The Science of Trust: How Brands Can Build Lasting Customer Loyalty

by Leave a Comment

The Questions That Drive Trust

  1. Why do we instinctively trust certain people and organizations?
  2. How can brands earn the trust of customers they’ve never met?
  3. And what strategies can they use to turn that trust into lasting loyalty?

These questions captivate me. As a fractional Chief Marketing Officer with a deep passion for neuroscience and psychology, I find the dynamics of trust—especially in today’s digital age—both fascinating and complex.

The Trust Gap: Perception vs. Reality

The trust gap is real. According to  PCW, while 90% of executives believe their customers highly trust their companies, only 30% of consumers agree. That’s a staggering 60-percentage-point gap—a disconnect that highlights how unpredictable and elusive trust can be.

The Personal Nature of Trust

Trust is deeply personal. It’s shaped by a complex mix of internal beliefs and external influences.

Consider Apple’s TV series Franklin. In it, Edward Bancroft betrays Benjamin Franklin, yet Franklin defends their friendship to John Adams, focusing on their shared history and Bancroft’s likability. Despite the betrayal, Franklin values the deeper connection—an example of how trust can transcend logic and be rooted in emotional and instinctual ties.

This hidden layer of trust is what brands need to tap into. It goes beyond product features and benefits, living in the emotional and subconscious spaces where true loyalty is born.

The Three Pillars of Trust

At its core, trust is built at the intersection of:

  • Logic: Demonstrating competence and consistency.
  • Emotion: Building connection and empathy.
  • Instinct: Appealing to intuition and subconscious cues.

Brands that balance these pillars create a trust that feels authentic and lasting.

How Brands Can Build and Activate Trust

In this guide, we’ll dive into:

  • The Psychology of Trust: Why we trust certain people and brands.
  • Neuroscience Insights: How our brains process trust signals.
  • Evolutionary Roots: Understanding trust’s role in human survival.
  • Proven Strategies: How brands can cultivate trust and turn customers into loyal advocates.

👉 Click here to download the guide

A BRAND’S HOLY GRAIL – ebook Virginie Glaenzer

Connect with Virginie Glaenzer to explore how your brand and organization can increase customers’ trust.

 

Reducing Your Risk of Business Failure in 2025

by Leave a Comment

As we step into 2025, it’s natural to focus on ambitious goals and growth strategies. 

However, my European background and six years as a Fractional CMO have taught me that I serve my clients best through honesty and direct feedback. This year, let’s take a moment to address the hidden risks that could threaten business success.

For leaders, minimizing the chances of failure is just as crucial as pursuing bold visions. 

Here are four key areas to remember and avoid:

Failure to Effectively Communicate the Vision and Mission

Your company’s vision and mission are the guiding stars that should align teams, inspire action, and shape decision-making. Yet, many businesses struggle when these core elements are unclear or not consistently reinforced.

Why it matters: Without a clear and shared understanding of the organization’s purpose, employees lack direction, and stakeholders lose confidence. This misalignment can erode trust, dilute efforts, and stall progress.

Solution: Leaders must communicate the vision and mission consistently and authentically. Integrate these principles into team meetings, strategic plans, and even casual conversations. When everyone—from executives to front-line employees—can articulate your mission, you’ve built a resilient foundation.

Zinier, led by CEO Prateek Chakravarty, a former client, is a Field Service Management SaaS that exemplifies well-defined departmental objectives aligned with the company’s overall goals, thoughtfully integrating insights from both sales and research. I had the opportunity to witness firsthand how they effectively communicate their vision and mission, ensuring clarity and alignment across the organization.

2. Overcrowding with Multiple Decision-Makers

Collaboration is valuable, but when too many decision-makers are involved, the result is confusion and inefficiency. Overcrowded leadership structures can create unclear roles, competing priorities, and slower responses to challenges.

Why it matters: When responsibilities blur, accountability diminishes, and execution falters. Decision-making becomes a bottleneck instead of a catalyst for progress.

Solution: You can simplify and clarify processes by clearly defining roles and responsibilities for decision-making. You should delegate authority when appropriate and ensure everyone understands their specific accountability. With streamlined governance, you’ll enable faster and more effective actions.

While working with another client, LARVOL, a Pharmaceutical SaaS company, I observed their CEO, Bruno Larvol, lead the launch of a new product offering with a strong focus on seamless interdepartmental communication. His approach resembled a growth hacking team, effectively integrating efforts across product, marketing, and data. Moreover, his process clearly defined roles and responsibilities, which enabled the team to take faster and more effective actions.

3. Forcing Employees Back to the Office

For many organizations, the debate around remote work continues. However, mandating a full return to the office without considering employee preferences often signals an inability to trust or delegate.

Don’t let your company fall into the “Coffee Badging” trap!

Why it matters: Forcing employees back can lead to resentment, reduced productivity, and higher turnover. Modern teams thrive on autonomy and flexibility, not rigid controls.

Solution: Instead of rigid mandates, focus on outcomes and empower employees to work in ways that optimize their performance. Build trust through delegation, invest in tools that support hybrid work models, and prioritize results over presenteeism.

4. Not Having an AI Project

AI is no longer a future technology; it’s a present-day necessity. Businesses that fail to adopt and leverage AI risk falling behind competitors who are reaping its benefits in efficiency, personalization, and decision-making.

Why it matters: Ignoring AI leaves businesses vulnerable to inefficiencies and lost opportunities. From automating routine tasks to enhancing customer experiences, AI can be a game-changer.

Solution: Start small. Identify areas where AI can deliver immediate value—streamlining operations, improving customer engagement, or analyzing data. Launching even a modest AI project can position your business as forward-thinking and innovative. 

At TechCXO, we have put a team together to help our clients embrace AI, from an introduction workshop, a team training to full AI organization transformation.

Book a time, and we’ll help you get started.

Looking Ahead

Unlike traditional executives, as Fractional Executives, we avoid drinking the Kool-Aid or playing politics. This unique positioning allows us to address critical risks head-on and share honest insights about customer needs and market opportunities.

2025 doesn’t have to focus solely on lofty goals. You can build a stronger, more resilient business by proactively addressing these critical risks I’ve listed.

Success isn’t just about hitting ambitious targets—it’s about creating the conditions to sustain those successes.

Let this year be about building a lasting legacy—by reducing risk, fortifying your organization against failure, and strengthening the foundation for long-term success.

Subscription Fatigue: How to Evolve Pricing from Product Transactions to Relationships

by

Lately, I’ve noticed something interesting during my client engagements: people are getting tired of subscription models. If you’re in the SaaS or media entertainment sector, you might be feeling it too—this growing “subscription fatigue” that’s making customers second-guess that monthly charge.

According to woop, approximately 39% of global subscribers plan to cancel at least one subscription within the next year, citing content issues (54%) and high costs (43%) as primary reasons

As a fractional CMO and CRO, I help organizations rethink their pricing models to address this very issue. The goal? Combat fatigue and rebuild trust with our customers. I’m seeing an exciting new era in pricing, one that’s all about relationships rather than just transactions. Digital transformation and changing customer expectations are pushing us to rethink the old ways.

The Evolution of Pricing Models

Historically, pricing was simple: supply, demand, a little markup, and done. But that world has changed. Today’s market is abundant and open, with digital access and global connectivity totally reshaping how we perceive value.

What was once a simple “cost-plus” transaction has grown into a variety of sophisticated models that respond to different needs, behaviors, and expectations.

