Chris Cowles, Blocknify, Startupyard

Chris Cowles: The Importance of Getting to No

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Hi StartupYard people. Hello, current Batch X startups and fellow alumni! The StartupYard Team asked me to share with you some of my accumulated wisdom as a StartupYard alum and a startup founder (Blocknify, Batch 9).

I honestly didn’t think I had a lot to say, especially since my startup Blocknify, which allows people to sign documents securely in the blockchain without their document touching any external server at any time, is still new, and we are still in the early days of acquiring customers and finding our product/market fit.

Shameless plug y’all : Share Your Documents Without Sacrificing Your Privacy.

But I realized as I was preparing to say that I don’t have anything to contribute, that I actually do have one thing to contribute, and that is what I will call “How to get to no.”

How to Get to No

I spent some years as a consultant working with large corporations before co-founding Blocknify. One thing about working in a big corporation is that you never see the whole processes you work on. If you are in sales, then you don’t see the product being made. If you’re in products, you don’t see how sales work.

This leads to a certain way of working and thinking, which I guess I would call “accumulating yeses.” That means, if you’re part of a big organization, you are always trying to find ways to say yes to things. Yes, we can sell you a product. Yes, we can do that feature. Yes, that is a good idea. Etc. Getting a yes from your supervisor or your customer is the goal, and getting a no is a failure.

We like to say “yes,” and we rarely have to say “no.”

As a startup founder, I think the most important thing I have learned so far is that it is incredibly important to get to “no.” In fact, if people are not saying “no,” then it probably means you are missing something.

If you are not saying “no,” then it probably also means you are not focusing as you should.

I want to specify why I think this is an important mindset for startup founders with a few examples.

Getting a No From Customers

A few weeks ago I was invited to meet with an innovation team from a very large company. It doesn’t matter which one. Imagine any big company with millions of customers.

They sort of know that we help organizations handle contracts securely. They also know that handling contracts and agreements is a big struggle for them, both on the customer side and on the supply side as well.

When I show a group like this our product, we get lots of this reaction: “wow this is so great! We need this!” It feels really good, and it’s nice validation that you’re doing something your target users like and want.

Except for one minor problem. Will we make this sale? No way in hell. At least not anytime soon. The customer is just too big, has too many needs, and isn’t ready to work with us, like we aren’t ready to work with them. We have to qualify them out pretty quickly not to waste a lot of our time on something we won’t be able to reasonably do.

Yet this is exactly the kind of situation that is toughest for a first-time startup founder to navigate. That has been my experience because you so want to accumulate those “yes” answers. Even if the yeses you are getting don’t help you that much, we are comforted when we hear it.

When we first started having these sorts of meetings, I think I personally wasted a lot of energy accumulating yeses from people. Do you like it? Yes. Can you show it to someone else at the organization? Yes. Can we talk again? Yes.

Believe me, you can bounce around for a year getting nothing but yes from everyone in the organization, and still, nothing happens.

What you find out quickly is that when people like you and your ideas, they have a lot of ways to say yes, and few ways to really say no. Like: “is it realistic that we will be able to make a deal with someone at your company before we run out of money?” Nobody can answer that honestly. They want to say that they like you and that anything is possible. They don’t want to discourage you.

In startups, not everything is possible. Sorry, not everything is possible. You are time limited. You are resource limited. Picking what is most possible and executing on that takes a lot of focus, which is the only strength you really have as a small company. So I have learned that when I hear “yes,” I need to keep going until I hear a “no.”

For example:

“Do you see this as valuable for your business?”

“Yes.”

“Can we take the next step toward an agreement?”

“Yes.”

“Can we get it signed within 6 months?”

“Yes, it’s possible”

“Can we do it within 3 months?”

“Eh… not sure.”

Ok, so the “me” from my corporate life would stop after the first few questions. Can we move forward? Yes? Great. I got the yes. I don’t need to go further. This results in a lot of back and forth with little action and a lot of energy wasted.

The startup “me” understands now that I have to press forward and get the no, so that I at least understand what I’m really dealing with. What are the actual barriers to this actually happening? They can be small, or they can be way too big.

Qualifying new opportunities out this way takes vulnerability and requires you to be brutally honest with them and yourself. However, I believe people are attracted to vulnerability and honesty. Without bringing the conversation back to reality you are missing out of the other benefits they can provide such as improvements, understanding their sales process, and being advocated for internally or externally.

