I recently joined Techstars Seattle as a mentor. During the founder-mentor match day, where I met with many of this year's program participants, I was asked multiple times for key insights that I have learned from my One Year Wiser interviews.
Well, today I'm going to try and answer that for you (and hello to the Techstars founders who recently subscribed).
I started One Year Wiser in March 2021 and my goal was to publish an interview every other week. I'm happy to say that I was able to stick to that schedule. Over the past few weeks I've re-read the 19 interviews and there are five common insights that these founders and product leaders shared with me about their first year post product launch.
The key learnings are:
The first key piece of advice that was mentioned across a variety of interviews was the importance of not measuring the success of your product with a shallow metric. Shallow metrics, such as the number of subscribers on your marketing interest list, can be distracting and may mislead you. Now this doesn't mean you shouldn't measure top of funnel metrics to gauge if how you are selling or marketing your product is resonating with people, but it’s important to remember that it's just a gauge, not complete validation that you are solving a true problem. It's easy for someone to signup for a beta list, it takes a lot more for them to get their credit card out.
Instead, you need to use a metric that measures your high value users. Importantly, high value doesn't mean your highest paying customer. Rather, it's customers who are getting the most value out of your product. Find a way to measure the customers for whom your product provides the most value. Those are going to be your best customers and you need to find a way to measure that relationship.
I really liked how Phil Libin, the co-founder and former CEO of Evernote explained this difference to me while we were discussing his new startup, mmhmm:
"There’s a lot of different things to optimize for, but in the long term what we care about most is the growth of high value users. In this context high value means we are providing high value to them, not vice versa. Who are the people for whom we are having a meaningful impact on? Whose lives or jobs are meaningfully better off because we exist as a product? We want to measure that and we want that number to be growing every month."
Tori Bergeron, founder of Sesh, a mental health app that provides online group support led by licensed therapists, is doing exactly that. She told me that they don't just look at the number of signups for their product. Rather, they focus on the outcomes data from their customers to validate that their product is actually helping people with their mental health:
"Early on, we made the decision to add a short survey that asks about general anxiety and general depression as part of the onboarding experience. After members have taken a few sessions we ask again and this helps us understand how we are helping users along their journey. Ultimately, that’s hugely important to us. Does Sesh actually impact people in a way that is meaningful?"
Rachel Vrabec, the founder of Kanary, a privacy focused startup that helps people regain control of their personal information on the internet, said that one of the reasons her previous company had failed was that they had only used shallow metrics and easily got discouraged after signups decreased after a big launch:
"Previously I worked at a different company in the data privacy space and it failed. Partially because we lost interest and motivation in our idea. But we were also measuring the wrong things. We had these high expectations and looked at sign up rates and all of those things that you might to track if you were launching on Product Hunt. But they were shallow metrics and we got really discouraged when things got tough and top-level signups were decreasing."
Now, at Kanary, Rachel's made an effort to focus on more meaningful metrics which has proved to be more sustainable and valuable in guiding their product roadmap.
If you are interested in spending more time on how to pick the right metric, I highly recommend that you watch this Youtube video from Phil Libin. He walks through his metric framework called State Machine which is how he ran Evernote and applied to every product or company that he's worked on or invested in since.
Multiple founders told me that customer feedback was critical because it helped them understand how to evolve, pivot, and improve their product.
Victor Pontis, the cofounder of Luma, a company that helps people build their online community, pointed out to me that without a good communication feedback loop with your customers it's difficult to know if the reason people aren’t using your product is because it’s not good enough or if it’s simply trying to solve a problem that doesn't matter.
Tori, of Sesh, spoke about the importance of staying close to customer feedback as they shifted their product from a web-only experience to a mobile-first app experience:
"That [shift] was tricky. But staying close to our members with candid and earnest feedback loops has been really helpful. Especially with the ones that have been with us since the beginning, because they've seen such growth, but we want to make sure that they know we're providing them with new updates and new features that actually serve them and their experience."
Early customer feedback was also critical to Luke Mocke, the founder of Fairstream, a virtual events platform that helps companies recruit and hire candidates from diverse communities. Their initial product was not a virtual events platform, but a mentorship platform. They struggled to gain traction and customer feedback made it clear that they didn't have the proper solution:
"But with those first sales, we quickly found out that our mentoring idea wasn't the quickest way to connect talent from underrepresented communities to these companies, so we ended up pivoting...the feedback that we got from those clients, as well as from our advisors and the wider community, was that our process just took too long. So we started to think about how we could speed up the process and get direct access between candidates, hiring managers, and recruiters."
Again, creating an easy way for customers to give you feedback ensures that you actually get useful feedback.
If you don't implement a simple way to gather customer feedback than you are likely only going to hear from the most frustrated ones, or even worse, no one even bothers to take the time to give you feedback and your product slowly dies while you are left wondering why no one comes back to it.