For those of you in the C-suite—whether you’re a CEO, CMO, CRO, or VP of Marketing—understanding these shifts is critical for navigating your business through today’s complex market.

In this post, I’ll walk you through some of these modern pricing strategies, share real-world examples, and introduce some unconventional ideas that might just challenge how you think about pricing.

From Cost-Plus to Dynamic Relationships

Traditionally, pricing was straightforward: take the cost of producing a product, add a markup, and sell it. This “cost-plus” approach was reliable for physical products but often missed out on the customer connection—it was purely transactional.

However, as the competitive landscape evolved, more dynamic models started taking over. Think of it like a shift from a simple product purchase (like a limited-time clothing sale) to a relationship-based transaction, where the price can adapt to the customer’s needs, actions, or loyalty.

Two newer approaches embody this evolution:

  • Dynamic and Action-Based Pricing: Leveraging data, companies like Uber and Amazon dynamically adjust their prices based on real-time factors—such as demand surges or inventory levels—to optimize profits and align with customer behavior.
  • Licensing and Royalty Models: Content creators and technology firms, like software providers and entertainment companies, are moving towards royalty-based pricing. Used by companies like Substack, YouTube, Patreon and Apple Music, this model rewards stakeholders continuously, whether it’s for every stream of a song or per use of licensed software.

Tried & True Models Still in Play

Before jumping into the really out-there ideas, let’s review some existing pricing models that have worked well over the past decade.

1. Customer Usage and Value-Oriented Pricing Models

We find these pricing models align cost to answer perceived value, offering flexibility, reducing waste, and tailoring pricing to customer behavior, which fosters stronger relationships.

  • Usage-Based (Pay-As-You-Go) Pricing: Often seen in cloud computing (e.g., Amazon Web Services) and telecommunications, this model ensures customers only pay for what they use, providing flexibility and minimizing waste.
  • Freemium and Paywall Pricing: In the software and media industries, freemium models lure users in with basic free services (e.g., Spotify) while encouraging upgrades. Similarly, paywalls on news sites like The New York Times provide a taste of the content before requiring commitment.
  • Outcome-Based Pricing: Industries like legal services and advertising sometimes base fees on performance or specific outcomes. This results-oriented model aligns incentives for both the client and provider, creating a win-win situation when objectives are met.

2. Segmentation and Differentiation Pricing Models

Not all customers are the same, so why should pricing be? Segmentation pricing helps growing businesses understand customer needs and tailor pricing to capture more market segments and drive growth.

  • Tiered Pricing: SaaS companies, such as Slack or Salesforce, effectively use tiered pricing to cater to different customer segments, ranging from startups to large enterprises, each receiving features tailored to their specific needs.
  • Geographic and Regional Pricing: Netflix adjusts subscription fees across various countries to reflect purchasing power, cost structures, and local competition.
  • Loyalty Pricing: Airlines have mastered loyalty pricing, creating recurring customer engagement through miles programs that encourage repeat bookings and higher lifetime customer value.

3. Product and Service Bundling Models

Bundling can also help companies upsell by encouraging customers to opt for higher-value packages that include additional services or features.

  • Subscription-Based Pricing: Industries like streaming (Netflix) and software (Microsoft Office 365) use subscriptions to ensure predictable revenue while offering ongoing value to consumers. Microsoft relies on licensing agreements for its software offerings, such as Microsoft 365, enabling steady, predictable revenue through a subscription-based approach.
  • Bundling and Unbundling: Telecom companies often bundle internet, TV, and phone services to increase perceived value, while SaaS products might unbundle services to attract new users at a lower entry point.

4. Market Entry and Promotional Pricing

These pricing models can help companies quickly gain market share by offering competitive rates and incentives that attract a large number of customers in a short time.

  • Penetration Pricing: Spotify used low-cost introductory offers to quickly capture a large user base, relying on customers’ later transition to higher-paying plans for revenue growth.
  • Seasonal Pricing: Hotels and airlines use seasonal pricing strategies to adjust rates during holidays or peak travel seasons, optimizing both occupancy and profit margins. Uber employs action-based dynamic pricing to adjust ride costs during peak hours or bad weather, optimizing driver supply and passenger demand.

5. Psychological and Perception-Based Pricing

  • Psychological Pricing: The classic $9.99 vs. $10 psychological trick is alive and well across retail—a small adjustment in price often leads to outsized changes in consumer perception.

Finding New Pricing Ideas

Innovation in pricing is about more than optimizing what’s already there; it’s about creating new connections between cost, value, and trust.

I recently worked with a client in the energy sector, and we considered shifting from a pay-per-use model to a membership-based one, adding extra services to boost customer loyalty.

Let’s look at some bold new ideas for pricing—some are a bit unconventional, but innovation often starts with thinking outside the box.

1. Hybrid Pricing Models

  • Reverse Auctions for Services: Consulting firms could adopt reverse auctions, where service providers bid downwards to win projects, combining competitive pricing with quality assurance.
  • Community Investment Pricing: A model where part of the customer payment goes into a community fund, creating value beyond the product itself.

2. Dynamic Charity Contributions

  • Dynamic Charity Contributions: Fitness equipment companies could allow customers to choose part of their payment for charity, providing a deeper emotional connection.
  • Ad-Based Subsidized Pricing: Clothing retailers could offer discounts for customers who watch ads or share promotions on social media.

3. Behavior-Driven Pricing

  • Health-Driven Dynamic Pricing: Fitness centers could use wearable data to offer discounts for customers achieving health milestones, promoting healthier habits.
  • Behavior-Driven Discounts: Tech companies could reward customers with discounts for helping in product development or sharing feedback.

4. Social and Group Dynamics

  • Group Solidarity Pricing: A digital product where prices decrease as more people purchase, encouraging group buying and social sharing.
  • Time-Based Devaluation Pricing: A model where service prices decrease over time, rewarding those who are willing to wait while incentivizing early adoption.

5. Experience-Based Models

  • Emotional Pay-As-You-Feel: Entertainment venues could allow customers to set their price after the experience, aligning value with personal satisfaction.
  • Pay-Per-Mood Pricing: Aligns pricing with how much perceived value or comfort customers expect at different emotional states. A spa could base its pricing on customer mood—offering discounts to stressed customers while charging premiums to those already relaxed.
  • Karma-Based Pricing: Restaurants or cafes could implement pay-what-you-feel pricing, creating an emotional connection and community-driven value through customer fairness.

Steps to Reevaluate Your Pricing Strategy

If you’re considering shaking things up, here are a few practical steps:

  1. Understand Customer Behavior: Use analytics to figure out when and why customers buy. This might lead to dynamic pricing that fits fluctuating demand.
  2. Segment Your Market: Identify distinct groups and create tiered offerings that cater to different needs—perfect for SaaS and services.
  3. Focus on Relationships, Not Transactions: Moving away from one-off sales to something deeper. Subscriptions, royalties, and loyalty pricing can turn customers into long-term partners.

Final Thoughts

Ultimately, pricing is about trust, loyalty, and creating value—growth follows naturally.

Customers today have endless choices and are driving how they perceive value, making adaptability key. Remember, a brand is all about the experience it offers in the mind of the customer, and pricing should align with their beliefs and desires.

Using tools like AI and analytics, we can offer dynamic subscription pricing based on needs, seasons, or lifestyles. Whether you want to grow your market, sustain growth, or optimize profit, a fresh look at your pricing model might be the answer.

