Accelerating WorkHound Week 4
Filtering Signal vs. Noise in Fundraising, Sales and Product
At WorkHound, we’re tackling a big issue in the trucking industry: the 97% driver turnover rate. We’re building a platform to allow drivers to share feedback with their companies. Companies then receive the aggregated feedback to improve the driver experience.
This is our weekly post highlighting our learnings and actions each week in the Straight Shot accelerator out of Omaha.
Other Updates: Week 1 Update /// Week 2 Update // Week 3 Update
Signal vs. Noise
Creating a filter is a crucial element of participating in any accelerator. This has held true for my friends that have participated in Y Combinator, Techstars and a host of other programs. Straight Shot is no different, as we’ve received varying insights with some offering opposite advice on the same day!
Figuring out how to filter through the varying perspectives about what our product should do, what growth strategies to dig into and whether to raise money is one where our vision and gut has to lead the way (it’s tough telling millionaires you’re not acting on their advice).
This week was filtering through a lot of valuable, but opposing view points.
Investing vs. bootstrapping vs. grants
Accelerators are almost always geared towards seeking investment at the end of the program. We’ve received insights from successful founders and VCs around best practices for raising money, but we were also exposed to the bootstrapping approach this week by Dan Houghton of BuilderTrend, a 100+ employee tech company based in Omaha. While investing is often the direction companies attempt to go, it was nice to consider what bootstrapping could look like for WorkHound. In addition to that conversation, we also explored state grant programs as an avenue to generate funding as we grow our customer base.
Here’s a breakdown of some of the thoughts that have crossed our mind over future funding options:
Investment in the midwest is hard, especially pre-revenue (hopefully we won’t be at that stage). From what we’ve heard, it’s a grueling process that pulls almost all energy out of building the business. To gear up for this possibility, we’re working hard to build strong communications with the community, some of which may be prospective investors.
Another technique we’ve learned about is the “soft circle”, which is a technique to steadily filter prospective investors.
Here’s how it works: When meeting with investors, you ask if you can count an investor in for X dollars. If they hesitate, find out what concerns and parameters they have to lead to a firm commitment. When those concerns are addressed, circle back with the investors to seek a firm commitment. This approach seems common sense, but you can’t connect the dots until you collect them.
BuilderTrend’s story is one of those tucked away pride points for the midwest. They’ve quietly grown to dominate the international software for homebuilders and remodelers. The team worked extra jobs early on, only grew when they could afford to and had a sales-heavy focus (making 400 calls some days) to win their first few deals.
Their story is inspiring: showcasing true grit and hustle. It highlighted the less glamorous route that can be taken (you don’t see news articles for deciding against taking investment), but the founders retained full equity in the long run.
Another option we’ve explored are state grants. Most states have some grant programs for startups (especially tech or manufacturing companies) but they have many restrictions. While these grants can consist of $50K+ of equity-free cash, the requirements are tricky. After a lengthy application process (10+ pages), requirements such as living in the state for 3+ years, certain restrictions on how funds can be spent and a tedious reimbursement process make this a process that deserves contemplation.
Another series of considerations was on the growth side of the business.
We heard arguments for strictly pounding the pavement sales vs. “programmatic selling” which includes a strong content marketing funnel.
“We called 400 people a day to hit our goals.”
Dan Houghton from BuilderTrend shared their gritty story and they scrapped their way to success by learning the metrics needed to close deals on the phone. The art of the cold call became a science for their team, as they learned X number of calls would lead to Y number of demos that led to Z number of sales. This sort of scrappiness is not seen as much today, as sales professionals ween off phone selling.
In the trucking industry the phone is still a key way to communicate and parts of this tactic will be significant for our success.
“Programmatic selling” aka sales + content marketing
Adam Griffin of Galvanize shared his best hustle tactics around creating a detailed funnel for leads. Content marketing is a popular way to generate leads, but strong sales win the day. Adam recommended a mix of “thought leadership”, guest writing in outside publications, strong blog content on a company’s website as well as a strong social presence. This is quite the opposite approach from the “sell baby sell” method seen above.
The programmatic selling efforts are designed to generate as many close-ready leads as possible. The approach has the flow of:
•build rapport with the customer
•get to know them to understand their problems
•share how you can solve their problems with the product
Both approaches have worked wonders for a number of companies, but it makes for tricky decision making as we prioritize our sales assets (me). We’ll spend time experimenting on both fronts over the next few weeks.
The gray zone between customer and business development
We’re at an interesting point in our development as a company, the gray zone between customer development and business development. We’re confident in our findings from customer development (from drivers and the companies) and we’re now evolving into finding our first few beta partners (to build the product with) and initial customers.
However, going from “we want to learn” to “we want you to use this product” to “you need to buy this product” is a heck of a lot easier in words than action. Now decisions are much more deeply incorporated into the direction the product goes.
Patience with product
Creating a functioning product in 90 days is a tough task, especially building from the ground up. Like many founders, I’m impatient and want to delight our prospective users as soon as possible. I know it doesn’t work that way and we have to learn as we build, which is Andrew’s approach. He mentioned a quote that stuck with me during a chat last week:
“Nine women can’t make a baby in a month.”
The build up is a process. Whether on the product front, the customer front or even beta user front, we’re building momentum from all angles. It’s not the sexy part of the creation process, but it’s an essential one.
Thank you to everyone that has mentored us, offered words of encouragement and simply just followed along. This ain’t easy, but support from all of our networks means the world. We’re gonna keep on truckin’!
Want to keep in touch?
We’d love to touch base if we can help or elaborate more on our experience: