Unstable Revenue is Driven by an Insecure CEO

A company’s unstable revenue is driven by its CEO’s imposter syndrome.

It is the end result of 5 levels of our company failing, the final layer being the CEO’s doubts about themselves.

Here’s how they all connect, and how we can beat it.

Layer 1: Bad Market Fits

The first level of growth difficulty comes from the market we’re in.

Are we in a dogfight, a game of Twister or in the plate spinning market?

Companies in dogfight markets are in brutal scuffles. These are either fiercely competitive or highly commoditized local markets where we’re getting bled on price, offer and services by our competitors.

Even when we give the best discounts and bend over backwards for customers, it’s hard to get new clients while our old ones slip out out the back at night. It’s almost as if we’re still searching for product market fit, because on some level we are.

In Twister markets, our primary product has its limbs in so many different verticals that we twist ourselves into a Gordian knot trying to please every one of them. The problem is that we’re in too wide a market and our product is a square peg squeezing into too many different holes.

The end result is lukewarm customers with varying levels of loyalty, thus leading to waves of growth and recession.

Finally, there are the plate spinners. This is a classic case of a company with multiple offerings at various stages of product market fit. At any given moment, any one of them might fall and it is the instability of these individual products that creates erratic top line growth.

Each of these creates a very treacherous environment to grow in.

Layer 2: Leaky Business Activities

But markets don’t reveal the full problem. There is also something rotting within the company’s operations that causes this.

There are 3 core activities in every business: Attract customers, serve customers and launch new revenue streams.

Unpredictable revenue can happen when we fail to attract new customers. Either because there’s no compelling offer to lure them in or there’s poor handoff somewhere between marketing to sales to customer success.

Or perhaps the problem is not the flytrap but the stickiness of the nectar. Shaky retention can drive quarterly earnings turbulence. That can stem from either a core promise broken in the customer experience or the slow rate at which the company delights its patrons.

Either way, people are not sticking around.

Or perhaps its a 1 trick pony. Many startups stink at launching new products and services with the same level of engagement and discipline as their breakout hits. These hot-off-the-presses initiatives seem exciting in the beginning.

But ultimately they are poorly formulated and weakly implemented ideas that burn through a lot of cash and morale, and end up causing havoc in the financial statements.

Yet, even these don’t tell the full story.

Layer 3: Teenage Culture

The truth is that beneath every poorly executed business in a mismatched market is a tribe of people swerving that car off the cliff.

On a cultural level, unpredictable revenue stems from an unfocused company.

These are employees and leaders who work with the enthusiasm and attention span of a 17 year old, for better or for worse.

Either they’re energetic Tiktokers who are a bit ADD in the way they work and are all over the place.

Or they’re idealistic Boyscouts bending over backwards for just about everybody without really pausing to gauge impact.

We get the sense that they are invested in the direction, just not as interested in the details. They’re happy to get through the day and do their part.

Thus the company’s offerings are clunkier and undiscernible from the competition in the marketplace. They have less discipline in their follow-through to the customer, and have little to no quality control processes. They pay less attention to their client needs, because everybody is doing a little bit of everything for everyone with no time or energy to spare for deeper work.

Like legendary singer Nina Simone says, “You use up everything you've got trying to give everybody what they want.”

Teenage cultures feel exciting, but don’t confuse movement for progress.

Layer 4: Vanilla Brand Identity

Unfocused companies aren’t created in a vacuum.

They rise from the tailwinds of a weak brand identity.

All culture is most profoundly impacted by the strength and clarity of its enterprise’s mission.

A business’ ability to have deeply curious and intentional employees is directly proportional to the fierceness of the flag it flies.

The greatest companies are very clear on their authentic zone of genius and they feel comfortable making a very simple promise to their core cult customers.

And from that certainty grows the flower of focus.

Focus comes from being secure in one’s choice. The most powerful decisions are simple ones followed up with infinite conviction.

When we don’t have a strong and clear idea of who we are and who we serve, we are either a shy wallflower in a party that no one is dying to dance with, but they’ll approach if there’s nothing better.