Start by experimenting—look at what’s working in other industries and focus on building relationships, not just transactions. And if you want to dive deeper into innovative pricing models, here are some excellent reads:

TechCXO’s Matt Oess Joins Krach Institute for Tech Diplomacy

by Leave a Comment

The council’s goal is to accelerate the adoption of trusted technologies while preventing abuse from authoritarian regimes

ATLANTA, NOVEMBER 7, 2024 – TechCXO, a leading provider of on-demand executive talent to fast-growing companies, announced that Partner Matt Oess has been appointed to the Advisory Council of the Krach Institute for Tech Diplomacy at Purdue University. Its mission is to: “Bring together like-minded countries, companies, and civil society to operate by a shared set of trust principles. And, accelerate the innovation and adoption of trusted technologies to defeat one of the greatest global threats to freedom today: the weaponization of technology by authoritarian regimes.”

“As a proud Boilermaker, I’m honored to join this advisory council. The esteemed council members come from large, well-known global enterprises, institutes, and agencies. TechCXO’s participation and perspective are unique as we work with early-stage companies on the cutting edge of development in AI, Machine Learning, 5G/6G, cloud computing, and biotech,” Oess said. “I hope to help create a bridge between ground-level startups and influential decision-makers to ensure technology advances freedom.”

Download Full Press Release

 

Essential Tech Due Diligence Skills: Reasons to Avoid the ‘We’ve Got a Guy’ Shortcut

by Leave a Comment

When it comes to technical due diligence, some investors opt for big-name firms, investing significant resources to ensure thorough tech evaluations for their deals. On the other end of the spectrum, some skip tech diligence altogether or rely on “a guy” in their network to handle this crucial task—often a portfolio company CTO or a connection who can manage it “on the side.” While this approach may have sufficed in the past when technology was simpler, today’s rapidly evolving and complex tech landscape demands much more. Effective technical due diligence now requires specialized expertise, diverse skill sets, and a high level of emotional and business intelligence. It’s unrealistic to expect that “a guy” can meet all these critical needs and mitigate the associated risks.

Breadth of skillsets

The level of technical complexity in modern applications is increasing exponentially. The days when a single resource could effectively assess and identify risks across all technical aspects of a business are gone. Think of 50 years ago when a good MD was all you needed as opposed to the myriad of specialists required today. Different technologies and development frameworks require specialized skills that are unrealistic for one person to possess. Similarly, technical due diligence now almost always includes Security diligence, and increasingly, we are seeing it expanded to include Product diligence. With these additional elements, you are certain to outstretch the capabilities of any single person. For a deeper dive into the process, the full scope of what’s involved, and checklists that highlight just how many factors need to be considered, our Benefits, Process, & How-To Checklist blog post lays out the complexity in stark detail.

The importance of emotional intelligence

Another fallacy of the “we’ve got a guy” approach is that because someone is technical and understands code, they can perform this diligence. There is far more to conducting great tech diligence than just the technical part of digging into source code and evaluating architecture. Knowing the right questions to ask and, more importantly, knowing HOW to ask the questions makes a major difference in the quality of the diligence. Building trust with the team from the target company is essential. Tech leaders in target companies are commonly resistant to the process. This is understandable as the diligence process has the potential to put them and the application they have built in a negative light. As such, very guarded answers can be provided, making quality diligence impossible. So, excellent emotional intelligence is required to break through that resistance and get the transparency and cooperation needed to identify risk successfully.

Just pulling in a resource from your network to perform tech diligence increases the odds of ending up with someone who does not possess the critical emotional intelligence to elicit the most transparency from a target team.

The importance of business intelligence

Another critical aspect of effective Technical Due Diligence is the ability to discern which technical issues are relevant to the deal. Furthermore, explaining those technical problems in clear, non-technical business terms is essential. Both of these considerations highlight the importance of having a technical due diligence partner with not only great technical skills but strong business skills as well. This is a rare mix in the technology world. Using “a guy” who is not deeply experienced in tech diligence introduces the unnecessary risk that the diligence may raise issues that are not critical to the deal. Or even worse, it doesn’t raise issues because they are not technically critical but happen to be very important to the deal from a business perspective.

An experienced diligence resource would know the difference and could save a lot of time and risk by highlighting the issues that might otherwise be missed.

Helping after the close

In many cases, meaningful issues identified in technical due diligence must be remediated after closing. The new portfolio company often doesn’t have the expertise or bandwidth to address these issues on its own. An important consideration in selecting a technical diligence partner is to choose one with the breadth of expertise and the capacity to help remediate all problem areas identified post-close. It is rarely the case that “a guy” has either.

Summary

In summary, technical due diligence requires specialized skills beyond just the capabilities of the particular field. Investors intuitively appreciate that distinction for areas they are familiar with, such as sales, finance, and marketing. However, technical expertise is typically more of a blind spot for this group, so the assumption is pervasive that anyone technical can do tech diligence. Performing tech diligence with a resource who does not possess the variety of skills outlined here introduces a real risk that issues material to the deal may not be brought to light until after the close. They may be a “friend of the firm” and may have even been a great CTO for a prior or current portfolio company. However, great technical skills do not equate to great technical diligence skills, and assuming they do can lead to oversights and misjudgments that introduce risk. To ensure a thorough and accurate evaluation, ultimately safeguarding the investment and moving the deal forward with confidence, it is important to engage professionals with a proven track record in technical due diligence.

You very well may “have a guy” that you like, but a team— with skills, expertise, and experience in technical diligence— is the best way to ensure you uncover the risks that could impact the deal.

For more information on TechCXO’s Technical Diligence services, please visit https://www.techcxo.com/technical-due-diligence/

Technical Due Diligence: Benefits, Process, & How-to Checklist

by Leave a Comment

When investors are considering acquiring a company, they often say, “We bet on the founders.” This sentiment becomes a rationale for skipping technical due diligence — an in-depth assessment of the target company’s technology strategy, assets, systems, security, and processes to identify potential risks, weaknesses, and opportunities.

Instead, their approach is rooted in faith in the leadership’s track record, implying that a strong team guarantees a well-built, secure, and scalable product—a seemingly logical approach. While this perspective was perhaps reasonable ten years ago, the dynamic shifts in technology and cyber-security and the technical sophistication of all the stakeholders involved in deals today highlight the need for a more disciplined approach to technical due diligence.

What’s Changed?

The technological landscape is no longer what it was ten years ago; it’s changing at an unprecedented pace, supercharged by near-daily advancements in areas like artificial intelligence. These changes aren’t just technical—they reshape entire industries, altering the stakes for investors and companies alike. This heightened pace of innovation demands a deeper understanding of a company’s technical infrastructure and leadership, not just to assess its current state but to identify opportunities for the company to uniquely position itself in the market through technology.

Moreover, cybersecurity has transformed from a niche concern into a central element of investment decisions. What used to be important only in sectors dealing with payments, healthcare, or sensitive personal information (PHI/PII) is now crucial across all industries. Technically sophisticated investors increasingly prioritize security measures to safeguard their investments, often making cyber insurance a prerequisite – something that is impossible if the company doesn’t at least have the basic security measures in place. This highlights the need for intelligent and comprehensive identification and addressing of all technology risks at the start of any deal.

Uncovering Critical Issues

Another common excuse, particularly in M&A, is the belief that “we will figure it out” after the deal closes. However, without rigorous tech diligence, there’s a risk of overlooking critical issues that could significantly impact the success of the deal and can lead to significant financial losses or even failure to scale as expected post-close. While some may attempt to save costs by skipping this step or relying on internal technical resources, proper tech diligence requires objectivity, expertise, and experience. Through hundreds of projects, we’ve identified core architectural issues and lax security measures that can pose substantial risks and outsize costs to the business, even in companies with strong leadership. We know what issues to look for, where to find them, and how to analyze and clarify them for all stakeholders involved.

