Recently, I adopted a new mindset for executing on ventures that transformed my perspective on leading organisational efforts more efficiently.
As you grow up through school and college, your goals often revolve around single projects. Whether it's excelling in sports and winning a championship, achieving academic success, improving a craft,winning a competition, or excelling in a particular project, your efforts, training, and learning are focused on one of these pursuits.
Based on our efforts, skills, and performance, we achieve certain tangible results related to these goals. These experiences mark the first phases where we encounter failure. We set targets, work toward them over time, and end up either achieving our goals, falling short, or landing somewhere in between.
These experiences push us to approach our goals with a win-or-lose, pass-or-fail attitude. This mindset works for many traditional projects and goals in careers. However, entrepreneurship, innovation, and building businesses operate differently. Viewing efforts within these endeavors through the traditional lens can make them seem daunting. Let me explain.
In entrepreneurship, you still set goals, but it's not about having a single goal to either win or fail. For instance, if your goal is to secure a Fortune 500 company as a client, you can't focus all your time and effort on one company or a few and then feel like a failure if it doesn't work out. Instead, entrepreneurship operates on conversion rates and percentages. Numbers matter.
This is where Funnel Thinking comes into play. Approaching every goal like a funnel. If you want to fundraise, you need to build your materials, craft your story, develop your narrative, and then approach a wide range of investors. Based on their decisions and your choices, you narrow down to some investors that match and are interested. Feedback and learning is what we seek from every one of these encounters. The same funnel approach applies to hiring and talent, sales, finding the right marketing channel, identifying the product proposition, and discovering growth avenues. Even in venture capital funnels are built for sourcing and for investing. Strategic thinking helps us build and design these funnels and guides us around where to put over efforts, how to analyse these funnels and increase the flow through them or the rate of flow through them.
This fundamental shift in thinking matters because it allows founders to think in numbers. Rejection and failure become mere conversion rate determinants rather than personal setbacks. One can use feedback from the efforts and experiments to create even betters funnels with greater conversion rates and optimize them for the best results for your company.
Funnel thinking energizes all aspects of the business. It shifts the focus away from rejection and failure, emphasizing instead the importance of selecting strategically the right targets at the top of the funnel, increasing the flow of numbers, and focusing on conversion rates to achieve what is crucial for company growth. We entirely operate in terms of experiments.
The best startups I have seen perform really well not not only have great vision and team to execute but they also experiment and iterate at a super pace. Rate of iterative experimentation of a start-up team is a great lens to judge investments from.
Do try thinking in funnels for achieving venture growth. It will transform your approach and add a new dimention to how you craft products and ventures.