Best mental models for starting a B2B firm

What I learnt while building Wafrow, the small ideas, not the big ones.

I've had 3 conversations last week with friends who are thinking of starting up. Here's my 2 cents on how to start a new B2B firm. I built these mental models the hard way - by reading, talking, experimenting and failing. As I enjoy some downtime this week, maybe it's easier for you when you think of pulling the trigger.

1. Start backwards from average contract value

Notice that it doesn't say customer. That is answered automatically if you think you're selling a $0 or $500 or $50,000 per year product. Who will buy this, what will they compare it to, how burning is this need, how will you find these customers, what level of customer support do they need, when can they buy it (before budget is frozen?), all are questions that can flow backwards from that price point

I find it incredibly clarifying to pick a broad problem domain and fix a price point to initiate conversations with potential clients. The unique value proposition then becomes the outcome of those chats.

An objection to this way of thinking is: how can I fix a price if I don't even know what I'm building? By understanding that no firm is static and new firms can completely change what they are every few weeks. I had to switch half a dozen times. Will probably do it more in the future.

2. Prepare to become the world's best at 1 marketing channel

Notice it says 1 and prepare. It could be any channel: door to door sales, tiktok videos, email marketing, SEO, influencers, etc.

The choice of channel is answering the venn diagram: something you're good at and where your potential $x00 paying customers naturally hang out.

Preparing to be the world's best implies focusing on input metrics to that marketing channel. Say if youtube videos is your answer, this document written by a popular youtuber will be helpful. You don't need the whole thing, just this bit

The three metrics you guys need to care about is Click Thru Rate (CTR), Average View Duration (AVD), and Average View Percentage (AVP). Publish tonnes of videos and learn what gets those up.

It's messy work but if you picked the channel you somewhat enjoy, it is easier. At some point, I hope to excel at a few simultaneously but I'll stick to email for now :-)

3. Simplify your messaging

Craft a 5 second, 30 second, 2 min and 5 min pitch for your product. Force yourself to repeat it till it's simple enough for grandma to understand.

Then simplify it further.

Use that message across your marketing channels, sales calls you get on, friends you have coffee with. Things start to happen when that message is clear. It fundamentally shapes product features and UX design.

I fumbled the ball on this for a while... probably still do because I find lossy compression of big ideas almost repulsive. Slowly training myself to improve compression quality.

Notice I focus on inputs a lot more than I focus on outcomes. It's a deliberate choice because the outcomes are unknown. I also don't focus much on what is trending currently.

To known outcomes 🍻