Ketan Nayak

"The best offsites create space for serendipity." ✨ That was our guiding principle for Clarify‎'s recent team gathering in Seattle. The result? A transformative experience that's already paying dividends in team cohesion and product innovation. 🙌 Our key ingredients for offsite success: 🤝 Prioritize unstructured bonding time  💼 Mix work (hello, hackathon!) with 🤿 play (who's up for a lake plunge?)  ❤️Create opportunities for vulnerability and deep connection   💸 Keep it budget-friendly without sacrificing impact But the real magic? Watching our team of 11 take all their energy and use it to ship 6 awesome customer projects in the week following our return. Austin Hay‎ packed all our insights, learnings, highlights, and even a few missteps into the latest Clarify blog. Whether you're planning your first offsite, looking to level up your team gatherings, or just want some recommendations for things to do in Seattle, we've got you covered. 🌆 Bonus: We're turned the Notion and Google Sheets project docs we used to plan everything into templates you can steal for your next offsite.  You can find the link to the full write up w/ our templates in the comments. 👇

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Converting PoCs to Contracts - A Lesson in Difficult Conversations Like going from dating to co-habitating, moving your first customer from pilot to contract is a Big Leap moment for early stage startups. Waiting too long to have the conversation is the most common mistake. You are afraid of rejection, so you never learn if your product is making life easier for your customer, let alone how much they will pay. The truth is, once your pilot is launched, you can't be too early in discussing what it will take to move to a contract. I just got off the phone with a startup CEO who told of countless meetings, waiving integration fees, hiring a dedicated employee and more all to get their first customer live. After several revised timelines and a reorg, the engagement was going sideways until he said "We can't do this for free anymore. We need to move to contract or we are done here." At first, the customer balked. But once they assessed the situation and realized how crucial the software was, they changed their mind. The startup is now on track to sign their first big deal. That wouldn't have happened without a difficult conversation. Early stage startups are fragile. Moving from pilot to contract is the first real test of so many things - your product value, your customer success, and the real competition. Unless you test your relationship by taking the leap, you'll never figure out if you've got something real.

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There are two main things we did to give ourselves more runway with Harlow while bootstrapping the business: 1. Cut costs so that we operate at break-even, which extends our business runway infinitely to give us more time to do focused tests to figure out PMF and which growth channels will work for us. 2. Brought on consulting clients so we could make money, which extends our personal runway infinitely by allowing us to feel more safe and comfortable while building. How are my other bootstrapped founders making it work?

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My cofounder twisted my arm to join a "B2B Product-Market Fit" bootcamp. I was skeptical, but it wound up being insanely useful - probably the highest ROI thing we've ever done. Here's why: WHY I WAS SKEPTICAL: Yes, product-market fit is "the only thing that matters." But it's a vague concept. It's a vague, ethereal thing that nobody seems to understand. It doesn't seem like the kind of thing you can teach or learn. I'd also tried all the "best practices" out there (ideation exercises, customer interviews, experimentation, etc.) and found that they... didn't really work. So a bootcamp about product-market fit seemed like the best way to incinerate money and time. WHY I DID IT: My cofounder and I met with Rob Snyder, who's got founder experience and started this weird Product-Market Fit bootcamp... geared towards MBA/consulting/i-banking as well as product and developer types. In our first 30-min meeting, Rob didn't try to sell us on the bootcamp... he just helped us make a TON of progress in our business. I was still skeptical… But we decided to do the bootcamp & schedule weekly 1:1s with Rob. Why not -- it was more affordable than a sales coach, and Rob actually speaks at a founder level WHAT HAPPENED: The bootcamp is insane, like nothing else I've experienced. It approaches product-market fit from first principles, but is highly actionable. So we made a bunch of progress on our business, but I also built mental models about product-market fit and scaling that help me feel confident that I'm focused on the right things. It also didn't take a ton of time, maybe 2-3 hours per week. Not at all a distraction, with a very high signal:noise ratio. My favorite part has been getting a ton of feedback from Rob and from other founders in the program. We review each others' sales decks, sales calls, outreach messages... and debug things to get closer to "pull", vs "push." It was cool to see that there were pre-revenue companies all the way to companies with $2M+ ARR... each trying to find repeatable pull and deepen their understanding of product-market fit. SO WHAT: Our startup feels different now. We're getting a lot of traction, our sales conversations are smooth, and I know exactly what matters & doesn't. We feel pull in sales calls, customers say, "we're cutting budget... Konko is the only thing we're investing in." This is energizing to hear, and a lot of this comes from the work we've done as part of this bootcamp. If you're a B2B startup, $0-$2M ARR, and customers aren't pulling the product out of your hands... you should apply to the next Product-Market Fit bootcamp. We're coming back for our second round, it starts July 8, DM me for an intro to Rob! (Or just DM Rob Snyder)

