In light of the “tech stock blood bath”, as Chris Tottman so aptly describes it, it’s critical that every seed company focuses their attention “forensically” on what they need to prove first and what they need to achieve second.

Dramatically over simplifying here but most people think first about what they need to achieve in terms of the numbers of pilots, clients, revenue, etc. Clearly these are vital as a seed company works towards a new “Series A” investment horizon and hypothesis, but what really matters is the evidence you have gathered along the way, the lessons you have learned that have informed your journey and allowed you to isolate an ideal, repeatable customer profile in a large and scalable market. That results of course in the # pilots, # clients, £ ARR. Consider three different outcomes:-

• Company A - 18 months post seed, generating £100k MRR and growing month on month. But with 10 customers in entirely different segments: shapes, sizes and sectors.
• Company B - 18 months post seed, generating £100k MRR and growing month on month. Ten customers in one addressable segments but with ten different products / propositions.
• Company C - 18 months seed, generating £100k MRR and growing month on month, but with ten customers in one addressable segment, all with same product, pricing model and proposition.

The next investment hypotheses for these three companies are entirely different. In the latter, the Series A investment hypothesis is simple:

We know who our customers are, the pain they feel and why they buy. We want to double down on the current ten clients to expand revenues even further and add another ten new clients from the same segment with the same proposition.

A dramatic oversimplification, but it does help us to gather our thoughts and focus on what matters. So what does a seed company need to do?

Let’s start from the end, an ideal narrative if you like. Over the last 12-18 months you have constantly iterated your message, adjusted your segment focus and evolved the product to a point at which you can say:-

1. Lead times from initial contact to first revenue have reduced; we have isolated and focused in on the critical pain within the segment, narrowing and honing our message to the exclusion of everything else;
2. ACV has increased on initial orders, a sign that we have isolated the buyer with the most to gain;
3. Engagement is increasing showing that our focus on product quality, usability, UX, customer success, etc. is paying off;
4. Revenues are expanding within existing customers as we demonstrate the quantitative and qualitative value of our solution to the customer and expand into other teams, divisions and geographies;
5. And, we while we are engaged with many different customers we have isolated a single addressable and large market which we can address in the same repeatable manner.

Gather evidence on this basis and share with your current investors and the new ones you want to attract. Share the mistakes, the lessons learned and as you change, the progress you make. Align your organisation around these priorities, ensuring they understand the focus and clarity required and that this is a journey on which the evidence you gather along the way is as important as reaching the destination.