There are more and more entrepreneurs out there, we get it. That means more and more products in the market, more choices for users, and ultimately, LESS room for a failed launch. Still following me? Great.
Now, when I started Producteev a couple of years ago, I remember everyone was telling me about building a MVP (Minimum Viable Product), and then iterate from there, that’s (kind of) what we did. We took a little more time than usual to nail the perfect task management app, but it worked out pretty well in the end :).
Today, I don’t believe it is the way Product people should think of their release. It needs to be (almost) perfect, at launch.
I am not saying you need to pack your product with lots of features at launch, but it needs to be complete. If users of your app, or software are disappointed after their first use, there’s a big chance that they’re not coming back ever.
Take more time, make your product rock at launch, then you have your chances.
Like many of you, I am getting and sending many email intros every single week.
Let’s start by defining what an email intro is: someone from your network (let’s call him John) is asking you (Bob) to introduce him to someone you’re connected to (Mary).
Let’s describe a couple of potential roadblocks here before I’ll start laying out best practices:
A. Pretty often, you hardly know John, you just met him, so it might put you in an uncomfortable position to recommend him to someone else, (often) more high level.
B. At the same time, you might be connected to Mary on LinkedIn , but never met her, or don’t know her enough to intro people to her.
Those are the two main pain points for intros, and that’s why many people do it wrong. How do we solve those?
- Ask John AS MUCH background on the intro as possible. Why do you need it? Introduce yourself, give a clear overview on why Mary should connect with you.
- Doing an intro is actually a little bit of work for Bob, always. If you don’t feel like doing it, don’t do it, but DON’T SEND an 1-line email to intro John and Mary, except if they’re both expecting the intro. Which brings my next point.
- Most important mistake people make: ALWAYS ask Mary if she’s willing to get the intro. Honestly you’d be surprised by the answers. More often than not: she doesn’t think that would make so much sense / she’s very busy / she doesn’t need another email thread to manage.
- Once you write that email introducing John and Mary, even if they’re both aware of the intro, define clear action steps, and thank Mary for accepting the intro.
Frankly, if you respect those basic rules, you’re simply optimizing your chances for answers on both sides, and help your network make things happen.
At this point, you’ll provide value to everyone. #WIN
What I’ve noticed over the years I’ve been working in the Internet industry is the number of people who are starting a company (startup), for the wrong reasons, and therefore failing.
I’d sum this up that way, if you’re building a startup because you believe that it’s the best way to become rich, then, let me know tell you right off, that this is going to be a disappointing ride.
When you’re starting a business, where employees, investors, users and customers are involved (and probably a lot of other stakeholders), YOU - the Entrepreneur - are the least important piece to satisfy.
Don’t think about maximizing your own profits over time, make decisions that are good for the business, and very often, those decisions are inversely proportional to your own interest.
When running Producteev, I had to make a lot of though decisions over the past 4 years:
- Raising money when I was already 2 months late to pay salaries,
- Pay myself low salaries the whole time, even though I live in NYC with 2 kids and nothing in my Savings account (!!),
- After we almost died 4 times, insisting and convincing my investors that it was worth putting a little more money because we were so close
And I am missing a bunch of stories here. What I am trying to say is that I could have left and take another job, or start something else. Financially speaking that would have been a much better choice at that time.
But I always made decisions that were good for my company, and never thought of my own personal motivations. I actually couldn’t care less about how much money I would make at the end of the story. My only goal was to make Producteev a success, so I could build on this, for my career.
That’s my message: As an entrepreneur, don’t think about money, focus on what will make your Business a success, then, money will eventually come to you (not always, but often enough).
Since I got that question so many times, let me tell the story of our acquisition by Jive.
It all started with an email on August 1st, 2012, that landed on our generic email address : contact @ producteev.
I check this inbox every other day usually, in that case, it took me 2 days before I replied…
In 2012, we got a couple of those emails from other parties, so I knew the process, and was going to schedule a call quickly.
We got on the phone the day after, the call went very well. They had done their homework on the space and Producteev, and seemed to know our product really well, which was definitely something I appreciated. At the end of the call, no next steps though..
One part of the conversation was really important, the one when I mentioned that we had a term sheet to raise more money. We were indeed about to sign that term sheet with great investors, at great terms, and I was really happy about it. I wasn’t looking to sell Producteev at all when I got that email from Jive. We were profitable, growing and working on a big product update. No rush at all.
Like I said, no next steps at the end of the call. That meant that nothing was going to happen anytime soon..
Well, I was wrong. The day after, at 8am, I get a call from the VP Corp Dev (whom I quickly had on speed dial shortly after by the way!), with a short message: “Ilan, we want to compete with your new round, would you consider an acquisition?”. Gotta love the honesty there. I said, sure, let’s talk about it. A couple of days later I was in Palo Alto to pitch some of the Jive exec team, and it went really well.
Fast forward to a month and half later, Sept 25th, I am back in Palo Alto for a big presentation and live demo to the whole exec staff : CEO, CMO, CFO and everybody else… They were all there, and to be honest, I didn’t feel any pressure, because that’s my life theory.
Everybody sounded REALLY excited by the potential of this, and Tony, Jive’s CEO came shaking my hand, and told me : “I told my team to move fast with you guys, really fast”. From that point on, I knew it was going to happen. The drinks we had with Oudi (my manager now), and the VP Corp Dev, on that night, were really fun. Well let’s say, we all got drunk to freely start sharing some numbers.
Between that day, and the day of the announcement, there was exactly 35 days. Which is exceptionally fast to close a deal of this size..
My days and nights during the acquisition process were simply the busiest and most stressful I’ve ever had. The “due diligence” as they call it, is very time consuming, but hopefully, if everything is clean, you go through it, it just takes a lot of time.
And suddenly, the announcement goes live on November 5th. This feeling of a fantastic achievement where your investors thank you as much as your users is really hard to describe.
This is really what I am most proud of: we did this thing right. Usually, when being acquired, you’re leaving some parties unsatisfied: employees, users, customers, investors, founders… Hard to content everyone right? Well, that was the only condition for me to sell Producteev, I wanted everyone to be proud of the outcome, and I can safely say that that’s the case today.
Will have more blog posts soon on things I learned as an entrepreneur from this acquisition, stay tuned.
When browsing AngelList for interesting startups (and there are many), I must say I was astonished at the valuations I was seeing… Especially for startups with unreleased products.
When you understand the startup life cycle, this can’t end well…
A couple of thoughts there:
- Entrepreneurs need to understand that high valuations at a very stage is most of the time, a BAD thing. Why? Simply because the chance for you to raise money again at a higher valuation after reaching your first round’s goals are pretty weak. I am not pessimistic, but being realistic there.
- Also, in case this startup thing doesn’t work out, and you have the opportunity to exit early, your high valuation at the first round will make your investors pissed when selling at a low price.
For Producteev’s first round, I settled on a (very) low valuation on purpose, with a small round ($100K), just so I could have investors I really wanted to bring around me, and I was right, since almost no one declined my offer.
Think about it when working on your valuation!