The Overlooked Benefit: Technical Roadmap

Tech diligence should be viewed as more than just a checkbox item. This thinking misses out on one of the major benefits of tech diligence—creating a technical roadmap to success post-close. This process facilitates “forced introspection,” allowing the business to get an objective assessment of its technical strengths and weaknesses. This almost certainly wouldn’t happen without the forcing function of an imminent potential transaction.

Often, we uncover hidden and unexpected opportunities for improvement that can enhance scalability and security for investors. Moreover, the specific recommendations from tech diligence provide a framework for holding the technology team accountable and driving meaningful progress. These are invaluable resources for stakeholders and are best identified during the technical due diligence phase.

Keys for Conducting a Successful Technical Due Diligence

Several factors impact the effectiveness of technical due diligence that are commonly left to chance.

Areas to include

While each deal is different, multiple areas within the target company’s product development and technology functions should be considered for inclusion in the project. Not all of these will be appropriate for every deal, depending on the company’s stage, product offerings involved, and any previously completed diligence efforts. However, each should be considered and only excluded when there is a clear reason to do so.

  • Product – Is the Product complete? Is the roadmap well-defined, and does the go-to-market strategy make sense? What does the competitive landscape look like?l
  • Architecture—Is the application built securely? Is it maintainable? Is it scalable? Will a major additional investment be required in the near future to enable it to support the planned sales goals?
  • Deployment—Is the hosting environment (e.g., AWS, Azure, etc.…) both secure and scalable? Are there opportunities to significantly reduce hosting costs?
  • Team – Can the current team support the business in achieving the projected growth? Are there key missing roles, and can the leader lead the team to the next level?
  • Process – Are there solid product development and support processes in place that will facilitate growth and a consistently high level of quality in the application?
  • IT—Is the business’s IT infrastructure adequate for its current state, and where it needs to scale? Are employees able to work effectively, and is business continuity properly considered?
  • Security—Does the business have solid security policies and practices in place? Do they have the proper compliance (e.g., HIPAA, SOC2, HITRUST, etc..…) for their industry?

When to Perform It

Technical Due Diligence is typically performed toward the end of the overall diligence effort. This is understandable, given the many other reasons a deal might not work out and the desire not to spend the money or effort here until there is reasonable certainty that the deal will go through. However, a few things can be done earlier in the overall diligence process to help ensure more effective technical due diligence.

First, set the expectation that access to the source code will be required if a software application (either SaaS or tech-enabled service) is to be assessed. It is common for the leadership of the target company to either have concerns about sharing access to source code or try to avoid it because of concerns about what might be found. When these concerns come out towards the end of diligence when technical due diligence begins, there is seldom the appetite for the acquirer/investor to push for it in fear of derailing or slowing down a deal at this late stage. The result is less thorough tech diligence and an increased chance of serious issues hidden in the code that won’t be discovered. Setting the expectation early that source code access will be required will help to avoid this late-stage reluctance to push for it.

Secondly, the expectation of who will be required to participate should be set. Frequently, when technical due diligence starts, it is discovered that the technical resources needed are unaware of the transaction and cannot be included, resulting in a less-than-optimal assessment. In some cases, this will be unavoidable; however, setting expectations early in the diligence process that technical participation will be needed can give the business a chance to consider including the necessary people.

Finally, a good amount of information needs to be collected before technical due diligence to facilitate the process (see our Technical Due Diligence Checklist). While it doesn’t make sense to have the technical team start on that too early for the reasons mentioned above, beginning the process a week or two ahead of the start of technical due diligence is helpful. This gives the target company time to gather the necessary information, allowing the diligence team to hit the ground running!

Execution of the Process

Multiple steps should be understood and followed with each deal to ensure a proper technical due diligence effort. They are as follows:

  1. Investor Kickoff – The technical due diligence partner must have a solid understanding of the business you are looking to invest in and your goals for the company after closing. The technical requirements and skill sets needed for a business to grow 10x and launch multiple complementary products are very different from those of a company where the product is very mature, and there is no need to do major things with it. The scope of the project is also discussed here so the diligence provider knows what areas to focus on and any special considerations to take into account, such as specific concerns to look into or areas that may not require as much focus as others,
  2. Information Collection – Gathering any information the company has documented related to the roadmap, process, team structure, architecture standards, security policies, etc… is very helpful in getting a full picture of where things stand ahead of direct meetings with the team. Getting this information to the diligence team up front goes a long way towards reducing the time required for the product development team to meet with the diligence team. (See the link above for a comprehensive checklist of questions and material to request.)
  3. Company Kickoff – A kickoff call among the Investors, Tech Due Diligence team, and key Product/Technical leaders in the target company is crucial in getting everyone aligned on the technical due diligence process and their roles and addressing any team questions. As part of this meeting, the tech diligence provider will establish key contact points for the various workstreams, get key follow-up meetings lined up, and provide an overview of the process.
  4. Function-Specific and Individual Meetings – Following the Company Kickoff, several “function-specific” meetings (e.g., Product, Architecture, Team, Process, Security, etc.…) are typically scheduled. In some instances, when deeper insights are needed around the team and leadership, multiple individual contributor meetings will likely be held.
  5. Assessment – Equipped with all the information provided and notes captured from the meetings above, the team can now dig in to do their actual assessment. This includes reviewing documents, reviewing notes, digging into the source code, looking through the team’s project management tools, inspecting their cloud hosting environments, etc….
  6. Report Compilation – The technical due diligence team will write up their findings and recommendations in a report using the insights gained above. This must include both the technical detail the team will need to remediate issues found but also a clear and easy-to-understand “snapshot” for the investor outlining where things stand, what issues they need to pay attention to, and whether there is an excessive risk to the deal based on the findings.
  7. Stakeholder Review – The technical due diligence team will walk the investors and other stakeholders through the report, outlining the important things the investor needs to know, why they are important, and what the company needs to do to rectify each issue.
  8. Action Plan Review With The Company – A technical due diligence effort and resulting findings should not just be used as a go/no go decision point for investment. For most deals, many other issues are identified that don’t raise up to the level of interest for what the investor is looking for. Having the provider walk the company through the findings leverages the effort spent on technical due diligence to help update the company’s technical roadmap. This process can highlight valuable recommendations that may not have previously been on their radar.

Selecting the Right Technical Due Diligence Partner

The final step to ensure a successful Technical Due Diligence project is to select the right partner – there are several considerations here:

Using an individual versus a firm specializing in technical due diligence – while it is common to use an individual who is either part of the firm or a friend of the firm (possibly a CTO from another portfolio company), this approach is limiting. Looking across the scope of what should be covered (see above), one person can’t have the requisite expertise across all those areas to be fully effective. Furthermore, effective technical due diligence is just as much an art as a science, requiring emotional and business skills that go beyond the capabilities of many technical professionals. Using resources not experienced in tech diligence will limit the value obtained in the effort.

Capacity and Bandwidth—It is important to work with a provider who can take projects on quickly, complete them quickly, and have expert resources across all the areas mentioned above, including multiple architect resources with expertise across a wide variety of common tech stacks.

Clear and Actionable Report—Spotting technical issues is not the hard part of tech diligence. The best providers stand out by having the discernment to understand which issues are important to the deal and being able to present those clearly and concisely to non-technical stakeholders. Ask to see examples of previous reports.

