Joe Procopio: 3 blind spots every growth-stage tech entrepreneur misses

Joe Procopio

RESEARCH TRIANGLE PARK – You’ve dragged your startup from idea to reality. You’ve raised a couple funding rounds, maybe some VC money. You’re growing and closing in on cash flow break even. It’s time to constantly be thinking about how it could all fall apart.

Every founder struggles with scale, regardless of their own level of experience. Technical founders have it even harder, as their strengths, which are crucial in the beginning, aren’t enough to get from early-stage through growth stage.

This gap has everything to do with the natural maturity cycle of the tech entrepreneur. I learned pretty early on that if I was going to level up, so to speak, I’d have to move to a product focus.

Techies want to build beautiful technology. It’s what we do. We want to fire the rocket farther than it’s ever gone before, and we sometimes don’t care if it lands in one piece. Product people focus technologists to get the most use to the most customers with the least friction. They get the rocket safely back to Earth, so it can be reused for more specific, revenue-generating purposes, like payload or passengers.

But the shift from code-focus to product-focus isn’t the end of the story. That shift will get you to a viable, game-changing product. That shift will get you to your first round of public funding and/or your first large group of paying customers.

Once that happens, the tech entrepreneur has to start looking holistically at the company they’re building, and level up again. So here are the three areas that most of us tech founders miss on the way through the growth stage.

Finance

If product was the first blind spot I tackled, finance was the last blind spot I mastered. Not for lack of trying, I quickly took on all those fiscal responsibilities, everything from pricing to sending invoices to paying employees. I did it very well, until I realized that if we were going to scale then that wasn’t what I should be doing.

So by the time I started my second company, before I hired my first employee, I made sure I had two roles already on board — legal and finance. This way, I’m not going over contracts with a fine-tooth comb, I’m not digging through employment and liability regulations, I’m not balancing books, and I’m not cutting paychecks. This leaves me ample time to worry about the only two financial areas I need to be worried about.

Profit and loss.

I know. Techies hate staring at spreadsheets. I’d rather build my own financial system from scratch along with the AI that will do my BI for me than pour over numbers in Excel a couple times a week. But you need to learn to love spreadsheets.

This doesn’t necessarily mean staring at those spreadsheets and making sure your income statement and your balance sheet align, you have a finance team for that. But it does mean staring at those spreadsheets and figuring out how to shape the company to increase the top and bottom line, and you need to have answers that are more creative than “Everyone work harder and spend less.”

Your growth-stage company is a living, breathing, moving target. Experimentation that was encouraged during the early stage can be far riskier and more difficult during the growth stage. The goals balloon from survival to impossible overnight. You’re no longer just trying to do something that’s never been done before, now you’re trying to sell more of it than anyone has ever sold before. There’s a balance that needs to be struck between innovation and sales, feature set and margin, horizontal and vertical.

Not only are there big decisions that need to be made on each of these fronts, but the strategy that accompanies each decision needs to come from the top. Those strategies must include answers for what happens a year from now, three years from now, and five years from now. You also need metrics that can determine pretty quickly how well those strategies are working. And you need backup plans for when those strategies don’t work.

Sales

Once I got good at product, and since I’m able to lean on my technical background, I got pretty good at sales pretty quickly. The only problem was I really hated doing it. One regret I have today is that I didn’t do it more.

You never really know how good a technical advancement is until you turn it into a product and try to sell it. Once you start incorporating product-based data into the metrics that determine what to build, the next logical step is to fold in sales data, quantifiable and anecdotal, because you’ll never be fully confident in your product until you hear, first-hand, what the objections are to closing a deal.

So once I have finance down, I turn to sales, and I start fixing that blind spot. Once we get to the growth stage, I’ll start sitting in on sales calls. Just as product is hunting through data to find the levers we can pull to increase value to our customers, what you get out of a sales call can speak volumes about what might be needed by people who aren’t your customers yet. And this is what growth is all about.

As a tech entrepreneur in the growth stage, leading sales is not just about building a great sales team, although that’s paramount, it’s also learning that every decision you make is ultimately a sales decision. This isn’t an easy mindset to get into. Tech decisions are tech decisions. Product decisions are product decisions. Marketing decisions are marketing decisions. But remember, the bottom line is your job, and it is much, much easier to increase the bottom line when the top line is already increasing.

So tech decisions are made to boost margin and competitive advantage. Product decisions shorten the sales cycle and increase lifetime value. Marketing decisions broaden your share of the total addressable market and locate new prospects.

Brand and Culture

If your HR and Marketing teams aren’t working together, fix that immediately. It might not seem obvious in the early days, but once you start to scale, these two teams are going to build the brand and culture of your company internally and externally. And they’re going to take their direction from you.

In the growth stage, goals are no longer about unit economics so much as the macro. Marketing isn’t selling the product, that’s the job of sales. Marketing is selling the brand, which is the company. And Apple doesn’t market iPhones, it markets Apple.

Your product may offer the world unique technical advancements, but customers don’t buy technical advancements, they buy the betterment of their lives. This is the message marketing will be delivering to your customers, and how your customers’ lives get better is a message that has to be translated from your product and your tech.

Internally, company culture isn’t something that just happens, it’s something you nurture. Human resources will carry out your plans, but those plans have to come from you. At the startups I’ve founded or been at recently, say over the last 10 years, when decisions needed to be made about culture, those decisions were made at the top level.

Like branding, culture cultivation looks easy. Like branding, it is not. This is where the blind spot usually manifests. Culture, like brand, is something that has to be studied and learned, then implemented and measured. It also has to be lived, from the top down.

When tech founders make mistakes in culture, it usually happens at one extreme or the other. We either ignore culture and take our chances that it will happen organically, or we overdo it and wind up implementing too many values, too many programs, and generally too much fluff.

Culture is one area where it’s much better to have done it than try to read about it or group-think it. But if it’s your first time at the growth stage, this is what your mentors and advisors are for. And maybe some of your senior executives, especially the ones in HR.

The thing about all these blind spots is it’s not just a matter of adjusting once and then driving until you get to your destination.

These are areas that you need to stay on top of, as much as you would stay on top of the technical developments and product breakthroughs that are 90% of the fun of your job.

The blind spots are also why some tech founders get shoved aside at the growth stage, so make sure you’ve got your eyes open.