I think there is this need from startup founders to always be getting good news. You need bad news too. You have to have it to move forward.

Getting to No With Investors

There was a similar learning process with investors. What I thought would happen was that we would pitch to people, and they would either “pass” or “be interested.” If they were interested, I thought that meant that there is a chance of a deal happening.

Sometimes there is zero chance of a deal, but if you don’t get to no, you’ll never figure that out. No one wants to tell you no. Just a lot of time spent making more and more spreadsheets and presentations.

What you learn is that many investors basically never say no to your face. It’s similar to how customers work. Why say no, when you can say, “let’s stay in touch,” or “it’s interesting, but I’m not sure about x.”

Very few investors will just tell you “no, you’re not for us.” You have to make them get to that point of saying no. If you pitch someone, and they have all the information they need, then you need to know what’s going to come next. A no today doesn’t mean a no forever, but a yes today doesn’t mean a deal will happen.

“Do you like the idea and team?”

“Yes.”

“Would you be interested to discuss an investment?”

“Sure.”

“Do we meet your requirements for an investment?”

“We need to determine….”

“Based on our conversations will you participate in this round of funding?”

“No…”

If I don’t get a clear idea of what “no” is, I can’t very well judge how much time I should spend on trying to persuade that investor. Just like the customer, if they can’t buy, then I shouldn’t spend a lot of time trying to sell. I get to no, and I move on from there.

Getting a no does not mean you should necessarily give up. It just clearly establishes what the challenge is and where they stand. Maybe you don’t meet the requirements right now, but you can at least find out what they are. If you don’t ask, you won’t know.

Just recently we got to a “no” with an investor that we liked and liked us. We see this as not the end but the beginning of a new relationship. We will keep them updated and ask for investment advice and connections, which is hard to ask for during investment discussions. If we had not gotten that “no,” then our relationship would not have evolved at all. Now we can move forward.

Sometimes, many times, the investor you are talking to is saying yes, and someone above them is saying no. That’s really important to understand, and to get to the bottom of where the “no” is coming from. Can you work with that no and make it a yes? Or is it not worth your time?

Even when you are ready to make a deal, again, you have to find that limit – that point where they will say no. How do you know the terms you have are the best you can get? How do you know an offer is the last one? Because you asked for something even better, and they said no.

Getting to No with Your Team

Here is yet another way that “getting to no,” is really beneficial for a startup founder.

When you are dealing with your team members, whether it is co-founders or early employees, or whomever, again it is in people’s nature to try and not disappoint you.

As I learned in this process of creating a brand new product out of nothing but an idea, you can ask people like designers or engineers “can we do this?” And the answer will almost always be some form of “yes.”

When you get into the details, you do find out that the answer might as well be “no” in some cases. Can we do this in the required amount of time? Can we do it within our budget? Can we do it safely, securely, etc? Now we start to get to some “no” answers.

That does not just apply to knowing your limits. Sometimes it is about knowing your capabilities and figuring out what it practically takes to accomplish the project:

“Can you do this in a month?”

“Yes.’
“Can you do it in 2 weeks?”

“Yes…”

“Can you do it in 1 week?”

“No.”

If you are managing a team for the first time and trying to understand what you can reasonably accomplish, getting to that lower limit is also important. If I say a month, it might take a month (or more). But if I find out it’s actually possible in two weeks, or one week, then I might get it in that time. People who work for you also need to know what you expect, and what is expected of them. It also can serve as a way to break down and talk through assumptions they may have.

“Can you join us in this startup?”

“Yes.”

“Can you quit your job to do it full time?”

“Yes.”

“Can you put in more than 40 hour weeks for low pay?”

“Well… not sure.”

Love to Hear “No”

One thing I learned in StartupYard was to have and express an opinion that forces your audience to agree or disagree, i.e., be controversial.  I have realized more and more the truth in this teaching. The fact you are doing something on your own is already controversial, so why stop there?

You can’t be going with the flow if you are supposed to be disrupting the flow. This even applies to yourself.

Recently I was talking with our designers and I told them to push the limit and forget about all my preferences and suggestions. This process resulted in an amazing redesign. I’m not comfortable with all of it but that is the point. I wanted them to get me to “no.”

