In this episode of the DevReady Podcast, host Anthony Sapountzis is joined by Klaus Bartosch, CEO of Dreamoro, to discuss the critical gaps in startup strategy and commercialisation. With over 35 years in IT and experience founding and exiting a listed health tech company, Klaus brings invaluable insights into the challenges facing entrepreneurs today. Having engaged with more than 450 founders in the past 18 months, he reveals a startling reality—only two had a well-thought-out strategy, while most confused go-to-market plans with a comprehensive business strategy. Klaus stresses the importance of strategic planning, capital allocation, and defining a clear target market early to increase the chances of successfully commercialising tech solutions.
A key challenge for many founders, particularly those in their early twenties, is their limited skill set beyond domain expertise. While they may understand their industry, they often struggle with areas like UX design, software architecture, commercialisation, and marketing. Klaus highlights how even experienced entrepreneurs make strategic mistakes and advocates for using the Playing to Win framework to define market positioning, customer focus, and growth strategies. A crucial factor in startup success is identifying the single most important metric that drives accelerated growth, as it shapes the overall business direction and informs key decision-making.
Understanding and leveraging key growth metrics is often overlooked by founders. Klaus discusses how many startups fail to correctly identify their actual customer base, drawing on examples like Xero’s strategy of turning accountants into their sales force. He emphasises the importance of co-designing solutions with end users to ensure real product-market fit, rather than relying on assumptions. Additionally, he challenges the conventional approach to Minimum Viable Products (MVPs), arguing that they must deliver tangible value beyond being a simple proof of concept. A true product-market fit is evident when demand grows organically without excessive marketing spend.
Klaus critiques the way marketing success is often measured, arguing that vanity metrics like clicks and likes are meaningless if they do not translate into revenue. He warns against marketing agencies that avoid accountability for business outcomes, stating that return on ad spend (ROAS) is the only metric that truly matters. He also highlights the need for founders to calculate customer acquisition cost (CAC) accurately, incorporating all related expenses such as sales, onboarding, and churn. Misleading figures that ignore early customer drop-off can create a false sense of success, and businesses must take a brutally honest approach to assessing and optimising acquisition costs.
Strategic focus is essential for early-stage startups, and Klaus warns against the temptation to pursue an overly broad market too soon. Referencing Playing to Win by A.G. Lafley and Roger L. Martin, he outlines five key steps: defining a winning aspiration, selecting where to play, determining how to win, identifying required capabilities, and establishing management systems to track success. One of the biggest pitfalls for founders is “chasing the money” by adapting their product for a single client at the expense of their broader vision. Short-term revenue wins that do not align with the company’s core strategy can lead to long-term failure, making it essential to resist distractions that could derail sustainable growth.
Finally, the conversation turns to the realities of entrepreneurship, including the pressures of setting ambitious goals and the misconceptions surrounding startup success. Klaus emphasises that simply setting high targets is not enough—founders must realistically assess the scale of the problem they aim to solve and establish practical milestones. Many entrepreneurs overestimate their market size, overlooking adoption curves and true market penetration challenges. He also addresses the impact of social media glamorising startup life, contrasting it with the stark reality of failure rates, which exceed 80-90%. Klaus critiques Australia’s “tall poppy syndrome,” arguing that failure should be viewed as a learning experience rather than a reason to dismiss founders in future ventures.
Topics Covered
- Common mistakes founders make in business strategy and capital allocation
- Importance of structured planning and the Playing to Win framework
- Identifying the key metric that drives startup growth
- Understanding the real customer and achieving product-market fit
- The role of Minimum Viable Products (MVPs) in delivering value
- Misconceptions in marketing metrics and the importance of ROAS
- Accurate calculation of customer acquisition cost (CAC)
- Risks of chasing short-term revenue at the expense of long-term strategy
- Challenges of setting realistic goals and market penetration
- The realities of entrepreneurship and overcoming failure stigma
Important Time Stamps
- 450 Founders, 2 Strategies – Why Most Startups Fail! (0:07 – 3:22)
- The One Metric That Can Make or Break Your Startup (3:23 – 8:10)
- Who’s Your Real Customer? You Might Be Surprised! (8:12 – 17:04)
- Why Most CAC Calculations Are Dead Wrong (17:05 – 21:16)
- Startups: Play to Win, Not Play Everywhere (21:17 – 32:50)
- Why Startups Overestimate Their Market Size (32:51 – 43:45)
