial flow structures so that the company can use its new money quickly to continue to feed the founders if needed, and to support the next wave of business.
If you have a physical product or device, the CRO might be able to promote and sell use to the first iterations of your app, sell access to industry highlights or information your team holds. There are simply no rules to growth hacking, and your startups success completely relies on it.