Be authentic. You don’t have to be friends with everyone. Don’t “get along” with everybody all the time. Don’t take yes for an answer, basically. Get to the “no.” Find what the limit is on what you can do and what people are comfortable with, and push to that limit as much as you can.

I asked Lloyd if I could keep going with this analogy for a few more pages, and he said “no.”

Mark Holmes, Waymark, StartupYard

Focus on Founders: Mark Holmes: From Zero to Seed

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Waymark Tech, a Startupyard Batch 8 alum, is a London based AI regulation intelligence company, with clients among the top accounting and consultancy firms in the world. Waymark helps big enterprises to stay on top of regulatory changes, and bring alerts and guidance about regulation compliance to the right places in the organization, at the right time.

You can read more about Waymark’s story and its Founder and CEO Mark Holmes in our last in-depth interview. This week I connected with Mark for a one on one chat about his journey since StartupYard. Since he left us nearly a year ago, Mark has managed to raise a seed fund for his young company, and now has a team of 5 working on Waymark Tech, as well as a growing list of clients either actively using, or testing their technology.

We decided to focus our discussion on the challenges for a first time founder raising seed capital. From hiring the right team, to picking the right investors, we took a detailed look at the process, and what Mark learned from it. Here is a version of our conversation – edited for clarity and length.

Hi Mark! We’re gonna talk today about the process of going from a one-man-show startup, to being CEO of a small startup team that has raised seed investment, and gained a lot of traction with their product. Sound good?

Looking forward to it. Lots to tell. Lots of ground to cover since then. As you know, we’re now a team of 5, we have a bunch of customers in our pipeline, and the product is out in the world being used by companies today. We also had Credo ventures join with StartupYard and Seismic Foundry as our seed round investors in March.

That’s where I want to start. Can you tell us a bit about how that process worked for you? What’s it like to negotiate a deal like that for a first time founder?

Well, I did just about everything wrong at the beginning, but you learn as you go. You figure out what investors are looking for, what they need to see from you to feel comfortable. You have to figure out also what you’re looking for, and what kind of an investor you really want. It’s just a big learning process for everyone, and I think we got the result we really needed. That’s the important thing.

What did you get wrong?

There were thankfully no big mistakes in the process, but rather I found out that many of the things that investors look at are just very different from the things I thought would be most important.

I’m a product guy, and that’s where I come from. Going into the process of raising funds, I also had some customers who were ready to work with me. You think from your own perspective, this is enough to justify an investment. Of course it isn’t, because a VC investor like Credo are looking for more than this. They want to see the big picture in 5 years. They want to see it down the road, and how this thing you do can become really essential and irreplaceable for the customer.

The fact that you have this customer ready to buy is great, but the investor wants to know how you are going to make that a growth relationship, and how you’re going to repeat it everywhere you can.

To demonstrate you are doing something that people are not going to be able to get on without, that’s not the same as having a great product. It’s having a sticky product, that can’t just be replaced tomorrow. Especially for the early stage investors, they want to see that this will be at the heart of your industry in the future, which people will depend on. I did find this helped me to make some critical product decisions as well.

You made more scaling focused decisions?

Yeah, definitely. More importantly, I made more customer focused decisions, that were not necessarily about the product features. You have to get over this fear of rejection, which is very big for a product person. It’s maybe the worst thing I can imagine, to be told someone doesn’t like my product. You fear they’ll dismiss you, and you will lose your chance with them.

Now that I’m selling and not just building, I see that this doesn’t happen. Actually the opposite, because you aren’t selling the idea only, you’re selling the relationship you’re going to have with the client. They have something to react to and to give you feedback, which makes the product even better, and makes the relationship even better.

I found out when you show your product to a customer, even if it doesn’t completely work yet, that actually builds a lot of trust, because they can see what you’re doing is real, and it’s not so big a risk for them to start trying it. I felt this surge of confidence from getting all this feedback, positive or negative, because people are showing that it matters to them. You are doing something that matters.

Knowing that now, what would you tell yourself to do differently when approaching an investor?

Maybe this: that they are “technology” investors, but they are investing in you at the end of the day. The product can be the best, or just good enough. I want my product to be the best, but the investor needs your team to be the best, your traction to be the best, and your technology to be unbeatable. At the end of the day, the product is a small part of that mission. A critical, but ultimately small part of it.

