If this is your first time reading, I recommend you start with my 6-month challenge and table of contents of weekly posts for the past 17 weeks.
tl;dr I received direct feedback on my Rock Health application, realized I need more manpower and venture funding, made a hard decision to divide my focus, am starting to work on a new B2B SaaS product, realized 11 hard lessons and am going to have a weekly review of KPI’s.
PS. I’m posting once every 2 weeks, rather than once a week.
This marks a sort of major crossroads and decisions point for me.
Since this blog post covers 2 weeks, it will be longer than a typical weekly blog post.
I. Rock Health results
II. Wanted: more manpower and venture funding
III. Dividing my focus
IV. 11 hard lessons realized
V. Review of KPI’s
VI. Next two weeks
I was writing a talk for investors, and I had to explain what to look for in founders. What would someone who was the opposite of hapless be like? They’d be relentlessly resourceful. Not merely relentless. That’s not enough to make things go your way except in a few mostly uninteresting domains. In any interesting domain, the difficulties will be novel. Which means you can’t simply plow through them, because you don’t know initially how hard they are; you don’t know whether you’re about to plow through a block of foam or granite. So you have to be resourceful. You have to keep trying new things.
Be relentlessly resourceful.
That sounds right, but is it simply a description of how to be successful in general? I don’t think so. This isn’t the recipe for success in writing or painting, for example. In that kind of work the recipe is more to be actively curious. Resourceful implies the obstacles are external, which they generally are in startups. But in writing and painting they’re mostly internal; the obstacle is your own obtuseness.
– Paul Graham, Relentlessly Resourceful
I. ROCK HEALTH RESULTS
I got the email last week that I didn’t get into Rock Health.
It wasn’t a huge surprise to me, and honestly I almost forgot about it. I already planned to assume I wouldn’t get an interview.
This wasn’t unexpected, and actually somewhat of a relief, given I’m going to divide my focus (I’ll get into that later).
What’s interesting is that I emailed my friend, someone very high up in Rock Health, the results since I had asked him for application advice a month or two prior, and — (I did not explicitly ask him to do this at all) — he actually went in and got the actual committee’s specific comments on Cusoy’s application for me. It was really sweet and generous of him.
“Cusoy was rated highly, but with 435 applicants for ~10 spots, things ended up leaning toward larger market or more mature companies this round.”
He then included actual bullet points from the application readers on Cusoy, but I won’t post them here.
Some common gaps included:
- Single founder — needs a team
- Hard business
- Needs incredible scale, growth and distribution
None of which surprised me, but it was great to get direct feedback rather than just rely on my own assumptions.
I was also invited back to Rock Health to participate in their office hours anytime.
All in all, I am very happy I still went through the thought process of the application and spent time with Rock Health. All in all, a great learning experience 🙂
II. WANTED: MORE MANPOWER AND VENTURE FUNDING
I need more manpower on the sales/marketing/business side to do restaurant outreach, user acquisition, user retention, content marketing, email marketing and so forth.
Because Cusoy is not making money from day 1, it needs more manpower and probably 1-2 years to really get it off the ground… it needs venture funding. Plain and simple. I’ve expressed in the past I’m not a fan of courting investors, and this was honestly the primary reason why I applied to Rock Health (I wanted the prospect of getting a $10k-$20k grant, not even shooting for a $100k convertible note).
This is a big revelation and admission for me, because previously I thought that I could do everything myself — both on the product and sales/marketing end. But I’m being stretched mentally thin to threads.
III. DIVIDING MY FOCUS
After a lot of consternation and heartache, I’m going to divide my focus 50/50 between the B2B SaaS product I’m working on as well as Cusoy. B2B SaaS will help pay the bills (again, this is a big hypothetical if I can pull it off) while Cusoy has a grand vision and potential to be something really big (but in the meantime, has no funding, no paying customers and no other team members).
Cusoy’s main focus will be user acquisition, sales/marketing, growth and distribution as well as restaurant additions and outreach.
As I write this, I have fears people will judge me for “selling out” early, but I have to be decisive and do what is best for me and my goals. How should I best spend my time? Especially since Cusoy is a free product my users are not paying me for, and I am working entirely from my own savings.
My runway will run out in roughly 6-7 months (I may try to do freelancing gigs here and there, though).
I’ve been going back and forth on the notion of dropping Cusoy completely for the B2B SaaS product, or vice versa, but I just can’t do it. So I’m splitting my time between them. This is going to be difficult but with strict discipline, it’s doable.
IV. 11 HARD LESSONS REALIZED
Here’s a little summary of 11 hard lessons I’ve realized.
I speak on behalf of myself and my own personal experiences going through Cusoy and openly acknowledge others may have contrary lessons and experiences.
These are just my own 2 cents. Take them — as well with any and all advice you ask for and receive — with a grain of salt.
Lesson #1: On working alone
I realized that it’s a lot harder to work on something on your own than with others in areas that matter the most — growth and distribution. I realized I need a sales/marketing/business partner. I realized there’s a reason why it’s so rare to find a successful company that was only founded by one person — it’s all just too much work (and emotional/mental toll) for one person.
Lesson #2: On uncertainty of growth and distribution
I realized growth and distribution — the act of acquiring users (better yet, customers) — is a lot tougher than simply just building a great, usable product. Both are hard and important, but the growth and distribution is not emphasized enough, in my opinion. It’s a lot of grunt work with “growth hacking” involved, with a very gray map to guide you — as opposed to a clear product development roadmap of “we need feature X, Y and Z”, etc.
Lesson #3: On trying to be a hero
I realized I need to stop trying to be a “hero” — I’ve had a personal history of trying to do everything on my own and sometimes even trying to micromanage others when I feel they aren’t working up to my standards (this was back in college when I founded a student organization). I admit I am far from being a great manager — let alone a great leader — and have lots to learn. I’ve been toying with the idea of hiring a virtual assistant and have interviewed several potential VA’s on Odesk but have not hired anyone yet.
Lesson #4: On “hiring” or finding team members
I realized “hiring” — or finding cofounders/team members, in my stage and case — is an incredibly difficult problem. I think hiring will always be a hard problem, and it’s something I am not even remotely close to coming up with a good solution (for myself). As I’ve mentioned before, sometimes a part of me wishes I had opted to work at a bigger company like Google or Facebook; to be honest, more so for the sheer high-caliber quality of people around me who I could potentially work with in the future in startups than for the impact I’d be having there (answer: very little, especially at Google). Surprisingly, Evernote has a very small (but growing) contingent of twenty somethings — but nothing remotely close to the sort of young grads cohort at Google or Facebook.
Lesson #5: On sales in recruiting and everything else
I realized that sales is everything regarding recruiting and pretty much everything else. I realized I hate trying to sell people on something I feel is self-evident and self-explanatory (why Cusoy solves a pain point for a certain group of users), but again, marketing rules (almost) everything. You know your product and problem the best; others don’t. It’s your responsibility to sell yourself, because no one else will.
Lesson #6: On the importance of your environment and support system
I realized who you hang out with is incredibly important in terms of how you feel about yourself, your mindset, your future outlook, etc. I just feel blessed to be in the Bay Area where the entrepreneurial culture is so rampant. As I visited my parents over Thanksgiving, I realized this could never work if I worked out of my parents’ basement in DC. I realized you need to have a support system that has or is going through the same thing and encourages you without being negative or giving off bad energy that makes you believe you can’t do anything right. That support system, for me, is not in DC living with my parents.
Lesson #7: On figuring out how to make $ without funding
I realized that “I’ll figure out the business model and revenue later” or coming up with a list of possible business models (but none of them manifested yet) is not an acceptable answer, not just to potential investors but to myself. I realized that putting off uncomfortable discussions with myself about my livelihood is not a responsible thing to do and that I need to take careful, calculated risks.
Lesson #8: On being true to yourself
I realized that I find it very difficult to say “no” to others, therefore doing things at the expense of myself. I realized that you need to make decisions that are best for you, especially if people are not paying you for your work. I realized I have a hard time of telling apart trying to go for a pigheaded determination sort of approach or knowing when to quit, pivot or persevere.
Lesson #9: On making your own 20 mile march
I realized it’s very easy to get discouraged on a daily basis, but I’m growing more and more emotionally resilient each day. It is better to focus on incremental progress and keep moving forward. Before you know it, six months later, you’re significantly farther than you were — if you keep up with your 20 mile march each day — than you’d be sitting there and stewing in depression.
Lesson #10: On B2C vs. B2B
I realized it is f-ing hard to build a profitable B2C app without traction or funding behind you. I’m laughing as I write this. Man, the things you learn when you go through this stuff yourself and stop reading about glorified fundraising announcements on TechCrunch and PandoDaily. I am thankful of the journey I’ve gone through with Cusoy — but, if I could go back, I would go for a revenue-first B2B product, rather than B2C.
Lesson #11: On my goals
Above all, I realized that I am not trying to build a billion dollar company. I don’t know if this is going to come back and bite me, but I realized I don’t want to look for venture funding. I realized the best investors are your customers — hands down, full stop, end of story. Period. I realized I want to build a business with paying customers that solves a problem and makes their lives easier. I realized I want this business so I can be financially independent and travel the world, help pay off my brother’s college loans and so forth.
I realized the term “lifestyle entrepreneur” is stigmatized here in the Valley (where the mentality is “go billion dollar company or go home”) but that is what I really want. Maybe I can try to build a billion dollar company later down the road, but that is incredibly over my head right now.
V. REVIEW OF KPI’S
Dan Martell of Clarity.fm has a great high-level approach for startups:
- Focus on your product 70% of the time and metrics 30% of the time
- Get your product activation (sign-up + meaningful action) to 60%
- Get your product retention to 20% weekly
These are the only 2 metrics you need initially.
Once you have that, then you have traction, then spend 80% of your time raising a round (if you actually need it – longer response on why you may not). Pick a date 6 weeks out, and hustle to close on that day (close = money in the bank).
So, in terms of the two metrics above, here are Cusoy’s numbers since its soft launch on November 8:
- Product activation (sign-up and meaningful action) in past 30 days: 50%
- Product retention in past 30 days: 25% (may be higher)
So, according to Dan’s approach, I am already pretty much hitting the ideal targets.
These numbers may seem “high,” but it’s just that I have very engaged users that sign up. The number of signed up users actually isn’t a big number, but again — as I have to remind myself constantly — the # of signed up users doesn’t mean a thing if they don’t engage in your product at all.
What’s the use in having a million users if only 10% log in and engage with your product? Extreme example, I know, but you get the idea.
Cusoy doesn’t require users to sign up to use it, and I haven’t integrated tracking yet to see what users do once they log in. That’s on my to-do list this week.
VI. NEXT TWO WEEKS
Over the next two weeks, I’m going to try to go harder on sales/marketing and also keep working on product and metrics/analytics. I’m also thinking about publishing my actual roadmap for greater transparency and accountability — and will be incorporating a “Review of KPI’s” each time.
Hope everyone had a great Thanksgiving weekend!
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