Today’s Startup VUCA
Volatility.
Uncertainty.
Complexity.
Ambiguity.
Otherwise known as: VUCA.
As we navigate the post-zero interest rate economy and markets, as inflation has been (at least) temporarily tamed, and while companies have been torched by supply chain disruptions, sky high interest rates and a looming recession—VUCA offers a light to guide us through this dark forest in which we find ourselves.
VUCA is a concept developed at the Harvard Business School and the U.S. Army War College.
Today’s startup world includes many indicators and solutions to VUCA:
Complexity: Most startups manifest complexity through positioning, product marketing, website language, sales presentations, and other GTM-related tangibles and execution programs.
Solutions:
Simplify marketing communications, and restructure and highlight your purpose.
Arrange an offsite where you (and customers?) focus on examination, validation and refinement of product messaging and positioning.
Huddle with your PR firm or communications counsel to examine external descriptions of your company, and ask: Has it evolved over time?
Consider bringing in specialists (such as BCG Brighthouse or others) to address your messaging complexity and uncover and align your purpose.
Volatility: For all startups delivering solutions via the cloud or SaaS, the problems revolve around reducing churn, expanding usage, and minimizing lumpiness in sales-revenues-and-ARR.
Solutions:
Expand your sales enablement and product marketing teams to reduce churn and increase customer satisfaction.
Improve the customer experience by adding UI, UX or UI-UX engineers.
Re-examine your OpPlan and hunt down volatility.
Ambiguity: It’s often unclear what value your business activities—especially with outside parties—bring to the table. Many contributions have indeterminate worth. Your goal is to eliminate ambiguity, a steep hill to climb.
Solutions:
Launch some new, innovative marketing experiment.
Examine your contracts, license agreements and other engagements, and tweak the terms.
Switch from a general to a specialist PR firm. For instance, cybersecurity and telecom/networking startups should consider firms with deep domain expertise and deeper relationships in your field – such as Guyer Group.
Re-examine your KPIs and overhaul some of them. CLTV or LTV is an obvious candidate. Refining the length of your sales cycle is another one.
Uncertainty: You face many unknowns: Some are “known unknowns,” and some are "unknown unknowns." To reduce uncertainty you have to find new data and avenues for information flow.
Solutions:
Attack uncertainty through an internal analysis of your competition. Be unbiased as you answer questions related to new products, customer satisfaction, and the effectiveness of their salesforce or channel.
Setup a task force with your most market-knowledgeable people and test your assumptions: Are segments the same way? Are market drivers the same?
Invest in market research from a professional research firm like: IDC, Forrester, NewtonX, Gartner, etc. (NB: This is tricky because market studies are expensive and range in quality—look to an Analyst Relations expert for guidance).
Unconventional: Arrange a meeting between your CEO and the competition’s CEO.
It’s a VUCA world out there, and companies that utilize this framework for understanding its hazards will reap the benefits. Those who ignore these pitfalls do so at their peril. Whether it’s examining how your company really operates, or investigating the things your competition is doing well, knowledge is power and VUCA knowledge is a super-power.