Or we’re the constant new flavor of the month, mimicking every new fad in the marketplace and copying every viral trend on TikTok. People can see that we’re trying a little too hard.

Ultimately, unclear brands confuse their employees, thus leading to an infestation of different priorities sprouting up all over with very little conviction behind it.

And the worst part, they make the business forgettable.

Unstable revenue & vanilla brands are a tale as old as time.

And yet there is something more sinister pulling the strings on all of this.

Layer 5: The Insecure CEO

We’ve at last reached the final boss level, literally.

Getting a startup to a mid 7 figure - early 8 figure business is a truly Sisyphean labor for any founder.

But when the outcome is a venture with wobbly revenue, there’s something deeper at play.

Oftentimes, it’s because the founders have a chip on their shoulders.

In the beginning, this is a great motivator. Their desire to prove their haters wrong makes them work incredibly hard and partly gets them to where they are.

But it’s also why the business is now having instability, a lack of focus and haphazardly selling blah products to anyone who’ll bite.

It’s because the entrepreneur’s original need to prove themselves in the early days has now mutated with their recent success.

It has now become a need to please everyone all the time and not lose what they’ve fought so hard to build. Because if they don’t keep feeding the beast, they’re terrified the whole castle will come crashing down and everyone will see them for who they truly are.

If so, it will confirm a core childhood story that they’ve fought against their whole life:

I don’t truly belong here.

At the heart of every business with unstable revenue is a scared boy king trying to be emperor.

To quell the rebellion in our monthly net retention revenue, we have to first put down the one inside us.

The Solution

A strong brand identity starts with the founder’s self esteem.

It takes a lot of courage to double down on our true organizational zone of genius and to say no to paying customers that don’t fit in it, while disappointing those investors who love top line growth.

Building that kind of confidence is a 2 part approach.

1. Kick-start our confidence by knowing our real customers intimately

Find the 5-10% of our customers who pay us the highest and refer us the most to others, and invite them to chat with us/our team. We should be meeting with them once every 1-2 weeks.

The more we build a relationship with them, the more we will gain confidence from the outside in.

Meeting people who are big fans of ours will not only be a morale boost for us, but we’ll also get a locus of feedback that’s deeply personal, highly actionable and limited in scope. Thus making it easier for the company to rally behind new ideas.

Real business confidence comes from honing our hyper sensitive intuition with our core customers.

2. Protect our confidence by building an insecurity fail-safe

To not drown when our dark storms strike, we also need to build a neural escape tunnel.

Every time we feel small or get heart palpitations, take out a notebook and write down what all we’re feeling. Sit with it and then ask ourselves the 5 Whys & Whats.

Why am I feeling like this? Why does this matter to me? What happens if this is true? What’s my worst fear here? What’s the core story I’m telling myself?

And once we get to the root emotion, find evidence to the contrary.

Is it really true that I am not a real founder?

Have I really lost most of my customers with this decision I made?

Wasn’t there a time where I made a similar decision and no one left? Maybe I’m being a bit too dramatic. In fact, didn’t a handful of customers really love that previous decision later on…

Let’s be real, I’m the one with the closest ear to the customer voice so even if I’m wrong with this decision, I’ll learn & move fast.

By sitting with our worst fears and then creating a new narrative out of it, we are taking that dark energy and redirecting it in a new and positive direction. If we Tai-Chi our negative emotions often enough, after a while, positive rebounding becomes our default crisis response.

Conclusion

Unstable revenue is a nerve-wracking time. It can thwart our grand growth plans and sabotage our peace of mind.

So if we truly want predictable prosperity in our kingdom, we have to first earn that crown from within.

Then use our royal confidence to set the company on a bold and authentic path, and help our employees settle into this simpler way, so that they can fix the leak in our customer scooping bucket and we can play in markets where we can be #1.

In that regard, a founder’s mindset is a lot like their early stage growth company.

Both require stable environments to thrive in.