At Energize we are fortunate to see many next-generation technologies. As an investor with a commercial focus, I usually ask the entrepreneur something along the lines of: “what budget or line item at the customer do you think funds this technology purchase?”
Less commercially aware CEOs will answer this question by proclaiming of a new line item or a new approach to the customer’s budget. In my years of venture, this “create a new budget” approach typically leads to sales pain and capital inefficient growth.
The start-up’s technology may be next generation. And the start-up may be using NEW technology to solve an old problem in a NEW way.
However, the most experienced execs will do everything in their power to jerry-rig their technology solution to an existing budget.
Seasoned execs know that if a line item budget exists at a customer, the customer has previously determined they will pay (internal or external resources) for value delivered. By aligning the new technology solution to the outcome-validated budget, a startup backs into budget access and approval.
I call this product-budget fit.
The best start-ups think through product-budget fit from the earliest days of the company. With this awareness, a company fine tunes product development, go to market, and commercialization techniques accordingly. I enjoy seeing this narrative come together at a high growth company and Team Energize thrives in working alongside entrepreneurs at this stage.