One thing I didn’t do, which I honestly should have before talking with investors, is to know more about their portfolios and their history. Focusing more on how the investor’s portfolio and the team they have is going to be a help in scaling and really in growing your business. Do they have the existing clients and companies in the industry you’re targeting, and can they open these doors for you that can’t be opened otherwise?

You always say at StartupYard that it isn’t just the money. That’s really, really true. The wrong money is not a blessing, if you aren’t also getting the right network and the right support to use it.

I didn’t read enough about investors before talking with them, because obviously it feels like they are the ones interviewing you. It’s not like that though; you have to interview them too, and figure out if the relationship really makes sense, apart from the financial consideration. That goes both ways too: how do they enhance your ability to scale, but also how do you enhance their portfolio? Are you going to be of value to the investor in the future? If you are, that is a good sign you will get the support you need, because they also need you.

It ended up that investors started to sort of pitch me on their ability to help the company grow, and this is when I started to pay more attention to an investor’s history, their other investments, and the decisions that the individuals you are working with have been a part of in the past.

As a result of this growing awareness, I did end up stepping away from the table with some investors who were interested in a cooperation. I saw that if you can’t see how you’re going to enhance each other, and have more of a marriage than a business relationship, then it might not be the right move. That’s particularly true in an early stage investment. These people are going to be around for a while. They will maybe have board seats. They will have opinions. You want them to compliment what you’re doing, not make your life harder unnecessarily.

I am ultimately happy with my choices, so I think I managed it ok.

What were some of the harder topics for you in the initial discussions with the VC investors you talked to? What did you need more preparation for?

There are obviously some things I wasn’t familiar with, that I had to study up on. Liquidation preferences, and preferred shares, shareholder rights, and other legal and technical things. These are really important to get your head around, so you know that the goals you are setting together make sense from everyone’s perspective. You want to have your expectations be aligned as much as possible.

I found I had to get used to this idea, that for a VC investor, they are really expecting most of their investments not to produce much in the long run. Just a few will pay back the fund, and maybe one will be that unicorn that will change everything. That being said, this is the kind of mindset they have when they are making decisions about who to talk to. Can you be the unicorn for us? Can you pay back our fund?

That is much less about your product than about your ability to scale, and to be sticky. I know that having a great shiny new product isn’t enough if it isn’t used by anybody, but I’m still a product guy. Still the focus on scaling and traction is really powerful from investors.

I also struggled with this, and we worked on this together a lot at StartupYard, which is that you have to have a story that someone can understand and relate to. These are really smart people, but generalists, and usually not as involved with your industry as you are. They are fast learners, but you have to give them something to work with, and that was something that was a challenge for me.

I’m doing regtech. Even just a year ago, this was not something being talked about much. Nobody knew what the stakes were for this industry. How important will this be, right? If you remember, at our DemoDay for my batch, we came up with this great story about a vineyard in the UK that made this wine, and then come to find out they can’t call it “wine,” because of some EU regulation they had no idea about. So they call it a “fruit-based alcoholic beverage,” which is just a crap thing for selling a good wine.

That was a story that early investors could really see very clearly. You can sense the frustration when you tell that story, and people get it immediately, that it’s this real problem, and it can effect them too. Once you can do that for people, you can get them to start seeing what you do as something that matters. This was a new discovery for me, just how powerful these little stories are in helping people to just “get it.”

You said the focus on the team was also a surprise for you. Why is that?

I knew they would want to know about my team, but it was something that went deeper than I thought. It’s not just having talent, which any company can find.

The investors are focused on your team because that is where the value is really being built in the company. With just a technology you have something that potentially anyone can do. There can be other ways to solve the problem. You are not likely to be so unique that nobody could ever replicate that technology.

I had grown the business through outsourcing, which is cheaper. Well, anyway it seems cheaper, particularly when I was trying to get a lot of things done very quickly. The investors look at this as a bigger risk in the long run, than slowing down a bit and building a great team that is going to continue to grow your product in-house and bring that organizational knowledge and experience that makes you viable in the long run.

There are other things like security concerns, IP concerns. However, I think it’s mainly that the investors do recognize that the team is going to be critical in building the company’s value, and reduces your risks.

