Selling a Swiss Army Knife
Them: “If you don’t find a specific problem to solve you’re going to go bust before you get to market.”
Me: “I know.”
Them: “You need to focus.”
Most of the seed-stage investors we talked to hated the idea of our start-up. Like really freaking hated it. Halfway through building our “stupid simple workflow” product we were getting beat down with variations on that same theme. They did not have a problem with the idea of a lightweight process management app. But they didn’t like the lack of focus on a very specific pain point. Maybe we could have accepted that advice and targeted a narrower problem set and solved it really, really well. But that was not the vision we had for our product.
Them: “I just don’t see what problem you are solving. Nobody wants a Swiss Army Knife. You want a knife — buy a knife. You want a screwdriver — buy a screwdriver. Horizontal software products that can do anything are a really hard sell.”
So very true. And yet, I own three Swiss Army knives.
“But what problem are you solving?”
This is the question that any investor wants an answer to, maybe even before they consider the founding team’s ability to execute. Is there really a problem? Can you quantify it, or at least provide sufficient evidence that there is a market? They knew there was a multi-billion dollar business solving process problems at scale. They were not so sure that we could front-end that business with a very simple and approachable cloud-application. If we were not going to be selling knives to chefs or screwdrivers to repairmen what problem were we planning on solving?
Repeat-ability. It’s maybe not a word, but it’s a thing. In order to scale a business, you need to be able to quickly find and repeat things that work. You can’t repeat something if you don’t have a good way to capture it. And you aren’t going to capture it if you don’t have the time, budget, or technical skill set. This is a very real problem. But is it quantifiable for an investor?
“Who are your competitors?”
I spent a lot of time as a Product Manager and Marketer studying and distilling the behavior of other vendors in the software business. Salespeople obsess about them more than everyone else does because they run up against them in the market. In my opinion, worrying about other companies in the same space is a pretty big waste of time. Sure, you keep tabs on them so you don’t get run over. And it’s certainly good to understand who they are if you are an early-stage business as they help validate your product for investors. However, they are not the thing that’s going to keep you from being successful. Your real competitor is what your potential customers are doing today, and the inertia that prevents them from doing something better.
In our case, we knew that we were competing with another Swiss Army Knife. People have been stuck managing and tracking processes in spreadsheets since they literally have no better choice. Rightly or wrongly spreadsheets have offered a bridge between here and software. They provide a workaround as you can use them for pretty much anything. The problem is they really suck at engaging people in a process and they were never meant for managing repeatable work.
“I just don’t understand the value”
In the proper context a Swiss Army Knife has tremendous utility. It’s the ultimate outdoors tool: a bootstrapping tool. In a couple of days, I’m taking my 5-year old son on the annual boys fishing trip for the first time. We’ll be making sandwiches on the water, opening a bottle of beer (apple juice for the little dudes), clipping the end of a leader, and probably trying to un-stick the hook of a fly from an article of clothing. If we do more catching than talking, maybe I’ll even clean a fish or two. Tremendous value packed into a 3.6-inch plastic case: simple, lightweight and adaptable.
So many categories of business software are far too heavy, expensive or time-consuming to manage processes that are still being discovered or refined. They are inappropriate in that context, even if they may be immensely valuable in another. We decided to build something that teams could rely on from the very beginning to bootstrap processes and iterate them over time. We saw a real need for ‘simple, lightweight and adaptable’ workflow.
“Good luck with that!”
We didn’t get a term sheet. We barely got a cup of coffee. Instead, we recruited a really great team of passionate people. We gave them a huge stake in the business and we built it in our basements. But we did build it.
There are some painful implications to not getting funding early-on. The product matured a lot slower than we wanted it to. We had to replace learning on someone else’s dime with taking the risk on ourselves. We turned our attention from pitching an unproven concept to investors to engaging some patient visionaries at really awesome businesses. They have helped us to find the overlap between our vision for Keener and ‘the thing’ they actually need.
Launching a product doesn’t afford you the right to say: “I told you so”. By itself, it doesn’t really prove anything. It would also be patently unfair to characterize the really smart investors we pitched to as unhelpful. But one day maybe…
Them: “You’re back?”
Me: “Yeah…selling a Swiss Army Knife…and it’s a hell of a business.”