Ongoing Support—While it is good to be aware of the key technical issues identified in diligence, it is common for the company not to have the expertise or bandwidth to remediate those issues. Work with a partner who can provide expert, ongoing fractional support (CPO, CTO, and/or CISO) and be available to jump in to help clean things up after the close.

Conclusion

In today’s tech-driven landscape, technology due diligence is indispensable in any investment or acquisition scenario. Betting solely on founders or assuming any technical issues can be figured out post-close is no longer viable. With stakeholders’ increasing technical sophistication, informed decision-making pre-close and strategic planning post-close are imperative. Embracing tech diligence is not just about mitigating risks but maximizing the potential for long-term success.

For more information on TechCXO’s technical due diligence services, visit https://www.techcxo.com/technical-due-diligence/ or contact me at greg.smith@techcxo.com.

FAQs

Q: What is technical due diligence?

A: Technical Due Diligence is the evaluation of the technical aspects of a business, typically within the context of an acquisition or an investment. These technical aspects include product viability, application architecture, cloud infrastructure, product and technology teams and processes, IT infrastructure, and security posture. Outside experts in the areas outlined perform an audit to compare the target company’s people, process, and technology against industry best practices, seeking to identify any risks stakeholders need to be aware of before proceeding with a transaction.

Q: What are the benefits of technical due diligence?

A: The benefits of technical due diligence include visibility into a company’s technical risks that can negatively impact scalability and/or require significant unplanned additional investment to remedy. In addition, proper technical due diligence will leave the target company with a technical roadmap outlining the items that must be addressed to ensure scalability and continued customer retention.

Q: How much does due diligence cost?

A: The cost of technical due diligence can vary very widely depending on the scope of the assessment, the size of the target company, and the number and size of the applications the company has developed. As a high-level guideline, below are estimates for the various stages of investment:

Seed: $10k – $15k

Early: $20k – $35k

Growth: $40k – $55k

Mezzanine: $60k – $80k+

Q: How long does technical due diligence take?

A: The duration of a technical due diligence project depends on several factors, including the scope of the assessment, the size of the target company, the responsiveness of the company, and the number and size of the applications the company has developed. As a general guideline, below are the typical durations for the various stages of investment:

Seed: 2-3 weeks

Early: 2-3 weeks

Growth: 3-4 weeks

Mezzanine: 4-6+ weeks

Q: Is technical due diligence required?

A: As the pace of technical advancements increases and business reliance on technology increases, ensuring that a business’s technical capabilities are in good shape is required. It is critical to understand any inherent technology risks and to get a clear picture of any significant unplanned costs that would only come to light when the business tries to scale. Additionally, unlike five years ago, cybersecurity is now a significant consideration in technical due diligence for all types of businesses, not just product development companies. Skipping technical due diligence significantly increases the risk profile of potential investments.

Q: Can I use a technical person I know (perhaps a CTO from one of our portfolio companies) to perform technical due diligence?

A: You can; however, there are several reasons this will limit the value that you receive from the technical due diligence. First of all, the breadth of the technology landscape is expansive (and growing) – to think one person can adequately cover the different aspects of tech diligence and the multitude of tech stacks is unrealistic. Secondly, quality technical due diligence is something that only some technical people can do well since there is just as much art to it as science. Finally, an individual will not likely have a structured report that contains not just the technical details but also the discernment from an investment perspective of what the investor needs to pay attention to. For a more in-depth discussion on this topic, see the article ‘Why ‘We’ve Got a Guy’ Falls Short in Today’s Complex Technical Due Diligence.’

Q: Why can’t we just “bet on the leadership team”?

A: Some firms don’t perform technical due diligence as they are betting on the leadership team. The logic is that if the leadership team is strong and there is a product with happy customers, then any technical issues that come to light later can be figured out. The problem with this logic is that it is very common for companies to have an application in the field that is working well from a customer’s perspective but will not scale, requiring significant additional investment down the road. Similarly, there could be a tech leader in place who presents well, but when you dig in, is really not the right person to take the team to the next level. Having an objective and expert assessment removes the gaps that are left when you just “bet on the leadership team.”

TechCXO Returns to Inc 5000 List

by Leave a Comment

TechCXO, the pioneer of on-demand executive leadership services, returns to the Inc. 5000 list of Fastest Growing Private Companies. The company has been on the list for 15 of the last 16 years.

ATLANTA, AUGUST 28, 2024 – In an outstanding affirmation of its enduring excellence and growth, TechCXO, the pioneer in providing on-demand executive leadership, proudly announced its return to the Inc. 5000 list of America’s fastest-growing private companies for 2024. TechCXO’s consistent presence on the Inc. 5000 list for 15 out of the last 16 years is a testament to its unwavering commitment to empowering clients and fueling their growth. The firm appears on other Inc. lists: #199 in Georgia, #500 in Business Products & Services, and #187 in Atlanta.

TechCXO was founded in 2003 on the premise that companies can benefit from having the best executive talent available to serve as their CFOs, CTOs, CSOs, CMOs, CROs, COOs, CHROs and other executives on a fractional, part-time, or project basis. Companies might not otherwise be able to access the talent and experience level of a TechCXO partner and teams due to cost or availability.

Kent Elmer, Managing Partner of TechCXO, expressed his enthusiasm for the company’s latest accomplishment, “Being recognized once again on the Inc. 5000 list is a testament to the hard work and dedication of our team to excellent client service. Over the past 20 years, we’ve been committed to changing the game in fractional executive leadership, and our repeated inclusion in the Inc. 5000 underscores our success in this arena.”

Read Full Press Release

Signs Your Business Needs a Chief Marketing Officer (CMO)

by Leave a Comment

Signs Your Business Needs a Chief Marketing Officer

Most companies have a CEO — the person who drives the direction of the company and makes the important decisions. They also likely have a CFO, COO, CTO, and even possibly a Chief Product Officer or Chief Revenue Officer.

But what about Chief Marketing Officer? Many companies choose to go without one, full-time or fractionally, for a number of reasons.

First, marketing is a “fuzzier” function than, say, technology or finance. It’s a little harder to be specific about what a CMO does or adds. “If I have junior marketers doing work, what does a CMO add?” they may ask themselves. In addition, senior businesspeople often believe they know enough about marketing to do the work of oversight.

But the biggest reason companies go without a CMO is, they have gotten used to what it’s like without a true marketing leader. Like homeowners who forego rehabbing their house for so long that they stop noticing the peeling paint, leaky faucets, and outdated look and feel, these companies can’t seem to prioritize what real marketing can do for them.

So here are a few signs that your marketing may not be delivering enough value for your company — and that you might need some experienced marketing leadership to get you over the hump.

You’ve been saying, “We need a website update,” for so long you’ve lost count. Websites get old. However, there’s nothing more important for your business. And letting it molder is a sure sign you’ve lost the ability to recognize the business lost by giving prospects the wrong first impression about your company and its offering.

The marketing you do is a series of tactics and one-offs. No customer ever sees your strategy. So, at the end of the day, marketing is actually a series of activities and behaviors you perform in the world. However, your strategy is what helps connect your execution across time, channel, and customer. Without strategic leadership and the rigor that comes from it, you may be pushing out mere transactional messaging, transitory promotions, and random product news.

And because no one has built a holistic plan, nothing is adding up over time in the customer’s mind. As I’ve written here before, great marketing is a “system,” working together as “connective tissue” to add value to an organization.

Your brand’s story is all about what you do, but not why. A clear purpose is a sign of a strong strategy – and it helps frame your narrative around the value you provide, vs. the attributes of your products and services.

