This week's newsletter features actionable strategies from Saba Karim of Techstars on how to gather believable feedback, find interviewees, and prove early traction. Also, read our update on the fundraising marketplace, hear Guy Friedman's story of raising capital for SteadyMD on the Funded podcast, and brush up on your knowledge of GTMF and PLG with a new blog series from Blackbird.vc.
Fundraising during the holiday season
Murtaza Bambot, founder of Heartbeat, advised founders to wait on raising capital until January to avoid the seasonal slump. In response, DocSend's Russ Heddleston laid out historical data around this well-known slowdown and points out that even though 2021 has seen higher fundraising activity than any year we've recorded, the seasonality will likely persist. Here's the full Twitter thread with data.
What are your thoughts on fundraising during the holiday season? Tweet us!
How to gather notable feedback and prove traction even before product
Saba Karim, Global Startup Pipeline Manager, Techstars, is responsible for helping source 450+ startups from across the world that are accepted into its accelerator.
Building a startup is easy, right? All you need is an idea, and the right skills, with related past experience, alongside a strong team, with just the right amount of money, a grand vision, an insane level of perseverance, people open to giving you a shot, and a bit of luck, all at the right time.
OK fine, building a startup is hard. Well, at least about 4,000 people here agree.
That is why I want to spend some time sharing the importance of customer development (also used interchangeably with the terms user discovery and idea validation) – so you don’t waste months or years of your life building something no-one wants.
But first, let’s level-set on the average progress early-stage startups have made on their product at the pre-seed and seed stage. I’ve found that through the years, as the market has become more crowded and therefore competition has increased, expectations of having some sort of MVP earlier and earlier in a company’s lifecycle have become the norm. In fact, according to DocSend’s research, a heavy majority of companies have gone out to fundraise their first official venture-backed round with at least an alpha or beta version of their product.
As a founder, R&D and market research is hopefully what drives you in these early days of building a company. My love for market research came from these books: The Startup Owner’s Manual, The Lean Startup, Running Lean, Sprint, and Hacking Growth. Check them out if you find yourself resonating with the lessons within this blog and want to dig in deeper.
The three strategies I will focus on — in order to gather idea validation and user feedback regardless of the stage that your product is at — are defining the ideal customer profile, investing in customer development, and finding interviewees.
Here is the first strategy out of the three I explain onDocSend's blog:
Strategy 1: Finding Interviewees
Some find this the hardest part. If it’s too hard, then really figure out if you are building something needed. For example, if it’s impossible to find your target audience, then it could mean your total addressable market (TAM) may be too small, or that people don’t self-identify as potential users of this solution. Proceed with caution. Otherwise, if you know your buyers exist and just need more, this should give you some starting points to find folks:
Reach out to old connections on LinkedIn that fit the persona you are targeting. The advanced search on LinkedIn is very useful here.
Email your friends, family and colleagues and ask if they know someone who fits the persona you are targeting. You can ask them directly too, but know that they’re likely the ones to just say “yes, you’re awesome just build it” (My thoughts on: How to tell if your friends or mum are just saying your idea is awesome…)
Meet people out and about, at coffee shops, co-working spaces or networking events. Be careful not to make judgment on whether they fit your persona, and always try to #GiveFirst. Some things you can offer are: free trials, office hours, coaching sessions on your area of expertise, or introductions to people in your network.
Post on forums like Reddit, HackerNews or Facebook Groups where people are often sharing their own ideas. Kernal is another more recent platform that I recommended checking out too.
With these forums, it’s important to not join all of them and “spray and pray”. The key is find subtopics, or relevant categories to follow and find people who are in your target group. I always say, it’s better to speak to 20 vetted people than 200 unvetted.
Join founder/creator communities like Product Hunt or Pioneer. These have recently been my top picks.
Product Hunt – the best of the best community where anyone can post their project and collect feedback from thousands of people.
Pioneer – more tournament style (if you want it, you get paired with other entrepreneurs that you work with closely once a week.
Explore TalkHowdy.com to find free or paid communities on Slack, Discord, and more. There is literally a community for everyone, so join them, start engaging and get them excited about what you’re building!
Host Twitter Spaces, Clubhouse rooms, or other audio-first platforms to randomly meet people who have the same interests as you.
Attend Startup Weekends and Hackathons to mingle with other entrepreneurs who are building stuff.
If you have the budget, you could also use User Interviews or User Testing. Note, these tools are great because they are even more useful post-launch.
Remember though, market research doesn’t stop after launch. Continue to listen to your users. Email them, send follow-up surveys, have phone calls with your most active users, and your least active. Have video calls whenever possible.
Whatever it takes to give them a voice in your product development roadmap.
Just because you gain some traction, raise some money, or have some happy customers, it doesn’t mean R&D stops. This is always a critical role of being (co)founder and CEO.
Last week was another record-setting week in the fundraising marketplace. Investor interest slipped 0.36%, while Time Spent per deck fell 2.32%, and Founder Links Created dropped 10.94%. VCs are spending an average of 2 minutes, 31.8 seconds analyzing pitch decks; another all-time low. (retweet our tweet)
Track investors’ hunger for deals and founders’ search for capitalon a weekly basis.
Recommended Reads
Startup Marketing from $0 to $100M in ARR (keynote slides & vid)
Jeff Yoshimura, Chief Marketing and Customer Experience Officer at Synk, breaks down his top marketing tactics that impacted ARR and includes multiple case studies from his time at Snyk, Elastic, and Zuora as they scaled over the years.
The team at Blackbird.vc lay out a four part series that dives deep into go-to-market (GTM) and product-led growth (PLG), including foundational principles, models, and case studies.
Fundraising Didn’t Just Weather the Pandemic—it Charted the Course to an All-Time High
Based on our data, we look at market influences over the past year, how recent trends compare to previous years, and what the data means for the startup industry.
In 2016, Guy Friedman was a successful startup founder with an exit. Most would think that would make raising money for his next company SteadyMD a breeze. Instead, none of his prior investors decided to back him and he was on a familiar grind to getting funding. Fast forward to 2020 and Guy was steadily growing his core business when a wave hit in the form of acceleration towards telemedicine. All of the sudden he was surfing andfundraising became a very very different experience.
