90% of startups fail, or so the almost unbelievable statistic keeps telling us. It seems far-fetched to take this stat seriously, but if you’re a new startup founder embarking on your latest company, then it’s worth paying some respect to this figure. Mathematics doesn’t lie! As an entrepreneur, you have to be open to the possibility that your startup may well end up being just another sad stat.
So how can you ensure that it won’t be? There’s no magic key (at least not that I know of, otherwise we’d all be rich). What it boils down to is making the right decisions at pivotal moments. This is what I’m going to reflect on in this blog: the pivotal moments in our first year at our startup Quuu, and some tips we’ve learned along the way.
Month 1: Business plan or quick rollout?
This was the first major decision. Do we spend time planning in painstaking detail something which will inevitably not reflect our business plan’s projections at all, or do we just get the idea out there, gather feedback and react to the situation in hand?
When you start a new business you’re told that you need to create a business plan to prepare yourself, set out goals and have a ‘go to market’ strategy. One of the main reasons people usually spend months on a business plan is for it to act as a feasibility study, to tell you whether or not your business concept could work (Is there a market for it? Does it scale? Can we do it?).
However, based on previous experiences of following the more conventional route, Dan and I chose to go at it more directly. Dan whacked together a basic brand and some app screen designs, and we slapped the company concept on BetaList to gather feedback on the idea from hundreds of potential users in just a few days. If BetaList didn’t go to plan, then we could have reluctantly accepted the bad news, and simply moved on.
It took about a week in total for Dan to create the designs and for us to launch on BetaList. If the market told us they didn’t like it, well we’d have only wasted a week. As it happened people did like the concept – and the brand.
The next step was to build the Minimum Viable Product. If you’re not sure what this is, it’s usually referred to as an MVP, and it’s the most basic version of your app, service or product that you’re able to offer to users to test the concept at the earliest stage of its development. Essentially it’s enough to simulate the experience of the service so that you can gather some early feedback on the startup idea itself, maybe even how people react to the brand.
So Dan connected with a talented developer that he knew called Mubashar Iqbal (‘Mubs’), who was happy to work on Quuu in return for equity in the business in the eventuality that things came to fruition. We had a Minimum Viable Product of Quuu completed over the weekend, and so the journey could begin with our beta phase.
Within 1 month we had done market research, created a brand, validated the idea, and built a functioning version of our app, we even had a mailing list of over 300 early adopting users who were willing to use the beta version of Quuu in its infancy (bugs and all).
It was great timing, too: shortly after Buffer stopped providing content suggestions, Quuu was ready to fill the gap.
Month 3: How should we go about getting investment?
When we started Quuu, Dan and I were actually still running a semi-successful branding company, but we both wanted to focus full-time on Quuu. Needless to say, we couldn’t do both, and like many experimenting entrepreneurs, we couldn’t yet afford to just dip into our savings to float ourselves to work full time on our desired project. So, we had little other option other than to seek investment.
As chance would have it, one of our branding clients (who happened to be an investor himself) came to us as a result of Dan and I having pitched him a different business idea that didn’t receive funding. He liked our pitch, he knew we had the ‘hunger’. He set up an investment meeting for us in London in front of the Startup Funding Club, and he’d be present as a potential investor. So, a few months after being rejected for one idea, Dan and I found ourselves on the train to London to pitch another one!
Unlike the first pitch, where we’d developed one of the most detailed business plans of all time and developed a slick pitch, this time we rocked up without any planned pitch, 2 sides of undesigned A4 paper and some stats that proved people were interested. We had very few nerves; we knew this idea would work.
Here’s why we weren’t worried: Quuu wasn’t just a speculative concept, it was a concept with support…and $20 revenue. The fact that 2 people had paid us $10 to use Quuu at this early MVP stage, without us pushing it at all, was a comforting sign. The investors laughed when they saw how excited we were by this tiny amount of money.
The other reason we were confident was that our elevator pitch was super simple. With our previous idea it took us about 2 minutes to describe what it was, and by the time we had finished, only half the people in the room thought they understood. So wasn’t exactly easy to mass market. With Quuu, it could be summed up in a sentence:
“It provides hand-curated content suggestions for social media.”
Then we just waited to let them react to see if they got it.
Knowing that we could describe the business model so succinctly meant that our pitch didn’t have to be rehearsed or rigid. It was a natural conversation about a cool idea.
The investors told us they wanted to chat about it for a few minutes and would call us with a decision later that day. So we both went for a drink at a bar around the corner before we caught the train back. They called us as we arrived there, and congratulated us on the pitch and agreed to invest.
The next day we started on Quuu full time.
Our pitch was not over-rehearsed, but it was structured. Know all the details, like your value proposition and USP, inside out.
Month 5: Startup SaaS marketing approach
So, we had the product online, it was functioning, and we had a few hundred early adopting users. After ironing out some early bugs and UX/UI complaints, we saw a considerable drop in feedback – people were generally happy with the way Quuu worked. It was time to let more people know about Quuu and get them signed up.
We had enough money for some experimental paid advertising via the normal channels (FB, Twitter, LinkedIn, Google Ads etc.) None of them produced any results worth mentioning, so we started a blog. The blog posts were put into Quuu itself, as content to be shared with our users. This did produce consistent traffic, and it helped to grow our new social media profiles.
