Event Recap—Solidify your Product Strategy & Financial Readiness to WOW Investors

Kelly Gebo

In the past 2 years, thoughtbot has transitioned from a studio model, to a team model, focused on supporting clients specific needs in various stages. That now includes two teams focused on supporting start-ups:

In exploring partnerships that can equip our clients to be successful, we are proud to list Forecastr as a new partner. Forecastr is a leading FP&A software company that helps startups create great financial models to impress investors, confidently raise capital, and effectively run their businesses better.

Recently I had the pleasure of teaming up with Jeff Erickson, the Director of Strategic Partnerships to pass along the tips we commonly share with startups who need help navigating milestones. This blog is a written summary and our full event recording can be found here.

We see start-up leaders seeking support in the following situations:

  • “I have a simple MVP and need to know how to scale it to a robust v1.”
  • “I have gotten some traction with my startup but aren’t sure how to get to the next stage.”
  • “I’ve recently fundraised and need to determine where investment is best spent”
  • “I’m struggling to fundraise and need help solidifying my story and ask”
  • “I want to feel confident in making strategic business and product decisions”

Speaking to both of our team’s perspectives, Jeff and I shared our strategies on Product Strategy and Financial Readiness.

Clarifying Product Strategy—thoughtbot Perspective

To put it simply, Product Strategy is your approach to aligning your product (website, web app, mobile app) with your business goals. This is important when starting a company but equally important when navigating milestones. A sound product strategy includes a clear understanding of the following:

  • Target Audience—Who your product and/or services provide the most impact with. This should include their needs, motivations, pain points, demographics, etc.
  • Problem Statement—The primary problem you are solving for. We suggest using a jobs to be done format. This keeps you focused on the pain point, motivation and goals—less so the product itself.
  • Critical Path—A step-by-step flow of the user’s simplest experience through your product.

We suggest getting the full team together to brainstorm and align through a Product Design Sprint or specific design thinking exercises to fill any gaps. Make sure to capture assumptions along the way as these inform research with target customers. The next step is to connect with your target customers through 1+ mediums; surveys, polls, communities, events, and 1-1 interviews. As you learn more, your understanding and testing script should be optimized.

Another important aspect of your Product Strategy is understanding where you fit in the market, or your Product Market Fit. Two suggestions we have for uncovering info:

  1. Conduct a Competitive Analysis of indirect and direct competitors, using set attributes to draw conclusions (ex; SWOT analysis). At a minimum you should talk to their customers, see how they present their value proposition, and/or demo their product.
  2. Keep a pulse on the Industry by setting up news alerts, following top industry players, joining relevant communities, attending events, and networking. These channels will be great to establish now and revisit as things evolve.

The Importance of Financial Readiness—Forecastr Perspective

Similar to doing research, Financial Readiness means being on top of your financial situation, and projections, and being prepared to answer an investor’s financial questions. Whether you are a startup who has already raised capital, or a founder with a solid business plan looking to raise money, knowing your numbers (or not knowing your numbers) can greatly affect how investors view you. Knowing how much investment you’ll need to reach and surpass key milestones is crucial to business and fundraising success.

Each investment firm will have different statistics they care about, but without exception, any educated investor will want to know details beyond revenue projections. While you may not need this level of detail for a pitch, before an investor actually writes you a check they are going to want to confirm some important numbers.


  • Monthly Recurring Revenue/ARR
  • One-time revenue (Pilots/Proof of Concepts) versus Subscription Revenue
  • Debt (short and long-term)
  • Monthly Burn & Current/Needed Runway

Customer/User Statistics:

  • Average contract value
  • Average contract length
  • Customer acquisition costs
  • Usage statistics (where applicable)

Previous Investments:

  • Past investors
  • Previous investment terms
  • How the money was spent


  • Total addressable market
  • Market growth rates
  • Competitor market share and differentiation

Remember, investors expect you to live and breathe your company, and knowing your numbers lets them see that you’re doing just that. Although your numbers may be changing constantly as you grow, developing a good sense of where your company is at a given point in time is an important skill for any founder.

Financial Model

The best way to organize these metrics and project your longer term financial situation is with a thought out financial model. Taking the research and validation you’re conducting, you can plug assumptions into your model to better understand how much you need to raise, how long the money you’re making will last you, and where you should focus spending.

Using best assumptions, you can run different scenarios to see what moving money around will yield. Seeing these projections and having the visibility to make smart decisions will reduce risk for you and your inventors. You’ll also be prepared to answer questions such as:

  • How much are you raising and why are you raising that much?
  • What are your sources of capital?
  • How do you need to spend the money?
  • Who specifically are you planning to hire, and what impact does that have on burn?
  • What are your customer acquisition plans and how many do you need to hit certain revenue milestones?
  • How do you plan to grow the business? What specific actions will your team take in order to ensure that the investor has the greatest chance of returning a profit?

If your model is buttoned up, and you can tell your investors your plans based upon the financial picture, this builds their confidence in your knowledge and chances for success.

In Summary

Having a solid financial model in place, along with your customer validation and product research from work with thoughtbot, differentiates you as one of many founders talking with investors. If you are a startup that is looking to grow, we would love to discuss making your product and product team the best they can be. As our client, we are happy to introduce you to the Forecastr team and extend a discount to their services. Send us a note here.

Special Offer from Forecastr

Forecastr is offering a 25% first year discount, and waiving the implementation fee for any thoughtbot customer. This gets you a solid, readable financial model, created in cooperation with one of their financial analysts. See more about Forecastr’s services on their website.

Other resources from today’s discussion

Free Forecastr Templates—11 financial model templates for companies of all shapes and sizes Forecastr blog thoughtbot Playbook—Includes the Product Design Sprint guide and Design Thinking exercises mentioned today thoughtbot Entrepreneur resource center—Purpose Built