Distribution is vital to the success of your product. I think this is something that founders and product leaders inherently know is important, but for many it can be uncomfortable to spend time on it. They'd prefer to focus on the part they find enjoyable, building a product, with the hope that it will miraculously grow organically. Unless you already have a huge audience that's not going to happen.
Justin Kan, co-founder of Twitch and Partner at YCombinator has a tweet that I love:
In my 19 conversations over the past year, there was a common theme when it came to distribution and growth: don't be afraid to try non scalable things to grow your company.
This is inline with Paul Graham's, founder of YCombinator, advice: "Do things that don't scale...you can't wait for users to come to you. You have to go out and get them."
Attorney turned technology entrepreneur, Nicole Philips spoke to me about the importance of this. She co-founded Qatch, with her sister, a company that helps people discover clothing and accessory products along with new brands with personal recommendations delivered via text message. Her primary advice to entrepreneurs was the importance of not writing off non scalable ways to acquire customers:
"There's little room for pride when you are growing a new business. Don't write off something just because it seems silly or uncomfortable. I mean, cold emailing or a table at a local fair. All of these things that are a little uncomfortable in the sense that it makes you feel small can be hard for entrepreneurs."
Often times there are distribution approaches that can feel useless and not impactful in the early days, but they take time to build up. I spoke to multiple founders that wished they had gotten an earlier start on the distribution techniques that start small. Things such as SEO strategies, content marketing, and community building. In the early days they take a lot of work and don't drive many customers. It can feel non-scalable, but it compounds over time.
Ish Baid is the CEO and founder of Virtually, a platform that allows anyone to build an online school. He spent a lot of time in the first year writing content on their blog to target specific keywords. He also started a podcast for education entrepreneurs. Podcasts take a lot of time and in the beginning he had few listeners, but it's now become very popular in the education space and drives a lot of new customers to Virtually:
"It’s surprising how long [content marketing and SEO] really takes to kick into gear. When I started the podcast, I didn’t really have the intention that anybody would listen to it. ... That started over a year ago and it’s really skyrocketed in terms of visibility and the traffic that it drives to us. Education content marketing does take a while to pay off, but it’s worth it."
On the SEO front, Victor Ribero of ChooseYourPlant spent a lot of time in the early days making sure that each plant page was SEO optimized, meaning it was fast, had the proper meta data, and was well structured so that Google would rank ChooseYourPlan higher in search results. This approach paid off and a year later, almost 80% of his traffic was organic from search engines.
A couple of founders that I spoke to had spent time building communities that resulted in a good source of product awareness and new customers. Community building is slow going and it will take more time than you think to nurture and grow it. But if you get it right, they can be an incredible way to grow your brand awareness and customer base.
Matt Volm, founder of Funnel IQ, launched a community a few months after they launched their company as a way to complement their core product. Funnel IQ offers software to help Revenue Operations teams (or RevOps for short) manage their go-to-market analytics and measure the effectiveness of their marketing, sales and customer success teams. They started a community as a place for people in the RevOps world to get advice and tips from each other. It has grown to 3,000 members:
"We started that community about three month after we founded the company, but if I could have started that community the same day as the company I would have. It’s been paying off a lot in terms of building brand awareness and relationships. Community building is one thing that can be a big differentiator...You don’t need a product to start a community, it just takes time."
Finally when it comes to distribution, Daryna Kulya, the co-founder and COO of OpenPhone, wishes that they had spent more time encouraging customers to write reviews on B2B marketplace sites which has driven strong word of mouth signups for them. OpenPhone is a modern business phone for startups and small businesses, so B2B review sites are a perfect way for new customers to discover their business:
"We asked our customers to recommend us and write reviews on these platforms. We've seen quite a bit of organic demand coming from these platforms and that surprised us. I wish I knew that earlier because we would have had more time to build up our reputation and presence there."
So, don't be afraid to try non scalable things to grow your company.
In multiple interviews, founders told me the biggest thing they've learned when it comes to fundraising is that not all money is the same. It's vitally important to make sure that your investors are as passionate about the problem you are trying to solve as you are.
Rachel, the founder of Kanary, highlighted that you should not only find investors that care about your business, but even more importantly that they care about the general problem space and market trend:
"One thing that is super important when raising money and that I only realized after raising money is that you should focus on finding investors that believe in the market trend, even more so than your business in particular. I talked to a lot of investors who didn't care about privacy, and that was such a waste of time because the only investors who put money into Kanary are people who believe that there is a market for privacy that's going to grow exponentially in the next 10 years."
Nicole, the co-founder of Qatch, spoke to how in the early days when you are scraping by, it's really hard to turn down money:
"It's really hard to turn down money, especially in the early days when you’re worried about keeping the lights on or paying your employees next month. But we have turned down money and I am so grateful that we did because the investors that you take on early are going to help shape the future of your company...It's really, really important for young founders to be smart, normally you see a big check and you want to take it, but just remember...you're getting into a marriage with these investors."
