For a startup, there are three things you need to develop: a product, a customer, an investor.
Recently at Pollenizer we had an epiphany. Well, it was more of an observation of what was happening, but it was just as powerful.
Like all startups, we have a limited time to get the job done and get to the next level. Though I guess this is more for us since every single business we work on has a limited starting investment, and hence a limited timeframe.
For example, if we start the Minimal Viable Product phase, we have 12 weeks to build it, launch it, get traction and get investment to keep going. There is no 13th week if we miss it. This does a lot of things to our team.
It forces the product team to be brutally focused. Just the key features, leaving enough room for lots of testing and iteration.
It forces the marketing team to get out in front of customers. You can’t wait to the last minute to build traction.
Plus (here is the epiphany) it forces the founders to get in front of investors straight away. You can’t wait to the last minute to build a relationship and go through due diligence.
That’s the third startup stream: Capital Development.
When we started Wooboard, it was an internal business. i.e. the idea came from the team. So it was 100% Pollenizer funded. From day one, we knew that this couldn’t go on past the first 12 weeks. So we needed to make sure there was funding to take it further. Like all grit your teeth and get it done founders, I didn’t want to leave it to chance. In the first week I sat down with Bronwen (customer development) and Albert (product development) and we set some goals around what evidence we’d have to show for the business by when.
Working backwards from week 12, if it was going to take a week to get paperwork and money in the bank, we needed a YES by week 11. A few weeks to pitch it and close it. So we needed evidence of a business by week 9 at the latest.
What evidence? We imagined pitching Wooboard then and what we’d have to say to convince them that there is a business here. How many customer? How many paying? How much of a product? Support? Love? We wrote it down and that was our goals.
Then I started pitching and talking to investors. Not asking for money. Just telling them what we were doing. Getting them excited. Telling them the vision.
And I kept talking to investors. Constant updates. New versions. News.
I focused on a few investors who were showing interest, and in particular, Trevor Folsom from Elevation Capital. He had built a successful business up to 1,000 staff based on culture so I thought he’d be a good target. I pitched it every chance I could, including Innovation Bay, and by the time I was due to pitch it there, Trevor had said he was prepared to invest. That was week 8, 3 weeks ahead of schedule.
There is no way that could have happened if we had waited till week 10 or even week 6 to start working with investors. It was crucial to start early. Scott Farquhar from Atlassian started a lot of us thinking about this when he gave a talk to the founders and team of Pollenizer. They had recently closed a huge round from Rich Wong at Accel and he said he’d started the conversations and relationships more than 5 years earlier.
Now I recognise that not all startups need funding, but I think more need it than don’t. If you don’t, great. If you do, start early. Also, this may not be big news to some, but the idea to think about it as something you have to develop rather than just expect is useful to me.
So we now have 3 bit mottos at Pollenizer when we start a new business;
- Product Development: Launch it now!
- Customer Development: Sell it now!
- Capital Development: Pitch it now!