Illustration by Rogie King 🤴

Why we send our friends investor updates about our startup

Ever since starting Yala, we’ve been sending a list of 36 of our best friends monthly updates about our startup. Not just random, newsletter-y nonsense, either — I’m talking serious business updates, including all our metrics, roadmaps, hopes and fears.

Our friends became our confidants, advisors and promoters. They became invested in our startup — not with money, but with time and energy.

For us at Yala, these “friendvestor” updates have become a powerful tool. They force us to take a monthly breather, figure out what’s been going on and summarize it effectively. They make us take a new, fresh look at Yala every month, ensure we’ve been spending our time effectively and that things are moving in the right direction. They cause us to be cynical and honest about whether Yala is showing promise of becoming a successful business or not.

Public companies have to provide timely, thorough reports on their businesses. Venture-backed businesses need to provide updates similar to ours for their investors. And, in my opinion, every side project, small business or design studio should take the time to compose thorough updates, even if they don’t have investors demanding them.

I’d like to share my framework for composing these updates with you.

What do friendvestor updates include?

• Recent product changes and the philosophy that guided them
• Product roadmap and plans
• Growth metrics
• Retention
• (If you have them) Income + burn rate
• Miscellaneous articles, blog posts, features, partnerships and cool things that happened at Yala in the past month
• Anything else you want to include!

Such updates are usually reserved for a startup’s investors, advisors and other stakeholders. These people need to know what’s going on because of their involvement in the company. Yala doesn’t have any external stakeholders, so no one needs to receive our updates. No one needs to keep track of what’s going on at Yala.

Except for us, that is. We need to keep an eye on what’s going on at Yala. And there’s no better way to keep ourselves accountable than composing a monthly rundown of everything we’ve accomplished in the past month, including all the nitty gritty.

Composing friendvestor updates

For every company, the process of composing a friendvestor update is different, and depends on the different tools you use to track your metrics. Here’s my process:

1. I take a look at our “Yala Development” Trello board to see all the cards we’ve moved from the “Coming up” stack to “Ready for deployment”. I list the major ones and explain the reasons we’ve chosen to focus our efforts and resources on building certain features before others.
2. I grab all the different data points from Mixpanel, comparing them to last month’s data. I dig in deeper to see if there are any additional metrics that can prove useful and insightful to add to the mix.
3. Mixpanel also provides me with our retention metrics. Since Yala is very young, I check monthly retention for our entire userbase and for our latest cohort to see if we’re improving.
4. Looking at our blog and social accounts, I choose the most important things that happened at Yala this month and add them in.

Formatting friendvestor updates

I find that the format of the updates plays a major role in their effectivity. At first, I used to send longer, wittier updates. With time, I learned to tone them down. Here are a few tips I’d recommend for composing your own updates:

1. Pool your updates into 3–5 different sections and adhere to them. This adds a lot of coherency to your updates.
2. Be consistent. If you’ve tracked a metric last month, don’t discard it this month unless you’ve come to the conclusion it’s absolutely irrelevant. Updates are about retrospection as much as anything.
3. Don’t sugarcoat anything! I can’t stress this enough. If a metric hasn’t been performing as expected, include it in your update and draw attention to the fact that it’s been misperforming. Remember to fail hard and fail fast.
4. In my experience, using bullet points for everything helps keep the update super-focused and easy to skim.
5. Don’t be too serious. These need to be enjoyable to read and more importantly, fun to write. Throw in the odd emoji, find quirky headlines, add some jokes. It’s all cool.

Air your dirty laundry

It’s easy to be tempted to keep these updates to yourself, especially when things don’t look too bright. The process is, after all, a self-meditative one. In my experience, though, sending updates to real people is crucial.

1. It force you to do a good job. People tend to skimp work that no one will ever set eyes on.
2. Your friends become involved in your startup. You make friends by sharing. People who’ve been exposed to the inner workings of your startup are its most supportive allies.
3. They offer feedback. Startups validate their product by exposing it to users; They can validate their business by exposing it to friends.

Who should I send these to?

Send your updates to everyone. Seriously. Send them to your parents, your friends, your coworkers, the bartender, your competitors. The more people who get them, the better. It improves the chances of someone figuring out and asking the difficult questions. It increases the number of people who are involved in your business. And it forces you to build an actual business, without sugarcoating anything.

I’ll be happy to send our updates to you. Sign up here.

Example friend/investor update

Hello, friends!

This is a small introductionary note from you and your team. You’re sending this to your friends — say hi!

Product:

• Start out by explaining the overarching goals of last month’s development. Have you been responding to user feedback? Have you been revamping the UI?
• Feature release #1
• Feature release #2
• Major feature release #1
• If you can include a little gif of the newest features, that’s fantastic — just make sure it’s small enough to be emailed.

Growth:

• Data in (parentheses) represents change from last month.
• How many users do you have, in total? (% change from last month)
• How many users did you add this month? (% change from last month)
• Key performance indicator #1
• Key performance indicator #2
• A fun stat about your app

Retention:

• This is the most important factor. Explain how you measure it.
• All time week 1 retention
• Latest cohort week 1 retention
• All time monthly retention
• Latest cohort monthly retention
• Are you happy about retention? Say that here.

Misc.:

• A recent article about your startup
• A recent news item that has to do with your startup
• A new hire, new customer
• Anything else that’s important or exciting

What’s next?

• What are your plans for the upcoming month, product-wise?
• Which metrics are you focused on improving?
• Where would your startup be 1–3 months from now?

Closing off — thanks everyone!

Names of everyone on your team.

Sign up here to get our upcoming March update.