Startup Diary: Finding a rhythm: how the decisions we make now could make or break our startup
It's time for another investor update. Although I'm lucky enough to be self-funded for now, it's important to get into the mind-set of regularly reporting on the state of the business. This is "real-time" startup diary, so you get the inside track on what we are up to every week. The weekly updates tend to be very focused, so this will be a monthly update on the overall state of the business.
The relationship of a founding team to their investors can be pretty fraught. It's easy for the relationship to go sideways. Investors have to engage in a little self-delusion to invest at all. They are by definition overly optimistic. So too for founders, expect that it is much worse. Founders literally have all their eggs in one basket (would you invest in someone's side-project? No, you want founders to be all-in.), and you don't do that without a healthy dose of insanity. The result of this dynamic is a mutual and cosy view of the business that is far too optimistic. That's OK. Nothing would ever get started if you looked at in a cold, hard, light. What turns delusion into reality is execution. The founders have to get stuff done. The only way you know if you're getting stuff done is to measure. So you report your numbers to your investors each month.
Surprisingly many founders don't' do this, and many investors don't demand it, especially at the early stages. I've been guilty of this myself in the past. It's not healthy. Numbers keep everybody honest. So, dear consider yourself a virtual investor, and let's see how voxgig, our little company, is doing. We'll frame the report with some structure: First, we review the basic assumptions; second, we review the raw numbers; third, the team; fourth, key events in the last month; fifth, current challenges. sixth, money - how much is left? Seventh, put your investors to work by asking for help.
Our basic assumptions: workflows in the events and conferences industry are very inefficient. Most people use email and spreadsheets, and it's a nightmare. Some people do use event management software, but 53pc of the market does not use anything! Solutions tend to over-emphasise event management. We think other stakeholders, such as speakers, need help as well.
We've been validating these assumptions using customer discover interviews. We completed 30 of these so far. Each one is usually an hour or more, mostly via Skype, but sometimes in person. We go deep into the pain points and do some careful needs analysis. Even when you think you know and industry, and worked directly in the industry, and felt some of the pain (as we have), it turns out you still don't know half of what's going on.
These customer discovery interviews have been a big focus over the last quarter. We've held back on any significant feature development until we've get a clear sense of what to build that will deliver the most value. This is a difficult discipline for a software developer such as myself, but I've made the (very costly) mistake in previous businesses of just building better mousetraps and finding my door still very much in good shape at the end of the business day As an aside, while many startups in the current environment have great difficulty finding technical staff to build their solution, perhaps it is not such a bad thing. One startup that I advise used WordPress (a blogging platform) for their entire solution for over a year. They did most things manually. They saved a huge amount of money on software developers, and had time to discover some deeper needs in their market. They're doing great now, and finally building out the right technical solution.
Raw numbers: our main product remains the newsletter for conference speakers. Subscribers numbers have grown monthly as: 2, 79, 144, 192, 513, 667, 913, and currently stand at 1231. We've revised those numbers a little since the last report to make them more consistent month to month. We are growing at about 500 subscribers a month with our current promotional tactics (mostly LinkedIn outreach). That gives us a year-end of just under 5000 or so subscribers. We've been a little distracted by all the activity around the launch of the website, so the newsletter promotion has suffered (there's that over-optimism - see how infectious it is!). We're putting in place a content-based campaign for the next phase of growth. Since our goal is 40000 subscribers by the end of the year, we've go to figure out new growth strategies. That is exactly the point of such an extreme goal. Right now, all we can get to is 5000, and we're already a quarter down. Nailbiting stuff!
I can also now start to talk about out website traffic. Don't get too excited: in March we had 1388 users as reported by Google Analytics. Our launch was deliberately soft, and we're not promoting the website yet. Why not? Because you can't even log in! It's just a little search for conferences at the moment. This was the quickest, smallest thing that we could build as a working website. It's so important to be live, and have the discipline of weekly updates. Once we build out a bit more functionality for user accounts, we'll start with a inbound-marketing strategy. Read the Intercom blog if you want to know more about that before we get started: blog.intercom.com.
The team: the company how has seven employees, five of whom are part-time, with one based in London. We all work remotely or from co-working spaces (which I must write about soon - they are awesome). We'll continue to grow employee numbers slowly. Hiring too many people too soon is the number one startup mistake. Our gender ratio is over 50pc female, so we're doing great on that front.
Key events: we launched! But you knew that already. Post-launch we are executing our strategy of continuous improvement: bug fixing and minor features. In the background we are starting feature development for user accounts-what we will actually build first is under discussion, as we need to develop a feature roadmap from our customer discovery work. We've also launched a series of speaker training courses. They are going to run in Dublin and London. This is a marketing strategy. Speakers are a key stakeholder group in the conferences and events industry, but are quite underserved at the moment. You basically have to teach yourself to speak at technology conferences. Part of our mission is to help speakers, so it makes sense to provide speaker training, and follow that up with further services on our site.
There's another reason for running training events: we keep it real. By running our own events, we get to "eat our own dog food". The system that we are building should make it much easier to run and speak at events. One way to get instant feedback on how good our system is, is to use it ourselves.
If you're been following this startup diary for a while, you'll know what comes next: this is a key decision. It is a significant expenditure of resources. Will it work? Was it the right decision? Only time will tell. My purpose with this diary is that I talk about business decisions as they happen. I can't whitewash the results. We'll go all out to make these speaker training courses work, and we've brought in some heavy-hitters to give the courses. Is this the right allocation of precious resources? We believe it is, because we have a strategic justification.
Challenges: now that we've launched we need to change our operational dynamic. Before launch, we were a team focused on a fixed project goal. Now we need to find a weekly and monthly rhythm for the company. There are things that need to be done each week, such as the newsletter production and promotion. We've been executing with natural talent up to now, but the time has come to put repeatable structures in place. This is going to take a lot of effort, and needs to be balanced with the need to keep moving the product forward.
Runway: this diary is all about openness, but there are still some lines we can't cross. I'm not going to publish monthly management accounts in a national newspaper! That said, you can always go to the Companies Registration Office, cro.ie, and get all the numbers for voxgig anyway. Last year's numbers at least. The only thing I will say is what I said the last time - at the moment we have two years' runway.
If you do hunger for an even more extreme version of what I'm doing here, check out buffer.com/transparency. Buffer is a social account management system, and they believe in total transparency: salaries, revenue, source code, the lot. It's a hugely valuable insight into a growth stage startup.
Finally, asking for help: well you do that already, just by reading this column - thank you all for the feedback over the last few months!
Richard Rodger is the founder of voxgig. He is a former co-founder of NearForm, a technology consultancy firm based in Waterford.