The latest episode of Masters of Scale features Ben Chestnut, Co Founder and CEO of Mailchimp, and champion of simplicity and bootstrapping. When Ried asks him about when he started figuring out Dashboards and analytics stuff (Mailchimp ARR $600mn) Ben says – “Gosh, that’s a good question. I think to this day I still keep it very simple, myself. I obviously have a CFO who cares about it. He has big fancy reports, but I really say, you know, “How much money did we make this month? Is it growing? At what rate?” That’s all I really care about. I keep it pretty simple.” Strangely enough I also happened to read this article “Don’t Build a Startup, Build a Movement” by Ali Mese and guess who was the centerpiece of his narrative – Ben and Mailchimp. Ali makes a passionate plea for differentiated approach to your brand storytelling. Ali writes – “Over the last years, MailChimp has built an iconic brand with its design-centric approach and unconventional marketing campaigns.” that took Mailchimp, which was essentially a side hustle for about 5 years for Ben and his co-founder, to 15 million customers. So what did MailChimp do? They decided early to “Focus on building a brand customers love.”
I was re-reading Paul Grahams seminal post for Startup Founders (I have this framed and put up on a wall right outside my office) Do things that Don’t Scale.
Initial traction is hard. Recruitingusers one by one and setting a modest 10% per week growth rate should do the trick. Starting with 100 users focus on adding 10 more. And then 10% more next week. By the end of the 52nd week you will have 14000 users and in two years? 2 million.
A few weeks back David Cummings wrote about The Double Sale. A sales rep he was speaking with about selling the different softwares he has been selling through his career quipped about his latest job: “now, I don’t have to make the double sale”.
David Cummings on Startups is one of the most readable columns and I love his insights. In a recent post he writes about the need to challenge inertia. In other words this resonates with disruption. Sometimes status quo becomes the norm and there are lores of how Kodak sat on the Digital photography technology for over 3 decades because they believed that they were in the chemicals industry and not of memories. Sometimes entire industries are in denial – like, you guessed it – the music industry – which fought back Napster. A lot of it is still visible in the book industry that still doesn’t allow or have figured a way to allow the owner of a copy of a Digital book to be shared or loaned. The traditional license model of softwares, remember? I wonder what they are thinking about these days? Oh wait they have actually moved to a more sustainable Cloud/SaaS model where they cannot force customers to upgrade. Remember the backlash on Apple when users figured they are deliberately slowing down the phones through updates in OS? The same old Microsoft / Intel combination all over again.
Like most entrepreneurs who are exposed to the thoughts of Steve Blank, Alexander Osterwalder and the lean movement you see the value of building your Business Model Canvas. Simple as it may sound, plan-on-a-page, it shows only the tip of the iceberg when it comes to actually pulling off on the actions you list. The core of the idea is validation of assumptions as quickly and as definitively as you can. Earlier this month I wrote about asking the right questions to yourself about your business and your plan.
If you are planning to raise money from Angles of VC’s you need to understand how your venture is likely to be valued. Basically it is a black box with broad strokes. How each parameter corresponds to value is still unknown as it varies widely from one investor to the other. Specially if you have generated interest from multiple VC’s.
If you are a startup founder and are driven by the idea of raising funds you are also familiar with ‘NO’s. There are different types of ‘NO’s. Ones laid down on you gently and ones delivered like a punch on your face. Either way, it is never easy. Kathryn Minshew, the founder of The Muse – a job and career advice service got rejected 148 times before she went on to raise $30m.
The Go-To-Market Report for Startups 2019 covered a lot of ground with not so surprising information.
Andy Ruskin likes to cite two presentations – one, the Zuora deck and two, the Elon Musk presentation introducing the Tesla batteries as his example of great business stories told by companies. There is no denying that story telling or a compelling narrative with its build up , a la Freytag’s Pyramid [- Exposition – (The Set Up ) Rising Action ( complications, development ) Climax ( peak tension and turning point ) Falling action ( Resolutions, revelations) and finally denouement (final resolution )] needs to be designed. Or perhaps The Hero’s Journey. What ever the structure, there is no denying of the fact that your organisations story narrative is the key to your ability to communicate and execute on your vision. Andy Ruskin’s presentation The 5 elements of a Great Strategic Narrative has s Prezi version by Igor Lacerdino.
Mark Suster is Partner, Upfront Ventures and ‘2x entrepreneur (who) sold both companies (last one to Salesforce.com)’. He has written a lucid series on startups and boards. It is a contentious, ambiguous and a topic without clarity. For founders that is. When do you form a board? Who do you offer (or deny) a seat? Who drops off when? Who controls the board at round D? How can I protect my self from getting fired by my board? Is that a real threat