Build revenue before code: The smart Startup Strategy

As digital nomads and entrepreneurs, the dream of building a tech startup that scales rapidly is real. But many startups, especially in the early stages, make a fundamental mistake that often leads to wasted resources and missed opportunities: 

They invest in code and features before asking the only question that really matters: how the hell is this going to make money? 

In today’s fast-paced tech ecosystem, a shiny new platform, app, or tool can be incredibly tempting. But they’re the new fool’s gold. Sure, they sparkle and everyone wants one, but most don’t know what problem they’re solving with that tool. 

Developing software without a clear revenue operation strategy in place makes products that don’t align with market needs and teams that struggle to generate sustainable sales.

This topic is especially crucial for those embracing the digital nomad lifestyle in the Dominican Republic.

The country’s burgeoning tech scene, highlighted by initiatives like the Innovation Hub Punta Bergantín and the Digital Agenda 2030, offers fertile ground for startups. However, challenges such as regulatory complexities, infrastructure limitations, and market entry barriers persist. If you aren’t dialed into those challenges, your startup can stall before it even gets to market.

When you build a robust revenue operations framework first, you’re able to navigate these challenges more effectively. Then, you know your products align with what the market needs, and you’re positioned for sustainable growth. 

The Argument for Designing Revenue Operations First

Your Revenue Operations (RevOps) is the backbone of your startup’s success. It’s a cross-functional strategy that aligns marketing, sales, and customer success teams to drive growth. 

Most startups build the plane while it’s landing. It’s the name of the game. But it’s a lot easier if you at least know what the parts look like and how they go together. Here’s why RevOps should come before development:

1. Clarifies Your Market Fit and Customer Journey

You can’t build a product if you don’t know how you’ll sell it. Designing your revenue operations clarifies how you’ll target your customers, what channels you’ll use to acquire them, and how you’ll nurture them. This helps in defining product-market fit early on and gives you insights into what your target audience actually needs from your software.

Pro Tip: Use your revenue operation strategy as a blueprint for development. This ensures that the product is built with a clear sales funnel, conversion process, and customer experience in mind.

2. Increases Leverage for Investment

When you design your revenue operations before the product is developed, you can go to investors with a clearer picture of revenue generation. You’re showing them a scalable revenue model and a plan to achieve profitability, not just a vision of a cool app.  Investors are far more likely to back your startup when they see that you’ve already thought about how you’ll make money, who your customers are, and how you’ll scale your sales. It’s all about reducing risk in the eyes of the investor.

3. Develop Sales & Marketing Processes

Design the processes that will drive leads, convert prospects, and retain customers. This includes CRM systems, sales funnels, content marketing strategies, etc.

 4. Set Key Metrics

What metrics will you track? Define your KPIs—such as customer acquisition cost (CAC), lifetime value (LTV), churn rate, and more.

5. Align the Team

Ensure that your sales, marketing, and customer success teams are aligned in executing the strategy.

Pros and Cons of Designing Revenue Operations First

Pros:

• Clarity on Customer Needs: You’re building a product that directly addresses market pain points, reducing the risk of creating something that no one wants.
• Increased Presales/Investment: A well-thought-out RevOps plan can help generate presales and secure investment before product completion.
• Faster Market Entry: With a clearly defined sales strategy and customer journey, you can market and sell earlier, speeding up your time-to-revenue.
• Reduced Wastage: You avoid investing time and money in features or products that don’t align with customer needs or market demands.

Cons:

• Initial Delay in Development: Designing revenue operations upfront requires a thoughtful, strategic approach, which might delay actual product development in the short term.
• Complexity in Execution: A well-functioning RevOps system can require significant time and effort to create, especially for startups without prior experience.
• Possibility of Overengineering the Plan: There’s a risk of spending too much time planning and not enough time doing. It’s essential to maintain a balance between strategy and action.

How to Build Your Revenue Operations Before Product Development

So, how do you actually design your revenue operations first? Here are key steps to get started:

1. Understand Your Customer Segments: Who are your customers? What problems are you solving for them? Conduct surveys or interviews to gain insights.
2. Map the Customer Journey: Define each step of your customer journey, from awareness to acquisition, retention, and expansion.
3. Enables Faster Market Validation and Feedback: By designing your revenue operations early, you can begin engaging with your target market before your product is fully developed. Presales, early-stage partnerships, and customer feedback will give you invaluable insights into what customers want from the product. This enables you to pivot or refine your product based on real-world feedback instead of assumptions.

In short, create a feedback loop between your marketing strategies, sales process, and product development. When everybody is involved, the final product has a better chance of success in the market.

Start with Sales, Then Write the Code

As tempting as it is to dive straight into developing a product, designing your revenue operations first is the smarter, more strategic approach for any startup. It provides clarity, mitigates risk, and increases your chances of securing investment and driving early revenue. Most importantly, it sets the foundation for long-term sustainable growth.

Whether you’re still in the ideation phase or already have an MVP, take the time to craft your revenue operations strategy before jumping into development. The right plan today will lay the groundwork for success tomorrow.

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By Jonathan Joel Mentor
Founder & CEO of Successment | Revenue Growth Strategist | Expert in Startup Ecosystem Development | United Nations World Summit Award Nominee