What I Think About Sending Monthly Updates to Mentors and Investors
I recently stumbled upon a discussion about whether founders should send monthly updates to their mentors, investors, or potential buyers. The question was simple: is it worth the time and effort? What should you include? And does it actually make a difference?
This got me thinking about the fine line between effective communication and unnecessary busywork, especially in the fast-paced world of startups. Here's my perspective on sending monthly updates and how I'd approach it.
The Siren Song of 'Staying Top of Mind'
The argument for monthly updates usually revolves around "staying top of mind." The idea is that by consistently reminding mentors and investors of your progress, you increase your chances of getting help, securing funding, or even attracting potential acquirers. It sounds logical, but the reality is often more nuanced.
Let's be honest: most mentors and investors are busy people. They're juggling multiple commitments, advising numerous startups, and managing their own investments. Your monthly update, however well-intentioned, might easily get lost in the noise.
Furthermore, a poorly crafted update can actually do more harm than good. A rambling, unfocused email filled with vanity metrics and unsubstantiated claims can quickly erode credibility. You want to be seen as a competent, data-driven leader, not someone who's grasping at straws.
What Makes a Good Monthly Update?
If you're going to send monthly updates, you need to make them valuable and concise. Here's what I'd focus on:
1. Key Metrics
This is the heart of your update. Investors care about numbers, so present them clearly and accurately. Focus on the metrics that truly matter to your business. This could include:
* MRR (Monthly Recurring Revenue): The holy grail for SaaS companies. Show the trend and explain any significant changes. * ARR (Annual Recurring Revenue): MRR annualized. Useful for showing long-term growth. * Customer Acquisition Cost (CAC): How much are you spending to acquire a new customer? Track this closely and look for ways to improve efficiency. * Customer Lifetime Value (LTV): How much revenue will you generate from a customer over their lifetime? LTV should ideally be significantly higher than CAC. * Churn Rate: The percentage of customers who cancel their subscriptions. High churn can kill a SaaS business. * Conversion Rates: Track conversion rates at different stages of your funnel (e.g., website visitors to free trial users, free trial users to paid subscribers). Identify bottlenecks and optimize accordingly.
Avoid vanity metrics like website traffic or social media followers. These numbers might look impressive, but they don't necessarily translate into revenue.
2. Wins and Losses
Don't just focus on the positive. Be honest about your challenges and setbacks. Investors appreciate transparency and a willingness to learn from mistakes. Sharing your failures also demonstrates that you're not afraid to take risks and experiment.
When describing your wins, be specific about the impact. For example, instead of saying "We launched a new feature," say "We launched a new feature that increased user engagement by 15% and reduced churn by 5%."
3. Lessons Learned
This is where you demonstrate your ability to learn and adapt. Share the key lessons you've learned over the past month. What surprised you? What would you do differently next time? How are you applying those lessons to improve your business?
4. Key Initiatives for Next Month
Give your mentors and investors a glimpse into your future plans. What are your priorities for the coming month? What are you hoping to achieve? This helps them understand your strategy and identify potential areas where they can offer support.
5. A Clear Ask (If You Need Something)
Don't be afraid to ask for help. If you need advice, introductions, or resources, make it clear in your update. However, be specific about what you need and why. Don't just say "We need help with marketing." Instead, say "We're struggling to generate leads through content marketing. We'd appreciate an introduction to someone with expertise in this area."
The Time Commitment
The question of time commitment is crucial. If you're spending several days each month crafting these updates, you're probably wasting your time. Aim to create a template that you can easily update each month. Automate as much of the process as possible. Pull data directly from your analytics tools. Use a consistent format to save time on writing.
I'd aim for spending no more than 2-3 hours MAXIMUM on these monthly updates. Any more than that and the ROI probably isn't there.
Alternatives to Monthly Updates
If you're not convinced that monthly updates are the right approach for you, consider these alternatives:
* Quarterly Updates: A less frequent update can be just as effective, especially if you're focusing on long-term trends. * Ad-Hoc Updates: Only send updates when you have something significant to share. This could be a major milestone, a funding round, or a strategic partnership. * Individual Check-Ins: Schedule regular calls or meetings with your mentors and investors. This allows for more in-depth discussions and personalized advice. * Use a Shared Dashboard: Tools like Notion or Google Sheets can be used to create a shared dashboard where you track key metrics and progress. This allows mentors and investors to check in on your progress at their convenience.
What I Would Do Differently
If I were sending monthly updates, I'd focus on personalization. Instead of sending the same generic update to everyone, I'd tailor each update to the recipient's interests and expertise. For example, I might share more technical details with a technical mentor and focus on market trends with a marketing advisor.
I'd also be proactive about asking for feedback. Instead of just sending the update and hoping for a response, I'd specifically ask for their thoughts on certain areas. This shows that you value their input and are genuinely interested in their advice.
Finally, I'd make sure to track the results of my updates. Are they leading to more conversations? Are they helping me secure funding or partnerships? If not, it might be time to re-evaluate my approach.
Ultimately, the decision of whether to send monthly updates is a personal one. There's no right or wrong answer. It depends on your specific circumstances, your relationship with your mentors and investors, and your available time. But if you choose to do it, make sure you do it well. Focus on delivering valuable information in a concise and engaging way. And always be willing to adapt your approach based on the feedback you receive.
Remember, communication is a two-way street. Don't just send updates; engage in meaningful conversations. Build relationships. And always be grateful for the support you receive. It's the human connection that ultimately matters most, not just the data points in a spreadsheet.