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I am always amazed when someone discovers whitespace in B2B SaaS that is eligible for pre-seed funding. It's interesting to see that Chiratae Ventures led Pre-Seed round for Pepsales. Pepsales is trying to help B2B SaaS companies improve their sales by creating personalized product demos using AI and ML. The pain point they are trying to address is that most demos don't impress buyers because they tend to be generic and one-size-fits-all. Congrats Ajay Singh and Abhinandan Sahgal! Source: INC42, Entrackr, VCCircle #VentureCapital #B2BSaas

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Ross Haleliuk posted the fantastic article below. This is the world where I live day-to-day. At TechOperators, we invest mostly in early-stage cyber, but we do things a little differently, and we believe there are ways to invest successfully outside of pure Power Law math. The article argues that many security problems are too small for VC. I agree. I often try to convince bootstrapped founders not to raise venture because doing so can turn a successful, slow-growing bootstrapped company into a failed venture-backed company because, despite a large infusion of capital, it couldn't double every year. VC is not monolithic--not by stage, strategy, or style. Venture is often equated with "Tier 1 Venture". Ross argues that VC is not always great for early-stage cyber--and he is right. Bootstrapping AND VC work when incentives are aligned. Does it work for an early-stage VC with a <$200M fund to invest in several early companies at reasonable valuations, setting up the conditions for reasonable exits that pay off for both investors and founders? Yes. Does it work for $800M funds investing in seed stage at $100M+ valuations? Well, that depends! Power law says it does (for VC), but the unfortunate externality is that these rounds destroy companies and founder equity more often than not. There is a role for patient capital in this ecosystem to fuel successful companies that retain exit optionality as they scale--driving exit value for both founders and investors.

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Truly inspiring to listen to Dax Dasilva tell the story of Lightspeed Commerce on 20VC. With $900M in ARR I was thrilled to learn that Dax bootstrapped the company for 7 years to get to $10M in ARR. I hope it doesn't take us 7 years to get Liquid360 there but it makes me feel better about the 3.5 years we've put in to date. For me these stories are deeply encouraging. When you're building something very big it can take time to get to launch. A couple of weeks ago we met with a global player in the VC world. They were looking to invest $5M - $10M and we said we weren't there yet. We'll get there but it wouldn't be the right move today. They then jumped to another conclusion. The wrong one. I get it. They have a multi-billion dollar fund and capital to deploy. We have a company to grow and too much cash will not help us do it right. We've made good decisions being lean. Our customers are starting at $500K. This is an enterprise/gov't product. We have to satisfy a very discerning customer. No bugs, no glitches. A dependable and reliable product. We are excited by the feedback. We are making the world safer. Harry Stebbings suggested that Lightspeed is one of the most misunderstood companies. It's market cap is $2.6B which seems really low relative to the ARR. Very interesting episode.

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During SaaStr Annual 2024 Dan O'Connell (former CAIO / CIO / CRO, Dialpad) shared three principles which he has been using started as a CEO at Front. You can see them on the slide behind Dan. And I agree with Dan. But also, Dan shared another three, which are essential supporters, and I cannot agree more. While these principles are seemingly elementary, in my experience not enough leaders practice them. - Step back and listen – You have to become familiar with your team and the product before you can make any big adjustments. Understand the power of listening: Listening leads to understanding, and understanding is key for strong leadership. - Create momentum — Leadership is not just making decisions. It is also creating the energy and inspiring your team to go with fire in their belly. - Transparency — Whether it’s about the current situation, challenges, successes, or the future (including financial results), being transparent is key to building trust within the team and gain team’s confidence. It was refreshing to see such practical advice being shared and I believe that by following these principles, strong leaders can truly elevate their teams and create lasting impact. #Leadership #Teamwork #Momentum #Transparency #LeadershipPrinciples #Inspiration

