After spending 4 months accelerating my startup at Techstars, I realized that what most of tech startups are selling is an experience.
I’m Hannah, founder and CEO at Babbler. We change the way PR gets done by connecting companies with relevant reporters.
We completed Techstars accelerator in Austin in May 2017 and decided to join this journey for 3 reasons:
- We were looking for constructive criticism ; and we needed to get out of our comfort zone.
- We knew we would solve the problem faster by having access to the Techstars network and accelerator program (5000+ founders, mentors and investors worldwide)
- Learn how to scale our business and automate sales and csm by exporting our SaaS in a foreign and huge market: the US.
We are simplifying the process of getting featured (for companies) and curate PR content (for reporters). Actually, this is what we were thinking we were doing before starting Techstars…;)
If you’re not embarrassed by how naïve you were six months ago, you’re not learning fast enough.
Listening is a lesson: during the first month at TechStars, we started with the “Mentor Madness”: meeting with a mentor every 20 minutes for 20 days! It’s not an elevator pitch but a marathon pitch;) You spend 20 minutes with each of them: spend 5 minutes pitching and 15 minutes getting feedbacks. I met with around 110 mentors total, in less than 3 weeks.
We had gathered total more than 250 feedbacks from killers in different domains (marketing, tech, product, finances…).We all agreed that we found out a real problem to solve: PR is broken, Reporters are spammed with wrong press releases and companies spend hours trying to get answered and hoping to get featured) but our solution was not delivering its promise yet because of a poor UX and UI and an industry with strong traditional behaviors. If your users waste hours understanding how your product works, you will end by making the experience longer and the process tricky..even if the product makes them save time if they use it correctly!
The 5 biggest lessons of this experience:
Lesson number 1: Stop selling products and start selling the experience.
Whatever your product does, technologies exist to make humans’ lives: easier, faster and smarter. For example, I use Uber rather than regular cabs because the driver arrives in less than 5 minutes, I don’t need to have cash or pay by credit card, I know in advance how much it will cost and who will be the driver. So why should I go back to regular cabs ? Switching to Uber and change my behavior then sounded like an evidence and as it was easy to use, I kept using it and more and more.
What makes the difference is the experience you make of a product, service or software. If the experience worth it, I can CHANGE my behavior with no friction. The solution to the problem you are trying to solve in your industry has to be evident but also easy to understand to ensure a quick and effective adoption.So it means that you actually can’t change a behavior or introduce a new usage on a market if the experience is harder or longer at the beginning. You have to make things SIMPLE to get your product adopted quickly and save your ressources.
That’s why UX is key, if you want to sell. From the simplicity of on-boarding to the user interface and navigation.
As Uber’s founder Travis Kalanick is fond of quoting:
“Uber is efficiency with elegance on top. That’s why I buy an iPhone instead of an average cell phone, why I go to a nice restaurant and pay a little bit more. It’s for the experience.”
For Gary Vaynerchuk, businesses are selling an experience in which the client saves time and/or get more convenience:
“In a marketplace of distraction, the company’s, products and services that can save you TIME, are going to win. That is why Amazon is a market leader. That is why Prime Now wins. They have simplified the process of buying and selling. They have saved you enormous amounts of time.”
Lesson number 2: Focus on what matters to your users and set up clear KPIs to achieve.
What your users want? Focus on one problem to solve, linked to 2/3 features maximum and execute them perfectly. Be very good at one thing, make it right and users will start using it. While redesigning the UX of our key features, we removed the ones that were not the most used and implemented VueJS as a front technology to align design, experience and performance.
In our case, each side of our market place has its own expectation of the product: companies come to us to connect with reporters and get featured ; reporters come to us to access targeted content for their next articles.
So we needed to create more conversations (inbox, messages sent) and engage better the reporters by providing them stories they will cover (newsfeed views, stories picked-up/covered).
How we doubled interactions between users:
Just by adding a contact button on the press release web page, that opens an inbox conversation.
How we doubled the scrolling rate of the Babbler Newsfeed: by changing the search system, show more stories before scrolling and refreshing the UI.
How we increased our NPS (net promoted score) by listening to our users:
Lesson number 3: iterate until you crack it!
To iterate means, then, to repeat some procedure based on the result of a previous version. To optimize, to improve, to improve the derivation of knowledge from previous versions.
This means defining a hypothesis, building a small product feature which can test that hypothesis, then learn what happens, and adjust accordingly. This simple method is showing amazing results, and enables companies to make small bets on many ideas at once, and allow the findings to determine which ideas move through the gates.
Always judge the design by the results that it causes in your users’ behavior.
Lesson 4: Cut your burn rate as quickly as you can
Burn rate is essentially the rate at which your company is “burning” through its available cash. This is usually represented in terms of months.
The “burn rate” indicates how much money a company is losing over a given period of time.
Money is fuel for companies: it propels your startup forward on its path toward growth and profitability. If you use your fuel inefficiently or burn it too fast, you might not reach your goal or destination.
The amount of time you can keep burning money is called the runway. It indicates how long your cash balance will be able to cover your losses. This is how you calculate it:
Runway = Cash Balance / Burn Rate
To reduce your burn rate and increase your runway, you don’t have many options: you have to sell more while spending less money. We reduced by 63,6% by reducing our costs (HR, Tools, G&A..) and automatized sales (inbound qualified marketing with a freemium model).
Lesson number 5: kill your pitch
The Demo Day pitch is the day that closes the Techstars program and when you pitch the best version of your company in 2 minutes in front of 150+ mentors, startups, VCs, friends and family and partners.
Pitching in 2 minutes is an art.(an even more when english is not your native language).
Here are the best tips I took out of this experience:
- Tell your story as you show your product: they are all here to hear a story that they will want to see the next chapter. Don’t focus on features but on what they allow your users to achieve and the vision.
- Use facts and datas: there is no place for bullshit and you have to get the audience’s trust. Show there is big problem (market size, studies), demonstrate your solution has user traction (product kpis growth) and that you already make money out of it ($).
- If you’re not excited, nobody else will be! Speak with conviction and the passion you have for your startup. Be yourself and bring your energy!
You are up beside other companies, and even worse, against people’s phones. Make investors, press and everyone else pay attention.
And make sure the pitch is clear. Here is mine:
Babbler – Techstars Demo Day Pitch
In Closing: Expect Everything to be Unexpected
Set up assumptions but never forget to validate and question them permanently. There are no rules to success in Startup Land!
Building a startup is one of the most humbling and amazing experiences in the world.
I’m honored to have been part of this class and now a part of the Techstars community.
Thank you Amos Schwartzfarb for this opportunity.