What I learned from early stage B2B startups

Tips on how to PM in your early stage B2B startups.

Most of my experience has been in early-stage B2B startups. I characterise early-stage as pre-PMF, where companies are generating their first revenue and working with their initial ±5 clients, typically employing fewer than 10 FTEs. Over the years, I've gathered several observations. While many points align with those in larger companies, I think they are more evident in smaller startups.

Documentation is not as important as scope.

In the early stages, the entire company is primarily focused on answering one question: “Is your solution needed at all?” The viability of your product is paramount (don’t trust, refer to SVPG 4 risks of the product). Therefore, your goal as a PM must be to define the scope of the Minimum Viable Product (MVP).

I remember being a PM in a startup that had achieved Product-Market Fit (PMF) and understanding of the user. Working there was relatively easy (although still stressful) because we had a clear idea of what we needed to build and why. It often felt like all we needed to do was prepare PRDs, tickets, and documentation. In reality, it felt more like project management.

PMing at mature startup

Joining an early-stage startup without a clear vision or understanding of the users and problems to solve was challenging. The team was less concerned about exact specifications or documentation; instead, they wanted to understand our Ideal Customer Profile (ICP), the rationale behind building specific features, and the impact they would bring. It was as if everyone in the team was transcending these questions.

PMing at an early-stage startup

To be honest, it is a little scary to be in this position. (Actually super scary to be in). So, I took some steps to move:

1. Pick the 1st priority and start moving. The team had some ideas already to explore. So, we prioritised the ideas based on factors like “Potential Impact“, “Effort”, “Confidence” (how sure are we in our estimates), “Market size”, “how well aligned is it with our business vision”. Based on this priority list we started picking ideas 1 by 1 (in truth it was more like 1, then 2, then 1, then 3 and so on).

2. Interviews. Some ideas can be tested via interviews. I love them. Except for searching for people to interview. Agreeing on time. Following up. Making sure they join. Rescheduling when they do not join. And then the cycle repeats. It is nice when your product has a community that your company is building, or already some users to interview, or people in your area are open to interviews. But normally it was always a pain. If you are an early-stage, there is a high chance that your website does not have that many visits, your community is small, and you have a low reputation so not everyone is eager to join a call. Yes, and well, that’s life 

   • Join forums, seminars, meet-ups, conferences, 

   • Talk to friends of friends, 

   • Text via LinkedIn, 

   • Email outreach, 

   • Find contacts in your CRM (if you have it), 

   • Hotjar (give it a try at least). 

   • Basically, just do it, network and somehow you will find people to interview.

3. Analyse the results. After you have done some number of relevant interviews (let’s say 5-10), it is time to make a meaningful conclusion from the interviews and external research. For me it works to share the results with the entire team (notice that you are <10 FTE). Now you have some understanding of the market you are in, so when you generate new ideas you know better what to dismiss and what to try. Also you understand better if you need to move on to the next priority (see the point 1) or actually build this thing.

It is a classic try, fail, learn, repeat cycle. It helps you, as PM, reach the goal to define the scope of MVP, which in turn is really helpful to the whole company.

Make them pay, retain, activate

Another key point how you can help the company is with Activation and Retention. Your key activities should be focused on improving these 2 stages of the AAARRR funnel and metrics associated with it.

The point is that at some point you figure out what you need to build as you understand your ICP better. Your goal is to make sure to convert more people to this ICP.

It is kind of like a game where you progress from one level to another. First you make sure people pay for your service (Revenue). It means that the service solves their problem enough so that they want to pay for it. Here we sold the product directly, we did not have many sales from our website. Onboarding is manual, any changes to the plan is manual, 24/7 customer support. Basically you babysit each user and learn from them.

1. Improve your product, so that people who try it would love to pay for it

Take advantage of “babysitting” as it helps you to improve your product and understand better what users like or miss. So you improve your Retention. Maybe it is about missing features, integration, steep learning curve, whatever. Spot it and improve.

2. Babysit users to improve your product to make them stick to it

Then you try to optimise the Activation. Here it goes about sign up flow, making sure your messaging on landing page reflects what your users expect to see, figuring out onboarding flow and personalising it, figuring out “Aha moment” and more.

3. Improve your user and problem understanding to polish your Value Proposition, so that once users see your product they engage and start using your product

It sounds like that first you go on step 1, then 2, then 3, and you are golden. In reality you go to step 1, then 3, then 2, then 1, then 3, then 2. It is a never ending back and forth where perfection does not exist. But as a they say “it is not the end goal, it is about the path”.

It is not a straight process. It is continuous back and forth, learning and improving.

