What I Wish I Knew on Day One of Start-Up Studio
Bowtie is now a little over 2 years old. That’s a toddler in human years and a teenager in start up years. My co-founders, Mike Wang MEng 16’ and Vivek Sudarsan MEng 16’, and I started working on the company in Startup Studio at Cornell Tech in 2016. I decided to apply to Cornell Tech having been in Product Management and R&D for 5 years because knew I wanted to start my own business and believed this degree could help me realize my dreams. I was open to figuring out what kind of business that would be throughout my time at CT.
My team and I through much research and many iterations arrived at our current platform. We offer an AI receptionist for appointment based businesses (Spas, Salons, Doctor’s Offices, Acupuncturists etc.) that amongst other things ensures businesses never miss a customer by automatically texting back and conversing with any customer who calls when the business doesn’t answer. We now have over a quarter million dollars in Annual Recurring Revenue (ARR) and customers in the U.S., England, Australia and Canada! I say this to give you a sense of where the business is at today and how much progress we’ve made since our founding.
Reflecting back on our precarious beginnings, for the sake of the Cornell Tech entrepreneurs just starting out, I am taking a moment to think through what I would have told myself as a young late 20-something MBA about to begin Startup Studio. I’m going to break up the lessons into each phase of my time at this start up from pre-idea, to idea, to MVP, to first customers, to where we are today $20,000+ in MRR.
Chapter 1: Diapers Phase a.k.a Startup Studio.
Stop talking about equity.
Your equity is worth zero at this point. Who knows which of you will stay and which of you will go. Your time working on this at Cornell Tech counts as working on a school project, not a startup. I don’t care how consequential you think any of your contributions are, the clock on your startup starts the moment school ends. If you are on the startup train the day after graduation, that is when you earn your right to equity. The moment the framework of school is gone you will see who has the nerve, the guts and the lunacy genes to continue this journey with you. Until then, there is nothing to discuss. My recommendation is that you all vest equally for 4 or 5 years starting the day you incorporate after graduation.
This is important because talking about equity is poison to your company. It’s an energy suck, a huge distraction and will have you caught up in complete nonsense since you have nothing of value whatsoever that you are even arguing about. Every moment you talk about equity is a moment you are not dedicating to building an amazing product and cracking your market.
If you can’t trust each other now — you’re in trouble.
Your best idea is out there.
So you found an awesome group of people that you want to start your startup with. You have complementary skill sets, you love working together and it just feels right. You gather in a room with a marker and start writing down all your ideas and boom, jackpot — billion dollar startup idea is laid out in the board. Wrong. As is often the case you can only innovate from what you know, and what you know is in all honesty not that much. The solutions you are coming up with need to be 10x better than existing solutions and you also need to find the best problems to solve to create these game changing solutions.
The best way to find a startup idea is not sitting in a room with a marker bashing your head against the wall until magic unicorn pixie dust pours out. Rather, it is by speaking to as many people as you can in the area you are interested in innovating in. I spent so much time thinking by myself or with my team that I wasn’t focused enough on just talking to as many people as I could to understand what they were thinking and dreaming about. As soon as we started to get out there, we were no longer pulling ideas out of ourselves; potential customers were handing us the building blocks and all we had to do was follow the breadcrumbs.
Want to improve the hiring process? Start calling and emailing everyone in your network related to the topic and asking people to connect you to others in the space. Don’t be afraid to cold email Target’s HR department or give Warby Parker’s HR team an inMail on LinkedIn. Whatever it takes.
You know what the best part is? You are a student. Milk it for all it’s worth. You are not their competition and you are not trying to make money (yet). When you reach out to them put that front and center. Most people will have no problem talking to grad students from Cornell Tech who are interested in learning more about their space — it’s disarming and still authentic.
You need to get on the phone or email with 50–100 people to understand their problems, what solutions they use to solve those problems today and as importantly, what ideas they have about what would make their lives better. Seriously, the more inputs you have, the stronger your startup will be during this crucial phase. Your best idea could come from the extra conversation you scheduled with your friend’s friend’s friend who is a recruiter at App Nexus — you really have no idea.
