And more advice from Brian Scordato, Founder of Tacklebox Accelerator
Tacklebox is a selective, six-week program to help early stage founders with full-time jobs validate and build their startups. They accept between six and eight startups per batch, most of which are pre-product. Alums have launched products, raised money, and gone on to other accelerators like Y Combinator.
1. When you first begin with your startup, don't take time for granted.
The goal behind Tacklebox is to get all the things the Founders learn through making mistakes and make sure we get those out of the way as soon as possible. I think about mental models. Your idea sort of looks like an hourglass. You have a certain amount of sand in there. That sand is domain expertise, your network, and the money you have saved up to spend on the startup. Factors like how many hours a day you have, if you have a family or if you are single, if you have a job, and so on, play a part. As soon as you start working on it, you turn that hourglass over and start using up that sand. You can't really add more sand. If you are spending your time making mistakes, then you are shot. You are not going to be able to bootstrap. You are not going to be able to iterate. You are not going to have the resources to succeed.
2. The biggest mistake is not having the right idea for you.
I see two types of ideas. One type of idea is where someone sees a need and fills it. Let's say, for example, there is no water at my WeWork, and I think people would like to have water. I don't know anything about the water industry. I would be spending all my time with this sand in my hourglass learning about that industry. The second type of idea is the one that someone has been subconsciously preparing for all their life. Let's say you have been working in the wine industry for a long time, and you realize people love small vineyards from overseas. People can't get them because it is really tough to bring them to the US. You would be perfectly positioned for that business. Then you can spend that sand on executing, testing and iterating to bring your idea to fruition.
The first type of idea is like a whisper idea. They realize that they have no advantage over anyone else to start that idea. The second type of idea you could shout it from the rooftops. You could talk all about the wine industry and how it would be better to get smaller vineyards into NY, but no one knows how to do it better than you. We look for the second type of idea to work with at Tacklebox.
When I meet Founders with the first type of idea, I tell them to think about their life as a bunch of circles. What are the skills that you have? What are the experiences? How can you match them up into an interesting Venn diagram to create something really unique? You start adding them together, and it starts to get pretty interesting. You could build something that others don't have with your type of insight.
3. It's all about customer acquisition.
Who are you building the first version of your product for? That initial segment should overlap with the circles that are your expertise. Here is our business process for finding, acquiring and converting users. Here is our supply chain. I think people spend too much time customizing stuff for customers. It is important very early to prove that customers care about what you are doing with a minimal site. Another thing that people get wrong is during those early stages you want to be getting more customer focused. You build a product, and within that segment, there is a smaller segment that really loves it. Then you want to focus on them as opposed to trying to get to the rest of the segment by adding features that may not be important. Focus on the people that are listening as opposed to trying to get other people that aren't listening. I think that is a better strategy early on.
4. Don't waste time looking for a Technical Co-Founder.
A lot of Founders are building something I called "tech enabled" where none of the tech you need for your product is that complicated. It is existing stuff that you need to piece together and have it work. They are a solo Founder, and they have domain expertise. They spend all their time looking for a technical Co-Founder to build the product. I think that is a bad use of time. This is a little controversial; some people don't agree. I think it is more important validating that your customer wants your product, and you should find a way to piece together $20K to $50K to get the first version of the product built for your customers that you have already validated. Tech is pretty much cheap enough now that you can build something pretty good for this manageable amount of money. As for the CTO, especially if this isn't going to be a very technological product, you are giving away a lot of equity and time for someone that even six months down the road isn't going to be that important strategically. It is something that you can outsource. It continues to be easier. We have found a number of great shops in South America, Eastern Europe, and Nigeria. If you find a good solution like that, I think you can move a lot quicker.
5. Don't fundraise until you have a working product and customers.
People fundraise before they are ready. Startups are about learning; companies are about growth. If I think about my investor days, I wouldn't want to invest in somebody to learn about their customer. I want to invest in someone to grow. Even early stage, you need to come to someone with a product that works and is continuing to grow. You need money for team, marketing, etc. You need to show that the customer wants your product. Too many people think that this initial fundraise is to learn about the customer. Your job is learning, and when you have learned that there is a customer that wants this thing, and you can deliver this thing, and that the whole feedback cycle is there, you are ready to fundraise. You know how they find the product, how they use the product, how they find value, and how they decide whether it is valuable or not. You know how they share it. If you can do all these things, then it is time to fundraise.
6. Don't use the same marketing strategy as your competitors, get creative.
Let's say you have a unique eyeglass company. You decide to advertise on Facebook. Well, Warby Parker is spending a million x of what you can spend. That channel is already burned. It becomes a race of who has the most money to get those eyeballs. So, you have to use what is unique to your startup. You need to think about who really needs my product. What are the channels that they use that other people don't use where I can find them? There is a company called Underdog. They are in the hiring space which is a very crowded market. They are hiring technical people for startups. They work with smaller companies. They couldn't afford AdWords or Facebook. They did a couple of clever things. One was that they targeted newsletters that VC's would send out in New York City, and they sponsored those. They hadn't been sponsored before, but they reached out to the VC's and said, "hey, can I give you $200 to sponsor your newsletter?" Those were going to their audience, and then the audience used them. It was a very specific, targeted ad. That worked. They also then worked backward. They would reach out to the VC that invested in that startup, and say,"hey we helped this startup get a great CTO, can you introduce us to your portfolio?"
On messaging, I don't think people get specific enough. There is a phrase that we use at our Tacklebox companies. We help you do X, so that you can Y. That needs to be something that is very specific to your customers. The goal of that sentence needs to turn off some people. They may say that's not for me, but there will be people who say that IS for me.