Thread by @EvergreenMEP

You brought in new capital, have the team, released a strong initial product and … not much happens.

You’re in the startup J Curve. And it can take you out.

What is it and how to manage through.

First, why should you care?

Because this common startup cycle can drain your cash.

So you need to care. Now, let’s make it easy to understand.

The J Curve is an initial dip that exists after 🚀.

Happens to almost all startups for a simple reason: You got something wrong.

- wrong pricing model
- Wrong feature set
- Wrong target market
- Poor positioning
- Something else

There are several natural stages to company building …

Morph is the depth of the curve and where changes are required.

This is also where team confidence will be shaken.

No change = no💰or people left.

First Principles thinking.

Get to the "why" fast

👉🏽 Push back on pricing? Change the pricing model or cost.

👉🏽 Miss on functionality? Get it built quickly.

👉🏽 Lower than expected interest? Examine your target market or positioning.

You need to navigate out, here’s how.

Then test quickly. Agility will be your lifeline.

Based on your analysis:
- Test new pricing
- Test new messaging/positioning
- Modify the product

Tip: Run quick test one at a time. Not all at once. Will cause chaos. Trust me ... I've caused my share of chaos.

No startup gets it all right. Never happens. Never will.

Some stay in the depth of the curve longer than others.

Keep testing and iterating. There could be multiple issues.

You’re racing against the cash clock so speed is essential.

Don’t over analyze, just experiment.

And don’t over raise at this stage. Make sure you have enough cash on hand to survive the curve.

Save the big raise for the Scale phase.

This is where things are predictable and investments in sales and marketing have a clear ROI.

A founder’s desire to rush through this phase will be intense.

This s stage sucks. Filled with uncertainty and fear.

Focus on the strategy and keep iterating.

The magic of product/market fit happens in this phase

Emerge from the depth of the J and there is no looking back.

Summary ..
- The J Curve is a natural startup cycle
- You will dip after 🚀
- Iterate quickly on product, positioning, pricing, etc quickly
- Raise limited $$ at this stage to survive and fix
- Once solved, growth accelerates. Then go big.

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