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I recently reviewed a term sheet with a portfolio founder for a priced seed round from a new investor. We’d led their pre-seed round and there was a specific provision in the seed term sheet that the founder was adamant about pushing back on - founder revesting. and my advice surprised him. I pointed out that not only was this term not harmful, in fact it was beneficial and meant to protect him in the long run. Often times, included in early stage term sheets is a provision requiring founders to revest their shares - typically another 4 years. The purpose of this is to mitigate the potential for "dead equity" on a cap table. When a departed founder owns a meaningful stake but is no longer actively working on the business it can be demotivating for the remaining founding team and also make raising additional capital very challenging. The initial reaction for most founders is to push back on this term - and logically it makes sense - they've already vested a fair amount of equity and don't see why they should start over. The longer you sit in a VC chair you tend to see every iteration of founder dynamics play out. Founder departures are fairly common- they happen for all different reasons/circumstances, but in nearly all cases founders should want the lions share of the equity to be in the hands of the individual founders that are still meaningfully contributing to the success of the business as it scales. Sheel Mohnot at Better Tomorrow Ventures recently wrote a great piece related to this topic, focused on initial founder vesting schedules. He recommend founders set an 8 year vesting schedule at inception, which I think is an interesting direction seasoned founders could head in.

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Orb (#uncorrelated) raised $25M to continue building their pricing and billing platform that lets companies automate a range of different billing modes e.g., usage-based, subscriptions, or a mix, marry analytics and billing, collect and meter product usage data, invoice customers, generate revenue reports, draw on product usage insights to find revenue opportunities, model out alternative pricing plans (thus enabling experimentation), orchestrate changes in real time, schedule future price changes for certain customer cohorts or contract renewals, directly embed draft invoices into product billing portals, surface past-due invoices, and recover failed payments automatically. "Orb gives companies a single source of truth that can connect every unit of product usage to revenue. We’ve found a particularly strong fit in AI, cloud infrastructure, fintech, and dev tools, and have seen most of our growth come from those verticals.” Orb’s revenue grew 5x in the past year, and the customer base tripled to include brands such as Vercel, Replit, Pinecone, and Perplexity. https://lnkd.in/gYh4y2tg

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After working with over 200 employees, 10 joint-ventures and 5 exits, here’s my simple framework to set-up any collaboration for success: 1. Why: Clarify the reason why we’re working together. What is the project? And why are we doing it? 2. Value: What is each party contributing to the project? What are each party’s responsibilities? 3. Success: Clarify how success looks like in 3, 6, 12, 24, 48 months from now for the overall project and how we measure success of each party involved. I like the traffic light system (green for great, yellow for ok, and red for bad outcomes) 4. Compensation: How is each party winning based on the project and our contribution? 5. Termination: Agree ahead of time how lack of success looks like in each scenario (green we’re all happy, yellow we explore / analyse how to get to green, red we stop) and how it works when we stop working together. These are not exchaustive but just a list with the essentials in my opinion. This works in a lot of different types of relationships, could be an employee, a contractor, or even other partnerships and even M&A contexts. Wondering about the key elements you’ve seen are important to set-up any collaboration for success?

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🧙‍♂️ My friend Gandalf dropping some real SaaS wisdom in his latest podcast episode: Took the new Runway ACT-1 for a little test drive yesterday. What do you think? 😃 Steps: 1. Open Runway Act-1 2. Record or upload a reference video of yourself 3. Create or upload a reference image (used Midjourney) 4. Click "Generate" (no prompt needed) 5. Final video edits with VEED.IO