Buyers buy solutions that promise to solve their problems and challenges; product attributes are the reasons to believe your promises, not the main message you tell.

You aren’t obsessed with your customer. When marketing is strategically led, it is always developed in the service of its customers. But without a CMO driving it, it’s likely that your company’s efforts are focused on “push-based” marketing, vs. insight-based marketing built around customer need.

Every good marketer at your company leaves. The thing about good marketers is that they love marketing. They want to do strategic, interesting, big things. Without a leader in marketing, their work instead ends up being completing a long to-do list, spinning plates, and working on putting out the latest fire. Good marketers don’t feel fulfilled by this type of work.

No one is setting objectives, developing goals, or measuring your results. When marketing is focused on today’s fire drill, it’s likely there’s no long-range planning. And, importantly, you’re more than likely not tracking, or optimizing your efforts on an ongoing basis.

A CMO — full-time or fractional — may seem like an indulgence or luxury, especially for an early-stage or startup company. But if you know how to spot the signs, you’ll realize that without one, your marketing is likely to not leave a mark at all.

Email | LinkedIn | Download CV

The Start-Up’s Guide to Extending Your Cash Runway

by Leave a Comment

If it’s been a while since you raised funds for your start-up business, and your cash runway is starting to resemble your personal bank account – a bit thin — you’re not alone. There are fewer potential investors and those that are in play are taking longer than ever to make investment decisions, especially in new companies. If you’re barely hanging on, trying to retain your team and make it to that next inflection point for your product or service, here are some simple ideas to extend your runway and avoid finding yourself in a desperate situation.

Control the Outflows

You should have a strict policy on who spends what with signoffs from your CEO or CFO. There are certain expenses such as travel & entertainment and consulting that are the “canaries in the coal mine” and are leading indicators for how you are managing your spend. You should know where every dollar is going before it is committed.

There will be an increasing number of portfolio companies and VCs who need to shut their doors in the coming months

Plan Ahead

If you only have 3 months of cash, it is too late to make meaningful cuts to extend the runway. For example, if you have to make the difficult decision to reduce your staff, the impact of those savings is magnified for each month in which you implement them.

Consider Alternative Means of Fundraising

While VC-led rounds of equity financing are desirable, consider raising money using a SAFE (Simple Agreement for Future Equity) or convertible note. These mechanisms avoid the difficult negotiations involved with a priced round and defer that decision until later. SAFEs and notes offer incentives such as interest and discounts to the next priced round for those who participate. Grants from the government or mission-driven foundations can also be an excellent means of bringing in precious capital.

Milestones

You need to clearly understand your milestones or key inflection points because those will be the triggers for raising capital at increasing valuations. Your cash runway needs to get you, not only to the next milestone, but you need to have 3 to 6 months to review your data and pitch the accomplishment to potential investors.

Pass the Hat

Many VCs are rightfully focused on their existing portfolios and keeping those companies healthy is their primary objective. VCs are scaling back their new company investments and triaging their portfolios. There will be an increasing number of portfolio companies and VCs who need to shut their doors in the coming months. As such, your current investors are the best and most immediate source for emergency funding, but they will want assurances that they are bridging your company to a meaningful milestone on which you can raise additional funds.

These difficult market cycles are just that – cyclical. With some advance planning and by using all the tools at your disposal, you should be able to position yourself for success.

TechCXO Reports Full-Year Revenue Growth for 2023; 20th Straight Year of Top-Line Growth

by Leave a Comment

ATLANTA, MARCH 12, 2024 – TechCXO, a pioneer in providing industry-relevant, on-demand executives delivering fractional and interim professional services, reported an increase in annual service fees in 2023 over 2022 to $56 million. TechCXO has increased revenue every year since its inception in 2003.

“TechCXO is in the strongest position in our history. We now have more than 120 partners – the most ever. Our partners love our collegial environment and how our model enables them to impact their clients directly and positively,” said J. Kent Elmer, TechCXO’s Managing Partner.

“Today, we’re seeing staffing and search companies, consultants, and business coaches claim to provide fractional executive services. That’s a testament to the success of our model,” Elmer added. “However, we know after two decades in business that the depth of partners’ expertise – every one of whom has been in multiple c-suite roles – and the team of professionals supporting them is a big differentiator.”

TechCXO was founded in 2003 on the premise that companies can benefit from having the best executive talent available and serving as their CFOs, CTOs, CSOs, CMOs, CROs, COOs, CHROs and other executives on a part-time or project basis. Companies might not otherwise be able to access the talent and experience level of a TechCXO partner and teams due to cost or availability.

Read Full Press Release

TechCXO has assisted thousands of start-up and growth-stage clients in its history. In addition to executive support, companies can also outsource their entire Finance, Sales & Marketing, IT, HR, and Operations functions to TechCXO for 50-75% less than it costs to staff full-time, loaded salaries. All TechCXO partners and staff are U.S. and U.K.-based.

About TechCXO

TechCXO is a pioneer in providing high potential companies across the country with industry-relevant interim and part-time executives on-demand. More than 5,000 companies, from startups to the Global 1000, have entrusted TechCXO to help with their critical functions by calling on TechCXO executives and teams as their CFOs, COOs, CSO, CTOs, CMOs, CHROs and other executive roles. TechCXO has appeared on the Inc. 500/5000 Fastest Growing Private list every year since 2008. For more information about the firm, please visit https://www.techcxo.com.

TechCXO’s Paul Sansone Named 2024 Georgia Titan 100

by Leave a Comment

TechCXO’s Paul Sansone Named 2024 Georgia Titan 100


Atlanta, GA – TechCXO Atlanta Managing Partner, Paul Sansone, has been named a 2024 Titan 100 honoree, recognized as one of Georgia’s top CEOs and C-Level executives. The award, presented by Wipfli LLP, acknowledges executives with exceptional leadership, vision, passion, and influence who demonstrate expertise in their respective fields.

This year, hundreds of applicants vied to be of one of Georgia’s Titans of Industry. The 2024 Titan 100 honorees are chosen from various sectors, including technology, healthcare, banking/finance, construction/real estate, professional services, non-profit organizations, and other industries. The Titan 100 and their companies combined employ over 125,000 individuals and generate more than $30 billion in annual revenues.

“I’m honored and humbled to be recognized with this award. I’d like to congratulate all the recipients and applicants. It is such a blessing to be a part of the dynamic Atlanta business and technology community,” Sansone said. “TechCXO is so invested in the success of our clients, as they are the fuel that propels so much of our vibrant business community. I’m also grateful to work with so many wonderful colleagues, and I look forward to growing our local relationships in the years to come.”

Sansone has over 25 years of executive financial leadership experience in several industries, including e-commerce, enterprise broadband, hi-tech R&D and manufacturing, and non-profit sectors. He has an outstanding track record in establishing financial turnaround and restructurings for more established entities as well as implementing financial controls, processes, and organization for startups.

In his career, Paul has led financial, accounting, IT, real estate and facilities, human resources, legal, risk management, and regulatory compliance functions at both private and public organizations, domestically and internationally.  His prior roles include the CFO of Better World Books, an Atlanta-based e-commerce company and the CFO of The Boys & Girls Clubs of America, a $1.8B youth-serving federation.

Paul’s wealth of experience, coupled with his Certified Public Accountant and Certified Management Accountant qualifications, are essential assets that have enabled him to excel as a Chief Financial Officer.

