MedCity Influencers, Patient Engagement, Startups

Are you managing the signals your startup is sending?

I’m building a startup to help investors, acquirers, and service providers etc. connect with startups […]

I’m building a startup to help investors, acquirers, and service providers etc. connect with startups to do deals. Funding, M&A, customer acquisition–these aren’t new things, but before Mattermark existed these professionals were cooking up their own solutions to this problem, their own proprietary ways of gaining deal intelligence to grow their pipelines.

Startups benefit from understanding that they have been tracked for some time in spreadsheets and CRMs. Judgement is being passed constantly, as your company is compared against others as a viable investment, acquisition, customer, and vendor. So why not take control of that perception by managing the signals you are sending?

Fundraising events

If you’ve ever announced funding for your company, you are probably familiar with the inflow of unsolicited outreach–some of which you want, and some that just feels like spam.

A funding event that garners media coverage gets a lot of traffic because it presents business opportunities. Many startups naively believe all those website visitors and signups are potentials customers, and some are, but your startup is interesting to many others:

  • Your competitors
  • Potential investors
  • Potential acquirers
  • Service providers (lawyers, real estate brokers, wealth managers, etc.)

Your funding isn’t just interesting for that day, the timing and participants also matter. Investors who like follow certain angels put you on a list of prospects, taking note of the date so they can contact you in 6-12 months to get a sense of traction since the announcement, and your timeline for taking more capital. Afterall, most startups raise money in predictable 18 month cycles–if they don’t they’re either a) profitable b) dead.

Your competitors are also taking note, and if they’re interested in coming after you legally this is often when they’ll first consider it. You’ve raised money, and your existence is a threat. They’ll also take note of who invested (don’t talk to them!) and who you announce as customers (poach them!)

Employee count
In between funding events it can be a bit more challenging to figure out which companies are growing, but adding new employees is a good proxy. A spike in hiring, or even just a steady stream of new folks, can signal:

  • A funding event that was never announced
  • Product market fit (rapidly growing the sales team)
  • New product under development (e.g. hiring first mobile dev)
  • Healthy employment brand
  • Attrition (is the culture messed up? is the leadership messed up? did they fail to find product market fit?)

Additionally, investors/acquirers/providers are often paying attention to who specifically is joining the company and how they are connected. Did you just land the person who used to run all of support for AirBNB? Did you poach the guy who did sales for Amazon Web Services and closed the most deals in their first year? Did you use a widely respected corporate recruiter who is known to service a select group of VC’s portfolio companies (and you haven’t announced that Sequoia backed you yet)?

Deal makers figure these things out, they are secrets hiding in plain sight.

Social media mentions

Discount them if you like, but whether your company gets mentioned regularly on Twitter and (to a lesser extent now that Pages for business has become crap) Facebook is very important to investors, especially in the early stages. Organic mentions of a company, whether positive or negative, signal that people at least care that you exist.

Think this doesn’t matter for non-consumer products? Think again. People don’t tend to mention “boring” business tools on their personal social media accounts unless they’re pretty passionate about them (for example see @SlackHQ).

Organic vs. paid web traffic

Understanding where a startup gets their traffic, a combination of advertising driving visitors and organic intent, is crucial to grasping the customer acquisition costs of a startup.

To some extent companies can buy something that looks a lot like traction, but an addiction to paid traffic or paid placement in the iTunes app store is a huge problem if it doesn’t work?—?eventually these companies run out of the ability to pay for these things, and investors have become much more savvy. Startups in the past might have been able to convince acquirers and potential employees to respect these numbers, but with the tools being provided today they are beginning to see through this.

Gaming the system (Mattermark optimization)

Any single metric can be gamed, for awhile anyway, with slight mis-directions that eventually fall apart or devolve to bald faced lies.

But if you “game” several of these metrics at the same time by improving them every single week, your startup just might be doing well.


Danielle Morrill

This post appears through the MedCity Influencers program. Anyone can publish their perspective on business and innovation in healthcare on MedCity News through MedCity Influencers. Click here to find out how.

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