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At @HustleFundVC the way we work with founders is by investing a quick $25k check (usually after 1 conversation) and then working with our founders on a growth project of sorts for about 1 hr per week for a few wks.
Some learnings from that:
Some learnings from that:
1) There are some companies who will knock it out of the park after that coaching period. And that's great.
But most will not. And that can be frustrating: "Why aren't things working??"
But most will not. And that can be frustrating: "Why aren't things working??"
2) To be precise, when founders say that, what they really mean is "Why don't my costs fit under my revenue numbers so that I can sustainably grow and repeat that growth over and over?"
3) Usually, there are a couple of things that need to be fixed first. A) More precise tracking to be able to see *by acquisition channel* how things are performing to know where there are issues and B) a better way to test creatives and tie them to outcomes in those channels
4) After that, most of the time - not always - there's not a whole lot more additional optimization that can be done around acquisition costs. (see other tweetstorm about this: ) But, there can be a boatload of optimization around increasing revenue...
5) And there are basically 2 ways to increase revenue: A) Sell at a higher price - maybe even to a different audience and maybe w/ a slightly changed offering or B) Upsell your existing customers so they are worth more to you
6) The main thing in considering the path to take when you don't have much cash at your disposal is what will be the best use of your time? For example, building out 10 new products to upsell may generate a lot more revenue per customer but will cost a lot of time
7) Going through this time is often frustrating to founders, because you've already put in a lot of hard work into an initial product. The reality, unfortunately, is that startups are ups and downs and mostly downs even when things are going well.
8) But what people often don't realize is that having an initial set of learnings and customers is actually a great baseline even if it seems like there's still a lot of work ahead. It's faster to do cust development w/ ppl who already know and trust you. So your cycles shorten.
9) This is often a hard time period to get through mentally (and I've been there too) and so my biggest value add is actually much more along the lines of literally cheerleading - pumping founders up and making them feel good about themselves again.
10) Having a positive mindset is important to being able to solve problems & get through tough times. It's a lonely experience to be a founder-CEO and plough through these types of problems. This is really what my job is - working w/ founders to keep their head in the game.
