FLT is covering the 2013 Startmate accelerator program, which aims to help early-stage companies become enduring internet companies.

With laptop in hand Storyberg co-founder Michael Dijkstra takes a seat across the table from Startmate program founder Niki Scevak. The startup’s weekly office hours session has rolled around once again. Dijkstra skims his notes. This mentoring time is valuable. These weekly meetings give each of the eight portfolio companies the chance to get one-on-one advice, offer an update on how things have progressed during the previous week, and ask for introductions.

Sitting next to Dijkstra is co-founder, Kevin Nguyen. He’s filled his glass with coffee from the new espresso machine in the kitchen. There’s a few bleary-eyes this week. Many founders have been working late at Startmate’s Redfern offices. Once home they’ll code until 1am, maybe later. Walk past the foyer cafe in the morning, and you’ll run into someone buying breakfast and something heavily caffeinated.

It’s the end of week three and the companies are beginning to feel the pressure. They have a short runway to prove they have traction in their market so they have a compelling case for investors. In April, these 20 hackers and hustlers will head to the U.S. where they’ll pitch to hundreds of investors, and network like mad. For now it’s a struggle to balance their time between code cutting and talking to customers.

In many ways, they’re flying blind; most are still trying to figure out exactly who their customers might be. They have a rough idea, but Scevak demands specifics. He hates terms like ‘small businesses’, or ‘young people’. It’s not specific enough. At the regular Monday pitch session, he hurls questions at each founder. It’s a change from his usually warm demeanour but as Scevak says, someone has to be the arsehole.

Pitch practise helps the founders learn to answer the questions they’ll undoubtedly get asked by seasoned investors in a matter of weeks. If they don’t know the answer then they need to figure it out. They need to know their customer and their customer’s problem. Scevak will ask ‘Which small businesses need your product? Why do they have this problem? How long have they been running for? Who is their decision maker?’ He’s after clear answers.

Each Monday the companies do their five minute pitch in a seminar room on the ground floor. It’s the only time you’ll find them all together — usually there’s a few in the office, with others out meeting people. The companies with clear roles seem to be better managing competing priorities. When you have a non-tech founder and a tech founder the roles are clear; one person talks to customers, the other codes. It can’t work any other way. For the other teams, it’s something they need to figure out.

“At the moment, the companies should really only be focussed on talking to customers, and building products,” says Scevak. But it can be difficult to focus. That’s the challenge. “You can get trapped in this sort of mental suicide where you waste time talking with press, getting excited about partnership conversations with big companies, or obsessing about competitors.” Scevak asks Dijkstra and Nguyen how their customer interviews have been going.

Storyberg co-founders Michael Dijkstra and Kevin Nguyen (Image: Zach Kitschke)

Earlier in the week, I’d accompanied Dijkstra to a meeting organised with BlueChilli CEO Sebastien Eckersley-Maslin. He wanted to find out whether Storyberg would be useful for the incubator’s growing stable of companies.

Eckersley-Maslin was impressed — the feedback was positive. Until now BlueChilli has used its own mash-up of software to track data on the impact of product changes. He’s keen to try Storyberg with a few BlueChilli companies. It was a good meeting. Afterwards Dijkstra laughs, “you came to the right interview. Some don’t go that well.”

Scevak says the companies should be spending 70% of their time talking to customers: “It swings in pendulums.” The ratio should fluctuate over time, but for now talking to customers should be the priority.

These first interviews should help better understand the customer and their problem. Later the teams should test with customers their product solution.

“They’re probably not as well structured as they should be,” says Dijkstra, when we chat after the meeting at BlueChilli. “I’m trying to understand who the key customer is, how big their team is, and their role.”

Scevak says customer actions speak louder than words. People don’t want to give negative feedback to your face. “The purpose of these interview is to figure out whether you’re solving an actual problem, and trying to determine the value of the problem,” he explains.

The pair is still trying to figure out how to get in front of companies at the right time. They think it’s going to be when a company realises it needs to track this information; not too early and not too late. Many potential customers have hacked their own solutions, but Scevak thinks it’s a good thing.

“The value of the problem is some junior guy spending three hours a day working on this awful spreadsheet,” he says. “Or for Storyberg, part of someone’s role might be to run these queries.”

“You should always be listening more than talking, and asking deep questions like ‘are they solving this problem?’ If not, it’s probably a bad sign.”

The initial platform was set-up as a Kanban board and project management tool, although the focus has shifted since the program started. The new pitch is helping people validate changes to their website. Eckersley-Maslin also has some suggestions; he’d like the ability to offer different logins to each company, and a more impressive visual display of the data. It needs to be easier to see how the stats are tracking.

While they’ve had some good responses in these interviews, the pair has found that they’re being asked for features which don’t fit with their initial focus. It’s a coin toss. Does that mean you change your focus? Or do you ignore those customers?

“I was hesitant to go down this A/B testing path. But that seems to be what everybody wants,” Dijkstra tells Scevak.

Adds Nguyen, “It’s so easy to get excited about a customer who’s interested, but they might not be the right focus.”

Naturally, the discussion turns to who the customer might be: Saas providers, game developers, maybe even large ecommerce or content platforms. It will definitely serve Saas companies, although the mobile and gaming space seems interesting. Dijkstra thinks it will work for any product where engagement is important.

The company’s current idea centres on the concept of release ‘cohorts’; each new feature is a new cohort to be tracked and measured. For one company, it may be clicks. For another, sales. It’s important to narrow down to work out who’s most likely to pay for it.

“The people who build something themselves probably don’t want to to do it themselves,” adds Scevak. “They would use a product if it did what they were after, but none of the existing products offer exactly that.”

With this last round of customer interviews, Dijkstra has been using wireframe mockups to show what the product might look like. Previously, the pair had felt as though they needed a working demo. They’re realising time is valuable — a week spent building something no one wants is a week wasted.

And so, the inevitable question from Scevak. “When do you think you’ll have this version of the product ready?,” he asks.

Nguyen sighs then lets out a small chuckle, “This week, hopefully. It always feels like it’s due yesterday.”

We’ll be following the eight companies over the course of the Startmate program. Follow the journey by signing up to our mailing list.