Navigating the Lessons of a Failed Startup: Part 2 of 3
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Chapter 1: The Technology Behind Our Startup
Last year, I shared a series of 14 posts over two weeks detailing the insights I gained from my unsuccessful startup in 2021. This endeavor became one of my most well-received LinkedIn series, garnering over 35,000 views, 200 likes, and 100 comments. It's been eight months since, and people still reference it, prompting further discussions. Here’s part two of my story.
Our Tech Stack
In this segment, I discuss the technology that powered our consumer marketplace startup.
Acuity Scheduling (Owned by Squarespace)
A customizable scheduling tool that enabled users to book appointments with lawyers seamlessly.
Inspectlet & LogRocket
These web session recording tools allowed us to analyze user behavior, which was essential for our operations. After winding down the business, I found Microsoft Clarity, a free alternative worth recommending.
Brex
A business bank account that provided complimentary wire transfers.
Ramp
Corporate credit cards that surpassed our initial choice of Amex.
Square & Stripe
Payment processors, with Square offering more out-of-the-box features that required minimal coding.
Proposify
A platform for creating proposals and obtaining signatures, akin to Docusign but with enhanced creative tools and notifications.
ConvertKit
Used for automating email sequences directed at customers.
Involve [dot] me
A no-code solution for customizable, dynamic forms that we utilized for pre-appointment surveys.
Versoly
A no-code tool for creating landing pages that allowed for rapid design iterations without burdening our developers. Although initially challenging to navigate, I later found Carrd to be a simpler, albeit less feature-rich, alternative.
Nethunt CRM
This helped in managing and monitoring cold outreach campaigns aimed at attracting lawyers to our platform.
Firebase (Google)
Served as our content management system and data repository for tracking user behavior on our primary website.
Google Messages
Enabled text communication with customers directly from a desktop app, streamlining our outreach.
These tools were not only cost-effective but also easy to customize and of high quality.
Key Takeaways:
- In 2001, this tech infrastructure would have been exponentially more expensive and less advanced.
- Launching a digital product or tech company doesn't necessarily require coding skills.
- It's an opportune moment to embark on new ventures.
Chapter 2: The Importance of Co-Founder Agreements
Co-founder "prenups" might not evoke romantic notions, but they are as crucial as formal documents like articles of incorporation or tax agreements. Each co-founder in my startup had distinct terms regarding investment, ownership percentage, and external cash flow. We operated on a partnership model without a designated CEO, which worked well in the initial phases.
However, as challenges arose, our varying agreements began to pull us in different directions. Here are some pivotal questions to discuss with your co-founders before formalizing agreements:
- What is our commitment to one another?
- What are we aiming to achieve?
- What pivots are acceptable or off-limits?
- What is the duration of our commitment?
- What are our ambitions for the business?
- Do we aim to sell at a specific valuation?
- Is there a plan for financial distributions versus reinvestment?
- What process will we adopt for external funding or advisory inputs?
- How can we gauge the health of our business?
- What guiding principles will inform our decisions during tough times?
- Under what conditions would we consider shutting down operations?
- Identifiable negative events or unmet milestones can serve as objective indicators.
- What situations would compel us to persevere?
While discussing difficult scenarios is uncomfortable, it's vital to acknowledge that challenges are inevitable. Clarity during prosperous times will facilitate quicker consensus when times get tough.
Boundless Optimism
Unrestricted optimism can be a double-edged sword for founders. On one hand, it fuels persistence and innovation; on the other, it can blind them to necessary pivots when adversity strikes.
Ups and Downs of Bootstrapping
Unlike many startups that secure substantial seed funding, we bootstrapped our venture. This led to tight budgets and significant emotional fluctuations, especially as we navigated our product testing.
Our initial month yielded a 26% ROI on media spend, which was exhilarating. However, the following month saw a drastic drop, with a staggering 91% negative ROI. These fluctuations led to moments of doubt about my decision to leave a stable career in fintech.
As we adapted our product, we experienced significant emotional highs and lows based on daily performance metrics. Unlike my previous role as a business analyst, where I could remain detached and focus on statistical significance, the stakes here were personal and immediate.
Ultimately, our team’s success hinged not just on our technical skills but also on our emotional intelligence, product instincts, and decision-making capabilities in the absence of complete data.
Key Lesson for Entrepreneurs:
Reflect on the early stages of your startup. Clearly outline the skills that will be vital and ensure your readiness for the challenges ahead.
Nine Unscalable Strategies We Implemented
Here are nine unconventional tactics we employed to establish our consumer marketplace:
- Reviewed nearly every session recording from our website.
- Contacted sales leads immediately upon noticing they opened our emails.
- Sent personalized notebooks with engraved names to leads.
- Texted each lead within 15 minutes of their free consultation to gather feedback.
- Compensated lawyers for taking sales calls with us.
- Maintained daily text communication with lawyers to discuss lead quality.
- Rotated lawyer rankings on our listing page manually to balance lead distribution.
- Offered complimentary services for 90 days to jumpstart our initial geographic reach.
- Took sales calls from my car while my son napped, as we lived in a small apartment.
What unconventional strategies have you encountered that helped launch a tech business?
Stay tuned for Part 3 of the series!
About Me
I am a business development executive based in Washington, D.C., currently working at Caribou, a fintech firm backed by QED Investors and Goldman Sachs. Previously, I held executive roles at Credit Karma and management positions at Capital One and comScore. Connect with me on LinkedIn.
Chapter 3: The Exact B2B SaaS Growth Process
In this insightful video, we explore the strategies that can propel a B2B SaaS startup from zero to 16 demos a month using LinkedIn.
Chapter 4: Building Another AI SaaS Startup in 18 Days
This video chronicles the rapid development of an AI SaaS startup within just 18 days, showcasing the essential steps and insights along the way.