Should we categorise ourselves based on the conversations that are comfortable and easy or uncomfortable and hard?
People who work on technology startups like to spend time with other people who are also working on technology startups. That makes sense. It’s often a lonely experience, and it can help to share that with others who empathise.
But, it’s important to realise:
These are easy conversations.
Technology is a broad church. And a lot of people have opinions about startups. Startup teams need to filter a lot of noise in order to get to the signal.
Perhaps there are better ways to categorise ourselves that would be more useful?
Working with the Timely team unlocked this idea for me…
In the beginning we incorrectly categorised ourselves as a technology company targeting customers in the health and beauty sector.
But eventually we realised we were ourselves part of the health and beauty sector and that our product was technology services.1
This might seems a subtle difference, but it resulted in a significant change in how we positioned our product, how we spent our time, and who we spent it with.
Rather than talking mostly to other technology people, who were all working in very different sectors, we prioritised talking to our peers in the health and beauty sector. We quickly found we had a lot more to learn from them.
Rather than describing our technology and listing the features we had built, we switched to focusing on the problems we were hoping to solve for our customers and talking about our solution using language and a style that was more familiar to them.
Rather than spending all of our time with other startup founders who were the same age and stage as us, we tried to connect with those people who understood the most about the customers we were trying to reach. Some of them were self-employed. Some of them were working in much larger businesses. Some of them became customers themselves or referred others. Some of them later join our team and became employees (or board members!)2
As we discovered:
These are hard conversations.
It’s important we don’t spent too much time preaching to the choir.
We need to be exposed to different people who will challenge our thinking. That creates friction. It’s outside of our comfort zone. However, hopefully this helps us to better understand the customers we’re hoping to serve.
When we categorise ourselves as a startup it’s easy to get sucked into celebrating the milestones that startups talk about endlessly - how fast we are growing, how much capital we’ve raised and from whom, how big our team is and who is on it etc. But in my experience customers don’t really care about any of those things.
It’s useful to ask:
Should we categorise ourselves based on the conversations that are comfortable and easy or uncomfortable and hard?
This is what I mean when I say there is no such thing as a technology sector.
We don’t call our local cafe an electricity company, just because that’s how they power their coffee machines.
Technology impacts every sector. Categorising ourselves on that basis isn’t especially useful anymore. The fact that we have engineers and designers on our payroll shouldn’t be the most interesting thing about our companies. Although, if we have no engineers or designers on the payroll that is increasingly remarkable, and not in a good way. If that’s true for your team it’s probably a reason to pause and think a bit harder.
When we work on a technology startup we need to think about what sector our customers are in and then lean into the hard conversations that will, over time, make us part of that sector.
See:
↩︎Vertical tech orgs, a mindset change I'd encourage (using @timely in the example):
— Ryan Baker (@ryanbakernz) October 14, 2020
Before: "We're in the technology industry and people from the beauty industry are our customers."
After: "We're in the beauty industry and we provide technology to our peers as customers."
This can cut both ways: I’ve also seen startups where the founders have a deep network in the specific sector they are working in, who never break out of that bubble and connect with other startup founders who could help them quickly understand some of the specific challenges with operating at that age and stage of business.
As is so often the case, the optimal answer is: a bit of both! ↩︎