It makes sense, for sure. If you are one founder, and it’s all in your head, that’s a big risk for someone to invest in. To gain trust, you have to also trust people, and bring people in, so I took that very seriously, and thought hard about how I was going to grow my team, and what kind of team we were going to be.

What is important to you about your team members? How did you pick them?

I got this I think from an old boss of mine in the finance industry, a long time ago. He said you can hire the best person for the task, but that isn’t always the best person for the job. There is talent, and there is fit, and you have to balance them.

Being with StartupYard was a good experience in this regard as well. In the program you’re with other companies that are struggling sometimes to find the right fit for themselves. Founders or employees come and go, and I saw some examples of what I wanted, and some of what I did not want. That gave me something a little more concrete, and made it easier to make these decisions.

When I was growing my team, to be frank I did not always choose the people with the most experience or the most skills in their area. I looked at their fit in the team, and their long-term vision for themselves, and tried to pick the best people for the job. I let some people pass with very impressive skills, which I think in the long run is the right thing to do. I couldn’t imagine how to work with them every day. We need that sense of belonging in the team, to be our best.

Also, I want to build a team that lasts beyond me individually. I am the “get it started” guy. I’m a builder and an idea guy, and I want to make something that I can pass to the next person to really grow it and nurture it. When we reach a size and a state where I feel I can hand this over to a great team that can take it to the next phase, I will probably step back and think about my next step personally. Since this is my nature, I am planning for that to happen eventually.

Ok, so more personally, is this something you can see yourself doing again in the future? Are you going to start another startup, if and when that time comes?

Look, never say never. Ok? I didn’t think I would even found one company, but there was just this moment that all of us know who found companies, that I knew I had to do it. It was just something I couldn’t let go. So here I am, and that’s the journey.

And by the way, I now see why some people do it over and over. I didn’t know this before, but the more I work with our customers and the more I solve their problems, I just keep finding even more mind boggling problems that I could fix, so my ideas are still growing. Your confidence grows, and your ideas just come faster, so maybe one day I will have to do it again. I don’t know.

I have spent 15 years in financial services and I do have other interests, so I want to explore them too. It might be a business, but it could be angel investing instead. I think the entrepreneur spirit is something that comes from having your eyes really open to what is possible, and what is not being done, that could, and should.

So to cap this off, can you give me maybe a bullet point list of the things you wish you knew a few years ago, that you know now? What would you tell young Mark of 2 years ago?

So many things. Ok, I’ll try and give you a simple list:

  • Know what kind of founder you are, and let yourself be that to some extent. Don’t try to be somebody else completely. I am a product guy, but this doesn’t mean I can’t focus on scaling and selling. I am selling now maybe 70% of the time. Still I spend time on the product, where I get inspired to keep going. Don’t lose that.
  • Remember that investors want to commercialize, scale, and grow. If you aren’t ready or you don’t want to go at their pace, you can choose not to. If you do, understand what it means for you.
  • You have to sell. You have to sell! You have to overcome this fear of rejection, and sell what you have, as soon as you can. That is so valuable to the creative process, and it will make your product better.
  • See clients as an advisor, and not a buyer. The old saying is “ask for advice, and you get money. Ask for money, and you get advice.” That’s it. If you are looking at your customers as the best source of insight, you are going to be rewarded in so many ways. Keep that focus where it should be, on listening and responding to clients.
  • Think about how your company is going to become essential, and how it is going to become impossible to replace. Whatever this is that makes you stick, you focus on that and you don’t lose focus. You don’t want to be one of many alternatives. You want to be the one that the customer has to have. That’s how you raise investment, and that’s how you get deep into solving customer problems.
Jakub Ladra, Claimair

Focus On Founders: Jakub Havej: Failing to Scale

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Over the next few months, we’ll be publishing a series of interviews with alumni founders from StartupYard. We’re calling it “Focus on Founders.”

These are personal stories from alumni founders about critical moments in the history of their company. Some of the stories have happy endings, some don’t. Our hope is that our alumni, current, and future members of the StartupYard program will benefit from their experiences, and hopefully recognize in their colleagues, positive examples for themselves.

Jakub Havej: Founder of ClaimAir on Failing to Scale

To kick off this series, we’re going to start with Jakub Havej, founder of the legal and travel tech company Claimair, which helps travelers request and actually receive compensation for flight disruptions, delays, and baggage issues.