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I've received great advice while navigating the VC environment, so I wanted to return the favor and share some findings. To achieve a power-law outcome, I'm finding alignment with the right VC comes down to three priority areas: Team, Market, and Product. 1) A-Level TEAM: The optimal VC not only invests in our product, but gets to know our leadership team...how we solve tough problems, pivot when necessary, and execute relentlessly across product and GTM. My belief has always been: "A-players recruit A-players (they're fueled by excellence)...B-players recruit C-players (they're intimidated by excellence)." 2) Distribution in a Growing MARKET: Many VCs want to invest in AI disruptors, but the right VC for Base64 adds more than $...they add distribution to our innovation. In a data market where AI entrants can disrupt slow-moving incumbents, cracking distribution is invaluable. 3) Strong PRODUCT: The best VCs ask questions that stress-test our product's defensibility / moat. While we can't foresee every future turn, we need to have the mental agility to adapt faster than the competition. These conversations also hone our value proposition and deepen our moat. Bottom Line: In most instances the right VC doesn’t just invest $...they invest time, expertise, and belief in building sustainable value as a partner. This equally requires a management team to be humble enough to acknowledge that with the right VC they are 'better together'. I'm also learning to watch out for the 'yellow flags': 1) The “invest and rest” mentality, where support fades after the funding round closes. 2) The “seagull” approach, where they swoop in, create a mess, and off they go. One of the greats, Battery Ventures, recently released 'State of the OpenCloud 2024' report, which provides valuable insights on how AI is catalyzing a new technology supercycle, with the potential to disrupt core cloud industry dynamics. Definitely worth a read. https://lnkd.in/ekzdR8bS #BatteryVentures #VentureCapital #SustainableGrowth #Distribution #Leadership

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AI is reshaping how enterprise software delivers—and prices—value. Companies like Zendesk, Intercom, and Forethought are shifting to outcome-based pricing, charging only when AI autonomously resolves issues. I've been investing in AI for over a decade. The shift to outcome-based pricing in enterprise software is a seismic change. As I told Jon Victor at The Information, software companies now face a critical decision: Does a company decide to change business models at the expense of losing revenue? It's a necessary risk. With cheap access to LLMs, businesses can build their own enterprise apps. Adapt or die. Why this pricing shift matters: → Vendor success ties directly to customer outcomes → Short-term revenue risks enable long-term market expansion → Industry faces widespread pressure to demonstrate measurable value Pitching AI-powered automation software as a clear cost-reduction tool could ultimately lead to greater revenue for vendors. This is because customers may view AI solutions as fundamentally different from traditional enterprise apps, whose business value is often harder to quantify directly. It's a huge market expansion opportunity. Vendors that nail outcome-based pricing could see massive growth as AI transforms enterprise operations. Those that don't? 😬🫣 How do you see this impacting sectors beyond customer support? Leave a comment. And if you're building in this space, send me a message.

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Recently I came across Molly Graham's philosophy called ‘Give Away Your Legos’ and wow I can't recommend it enough. In Facebook's early days Molly was responsible for empowering Facebook as they scaled, staffed and developed their culture from 50 to 1k+ employees. I found it super helpful for navigating the challenges of scaling a team, company and organization. Here are the highlights Simple checklist for founders eyeing rapid growth 1. Make a list of the qualities you want your company to embody. Who do you want to be? How do you want it to feel to work there? 2. Write down what you’re doing in the world. What’s your vision for the change you want to make? 3. Communicate these things again and again and again. Through all the channels. All the time. You can’t over communicate these ideas. 4. Focus on hiring quality people rather than speed. Don’t lower your bar because you need to grow faster. It will come back to bite you. 5. Fire people. Just do it! 6. Hire amazing leaders as early as you can and help them grow their capabilities as the company grows. 7. Prioritize principles over process. 8. Keep giving away your Legos! And tell everyone around you to do the same. It’s going to be okay. https://lnkd.in/gpzEKrqJ https://lnkd.in/gw38G_B8

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For early-stage companies, customers bring so much more than just revenue. Investors and founders often only rank customers based on metrics like MRR/ARR but that misses the boat when the goal is to build 10+ year companies. Sometimes, understanding how a customer reacts (or doesn't) to your product demo clues you in that it needs work. Sometimes, a failed implementation surfaces that you have a void on your team that needs to be filled. Sometimes, hearing consistent rejection from the same cohort shows you're selling to the wrong type of customer. Sometimes, pushback on pricing indicates voluntary friction preventing more sales. ***Try and stop viewing every customer interaction as a 'win' or 'loss' but rather an ability to improve for the long haul. (1) Product shortcomings -