I asked Nicole how she makes sure that a potential investor truly cares about your business and vision. While she said a lot of it is about being able to read people, she does have two techniques. First she often asks them a simple question that is very revealing:
"One great [question] is, 'what excites you the most about Qatch?'
"I leave it very open ended to see if they just reiterate back to me the things that I've already told them. The good investors don’t do that. They may say something like, 'Oh, well, I have this company who I help do x and I can imagine the synergies between you and them.' You can see it light up in their eyes when you give them the opportunity."
The other technique she uses is to ask them for references from their portfolio companies:
"I also talk to other founders of their portfolio companies. That is the most underrated tool in the world. Other founders are usually willing to share their experience, especially if it was a bad experience because they don’t want someone else to go through it. So my advice to new founders is to always reach out to other founders that an investor has invested in and do your due diligence on them."
After I spoke to Nicole I thought there must be a Glassdoor for reviews of venture capitalists and did some googling. Turns out there is: VC Guide. Use it as a resource the next time you are fundraising.
Finally, launching a new product is hard. So much of startup and tech culture is focused on celebrating launch day. We often forget about all of the hard work that goes into iterating the product after launch to find the proverbial product market fit and sustainable growth. (This is part of why I started One Year Wiser!) The year following a launch is usually quite challenging, and most products don’t go gangbusters with exponential growth. Instead there are countless tweaks, features developed then abandoned, marketing techniques tested, and long nights spent stressed about the future.
Two common ways to stay motivated emerged from my conversations with founders and product leaders:
Pretty much every person I spoke to said staying focused starts with not getting distracted by launches and the inevitable hype cycle that comes with it. Be committed to putting in the work. As Phil, of mmhmm, said:
"I think the most important job of a CEO is to isolate the rest of the company from fluctuations of the hype cycle because the hype cycle will destroy a company. It'll shake it apart. In tech the hype cycles tend to be pretty intense..."
He went on to stress the importance of having conviction in the long term direction your product:
"It also takes understanding of where you're trying to go and knowing where you're going is not based on the hype cycle. You have to have a long term conviction about that. The conviction could turn out to be wrong, but you're not going to know that based on day to day fluctuations of excitement or month to month. So have a clear direction of where you are going and then make sure the ship has enough momentum so it doesn’t matter what the waves are doing, you’re still going relatively straight."
Nathan Latka of Founderpath took a similar approach and had a commitment to work on their product for at least five years, no matter how the initial launch went:
"Going into our launch we said to each other that we're doing this business for five years no matter what. Even if the Product Hunt launch fails, we're doing this for five years no matter what...I think that's the key to any successful launch, you have to understand the launch is a spike and to be successful you've got to be committed to growing your baseline. What happens after the spike when it’s just the baseline day to day is what really matters. That's the true sign of growth."
Ish, of Virtually, spoke to how their vision was what inspired him during the months that were a grind:
"It was this vision for how we could impact education and how we could give access to people who didn't have it before. Whether you were a single mom or a high school dropout, you would have access to education even if it was somebody halfway across the world. And you wouldn't have to put your life on pause. That was quite inspiring."
In addition to being inspired by your vision, Emon Motamedi, the solo founder of Florian, which is helping students avoid loans and get ahead in their careers, stressed the importance of having conviction that starting a company is the right path for you before you take the leap:
"When going down the startup journey, it's really important to have a sense of the opportunity cost of that journey, a sense of the other opportunities you might be giving up so that you have a lot of conviction that this is the right path for you. For me, I had always known that I wanted to start a company. I looked at a lot of scenarios and asked myself if I would have regrets if I didn’t start my own company."
The second thing that multiple founders told me was that positive customer feedback was critical to them staying motivated. It was their oxygen.
As the solo founder of Kanary, Rachel, said her customers are her co-founder:
"My advice to somebody who doesn’t have a co-founder is if you really care about the problem you can do it alone because the people you're helping, your customers, they will end up being your co-founders. That's what has kept me going, that connection with our members"
At Toucan, a browser plugin that helps you learn a new language, Taylor Nieman went above and beyond the approach that many startups take of sending out a survey or two. Instead, she told me:
“After the official launch, I sent personalized emails to every single one of our users to welcome them and ask for their feedback. It’s actually something we still do to this day.”
I’m impressed that they still do this today even though they have 100s of thousands of users.
This customer-centric approach made it easier for them to stay focused on building and improving their product after launch day instead of getting distracted by the influx of signups and the inevitable trail off that follows any big launch. Instead of measuring the success of their Product Hunt launch by the number of signups, Taylor gauged their progress based on the sentiment of user feedback.
Again, the importance of being able to easily hear customer feedback, helps with the product development process and it helps you stay motivated when the going gets tough.
That's all I have for 2021. I hope you liked my end of year wrap up. If you did, please share One Year Wiser with your friends and consider subscribing.