Notes for ThisWeekInStartups Ep.605: Jared Fliesler (Matrix) & Erik Moore (BaseVC) w/rapper Too Short: marketing, messaging & hustle
From Launch Scale 2015, the speakers of this episode (Youtube link, Itunes) are Jared Fliesler from Matrix Partners (growth at Slide, Square) talking how to build a product and market it from concept to growth, followed by Erik Moore (BaseVC) shedding light on mistakes he’s seen founders make when raising money and his buddy rapper Too Short, sharing how he had to hustle his way to the top, tape after tape, block after block in Oakland in the ‘80s.
Cause “you don’t have to wait for somebody to give you an hand-out, do it yourself”. Like he did.
If you are a (wanna-be) founder, this is the talk for you.
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From concept to growth
In Jared’s presentation he’ll go over:
- How to build a great product (build phase)
- How to explain it to the world (message phase)
- How to reach that audience and market it (market phase)
If you don’t nail each one of these, they impact and draw down the others.
1. Build
- Building a great product is important for organic growth (free users, they show up on your door)
- Organic growth is the best test, the most honest to know if your product is of any good
There are 3 areas in your product that leads to organic growth:
a. Core product loop, the steps your users go through when they take key actions in your product
- Fastest growing products find some natural organic way to pull another user into the product when users go through that product loop
b. Word of mouth, the message your users take and share with other people (people talks about products the love)
c. Press/news coverage: reporters like to write about things they understand, you need a story that resonates with them and they love to talk to your customers
- Building a great product is like building a bridge
- First you identify a problem (e.g. people wants to get across the water to get)
- What do they use today? They swim, take a boat. Problems with that: you get wet, it’s exhausting, you need to find a boat and it costs money
- How do I build this bridge, how will it looks like: it will probably be flat, direct, fast, efficient
- Those are the same characteristics you want your product to have
5 questions to ask when building a great product:
- Focus: what’s the one thing you are trying to do, one you are doing really really well, better than anybody else?
- No matter how ambitious your vision, you need to start somewhere. Focus on that and expand as you go. Start doing one thing and do it very well. How are you gonna nail that and be better than anybody else in the market?
2. Market size: is this a really big opportunity worthy of the time spent on it, will it create a lot value?
- How do you make sure that what you are building is gonna be big enough?
- Customers create value in 4 different ways: they can give you money, content, views, other users that will give the other 3 things
- You have to deliver some kind of value
3. Status quo: how is people already solving that problem, what is the competition offering?
- Status quo is the world as it exists today, before your product hits it. If you are building a product that’s painful enough that deserves to be solved people must be doing something to solve it
- If they are not already solving it, it’s probably not that big of a problem and you should focus elsewhere
- Talk to your potential customers, don’t assume that what they use today is not good enough for them
4. Experience: how do you build something memorable that people are going to talk about?
- It used to be enough to just solve the problem. Now there are so many people and companies working to solve those problems, that your experience must be spectacular to stand out
5. Timing: why should this product exist now, what is it unique to this moment that enables this product to be successful?
- Answer the question: why now? There are not many new ideas left. Somebody have tried it but failed. Why are you not going to fail?
If you can have good answers to these questions, your product is on a good path.
2. Message
- Message is how you explain what you do in a way that your customers actually understand
- Better message, higher conversions rate, higher virality
- It’s what people screw up more than anything else
- It’s a line, a sentence that clearly articulate what you do to your consumers in a way that they actually understand it
- Be careful: you have the context, you know more about the product while your audience don’t know anything
- The ideal one is clear and it sounds easy; pretend you are talking to a kid; make it concise; make it captivating enough for people to care about the product
- You should be able to explain your product in one sentence and surely in less than 30 seconds
- Example: Square not matter what they would say, couldn’t get through customers skepticism. So instead of saying what they do, they use real testimonials explaining how they use the product and what makes it great for their businesses
3. Marketing
- Marketing is the channel you use to get that message out to the world
- It’s a mean to test your message: customers, investors and use ads, see if people click them
- Use press: it’s the best way to get your message out to the masses, as long as you have a product users love
- Marketing us easy if the first two steps are right
- Do a burst test: take some money and spend it all at the same time of many different channels
- You need marketing, it’s notlike Noah’s ark (If you build it, they’ll come — not really)
Matrix Partners one-sentence message
- “Your best partner for building a really amazing business” “Through thick and thin we’ll be your best partner”
Erik Moore on mistakes made raising money
- Founders spend lots of time raising money
- Erik Moore from BaseVC provides a few ideas and thoughts about signaling errors and rookie mistakes made to investors
- His goal is to help you avoid them
- He raised billion of dollars for institutions and millions for his funds and 10s of thousands for his startup
#1. You have to be your authentic self: be passionate “don’t chase the paper, chase the dream”
- When you figure out what you exactly want to do, the money will come
#2. If you are in the business of aggregating data to sell it (photosharing apps, etc), know that for very few companies it is a viable business model
#3. Letters of Intent (to do business with you): not worth much, it’s just “intent”, not written on stone. Not a legally binding document. Potential LOI in the future, worth even less, it’s just talk
#4. If your exit strategy is selling for 2x, they are not interested. They are looking for the 100x
#5. Design matters: if you have consumer facing app, your design should be impeccable and fabulous
#6. Be like Zappos: for 4 years they just sold shoes, focus one idea of business first and then expand later
- If you have an oversubscribed round and can turn down investors, don’t. Let them in even if it means raising more money. You keep them in the loop, they get invested in your company and in the future if you need their money or help, they’ll be more likely to help you
- You don’t necessarily have to raise money; you’ll have to display a class of hustle that’s unusual and your trajectory will be different than funded companies
- Be like rapper Too Short
Rapper Too Short is THE hustler
- In the ’80 he was selling tapes in the streets of Oakland (where Hip Hop wasn’t as popular as in New York or LA).
- He was able to scrap 2 grands, made a studio album and started selling cassettes and re-investing the proceedings into more cassettes until he was selling hundreds of dollars’ worth of cassettes
- You don’t have to wait for somebody to give you an hand-out, do it yourself