Under construction is better than over construction.
Focus on validated learning. Only build exactly what you need to demonstrate the value of your ideas and gather feedback as quickly as possible. For example, detailed user interfaces for editing content for your product is probably not a top priority when you are still validating the product itself. My co-founders and I built a menu editor for our initial food ordering-by-text MVP before we ever fully validated the MVP itself. We ended up never using that editor and doing everything through spreadsheets to keep moving quickly, which means all that development effort was a waste of valuable time we could have used to learn more about our customers.
Be willing to get your hands dirty and do everything manually using excel until you are feeling very confident about the direction you are taking having spoken to a critical mass of customers. This is hammered home in many ways in Cornell Tech, yet I find that people are always getting excited about parts of the product which are not key to getting it in front of potential users. So seriously don’t be distracted by the bells and whistles when you should be focused on validating your core beliefs.
Chapter 2: The Teething Period or Learning to Bite.
Your MVP sucks (but your vision is awesome).
When you are out there getting your first pilot customers, sell them on your vision and who you are — not your product. In all likelihood your product is a POS that is going to cause these people more grief than benefit for a while.
Think twice about charging anyone for these initial pilots because money creates expectations and these users are already giving you their most precious assets, their time. They are your partners in shaping this product and creating something amazing that has never existed before. You are using them to prove value and build your first case studies. These case studies are essential in helping you raise money and getting your future customers. These users are your character witnesses and initial proof points, not (necessarily) your first contracts.
In all likelihood you will end up losing them at some point in your journey so do your best to nurture that relationship as long as you can but don’t get too attached to any one customer. Converting these customers to paid may be impossible after how much they went through with you but that is ok! There a ton more customers out there just waiting for you to find them with your new and improved product, which brings me to…
Don’t chase — find.
In the early days of Bowtie, we had a lot of trouble convincing business owners to give our AI a go. They were either technology averse, stuck in the past or didn’t get the concept. Whenever you are introducing the world, especially businesses, to a new technology you will always run into customers who don’t get it. So much energy was being wasted on people who were not going to buy into the vision — because they were not ones to take the leap on an unproven technology.
In the early days after we graduated, Sharmadean Reid, a British fellow tech founder, had read my article about AI for small business online and immediately reached out as she understood the vision we were espousing. She needed an AI booking agent for her nail salon, WAH London, and had even begun building one herself using a 3rd party builder. After a quick negotiation she was on board as one of our early paying customer and we had one of our first customer advocates on board.
After this initial victory, I began getting rejected by many business owners who weren’t on board. Having shared my recent lack of progress with her, she emphasized how we need to find more people like her. At this early stage of the game we needed to find the people who loved our vision, not chase the ones who didn’t. Your early adopters are out there and they might even already be thinking about what you are building. Therefore, getting rejected by 50 late adopters should not demoralize you — just keep picking up that phone.
The power of no.
Being an early stage startup is exciting, it’s fresh… and it’s also very fragile. When you find those early adopters they are going to have their own ideas, their own cockamamie schemes that they will want to imprint onto your genome. Some may be good, maybe even brilliant but many will lead you down the wrong path and you don’t have the time or resources to lose focus.
Ultimately, this is the most important lesson I would impart to my student self. Stay. Focused. Many individuals excited about what you are doing with glitzy logos backing them up will come knocking on your door asking you to do X or Y. Most of these opportunities will seem like a huge win given that they are getting your foot in the door of this major corporation (which could mean big $$$!). However, if the ask is taking you away from your core mission, or is steering you into a product that is not part of the bigger picture of your platform — you must learn to say no. No to the pilot, no to the contract, and sometimes even no to the $$$.
Focus is what will set your team apart. Focus is what will set your product apart and focus is what will allow you to grow a cogent customer base that will catapult you to the next stage of your business. Speaking of which, Radical Focus, is a required read for any startup looking for how to stay focused on the success of their company.
That’s all I have time for, for now folks. Hope this helps techies :) To be continued…
