The Resilient Entrepreneur, Edition #134
Hi there
I hope you had a great week!
Here are the topics in today's edition:
- If a Customer Asks for a Proposal, This Is Today’s Top Priority
- Managing Your Costs Is Just as Important as Driving Growth
Please reach out with comments, questions, or suggestions for articles!
Talk soon,
Tom
TACTICS FOR RESILIENT ENTREPRENEURS
If a Customer Asks for a Proposal, This Is Today’s Top Priority
Compiling proposals has top priority for entrepreneurs. And if customers ask for something you don’t offer, tell them straight to their face.
One of my board members at Yonder, the B2B SaaS company I co-founded, has a saying: “Business is easy. Revenues up, costs down. What’s so hard about it?”
Every entrepreneur knows how hard it is to build a sustainably profitable business. Managing costs is just as hard as doing sales.
In this article, let’s look at an example from the world of sales. It’s an example of how not to do sales. This example agitated me because I know how long sales cycles can take, and how little control entrepreneurs like me have over geopolitics and corporate administration.
The Setting
As a SaaS company, we also buy software, typically in the form of frameworks that we incorporate into our product.
For most software products, that’s easy: Buy the license, install the product, done. Maybe you have to renew the license key once a year, but that’s it.
Not so for the software framework in this example. Although it was a technically solid product, those guys somehow didn’t get the memo called “how to do business 101.” They had a very administrative pricing model, requiring that we report the number of customers quarterly. Yes, in a quirky Excel spreadsheet. Yes, with their chaotic template that made zero sense. And no, not once in two years did we get the Excel spreadsheet on time.
The Complaint
So when the three-year contract entered its third year, I complained. Not about the product, but about the pricing model and the administrative efforts.
The sales guy I spoke to promised to simplify the administrative procedure and send me a new, simpler proposal for the period after the three-year contract.
I thought that this was a good approach, and I waited for the promised artifacts.
Nothing happened.
The Invoice Deadline
Months later, I received an email from that sales guy. Flagged as high importance, he requested all the quarterly Excel spreadsheets for the last year. Within the next three weeks, because their financial year was ending.
I grabbed my chance. I told the guy that I would only supply the information once I had finally received that proposal for a simpler pricing model.
A flurry of meetings with this software provider followed, involving people from sales, product management, and, in one meeting, even the CEO.
I repeated my request in every meeting: Send me a proposal for a simpler pricing model and reduce the administrative effort, or I will not renew.
In every meeting, I was promised a proposal. Either I received no reply or a short two-line email outlining possible options. That’s clearly not what I had asked for, and it’s clearly not what I’d do if one of my customers asked for a proposal.
The Breakup
In the meeting with the CEO, the mood was desperate on their side. They suggested continuing with “a new approach to build a new usage-based payment model in partnership”.
One of my team members rightly said that such a suggestion means they don’t have anything to offer.
So we decided to cancel. They were surprised.
Conclusion
This company didn’t kill the deal because their product was bad, but because their way of doing business was bad. If a customer asks for a proposal, compiling and sending the proposal has top priority. Always.
And if a customer asks for something you don’t offer, tell the customer straight away. You cannot avoid a termination, but at least you can avoid multiple meetings and a former customer writing a blog post like this.
STRATEGIES FOR RESILIENT ENTREPRENEURS
Managing Your Costs Is Just as Important as Driving Growth
When times are changing, turn over every stone to improve your costs. But with the right attitude, lowering your costs is a positive thing.
Entrepreneurs often think their only job is to maximize revenue, preferably at a growth rate of over 50% and at lightning speed.
But revenue is just one part of the entrepreneurial story. But there is another equally important one: Managing your costs. Managing your costs is less sexy than driving growth, and it requires managerial discipline rather than visionary leadership. It’s also less positive than driving growth, as cost management is often brought up when things seemingly don’t go well.
Cost management initiatives are often rooted in changing times: Geopolitics and war, technological disruptions such as Artificial Intelligence, or the effects of climate change requiring mitigation measures.
Since I co-founded Yonder, a B2B SaaS company, in 2015, we’ve seen multiple disruptions to our business: COVID-19, the wars in Ukraine and the Middle East, and the rise of Artificial Intelligence. Climate change is not so much of a disruption to our software business (yet), but as we serve the aviation industry, one day it will get into the spotlight.
Now, what can you do if you’re operating in such a volatile world?
When Times Are Changing, Turn Over Every Stone
Whenever a major change occurs in our business, I scrutinize every cost item in the company.
That’s easy, because each cost item is meticulously modeled in my configurable cash flow plan (you can get the template here).
But it’s also hard, because you’re not just making friends when you start turning over every stone.
Do we really need this tool?
Is there a better, more cost-effective way to funnel leads through our pipeline?
Can we optimize our cloud resources to save some server costs?
Ask my colleagues at work; I have asked plenty of such questions in the last few years.
Change Is Necessary, But It Hurts
Broadly speaking, I get two different kinds of reactions to my tedious cost-saving questions.
The first group of people is open to change, and my questions spark their creativity to find further cost savings I didn’t see. The best example I’ve seen in our team was when our DevOps engineers started designing a CloudNap solution after a town hall meeting where I informed the team about some upcoming hardship. The CloudNap solution turns off our non-productive cloud environments at night to save server costs, and automatically turns them on again in the morning. And for night owls, you can even override the settings and start the non-productive cloud environments at 2 am if you cannot sleep. The guys built this solution on their own initiative because they realized they could contribute greatly to our bottom line with some extra effort.
The second group resists change. My tedious questions get answers like “that’s the cost of doing business,” or “we’re already doing this.” What can you do in such situations? Either you cite positive examples like the CloudNap example from above, or you force people to change. The guy with the wallet always has the last word.
Retrospectively, Even Painful Change Is Good
Change is painful, especially when you have to inflict it on the change-resisting group of people. I had some very hefty discussions on change and cost management with my co-founders, but those discussions always proved to be a cleansing thunderstorm: Once the storm passed, the sunshine returned.
Viewed from a distance, even painful change is good for your business. For example, we have replaced quite a few licensed software components with open-source components. Migration was painful in the short term, but the long-term benefits were more than worth it.
Conclusion
Let’s return to the two groups of people described above. Interestingly enough, the group that is open to change always sees the glass as half full. The group that resists change always sees the glass as half empty.
This is a character trait and has nothing to do with business. Pessimistic people are not just pessimistic at work, but also in their private lives. That’s the bunch of people who always complain that their salaries are too low, and it’s the same bunch of people telling me we can’t lower our costs.
You can always lower your costs. It’s an attitude. Just like you can always see the positive aspects of a situation, even a very adverse one.
About Me
I’m a tech entrepreneur, active reserve officer, and father of three — writing about entrepreneurship, leadership, and crisis management from hard-won experience. No AI, no fluff, no promos. Just plain-text insights for people building and leading under pressure.
When I’m not solving problems, I find clarity in the mountains around Zermatt.
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