Key learning – “ALWAYS BE PITCHING”

ALWAYS BE PITCHING!!

(picture taken from http://www.thecompletepitcher.com)

IE Class Managing the Tech Startup – learnings from my view as a foodieSquare co-founder

First of all I would like to thank Enrique Dans for putting together that great class. It was really insightful to have speakers with very different experiences coming to class and chat with us.

My key take away is “ALWAYS BE PITCHING” as we from foodieSquare literally pitched our company to every single visitor and got great contacts, insights and even an invitation for presentation in front of investors out of it. You never know how the person in front of you might be able to help you, even if it is “only” a potential customer – a pitch is absolutely worth the effort so –> ALWAYS BE PITCHING!!!

Going chronologically by speakers I will shortly sum up my key take aways and relate them whenever appropriate to foodieSquare:

Jorge Mataserial entrepreneur 

It was interesting to see his view on how to raise money and how much to give away of your company for that. Basically “don’t give away too much” equity and try to make money on your startup. He always goes with a 2-3 million pre-money valuation for the seed round. My take is that this is possible for a serial entrepreneur who already has a track record of successfully launched start-ups, for a fresh entrepreneur the valuation might be a little lower.

His key investment criteria is 1st scalability of the business and 2nd the team. Could not agree more. For foodieSquare scalability means that the back-end processes of delivering the product is working smoothly, as soon as this works, there is no growth limit for foodieSquare.  Management team is of course key, without smart and dedicated people driving your start-up, nothing will happen and especially the pivoting part is not happening when it should. I liked that Jorge pointed out the importance of a balanced team. He likes to see clear division of team roles like ceo – finance – operations etc.

I would however also emphasize the importance of a network of mentors that supports you. As a small start-up you usually have three full-time employees and some interns. Covering all the knowledge you need is almost impossible and having experts guiding you in for example online marketing or in our case food marketing is essential.

One controversial point is, should founders invest their own money. Jorges’ take is, not too much to be scared to fail. If you put in too much of your own money, you e.g. rather sell pizza than admit that your business hypothesis does not work. I believe that some money should be put by entrepreneurs, but they should not put their whole life at risk for this one shot.

Important once you have investors – be upfront and honest especially with bad news. They will honor this honesty and it helps building a long-lasting relationship build on trust.

Now some quotes

  • Selling the company is like opening a water melon – early not tasty – late not good any more
  • Make strong due diligence with your VCs – ask invested companies – how are they?
  • Get CEOs from the countries you want to make business – it is cultural
  • Most of the value of the company is not in the technology – it s how you solve the problem for you consumer – how you execute

Inaki Arrola from www.coche.com 

As a web-company you have to focus on usability. It is crucial to have a CTO in a tech company that controls usability. You also have to be able to transmit your vision and dream to your CTO who should then build the e.g. webpage accordingly. This is really hard to do by only off shoring, so I also encourage every web company to find a good and dedicated CTO asap.

As an investor Inaki takes the team as the more important factor than market numbers and he also appreciates honest and straight forward people.

What I personally liked is his friendly approach towards competition, he said e.g. “Speak good about your competitors also on twitter”. For foodieSquare I can agree, each competitor is welcome as the market has to be developed and there is enough market for the good companies to succeed – there is always place for a second place after  foodieSquare 🙂

Gabriel Aldamiz-Echevarria from www.chicisimo.com 

Gabriel from chicisimo emphasized on the importance to bring out the first version of your company webpage as quickly as possible. The first prototype of chicisimo was online after one week and was supposedly really ugly. But it helps on getting data on how people react! This helps focussing on the customer needs from the start. A process that we at foodieSquare went through was feature cutting. We have many many good ideas but decided to cut the first foodieSquare version to a more basic one in order to quickly be out there.

Very important – When you build a company you are alone, nobody cares about you – you need to find a community that cares about you…belong to a community! I think we found our core community in the Slow Food movement. We share their philosophy and at the Slow Food Fair in Stuttgart (April 2011) we got in touch with many clients and producers.  Our idea was broadly accepted and appreciated as we solve a real problem for the Slow Foodie community – namely getting in touch Slow Foodies with small artisan food producers that produce in a biological and sustainable way.

One thing I heard from different experienced founders – we should not expect too much from the first launch. At chicisimo; “When we first launched  – the first weeks were disappointing. Then we changed things and it started working.”

For PR; Understand what the possible pr contacts are currently writing about. Generate content that is useful for journalists – they do not write about your company…give them content!

Jesus Encinar from  www.idealista.com

About 30 start-ups started before idealista –> not first mover. I think second movers have a strategic advantage of learning from their competitors mistakes and be more agile in implementing in a better way/direction.

I liked his approach on getting his first database – hands-on guerrilla style – he and his team walked 10.000 km around Madrid to get their 5.000 first announcements. Kind of like we at foodieSquare did – we went to the Slow Food fair to get our first 500 e-mail addresses of potential customers and over 50 producers who are willing to join us.