Using our own tool to market Quuu was an easy win: it was free, it was effective, and that meant more money in the bank.
Content marketing FTW!
Another thing we had on our side was a network of influencers, or ‘Quuurators’, who added their content to Quuu free of charge. These Quuurators had influence and reach, and helped us attract new users.
This was a nice start for the first month of working on Quuu full-time, but soon we’d have to step it up a notch if we were to prove there really was a market for Quuu. We decided to put Quuu on a larger marketing platform: Product Hunt.
On the day of the Product Hunt launch we came first, and more than doubled our user base. As a result, more people contacted us to write about Quuu, and we attracted the attention of well-respected content marketer and growth consultant, Sujan Patel. With new mentions about us on Forbes, Inc.com and the Huffington Post, we started to see even more organic traffic.
Month 7: When and how we monetised
Our investors had told us to not worry about making money in these first few months after Quuu Promote early.
We’d always intended this to be a major revenue stream for Quuu, but it was moved forward dramatically; so many people asked to add their own content to Quuu that we could no longer ignore such a demand.
This was also a pivotal moment for us because again, had we waited to build a dedicated Quuu Promote app, we would have needed more money and more time. We opted for the MVP quick launch option, using Type Forms and Zapier connected to Google Sheets and Stripe payments. It took us 1-2 days to get the wording right on the website and setup the infrastructure, and then we emailed our users. It was primitive, sure, but it was exciting; we knew 100% what each and every user thought and felt about the product because we were doing everything ourselves. Every email, review, transaction and support ticket was hands-on.
In the month following this decision, we made 4 figures for the first time since we launched. Just a few months earlier we were excited by $20!
Month 11: Growing the team
So now we had a decent bank balance, a quickly growing user base, but it had reached the stage where Dan and I were working the most ridiculous hours. When you start doing this something has to give, and in our case it was the response times on our customer support. And did we have time to plan the development and future of Quuu? Nope!
It was time to start hiring. So what kind of people would be best? What would their roles be? How would we find them?
We wanted people who were as similar as possible to us founders. More specifically we wanted people with the startup hunger, that intangible entrepreneurial streak, people with initiative and creativity. Dan and I don’t embrace all of these ourselves, that’s for sure, but together we do form the profile of an Entrepreneur 🙂
Another big consideration was the desire and ability to work remotely – it’s not for everyone. The last thing we wanted was to take on someone, spend time and money training them, and then realise that they weren’t right and start over.
Thrifty as the Artful Dodger, we placed a free advert on Indeed.co.uk for a Content Manager. We weren’t looking for any one type of profile (e.g. Marketing degree at 2:1 level with 3 years experience as CEO of Facebook). We just wanted to see who fancied their chances.
We judged it based on the style of their cover letter: was it perfectly written? Did it convey a genuine passion or interest for the role? Was it a template, or a custom application?
Then we checked their CV: was this well written and formatted?
If they passed this stage, they were invited to a 15-minute interview via instant message Skype, followed by a test. We wanted to see how the candidate came across on live chat without us having seen them – in other words, the way a customer would ‘meet’ them on Intercom. After this, we had a 30-minute video call to grill them in a bit more detail about their cover letter, CV, hopes and dreams.
It was very informal, but not easy. This was a key strategy for us because, had we not taken this unconventional route, we might not have the awesome team that we boast now.
Crucially, we staggered the hiring of the team over several months. It’s important to remember that while you might think you need to hire quickly to manage the workload, you can end up with a couple of quiet quarters after. This would decrease revenues and much increase monthly burn rate, with not enough work to split between all the new hires.
Do all you can to find the right people first time, be selective, and do it slowly (or at least at a sensible pace for your circumstances)!
These were just some of the meaningful points in our first year at Quuu. Quuu could have gone down several different routes, but we’re comfortable in our approach to date and are extremely grateful for all the counsel and feedback that we’ve received from our shareholders throughout the entire process. Debate around these sorts of decisions is crucial for startups; I don’t think that a full-blown risk assessment is necessary whenever a strategic decision is made, just an awareness of where you’re going and your journey to ensure you don’t veer too far from the correct path.
I think that the startups who begin with the simple goal to survive their first year will give themselves a great shot at achieving real long-term growth. The ones who go at it all the time imagining what yacht they’re going to buy for each of their family members, and not giving enough attention to the details that will provide the foundations on which they can grow such a company, will probably become one of the sad stats that we mentioned earlier. As entrepreneurs, we’re all dreamers by definition, but a combination of these two mindsets is required to allow your company to grow.
I’m not going to tell you what decisions to make in the pivotal moments of running your company, but I will provide one piece of advice:
Don’t make the colossal mistake of thinking that your business idea is infallible simply because you love it. Have an exit strategy. How could you pivot if something went against your vision for the future?
If you’re about to embark on starting your own business I would love to see your elevator pitch in the comments. If you’re a startup founder, is your business a success story, or a lesson learned?
You can send your own startup story blog posts to Quuu Promote, too, for our users to share with their followers. Thanks for reading!