3 Simple Things with Peter Blacklow, General Partner at Boston Seed Capital, a venture fund investing alongside founders who are striving to improve life, work, and play, through building innovative tech companies. www.BostonSeed.com
Boston Seed has a broad portfolio of companies in its existing portfolio, what advice are you giving them these days?
No earthshaking news here, but we have to ensure Boston Seed’s portfolio companies’ ongoing operations with cash in the bank, and we emphasize to them that raising new capital in a very uncertain market may be difficult or impossible. As a result, it’s critical for teams to make excruciating decisions in reducing expenses with the ultimate goal of extending the runway for new capital into the business or achieving a break-even model.
Also, it’s a fascinating insight into the DNA of entrepreneurs — I have observed that many founders believe our new social/economic reality could actually be accretive to their business. I would even say that most founders I speak with see a silver lining or a unique opportunity in today’s challenges as it relates to their business. I believe entrepreneurs are positive opportunists, which is what makes them special, but nobody has a clue what the short and long-term impact will be for our customers and their ability to do business with us. So, even those portfolio companies that are demonstrating short-term gains or no negative effect on their business need to plan for a deeper impact in Q2 and beyond.
You’re a marketing veteran with deep industry experience prior to joining Boston Seed—what would you advise company decision makers about marketing their products in challenging times?
It’s not easy. In our consumer businesses, many of our companies have significantly slowed or completely shut off marketing as a result of these uncertain times. In our B2B businesses, our customers are making similar cuts to marketing budgets, and SAAS implementations are much more difficult with a remote workforce. But, that doesn’t mean we can give up on marketing. However, companies have to be thoughtful around 1) finding an approach that will work with their customers and 2) speaking in a way that is sensitive to the upheaval in our daily lives. Alyce is one of our portfolio companies that has reacted quickly and thoughtfully to their customers’ needs. As a B2B AI gifting business that helps companies acquire and enhance communication with customers, Alyce understood that smart physical gifts delivered to business contacts via direct mail would be irrelevant today. So, they emphasized their digital and charitable gifting offerings and customer response was amazing. In this sense, Alyce listened to their customers, developed a product that worked given the confines of remote workforces, and provided a charitable component which resonates even more strongly in today’s world.
In this tumultuous period, what should new innovative product companies do now to attract funding, get launched and gain traction?
Many entrepreneurs talk about building businesses during bleak economic times, like in 2002 or 2008. This feels different for a couple of reasons. First of all, we don’t know how long or to what extent an economic downturn will last. Second, even an innovative product may have new challenges in terms of go-to-market given the massive social/economic changes their customers are facing.
We clearly need to continue to develop and launch innovative products. But, those companies also need to understand the current needs of potential customers and how to build a loyal customer base in times of social/economic turmoil. Bootstrapping a business and demonstrating proficiency in connecting with customers will continue to unlock capital, but not just because they are clever ideas – you’ll need to show customer traction.