Billed as a virtual bootcamp for early-stage startup founders, TechCrunch’s second edition of Early Stage event gathered content focused primarily on marketing and fundraising. The virtual event featured some of the top minds in venture capital, marketing, and startup management.
Here are some of the highlights that provide counsel and a solid roadmap to create successful tech startups poised for growth, according to some startup experts:
Lesson #1: How to growth hack and achieve product/market fit
Rahul Vohra, founder and CEO of San Francisco’s Superhuman, which promises its users the fastest email experience ever made, describes success in this initial phase of any early-stage founders’ path to fast growth as absolutely critical. If done right, you’ll know because “your phones will be ringing and you’ll be hiring like mad,” according to Marc Andreessen, one of the lead investors in Superhuman’s Series B funding round.
Vohra borrowed from the approach and key learnings of Sean Ellis, an early growth leader at Dropbox who coined the term “growth hacker” and co-authored a book on the subject titled Hacking Growth. Growth hacking is one of the popular business methodologies used in Silicon Valley and beyond today. It’s been used by companies like Airbnb, Pinterest, and Facebook to help these once early-stage startups to grow beyond a “best kept secret of couch surfers” (Airbnb), “a niche website frequented by bakers and crafters” (Pinterest), and “MySpace’s sorry step-brother” (Facebook).
Vohra outlined the five-step methodology to create a product/market fit engine that starts with customer-driven insights beginning with a leading indicator question for users: “How would you feel if you could no longer use our product?” Once early-stage startups reach more than 40% of their customers surveyed saying they’d be “very disappointed,” those lucky founders are on a fast growth curve.
From there, after achieving 40%+ of early customers loving the offering, begins a more complex process of segmenting current customers into different buckets: 1) “very disappointed,” 2) “somewhat disappointed,” and 3) “not disappointed.” There’s not much reason to engage with the latter group anymore, except to understand why they don’t love a startup’s offerings, but it’s well worth aiming to convert the “somewhats.” Next comes understanding points of view on 1) “What type of people do you think will benefit,” 2) “What is the main benefit?” and 3) “How can the startup’s offering be improved?”
The eventual end-goal of the product/market fit process is to understand the hard core customers (HXC), the most discerning core customers of an offering. These are the individuals who truly love a product and will help spread the word about it to their friends, family, and followers.
Sean Ellis honed this methodology as a member of the Dropbox founding team. Their core customers:
- Want to simplify their life;
- Are trusting, organized, tech-savvy, and looking for ways to get time back in their day;
- Want to know that someone has their back when it comes to their life’s work, which resides primarily in their computers — family photos, videos, work files, and school documents.
Lesson #2: Nailing the narrative
Storytelling is a valuable asset for startups. Caryn Marooney, who formerly led technology communications for Facebook, Instagram, WhatsApp and Oculus, presented a session to frame startup storylines so people not only pay attention and listen, but they also want to learn more.
After serving for eight years as one of the top PR advisors for Mark Zuckerberg, Marooney left the social media giant for a new role as GP of New York-based hedge fund Coatue Ventures in late 2019 after the firm launched a $700 million early-stage venture fund.
Marooney suggested the Relevant, Inevitable, Believable and Simple (RIBS) framework to help founders nail their narratives. Based on two decades of advising founders, Marooney noted she’s “heard all kinds of stories: good, bad, and everything in between. And one common factor for the very best stories is they all pass the RIBS test, designed to ensure story messaging is memorable; that it will ‘stick to your ribs,’’’ so it can be turned into a compelling and effective narrative.
For the first relevance pillar, Marooney used a classic example rolled out during her tenure as an advisor for Salesforce.
Benioff’s narrative, still being used more than two decades later, up-leveled the CRM startup’s narrative from a discussion of feature checklists to a more visionary discussion about how Salesforce was leading a significant change for the enterprise technology industry.
For the explanation of being inevitable, Marooney used the 2001 launch of the Segway — the two-wheeled, self-balancing personal transporter once forecast to become “more important than the internet” — by John Doerr, then a venture capitalist at Kleiner Perkins. While the brand still exists today, it never lived up to the hype because it was simply too niche and people didn’t believe in the inevitability of humans around the world using the invention as a primary transportation mode. Instead, it’s been relegated to more vertical uses like sightseeing by tourists, police patrolling streets in Sweden, or as a means of local transportation for workers in gigantic warehouses.
Marooney described believability, the third RIBS pillar, as a “longtime slog” that does not happen on day-one of a product launch. Sure, ideally, people need to believe that there is a fundamental shift underway, and your new product offering is inevitably part of the transformation. “But the launch is just the start of the process. Founders need to work hard to roll that boulder up the hill, paint the road and the road signs, and prove that the product is truly needed (by the masses) day in and day out,” said Marooney.
Finally, in terms of keeping the storytelling messaging drop-dead simple, Marooney cited the famous quotation from Mark Twain who once said, “I didn’t have time to write a short letter, so I wrote a long one.” Her advice is to keep it easy to understand and focused on what passionate customers care about most. Using WhatsApp as an example, the social messaging app has always focused on three key differentiators: being very fast, reliable, and simple to use — and it was designed to be global from the very beginning.
Lesson #3: Creating high-performance teams
There’s a famous quote from management consultant Peter Drucker, “Culture eats strategy for breakfast,” that implies the culture of a company is always the key determinant of company success no matter how effective a startup’s strategy may be.
About this, Movile CEO Patrick Hruby and VP of People & Performance Luciana Carvalho talked about a method of creating high-performance teams that has been taught at leading universities around the world such as Harvard and Stanford for many years and how creating and retaining a strong company culture is a winning strategy in and of itself.
Hruby and Carvalho laid out the pillars of what they call “the Movile way”, a cultural methodology for startups. They advised using unbelievably big dreams to rally people to move faster, together towards a future they can collectively see and believe at the end of the tunnel. The duo also advised never letting a company culture slow down or sag. Instead, it’s important to dangle new provocations along the way.
Hruby and Carvalho discussed the importance of maintaining a strong culture and purposefully hiring a common pool of younger employees with a strong cultural fit who are logical, diverse, and focused on innovating quickly while taking the risk out of failure.
Diversity continues to be an important issue for major tech startup ecosystems around the world. Carvalho reinforced the importance of initiatives to reduce prejudice and build more diverse teams, such as Movile’s chatbot named Fabi, developed to promote diversity awareness, and the strategy of hiring more women, blacks, and members of the LGBTQ + community.
That focus on creating more diverse teams has been proven to be a smart, profitable strategy through many organizational research studies including ones conducted at Stanford University.
Later this week, LABS will publish a second article covering the TechCrunch Early Stage Pitch-off between 10 promising tech startups that took place on July 9, so keep your eyes out for that story. All of the video sessions of the Tech Crunch event will be posted to Extra Crunch in the coming days.