As Jakub will attest, the past few years have been bumpy for him and his startup, with big swings in the size of the team, and the overall strategy and direction for the business.  Over the past half year though, the company has managed to stabilize, and record a steady operating profit, and begin to reinvest in itself.

I sat down with Jakub to talk about his failed attempt to scale his company faster:

Jakub, Claimair is cash flow positive. How does that feel?

First I have to say, It was not just last month, but for the first time we had a cash-flow positive month was in November 2017. Then from February to June this year, we were also cash-flow positive on average.

So I would say today we are able to break even on a monthly basis, and steadily invest more into the business. That’s the difference today: we’re steadily generating more operating profits.

Our goal isn’t to generate profits right now, but to bootstrap the company’s growth. So profits will be reinvested for the foreseeable future.

Claimair had a lot of ups and downs to get here. Tell us about the decision to go for break-even.

It was all about the realization that we had to survive. We really struggled with fundraising last year, and had some bitter dissappointments in that regard. We ended up having no other choice but to tighten up and focus on becoming sustainable, which we can now say we did.

In summer 2017, part of our “roadmap” was to raise a seed investment. As it usually happens, we had some very promising leads, and it seemed to me it would really work. Then at the last minute, with our cash running out, investors backed out without really giving a reason. Then we really had to struggle to survive.

Unfortunately, and this not a new story for startups, we had been planning too much on the investment, and had already started to operate as if we had it. We were too ambitious in that regard, and the shock of having this stop suddenly was hard on us. At the end, you could say I’m glad that happened. It forced me and the team to make decisions we had delayed too long.

The truth is, I was always focused on generating profits. I didn’t create ClaimAir to burn money on a monthly basis. I want to create a viable business. So with investment dissappearing, I got back to my initial mindset: “Wat are the necessary steps to generate positive cash flow?” Within the next few months, we reduced our expenses, got a much clearer vision of our future revenues, and had a target.

In that time, when we were operating in “emergency mode,” we learned how long it really takes to convert opportunities to revenue. We had to cut expenses in half to keep going. Finally revenue did start to grow, and we hit break even.

How is it to let people go for the first time, as a founder?

It sucks to let people go. It was really hard. We had a team of developers working on a great product. I didn’t want to lose them, but I also knew that the product was ready. The significant work was done, and the company had to focus on execution.

That is so hard also because these people helped you to get to this moment when the product (in our case, our claim processing systems), really works, and you have to let them go. It doesn’t feel fair at all. It isn’t fair.

However, we had to make that choice. Continuing to develop the product was in conflict with our vision at that point. It became unsustainable. We lost some other team members as well, and that also shows you who people are. The ones who stick around despite all this uncertainty are people you really come to value.

It’s important to go through these changes because you end up with a core team you can really count on, who have been with you in your worst moments, and you know can hang on and stick with you. In that way, the process is healthy.

Knowing how things turned out with the seed investment, how would you handle it differently today?

Shareholder, Claimair, StartupYard, Central Europe, Accelerator

Jakub Havej, of ClaimAir, talks flight compensation at StartupYard Demo Day.

To be honest, there is a part of me that says I would change nothing. We learned a lot from this that made us the team we are. I can’t replace that. Ok, if I am giving advice to the next founder in my situation, then I can say a few things, and maybe they can do better than I did.

Our mindset was always to generate a decent profit, and I’m not a really greedy guy. I didn’t really intend to build a huge startup from the beginning. Over time though, I got distracted by the excitement and potential that some of my investors and mentors saw in the business. The upside just keeps getting bigger, and your eyes just keep getting wider.

When you are in an accelerator, you are getting a lot of advice about “low hanging fruit,” and about scaling fast and take charge of the moment. That is absolutely valuable, but on the other hand, many of the “low-hanging” fruit that you can get excited about turn out not to be so low hanging. They turn out to each have their own unique challenges. You can run around as an early stage company and keep trying to reach all these opportunities, and never get any of them.

You can run out of time doing that, which is what we almost did. If you’re raising money to try and capture an unproven market, as we were trying to do, you’re under immediate pressure. You have to prove the value as fast as you can. We ended up working on scaling instead of getting the core activities right. and we didn’t manage to actually scale that way. The big opportunities were always just out of reach.