These 3 stages are the main ones to focus on, in my opinion for PM in an early stage B2B startup. Some say that first it needs to be about Activation, then Revenue, and some think it should be about Revenue and Referral. In my opinion, these 3 help you build the ground understanding of your user and problem to solve. But it is up to you.

What about marketing?

You might think to get more traffic to have more data. It is easier to see some pattern when you have thousands of visitors and be able to see where users churn and be able to collect feedback with inbuilt analytics tools. But I personally would not recommend doing marketing too early on.

There can be 2 issues with it:

• Your messaging can be either too generic or

• You target wrong people

Say you promote the accounting software for e-commerce, but you decide to target an accounting manager with pitch “easy to use, cool design”. But you might not know that you could have a better chance targeting the head of finance and pitching the idea of easier tax returns. Now, whatever analytics or feedback you get, might not be so relevant. Actually it can lead you to a wrong conclusion that your product does not work, whereas in reality you don’t understand your use case that well.

Don’t get me wrong, running some marketing campaigns can be really useful. The main point you would measure is ROI of your efforts, and it better be sales. There can also be other results. For example, setting up a landing page and driving some paid marketing - helps you test your hypothesis much quicker. But make sure to know what you are trying to achieve with marketing efforts. Don’t just go and buy a place in some tech news portal, magazine, or newsletter, thinking that users will simply come. No, they won’t. At least in my experience.

Think of your early stage customer acquisition channels. Is it inbound (probably paid ads because SEO takes time) / or outbound (usually founder led sales). There are other options as well but the important thing is that you can not do all of these things at the same time. And the method depends on your product, market and ICP profile.

MOVE FAST

You are on the clock. Not to ignite FUD or FOMO, but the clock is ticking. The whole company is on the clock. You might ask why? Well, your time depends on the runway. With this runway (probably you raised pre-seed, seed or even series A) you need to figure out what is the thing that users need.

As said above, PM can help with understanding the scope and improving the conversion funnel. However, keep in mind that you do not have the luxury to spend 4+ weeks on developing 1 feature making sure that it works great, just to illustrate the point to the user. Think in terms of prototypes, you need to be able to prototype the solution, test it with users, and get their feedback quicker.

Test your ideas quicker - prototype, present incomplete solution, hardcode (sorry)

One idea that helped me think of it is:

• you have 52 weeks in a year

• to test 1 idea → it takes 4 weeks (documenting, designing, developing, QA, user testing)

• it means you can test 13 ideas per year (52/4)

• if your runway is 2 years → you have 26 chances to find ICP, PMF, and everything

Moving fast and testing your ideas quickly can save some time and effort on building the prototype, and this time in return can be invested somewhere else. Just remember that some idea can be worth nothing, meaning that they bring no outcome, so be ready to throw them away. So it is much better to throw away an idea into which you have invested just 2 weeks than 1 month.

Another point, moving fast helps you prioritise what ideas to follow and which to ditch completely. For example, I remember we thought that it might be a great idea to target big companies in our market first to get great PR. You get “Google”, then you can simply say that your client is “Google”, so you won, yes? Not really.

It can take a long time to get a big enterprise onboard with you. Make sure you understand it and you have enough runway for it.

Big companies move slowly, and after that we focused more on SMEs and trying to get as many of them as possible to have more feedback and improve our product. You can’t brag that your client is MAANG, but at least your product is good.

So, be aware of ticking time, but do not obsess about it. There is no good in making decisions being stressed. Think of how to prototype quickly, test your hypothesis, and do not get focused too much on opportunities the fruits of which you would only see in 2 years (your startup might not survive until then)

Conclusion

In reality I do not think that there are more similarities between early-stage startups and scale ups or say unicorns. It seems to be that the focus is a bit more on making your first sales and figuring out what works, whereas scale-ups or unicorns also add fine-tuning and improving what already works.

Some points to take:

• Early-stage startup is about figuring out “why users even need your product?”;

• User interviews to help your team find new ideas, prioritise them, figure out what works and what does not;

• You need to strive to find answers to questions like “who is our ICP?”, “why we build some features?”, and “what impact it brings?”;

• Focus on Revenue, Retention and Activation;

• Build awareness of your product, once you know you ICP, their problem, and how best to solve it. If you do not have it there are 2 risks: “Your messaging can be either too generic” or “You target wrong people”;

• It does not hurt to promote your product, but then measure the ROI of your marketing efforts. It needs to convert in sales at the beginning.

• Move fast to test your idea - prototype, write bad code or no code at all. There is a chance your idea is worth nothing and will be thrown away quickly.

• Make sure that you pursue the right business opportunities and consider your current situation. Do not target “MAANG” if you can’t afford waiting for 2 years.

Thank you for reading! And feel free to share your thoughts on being a PM in early-stage B2B startups.