Earlier this week, I had the chance to spend two intensive days at the Founder University program (April ’18 Batch) in San Francisco. For those who don’t know about this program, it’s a two-day event by Launch, led by none other than Jason Calacanis. About 50 startup founders are handpicked for this program through a selection process which I am sure is one of the reasons why this program ends up being super impactful.
I wanted to be part of this last year as well. I moved to the valley from India in pursuit of more growth for my startup but also for myself. After all, if you are in tech and also doing a startup where else to be than the mecca itself! Sadly, I did not get picked last year. So, I was super excited to see the confirmation email from Jacqui – the Emmy award-winning producer of all of the Launch’s events! Well, that’s Jason’s words about her but having spent the two days at the program, I totally get it why she is so awesome!
Anyways, enough of the rant about the program. It’s needless to say that if you are a young startup with a product in the market and some early traction, this is one program you have to be part of.
My Learnings from Founder University
We covered a variety of topics including hiring, fundraising, sales, growth, and lots of pitches and feedback. I’ll try my best to summarize my top learnings:
Pitching Your Startup
Every entrepreneur should be always ready to give a powerful pitch within 30 seconds and a slightly more detailed one within 2 minutes. That’s all the time you will get to generate enough interest in someone to promise you a second meeting.
A few things to keep in mind when you pitch:
- Don’t miss the numbers. Everyone loves data.
- Make sure the data/metrics you use are simple and easy to understand
- While calculating TAM (Total Addressable Market), work bottom up instead of top-down. Most people use a top-down approach that gives a very unrealistic number and doesn’t make you look any good either. (I’ll do a detailed post on this in a few days.)
- Don’t miss talking about the money especially when pitching to investors. Talk about customers, revenue, ACV, etc.
Sometimes, it might be a good idea to keep investors and possible mentors/advisors on an update list. Send out brief updates to these guys once a month. You’ll be surprised when they might come in handy and would be happy to help.
Often startups stress a lot on driving inbound while outbound might actually be better for this. Some of the following tips are specific to B2B companies:
- If your average annual deal size is greater than $5,000, the economics for outbound sales might be in your favour.
- Ensure you identify your Ideal Customer Profile (ICP)
- Create a clear value proposition in a competitive market. This is what some people might call a secret sauce but it should be something that can be communicated as a real value to your customers.
- Some ways to identify your ICP is by doing A/B tests on the messaging maybe through emails. Test this messaging for different buyer profiles.
- Don’t underestimate the power of email.
- Spend enough time to create a successful SDR compensation plan. It should encourage SDRs to provide equal importance to all kinds of customers but eventually find leads that work for you. (I’ll share more on this in a detailed post next week.)
What Investors Look For
Some of this is known to most of us who’ve been following investors and also to those who might have raised any institutional funding round:
- Clear value of the leadership team
- A vision worth fighting for
- Does the problem even need fixing? Are existing solutions good enough?
- Large addressable market – typically investors want to invest in businesses that can get to $100M in ARR over a 7-year timeframe. That’s what will give them the unicorn they are looking for.
- Is there a roadkill to watch out for?
- Ability of the founders to focus
- Ability of the founders to attract and retain good talent
- Capacity of the founders to plan and handle growth
The most important thing to do before starting a growth plan or executing it is to come up with a Growth Code of Conduct. This code of conduct will serve as a rule book to make decisions on what you are allowed to do or not do, as a team. (I’ll share more on this in the coming weeks).
- Always optimize for learning. Growth experiments are always about learnings.
- Document them well, else it will soon end up being a waste of effort for you and the team.
- Always protect people’s trust – no spamming, no scraping, etc.
- Take long-term risks for growth. Growth is an ongoing function and requires efforts over the long term.
- Document and share success and failure
- Use data with care, always!
- Pick one real metric for growth that has some real value to the business
- Create and monitor your funnel and try increasing the Top of the Funnel.
- Don’t get stressed about creating some crazy growth numbers. try to grow slowly and consistently, even 5% every month adds up very quickly.
Remember – Good marketers do not make assumptions. Use data.
Hiring and Culture
I’ve written before on why I think hiring is the biggest challenge for startups. In fact, even investors look to see if founders can attract and retain a great team.
- Decide what you are rewarding for, and then create a culture of extreme ownership around it
- Reward learning from failure
- Calculate or project your Employee Lifetime Value
- Set up a clearly defined hiring process and always follow the process. No exceptions.
- Always be hiring (or have a process running). It’s often difficult to clearly estimate resource requirements. You don’t want to be in the position when a resource was needed yesterday.
- Create a termination playbook. It is sad when people leave or when they underperform and you have to ask them to leave. Ensure you have a process to manage this well.
- Hire people who have a high FSO (Figure Shit Out) quotient.
A big thanks to the entire Launch team for putting together this power-packed two-day event. Special thanks to Jacqui Deegan, Jason Calacanis, Zack Coelius, Maren Kate Donovan, Domingo Guerra, Prateek Alsi, Mei Siauw, Clara Brenner, David Ron, Nick Soman, Sara Deshpande, everyone at WSGR for hosting this, and of course all the startup founders who came in to learn as well as share their experiences with everyone.
Also published on Medium.