TechCXO is a pioneer in providing fractional, part-time, and interim executive services, was founded in 2003 and has served over 7,000 clients, including some of Atlanta’s most valuable startups.

Congratulations to Paul Sansone and all 2024 Titan 100 honorees for their admirable achievements.

Read the full press release here.

Fractional Leadership is Hot in 2024… and That’s a Problem

by Leave a Comment

Fractional Leadership is Hot… and that’s a problem

Single-shingle freelancers, staffing firms, and online marketplaces are trying to repackage themselves as Executives on Demand

How to Quickly Evaluate the Quality of Fractional Executive Firms

A business blog recently declared, “The Future is Fractional,” and fractional leadership is “in”. 

Startups and growth companies are embracing the concept of leveraging interim, part-time, and project-based leadership. Companies understand that they can upgrade the experience and talent level of key executives and functions while paying less than the loaded salary of a full-time executive. Better to have a fast-moving superstar as your CFO, CTO, COO, CMO, or CHRO for 10 or 20 hours per week, the thinking goes.

The problem is that with an uncertain business climate in 2024, the market is being flooded with freelancers, single-shingle consultants, staffing firms, struggling life coaches, and unemployed middle managers repackaging themselves as fractional executives. 

Here are four ways to quickly evaluate the quality of the fractional executive you’re considering for your business.

1. Define the “Executive” – A manager, director, or vice president is not a c-suite executive. The experience, decision-making, leadership, and skills of successfully guiding multiple organizations through big strategic decisions are very different than being a middle manager or lower-level executive. Unfortunately, a rash of corporate layoffs is pushing many directors and VP-level employees into the consulting ranks. Dig in on bio pages, LinkedIn profiles, and CVs to evaluate the depth of executive experience being presented.

Consultants are notorious for overstating their abilities. Many consultants at prestigious firms will present themselves as serving in an executive capacity; however, many of these people were plucked off the “MBA farm” without ever working inside companies, let alone leading in a C-suite capacity. TechCXO, for example, requires that every one of its partners has demonstrated success as a C-suite executive at multiple organizations. 

Freelancers who may be fine implementers might also present themselves as executives. While good fractional executives are “doers” and solid execution people, they also understand strategy and how initiatives fit into overall objectives, positioning in a competitive landscape, and support a unique value proposition. If you suspect your resource is a freelancer, ask a series of broad-based questions about customer segments, pricing strategies, and delivery channels. Then, listen closely. 

2. Define “Success” – Executives generally agree that the objective of a business is to eventually sell it. When evaluating a fractional executive, look to see if they were integral to a team that had several successful exits, IPOs, capital raises, and other M&A activities. 

The contributions of marketing, sales, product, tech, and HR people may be a bit harder to quantify than an exit, but seek out hard numbers for product launches, customer/revenue increases, profitability, and ways the entire organization was impacted by an executive’s efforts. 

Client quotes and testimonials are great, but they don’t necessarily communicate the scale of the work provided. Instead, look for true use cases and success stories with some level of complexity that took place over a number of quarters. Try to spot truly transformational work that scaled an organization, turned around a stubborn problem, or opened up new markets. Ask if you can speak directly with those clients, too. 

3. Define the “Team” – Small teams or single-shingle consultants may try to hide the scope of their organizations by not publishing team bios. Be on guard for that on the firm’s website. Some unscrupulous marketplace traders who talk about only 2% of their applicants make the cut, use fake bios to present a false sense of scale. They quite literally reuse photos and bios to present a “team.”

Check bios and the breadth of an organization. A level of scale demonstrates success. You don’t want to get caught in a situation where you are relying on a single company founder or one or two principals. They may be a startup organization themselves and all the dangers of time constraints, inadequate bandwidth, cash flow, or other disruptions.

Search and staffing firms may talk about their extensive “networks,” but they are in the business of plugging one or two resources into a hole. That approach does not constitute a team with a bench. Also, executive search and staffing firms are marketplace-brokered resources (found online) vs. referred, vetted, collaborative partner-quality professionals. Many specialty consulting firms are owned by exec search firms offering fractional and interim work, but do not have cross-discipline teams and resources. That can get expensive and blow up the cost-efficiencies you are anticipating.

For example, you don’t want a CFO-level executive handling your Accounts Receivables and Payables. You’re overpaying for that resource. You want to see a mix of talent at different levels and rates that might include a VP of Finance, Controller, Accounting Managers, and AR/AP coordinators.

Similarly, you wouldn’t want a CTO to be doing all your security, development, coding and project management work or your CHRO to directly do your recruiting and compliance work. A team with a blend of talent and rates is a good indicator of a well-established and high-functioning firm that can provide real-time and cost efficiencies.

4. Look for a Variety of Delivery Models – The classic monthly retainer arrangement or project-based pricing is familiar, but they also show a great deal of limitations. Freelancing, staffing, and firms with limited resources and delivery people are often locked into those models. 

A true executive on-demand firm has greater flexibility. It may discount rates up front for warrants and equity on the back end. It may offer a mentoring and coaching model. It may also offer specific, time-constrained training options. 

In a company’s lifecycle, they may need to push hard on recruiting talent but then may need to pivot to lead generation, sales and growth, or perhaps to raise capital. A multi-discipline executive on-demand firm can provide those resources and shift priorities and spending to the client’s needs. 

Fractional leadership may well be “in” for 2024, but for those firms who have been providing this unique model and approach, it’s been in style for decades.

Overcoming the #1 Obstacle for Newly Promoted Senior Executives

by Leave a Comment

Promoting team members to senior leadership positions is a significant achievement that showcases their performance and potential. It not only rewards their hard work but also demonstrates a commitment to further develop top talent, inspiring others in the organization. However, despite possessing the necessary functional skills, a track record of getting things done, and management experience, many newly promoted executives struggle to succeed in their new roles.

At TechCXO, our executive coaches are called into many situations where the new executive is struggling, feeling overwhelmed, and having issues dealing with the pressure and stress of the new role. In our experience, we’ve identified and believe the primary reason behind their failure: fear of failure itself.

Understanding the Culprit

Fear of failure is a completely normal and predictable response when individuals are thrust into unfamiliar and high-pressure situations. This fear often manifests as a nagging thought of “don’t fail” that constantly haunts their conscious and subconscious minds. It stems from the innate human desire to prove their worthiness and avoid any actions that might expose their vulnerabilities or jeopardize their new position.

Pitfalls Driven by Fear

The fear of failure can lead to two common scenarios. In the first scenario, new executives become hesitant in decision-making, second-guessing themselves and failing to assert their voices in senior team meetings. This overwhelming stress can paralyze them, impeding their ability to perform their responsibilities effectively.

In the second scenario, executives overcompensate by becoming aggressive, defensive, and siloed in their decision-making, which creates dysfunction within the senior team and isolates the new executive from their colleagues.

Resistance to Help

Even when support or mentoring is offered by peers and leaders, the fear of failure often prevents new executives from accepting assistance. They fear that seeking help might be perceived as a sign of weakness, potentially undermining their credibility. Consequently, they resort to toughing it out and adopting a “fake it until you make it” mentality. However, this approach becomes increasingly challenging under mounting pressure, making success almost impossible.

Hope is Not a Strategy

While fear is an inherent part of the human experience, effective support is crucial in helping newly promoted executives navigate their fears and succeed in their roles. Relying solely on hope and expecting them to figure it out on their own is a recipe for suboptimal outcomes. It is essential to proactively provide support and guidance to mitigate the negative impact of fear.

Here are a few tips that companies can employ to maximize the success of the newly promoted executive.