At the same time, our B2C business kept growing steadily. And we kept ignoring it, because it wasn’t as big as any of the opportunities we were seeing. At some point though, suddenly you realize you have a core business that is something worth focusing on, and getting right.

How would you avoid getting distracted next time? How would you keep focus?

Honestly, from the beginning, I would not have tried so hard to define who our product was for. I know this is blasphemy for StartupYard! It’s just that in our case, our customers were finding us, and telling us who they were. We needed to listen more, and not just try and listen for what we wanted to hear.

In the first years, you get hundreds of suggestions and recommendations, and you have to get through those quickly and evaluate whether they are worth your time. You want to hear about “multipliers.” You want to work with businesses because of the upside potential, and you don’t want to just plug away every day working with small customers.

I was always sure about what our product should be, right from the beginning. I wasn’t sure about how we should acheive growth. So we got focused on these big opportunities that always seemed closer than they really were. You find out that no matter how valuable some deal can be to you, that does not make it the priority for the other side.

Literally, as a startup you can be living and dying by one person’s decision inside some corporation, and that person just forgot to write you their answer a week ago. They’re on holidays. It’s that kind of disconnect in priorities. Too many of these disconnects, and you are at risk of losing your way.

 

So nothing you tried to scale quickly worked?

Some stuff works. It has to be repeatable and it has to be sustainable. You can push through a quick deal for a little bit of money with a B2B product, but the question is how essential you become to someone else’s life and ultimately their job and how well they can do it.

The truth is we never found that sweet spot in the B2B space. We were always nice to have, but not essential to anyone.

Yet again, we were slowly becoming this kind of product for B2C users. They really were relying on us more and more. We weren’t focusing on making their lives easier, as we should have been. We were focused on making our company bigger.

As it turned out, we should have focused on what was working from the beginning, which was simply PPC advertising that was profitable. We ignored things that were working in order to go after “opportunities” that were not as likely to happen as we thought.

So you’re profitable, but it’s not a gold mine… is that your feeling?

Maybe you can see it like that, but I feel great! I feel we did everything we could and tried to scale faster, and we didn’t find that fit. At the same time, we have a nice and growing business, we have customers who love us, and each month we’re able to invest in doing our jobs better. Making our service better for those people.

It’s so fun to talk to investors right now, because actually I’m raising money again. This time though, it’s to do this: to make our company better at what we have proven we can do. So investors will buy into a different vision than we tried to sell before.

It’s a great feeling, because now we can interview an investor and see if they are interested in helping us do what we do well. It is less about their ambition, and more about ours. Defining our ambition in this way, and accepting it, took a lot of reflection and changes in our team. I’m glad we went through it all.

Now I don’t need to beg. That’s something I learned about myself. I hated to beg. And now I don’t have to. Agree with me or not today, because my company makes money. I don’t need anyone else.

So you’re an SME for good?

Actually I still see huge potential for growth, but what I realize is that the shortcuts everyone hoped would be there aren’t really there.

Today I believe in a different kind of growth than we were trying to achieve before, and I think our advantage in this is that we have already tried everything else. We aren’t distracted anymore by the “pot of gold” at the end of every rainbow. We know where the money is, so to speak.

I won’t say more today, but we have some interesting ideas we are working on.

What would you tell our current teams and other alumni about your experience? What can they learn from you?

Listen to yourself. You will simply not achieve things you don’t believe in yourself. Don’t let an investor or anyone else make you do something you don’t think will work. It will be a self-fullfilling prophecy. Maybe that will work with some other founder somewhere else. Just don’t sell out your vision for the money. It won’t work.

Be good at what you actually do well. We came back to being a product company. At the end of the day, maybe there were other ways to grow, but I knew we could do this, and have a great product that makes us unique. So that’s what we’re doing.

Also don’t take money because of fear. The doubt that you’ll grow as fast as you need to is always there when you are talking to investors. It’s always “this other player can do this tomorrow,” so you always feel you need to hurry. You feel dependent on the investors because of that. Just know you don’t have to. You can stop. You can go into safe mode. You can cut costs.

Now that I’m fundraising again, I’m not so susceptible to this thinking, and it feels really different. The fear part of it is gone. You can’t be experiencing fear when you’re talking about investment.