BUSINESS STRATEGY & GROWTH • August 3, 2016
3 minutes Read
By Chris Myers
**Note from CAN Capital: As part of our Back to School series, our partners at BodeTree offer School Counselor-style advice on dealing with setbacks.
In 1519, eleven ships carrying 600 Spaniards landed on an inland plateau that would one day be known as Mexico. Their goal was to conquer an empire that had amassed a massive fortune of gold, silver, and precious gems. However, with just 600 men, most of whom were vastly under supplied, the prospect of conquering the vast Mayan empire seemed like an impossible task.
However, Cortes was undeterred. Rather than charge forward upon landing in Mexico, Cortes gathered his men on the beach and promptly gave the order to burn the ships they just arrived on, effectively destroying their only escape route. The only choice left was to push forward and succeed.
Taking the underlying morality of Cortes’ actions out of the equation for a moment, it’s easy to see how many entrepreneurs often find themselves in similar circumstances. To be a startup is to contend with a constant sense of being outmanned, outgunned, and out planned. On the surface, the idea of a small, often poorly supplied team making waves in the world may seem just as ludicrous as trying to conquer an empire with only 600 men, but they’re really not that different.
Sometimes, burning your ships and eliminating your safety net is the only way to inspire team members to push forward in the face of daunting odds. My team and I did it at BodeTree, and it was the best decision we ever made.
When we first launched BodeTree, our plan was to sell our products directly to small business owners, helping them to cut out the proverbial middleman when it came to managing their finances. We charged down this path for several years and achieved moderate success. However, we knew that in order to gain the scale we were looking for, we would have to explore other options.
We ultimately chose to shift our focus away from direct to consumer sales and towards working with large institutional partners. This move enabled us to gain scale rapidly and grow the business into what it is today. The shift was not going to be an easy one, and we knew that the sales cycle for selling to institutions can be long and painful.
At first, we merely dipped our toe into the market. Our institutional sales channel was, to be frank, an afterthought at first. We continued to support and market our direct presence and thought that we could serve two masters. For us, the direct channel was a safety net. If selling to institutional partners proved to be too difficult or time-consuming, we could always fall back on what we had built. We had our ships anchored in the bay, providing an escape route if the going got tough. As a result, we failed to fully commit to our new channel.
Once I realized this, I knew what had to be done. We had to burn our ships if we were to have any chance of succeeding. It was a terrifying decision to make, because we had invested so much into that effort. All of our marketing materials, brand presence, and technical features were designed around the idea of selling directly to the small business owner. To back away from this decision meant reworking our entire approach and making changes to the team we had assembled.
The decision was made in early 2014, and proved to be just as difficult as we feared. We had to replace team members and refocus the entire organization. We continued to allow direct sign ups and to support our existing customers, but we effectively have shut down all of our marketing efforts centered around that channel.
Our mantra became “all institutions, all the time.” To make matters worse, sales did not start rolling in. In fact, they stalled for months on end. The team grew nervous, and investors questioned the all-in approach we were taking. In spite of this, we maintained our course and never looked back. Over time, things started to turn around. Then, they started to accelerate faster than any of us could have expected.
It was our decision to “burn our ships” and commit fully to our institutional strategy that enabled us to persevere and eventually thrive. Had we had the safety net of our direct efforts waiting in the wings, we never would have been able to succeed. I think that there is some primal response that only surfaces when faced with a life-or-death situation. Too often, we limit ourselves by holding on to our escape routes and safety nets. Sometimes, you just have to burn the ships in order to move forward.