Driving growth by networking, Fundraising tips, R&D strategy, and more- Tactician #0016

06/12/2023

GROWTH

Seema Amble, a16z Partner, interviews Zach Perret, Founder of Plaid ($13B startup), to glean insights on how Plaid navigated its early stages, including its approach to product development, customer engagement, and market strategy in "Creating a Supportive Builder Community with Plaid’s Zach Perret"

• How they got their first customers:

  • Quote: "So, in New York, we ended up just going to a lot of meetups, talking to a lot of entrepreneurs [...] But one of the things that we did was just try to really deeply understand the people that we were talking to, initially, instead of doing contracts and sales and accounts management and things like that. We said, 'Hey, we’ll publish an API. You don’t have to sign any contract, just use it. And the only ask is that you give me your phone number so that I can text you [...]'"

  • "And what I would do is I would just, text these people that said they would use the API, I would text them like every week, and say like, 'Hey, what can we do better? Like, what, what feedback do you have? How’s this working?'"

  • "Our filters for who we take as customers was, 'Are you going to launch fast? And can I have your phone?' and we apply that to everybody. So if they weren’t going to launch fast and weren’t willing to talk to us a lot, then we didn’t really pursue it"

• How they motivated customers to move quickly:

  • Quote:"We did go to customers and say, 'Hey, look, you’ll get X amount of time free if you launch within Y timeframe.' So again, the goal was to get to usage to get to traction. And so, we would even say you’ll get a year free if you launch in the next 4 weeks. Like, it would be just these crazy deals, which would oftentimes encourage them to do it."

LEADERSHIP

Lisa Han, Partner at Lightspeed interviews Matthew Prince, founder and CEO of Cloudflare, and discusses Cloudflare's evolution, focusing on big-picture thinking, the value of innovation through internal 'pirates', handling unforeseen crises, and the importance of leadership that prioritizes success over popularity in "Cloudflare's Matthew Prince on Innovation, Leadership, and Startup Pirates"

• Innovate Independently with an 'Emerging Technology and Incubation' Team: To foster disruptive innovation, Cloudflare created a separate innovation team located away from the main office.

  • Quote: "True innovation rarely originates inside corporate HQ [...] your R&D teams will always be driven by whatever customers are asking you to deliver at that point in time. It might be innovative, but it definitely won’t be disruptive. That’s why Prince decided to create a separate innovation organization within Cloudflare and situate it 1500 miles away from the home office [...] I think of them like the pirates and the navy [...] The navy should get 90 percent of your R&D spend [...] But pirates should be allowed to be pirates. And every once in a while the pirates will discover a really valuable treasure [...]"

• Prepare for Unforeseen Crises with Agility: The article highlights the need for an agile team that can respond to crises, rather than attempting to predict and prevent every possible scenario.

  • Quote: "It’s actually better to wait for bad things to happen and then figure out how to deal with them... 'The worst things I could have imagined when we started Cloudflare never happened,' he says. 'But there have been things many many times worse that did happen.'"

FUNDRAISING

Kera DeMars, Head of Marketing at Hustle Fund, offers fundraising tips in "Raising from Angel Investors"

• Tip #1 - Pitch everyone:

  • "When she was on the fundraising circuit, Elizabeth Yibn (GP at Hustle Fund) did something insane. She pitched her optometrist."

  • "And while he didn’t end up investing in Elizabeth’s first round of funding, she learned something important: her eye doctor is an active investor. So the next time she goes out fundraising, that’s a warm lead she can follow-up on."

  • "The moral of the story is this: you just never know who is a good candidate to invest in your business."

• Tip #2 - Ask for referrals:

  • "After he turned her down, Elizabeth asked her optometrist this question: Do you know 1 person who might be interested?"

  • "Most people out there know 1 wealthy person. And this optometrist was no exception. Feeling badly that he turned her down, the doctor introduced Elizabeth to his doctor friends[...]"

• Tip #3 - Embrace the awkward:

  • "The secret? Just keep doing it. The more you do it, the more comfortable you get, and the smoother your pitch becomes."

SOCIAL NETWORKS

Dylan Diamond and Max Baron, Founders at Saturn, share insights and lessons learned from building Saturn, a social network for millions of students, highlighting the importance of single-player utility, personalized user experience, and the feasibility of initially unscalable strategies in consumer social product development in "Lessons on building a viral consumer app: The story of Saturn"

• Embrace a Single-Player Mode for Retention: The authors emphasize the importance of a single-player utility in social products, which aids in user retention and provides time for product improvement.

  • Quote: "Many people talk about the value of a 'single-player mode.' The reason is simple: it usually unlocks retention, and retention unlocks time—time to iterate and improve on your product. In our case, having a single-player mode gave us more time to launch and refine key social features that improved the network effects of our product. Great retention reduces the cost of making mistakes, and allows you to take bigger risks and learn faster."

• Leverage Unique Tools and Infrastructure for Scale: The article stresses the importance of investing in unique tools and infrastructure to support scalability.

  • Quote: "We are believers in the latter—although this approach requires patience and, if you’d like to scale nationally without compromise (as we did), a willingness to invest heavily in building unique tools and infrastructure and hiring more people."

• Build Products with Personalized User Experience: The article highlights the significance of making a product feel personal to its users, which enhances user engagement and trust.

  • Quote: "From day one, our approach helped make Saturn a refreshingly personal experience... When you logged in to any of these apps, you were greeted with an experience that was colorized for your school and perfectly supported the complexities of your schedule. It felt like the app had been built just for your school, because it was."

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