Be persistent – Jesus talked to more than 150 potential investors to get funding…”every guy with one dollar in the pocket I went and asked for it” – that is the will to succeed – in the end you only need one investor who supports you!

Usability is key: Design by addition is bad – forget about website structure – design each page as if it is unique  – focus on usability and interface – be customer centric!

Be no 1. in a mid-sized country is better than no 2. in 10 countries. Your product has to be verified in one place before you take it international!

Alberto Torrón from www.todotaladros.com    

Albertos insights in short – all very relevant for foodieSquare:

  • Right packaging is key – use high quality boxes that wear your logo.
  • Customer service – direct contact with customers, if possible directly by founders, is key and builds trust

Pedro Pedro Jareño from www.minube.com 

Perdo; its all about community interaction – not primarily about monthly visitors. People love experiences – for example TV shows about cooking. Sell an experience that people trust! For foodieSquare it should be possible to get people interact about the very emotional product we sell, food with a story!

How to build a community:

  • Target customer identification. We need foodies, bloggers, active users…it’s a everyday job! –> At least one person at foodieSquare is responsible for community management and building
  • Then talk a lot with bloggers. Try to be a reference in your blogger community. Get the blogger community hooked through the blogger of your target market
  • Write personalized email to each blogger (they did it with 2.000 bloggers) and it worked. 2-3 people did that full-time!!
  • Get users – each new user is a great success – “I need new users each day!”
  • Want user to come again – Important is proactivity – who that you are interested in each one of them – show constant activity – be the most active user on your own website!
  • Then dynamization
    • Its about conversation – tell each user that he is more than a customer – each user is an interesting person – talk about food
    • Contests – important – each month to two month a contest to get people active on a website
    • Create badges!
  • Loalty-fidelity
    • Newsletter – not about selling but about telling a story – personalized Hello “name of user” – Pedro e.g. spends 1 day answering the newsletter
    • Take users for a trip
  • Public recognition
    • People like to be congratulated – tell them they are important. Maybe its just a prize to tell the community – “foodie of the week” – “foto del dia” – “recipe del dia”

Amazing: minube did not spend a single EUR in marketing – it’s all viral!!

Where to launch your website: minube launched at a blogger community conference – wonder where foodieSquare is gonna launch 🙂

Great marketing idea; Pedro from minube organized a trip around the world to find people like them, bloggers, entrepreneurs, each city 14 days, writing the story in his travel blog – he asked for sponsors – edreams, hotel.es and orange for expenses. He had a website for the blog and asked for people to contact him. Got great feedback from the blogger community.

–> We have a similar idea for foodieSquare, inspired by Pedo; we want to start with a culinary tour through Germany in order to get in touch with our and potentially new producers and blog about our experience! Like minube we will try to get some minutes airtime per week in a tv show

Ronald J. Friedlanderwww.ReviewPro.com

Ronald has an absolute obsession about product process and costumers. He spent no money on marketing but focused on product- now he has the best technology of the world in his sector. I wonder how much you can achieve without marketing costs in a B2C framework, but I think it is possible to reduce the amount by increasing customer satisfaction and encouraging returning visits.

He for example started in the huge hotel market – that allows for mistakes and even with a mediocre sales forces or product you can succeed. True for every start-up; Look for a big and growing market!!

What I loved is that his company started with no industry expert and still does not have one – Ronalds take; It is great to not know a lot about the industry because you do more than you over think.

In B2B he went to the big chain, offered them a very aggressive price and got the first client.

No matter what happens – you have to be willing to be rejected 80 times – be persistent but adapt to win. True for every small start-up, many people tell you that you cannot succeed and you have to pull through!

Some insights in short:

  • User generated content; People have an inner urge to contribute with reviews if they benefitted from reviews
  • Negative reviews need rapid response as these have direct impact on your sales
  • Being only in one vertical gives us the advantage to focus – so focus on one thing, do it really good and penetrate that market well before diversifying!
  • Having VCs enter is seen like the holy grail for some entrepreneurs – but remember that you give away your company for that money!
  • Focus on product and clients – be obsessed!! –> If you want to grow big, focus on your customers!
  • We really take care of the customer – we give them training –> for foodieSquare that means giving our sellers really good training so that they can use the backend of our marketplace
  • Telesales/-marketing does work! Get the fuck out there and don’t come back until you have a contract! This is the kind of attitude you especially need in at least one of the founders of a start up. You have to have someone pushing and pitching all the time! My favourite saying: “always be pitching!!”
  • On pricing and discounts; We gave a discount for x hours of working with our product – contribute non-monetary things – be careful with the prices – no exception for prices!!
  • Have a vision on today and down the road – choose the right partners for that
  • We are absolutely obsessed with measuring things! If you don’t measure it you can’t manage it!
  • Parable of the Taoist farmer – it is an absolute rollercoaster – don’t overexcited on the highs and don’t get too beaten down in the downs

Comments and questions are always welcome!

Have a delicious day!

Sammy

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