Putting Fear in its Place

Fear should be acknowledged as a risk detector rather than a predictor of failure. To support newly promoted executives, it is crucial to help them differentiate between genuine risks and irrational fears. This can be achieved through education, building emotional intelligence, and improving communication skills. Although it requires effort, significant progress can be made in managing fear’s influence.

How to Support the New Executive

To ensure the success of newly promoted executives, a comprehensive support plan is necessary. This plan should include internal support from senior team members, immediate supervisors, and HR leadership. Additionally, we strongly recommend engaging an external executive coach who can provide unbiased guidance and a confidential space for the new executive to work through their fears and challenges.

Effective Communication and Support Structure

Open communication is essential from the beginning. Inform the new executive that fear of failure is universal and discuss the potential pitfalls they may encounter. Establish a regular schedule of one-on-one sessions involving both internal and external support teams and commit to the schedule.

Ground rules should be established to promote a judgment-free environment, emotional security, and encourage vulnerability. These sessions should focus on clarifying the difference between stress and actual problems, fostering confidence and clarity.

Lead by Example

Addressing the fear of failure should not be limited to the new executive alone. The entire senior executive team must be aware of their own behaviors that may contribute to the new executive’s stress. By managing their own fears, demonstrating emotional intelligence, vulnerability, and seeking help when needed, the senior team can create an environment where the new executive feels supported and open to accepting assistance.

Conclusion

Fear of failure is an omnipresent force that can either be harnessed positively or become a destructive obstacle for newly promoted executives. Companies that fail to provide a robust support plan for these new executives are likely forced to replace them within 18 months. The economics of lost productivity, recruiting fees, internal disruption, and failure to meet objectives is more than enough to encourage senior teams to put fear in its rightful place.

By following the recommended tips, such as proactive support, open communication, and establishing a strong support structure, organizations can significantly increase the likelihood of their new executives’ success, contributions to the senior team, and overall impact on the company.

Email Matt| LinkedIn

AI with a purpose: Driving Success through Actionable Intelligence

by Leave a Comment

Recently companies have been asking for assistance regarding where to start their AI journey. Which is understandable with all the hype around AI and the continuous ads about the latest and greatest capabilities it’s hard to determine where to start. Unfortunately, many of them rush to implement AI tools without understanding how they will integrate with their existing solutions, what key decisions will they enable, and most importantly how they will help drive growth. As a result, they end up with very impressive new AI powered solutions but are not realizing the business value from the insights/improvements they were designed to deliver.

In the rapidly evolving world of software solutions, delivering actionable intelligence is increasingly critical. Actionable intelligence refers to the ability to collect, analyze, and present data in a way that empowers data-driven decisions with a focus on providing meaningful insights and recommendations that can be acted upon immediately. Resulting in increased success for individual users and growth for businesses.

As with many operations-focused projects start with the end in mind. What data do you need to optimize growth for yourself or your customers? And where can AI deliver the data as actionable intelligence. Here are examples of where you can start and quickly realize value:

  • Improved Decision-making: Enable users to make more informed decisions based on real-time insights leading to better outcomes, increased efficiency, competitive advantage, and reduced risks. For example, evaluating overall customer sentiment to help drive product market fit.
  • Enhanced User Experience: Providing relevant information in a concise and accessible manner empowering users to quickly identify trends, anomalies, and opportunities, facilitating faster and more accurate decision-making. Such as engagement and intent data to help sales and marketing teams decide where to focus for optimal results.
  • Operational Efficiency: Streamline processes and improve efficiency by automating data analysis and presenting information in a user-friendly format allowing users to focus on critical tasks and eliminate the need for manual data processing. Using Chatbots and Conversational AI to help customers get answers 24×7 to common questions improving customer response times while reducing the workload on customer service reps.
  • Proactive Issue Resolution: Monitoring key metrics and delivering real-time insights to identify potential issues or anomalies early on enabling users to take proactive measures to resolve problems before they escalate. Using tools to help achieve uptime reliability by continuously scanning systems, networks, and processes for inefficiencies, potential disruptions, and to identify any looming threats.

In summary, carefully selecting and implementing AI tools based on the actionable intelligence that will be delivered is no longer a luxury but a necessity for businesses seeking to thrive in the ever-evolving digital age.

TechCXO Exec Operations team can help you ensure you are focused on the actionable intelligence that will result in maximum positive impact to your business and more importantly your clients. Schedule time with us to discuss the strategies for starting your AI journey and what to consider.

The Critical Role of Product-Market Fit in Growth Optimization

by Leave a Comment

Software companies continually strive to achieve sustainable and scalable growth that drives revenue, expands their user base, and solidifies their position in the market. At the same time, software buyers, in most cases, do not contact sales representatives until they have done their own research via reviews, testimonials, case studies, and talking with friends and colleagues. As a result, in today’s increasingly competitive market, one critical factor often determines the success or failure of growth optimization efforts in early and growth-stage companies: product-market fit.  

Software product-market fit represents the alignment between a software product and its target market. It signifies the degree to which the product effectively addresses the pain points, needs, and preferences of the intended users. When a software product achieves a strong product-market fit, it delivers exceptional value, enjoys high user satisfaction, and experiences rapid growth.

The Impact of Product-Market Fit on Growth Optimization:

  • Accelerating Revenue Acquisition: A software product that fits its target market is most attractive to potential users as it continually displays its value proposition, resonates with user needs, and establishes a compelling reason for users to adopt and engage with the product. This leads to increased user acquisition rates as satisfied customers recommend the product to others, refer friends, or share positive reviews and experiences. A strong product-market fit fuels organic growth and helps with profitability by lowering user acquisition costs.
  • Enhancing Retention and Engagement: When a software product genuinely solves users’ problems and delivers a superior, intuitive experience, it fosters long-term loyalty. Satisfied users are more likely to stay engaged, become power users, and advocate for the product. 
  • Fueling Revenue Growth: A well-aligned product attracts a target audience willing to pay for the value it provides. Users who understand the value of the product and see it as a “need to have” solution are more likely to become long-term paying customers or subscribe to premium features or services. A strong product-market fit allows for effective pricing strategies that maximize revenue while maintaining user satisfaction. 
  • Enabling Scalability: A well-addressed target market allows companies to focus on scaling their operations, investing in marketing initiatives, and expanding into new markets with confidence and without sacrificing profitability.
  • Informing Data-Driven Decisions: Through user feedback, analytics, and market research, companies gain a deep understanding of user preferences, pain points, and behaviors. This knowledge helps optimize growth strategies, prioritize feature development, and identify opportunities for product expansion and deeper market penetration. 

Product-market fit is an increasingly critical factor in growth optimization for software companies and acceptance by software buyers. It serves as a foundation for accelerated user acquisition, enhanced user retention and engagement, increased revenue growth, and scalability. By striving for a deep understanding of the target market, actively seeking user feedback, and continuously iterating the product based on customer insights, software companies can achieve a strong product-market fit that fuels sustainable and scalable growth, setting both software companies and software buyers on the path to longer-term success.

TechCXO’s team of experienced Executive Operations partners can help you determine the best strategies for optimizing your growth through product-market fit. Schedule a call with us to learn how we can help.

Download a Quick Product/Market Fit Guide

Product-market fit is an increasingly critical factor in growth optimization for vendors and acceptance by buyers. It serves as a foundation for accelerated user acquisition, enhanced user retention and engagement, increased revenue growth, and scalability. Click to download a quick, two-page guide that includes an initial phase and follow-on keys.