My learnings as an Entrepreneur In Residence at Partech
Before joining Partech, I was a Product Manager at Square in San Francisco where I got the opportunity to work with driven and talented teams on launching new payment products and growing the developer platform. Product Management was an exhilarating change of pace after studying computer science and getting experience as a software engineer at Google in Paris and as an engineer/designer at a few different startups in the bay area.
Fast forward to 6 months ago, when I was fortunate to get the opportunity to join Partech as an “entrepreneur-in-residence” (EIR). I can’t say I had a great idea of what that meant or what to expect, but I was eager to contribute my past experience in product and engineering where I could. I knew it would not only expose me to the startup ecosystem in France and Europe but give me a new perspective on how startups succeed or fail to address a market need, and rare insight into the other side of the startup fundraising process. Well, I am now closing out my last week, and I can safely say, thank you Partech, for quite a valuable experience.
Below is a distillation of some of my learnings, the interesting patterns that stood out to me, and insights I think will be valuable for my future self, but also hopefully for others who are aiming to solve a problem through the creation of a startup.
On creating a successful startup…
Customer Access > Product
While I understand that the best product doesn’t always win, i.e. “build it and they will come” rarely applies, my focus and experience in product development still biases me towards thinking that the product is the most important part of any startup. However, during my time at Partech, it really hit me both how difficult it can be and how important it is to ensure that you actually have access to the customers you think will derive value from your product. You can build an amazing product, one that solves a huge pain point, but if you can’t get access to your target audience, it’s not going to work. Thus, tactically, building your customer base early, talking to and selling your solution, even before you necessarily have a product to give them, is a major advantage. Of course, it will also allow you to more rapidly learn what it is they really want and the problems they face.
Advantage of Market Intimacy
Somewhat related to the learning above, if you have an intimate understanding of a problem in an “unsexy” domain, and you have an entrepreneurial mindset, you can have a great advantage. There are plenty of domains and problems where a lot of money is already being spent, however the current solutions are very manual or don’t yet employ modern technologies. i.e. extremely valuable low hanging fruit exists, and being in the right place to discover it, and having the mindset that you can change it by applying methods or technologies already in use in other industries, can lead to some promising businesses.
Example: Cardiologs
Process doesn’t have to slow down a startup.
I’ve seen many startups shy away from implementing even simple processes because they want to have a “startup-like” atmosphere… which ultimately ends up meaning chaos. There was this one mobile banking startup which was a great example of the opposite: they had invested quite a lot in how they collect customer input across various channels in the company and the processes they have around building and prioritizing their roadmap. They were very proud of the system they had developed, and it clearly seemed to help with their success.
On pitching…
Some of these are quite obvious, but probably worth repeating, as seeing pitches first hand really reinforced them for me.
· Tell a story that starts with a clear pain point.
o Pitches that did this were easy to follow and resonated the most. TradeDepot is an example that stood out.
· An early stage company should be laser focused on that current pain point, but also have an inspirational vision that demonstrates that they are driving towards an exciting future direction.
o Maze all did this well
· Demonstrate that your product is actually providing the value you say it’s providing.
o While in seed, sometimes it was too early to know, I was surprised by the lack of discussion around engagement and retention. While there were sometimes CAC and LTV figures, actually understanding if customers were getting what they were looking for wasn’t always clear when talking to the founders.
· Be upfront about competition.
o I was also surprised by the way many startups discussed competition. It seemed they wanted to paint a picture where there wasn’t much competition, when there clearly was, and most of the time they didn’t have a clear answer or point of view on why they would still be successful despite that.
o You’re not going to BS investors, and you don’t want investors that can be BSed by showing a matrix of features where all of your boxes are checked, and the competitors aren’t, or a two by two chart with a big gap where your product sits… especially if it’s not clear that the 2 dimensions you’ve chosen are actually the most valuable or right ones.
o One of the companies I met acknowledged upfront that they faced a lot of competition, but they made it clear why their value was different, the traction they’d had, and that’s what seemed to matter in the end.
· Have conviction, and know what you don’t know
o Related to the way founders talked about competition, it’s important to address the risks your startup faces, but demonstrate your conviction in mitigating those risks.
On investing, or really any other kind of decision making…
The importance of having gating questions.
Just like with product development, when you’re investing and seeing tons of opportunities all of the time, you need to be able to ask the right questions in the right order. E.g. there’s no point in digging into the nuances of the competition if you haven’t yet determined whether the market is worth investing in. Getting good at not only asking question but prioritizing them can ensure you spend your time most effectively no matter what you’re hoping to accomplish.
Some market observations…
Building on top of existing solutions to create a better product.
It is amazing to see how some startups are able to piece together solutions from third parties, and then add their own value on top of that in order to create a unique product offering. This enables them to validate the value they were providing while minimizing the upfront investment. Coming from Square, where everything was built from scratch from the ground up, it was interesting to see this contrast, and how much had changed in the industry since Square had launched.
Creating value by being a connector.
Its has become common for many types of businesses to use a suite of SaaS solutions/channels to create, run and grow their business. Businesses are piecing together different solutions in order to maximize value or improve processes, which creates two situations for B2B SaaS providers:
1. Integrations with other SaaS tools that your customer uses becomes an important part of your product’s success.
2. If your customers use other tools that are very similar to yours or requires the same set of data, getting your customers to do and maintain yet another set of integrations can be a challenge (whether it’s to replace one of their existing solutions, or it adds value on top of what they already use).
This has created an opportunity for middlemen to come in and act as connecters, providing a service that enables the customer to enter their data once, or do one integration, and then use that data in many places across different services. Being a connector, makes it easier for newcomers to enter the market and get adopted. In some ways, this combats companies like Google or Apple. If different SaaS solutions work seamlessly together, and customers can store their data once, but see it everywhere, then all-in-one, horizontally integrated solutions become less powerful.
And, on the Partech seed team…
I have to say, I was quite impressed and inspired by the autonomy and responsibility that all of the members of the team had; clearly a driven, self-motivated team that takes initiative to make things happen. They also made an effort to continually improve and evaluate the processes they had in place. This, along with their openness and directness in the way they asked questions, was refreshing. They did not shy away from conflicting opinions, but rather drove towards the truth in order to make the best decision.
So, I want to say thank you Partech! Thank you for you giving me a chance to learn from you all, I truly appreciated your willingness to share your knowledge and welcome me on to the team.
Last, but perhaps the most important insight I took away from this experience was recognizing how helpful and inspiring it can be to surround yourself with people who are trying to achieve similar goals. Meeting with so many founders and startups, seeing them in the grind, in a way normalized what they’re doing. It no longer seems so out of reach. It has motivated me to take some of my ideas seriously and pursue them, which is what I’ll be doing next in Stockholm!
Thank you again Partech.
Montana