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Startup decks vs Business plans. It's accepted that a startup needs a deck. Dax Dasilva of Lightspeed Commerce made an important point on 20VC. Writing a business plan - including financial projections - is an important step. It requires discipline. It provides a rigorous framework for thinking deeply about the problem you're trying to solve. Harry Stebbings countered that he doesn't even want to see a deck since it's all dreams. We spent a lot of time and energy on our business plan with the expectation that we would show it to no one ever. The business plan was part of our roadmap for the company. We researched customers - including having 50+ conversations. We wanted to understand them: their background, their interests, their presence on social media. We also wanted to understand how they were evaluated by leadership and how integrated they were with the business of the company they were protecting. We researched pricing both with potential customers and other products in our industry to find out if OpEx or CapEx was a better fit. How did they buy today? How would they like to buy? We did market research to understand the verticals and map the right entry point - we were wrong but that doesn't reduce the value of the research. We looked at competitors in depth to understand what they were seeing that we weren't. Dax is right. This is an invaluable document that should be updated every year - the company is changing, the market is changing, there's more feedback about price and ICP. It's not for sharing with the outside world. It's a map for driving forward. Decks won't get you investment - VCs invest in people. We make decks but we know they don't tell our story. The deck is a calling card. Dax and Harry are both right. https://lnkd.in/e25M82xY

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You know there's some momentum happening if Marty Cagan decides to write about a product topic you've been at work trying to enable for years. Love to see it, and BIG shout out to Stacey Langer for providing her expertise in this article! 🧘‍♀️ Here are a few other pros that came to mind for the product model: 1. The government product model makes product (public) value and risk management possible. Product risks—such as value, desirability, viability, and feasibility—are not risks that traditional project management models can effectively manage. Government agencies interact with the public through the services they offer, but government digital experiences are not always inherently valuable. It’s what these digital services do for users that create individual and public value. Building tech alone ≠ value. 2. Evidence-driven decision-making uses discovery, iterative delivery, and testing with actual end users, where you continuously learn. This enables many things, mainly building with your users while validating the solution direction. It can also enable an incremental funding option specifically for products/services (traditionally called ‘projects’) that are especially complex, high priority, and/or contain many unknowns. 3. Driving technology from a place of vision and strategy measured in outcomes that can align and even influence policy changes. 🤸‍♀️ Some realities in trying to adopt a product model in gov: 1. The word ‘product’ often can be confusing, especially when it doesn’t fully represent what is being built and managed. A lot, if not most, of the technology work happening in government often involves solving service design challenges. So, in gov products, you focus on solving for the end-to-end experience, which can mean processes and non-tech things. 2. Conway’s Law and government systems replicate the organizational structures in agencies, which are often siloed and isolated. This is often represented as 'legacy tech.' Much of the work in 'product' in government is modernizing legacy systems, which requires the same principles as the product model but often a different emphasis on its varied approaches. Not all products or digital services start from the same place; many are not greenfield. 3. Traditional ATO structures can stop the product operating model in its tracks. To overcome this, it is important to integrate the ATO into the product model, utilizing a ‘continuous ATO’ operating model. But see point 2 above. At the end of the day, the product model isn’t a process you learn to implement and then just implement. It’s not just ‘Agile’ or Scrum or DevOps. Those methods can (or sometimes can’t) enable the product model. It's a mentality and discipline for continuously using new inputs to deliver value throughout a product's LIFE. It's a cultural change as much as an operating change, and there is no 'single way' to do it. However, operating from product thinking principles can help us start from the right place.

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Great post Mark Phinick, I agree that finding and getting paying customers must be the primary focus for startups. As we learn from TheLeanStartup.com, the main thing for Founders is to keep the main thing the main thing. The main thing is to find a sustainable business model through validated learning. https://lnkd.in/ejF7qBuf The "how" founders go about that process needs to be informed by the Product Mindset. Chasing sales at all cost can be a huge distraction leading founders to sacrifice a market for a demanding customer. The tension is real, and, a good thing. Difficult decisions like that help founders refine their focus in a way that leads to a sustainable business model, which can be a critical factor for long-term success.

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