We’ve shared many milestones on our LinkedIn page this year – our successful capital raise, the growth of our team, over $80,000 regifted to charitable organisations in New Zealand and the amazing partners that have signed up each month to join us as we scale the business.
But the reality of an early-stage start up is not always glitz and glam, taking on the competition and trying to do good in the world. There are tough conversations, even tougher conditions (we’re looking at you, Covid-19) and lots of adjustments along the way. So, in the spirit of transparency, we thought we’d share our top five lessons for the year. Hopefully this reaches a few other early-stage dreamers, founders and operators and provides a bit of encouragement to keep riding the rollercoaster that is getting a new venture off the ground.
1. Check for confirmation bias
One of the easiest traps to fall into when building a startup is believing you’ve achieved product market fit based on the success of onboarding family, friends, colleagues, acquaintances or people that think like you. We had this experience as a business during our pilot phase – when onboarding early users, they knew the outcome we were trying to achieve was regifting money to charity and so they acted accordingly. But going out to market in the middle of a global pandemic and convincing people to regift money they could keep for themselves? Now that was a different story.
What advice would we give for other early-stage startups looking to achieve product market fit earlier? Be aware of the way in which you test your product. Are you just getting feedback from people you know? Are you using both quantitative and qualitative data to make decisions? What actions are you able to encourage in the early stages that you might lose control of at scale? This is key to making sure you achieve product market fit, rather than just validation from your peers. Particularly if you are setting up a social enterprise, people are naturally encouraging of ventures that have a positive impact on the world, so it’s vital to test outside of your bubble.
2. Be aware of behavior vs. intention
Closely tied to the above lesson is understanding that user intention doesn’t often mimic behavior, particularly in the charitable sector. For example, if you went out and asked a group of people whether they would gift money to charity if they had the opportunity, most would say yes. Why? Because society tells us that it’s the noble thing to do. However, when someone is by themselves in front of their desktop, tossing up buying a new pair of shoes or donating, the outcome often won’t reflect the same sentiment they shared in the survey. Although this is basic consumer psychology, it can be easy to miss and wonder “why aren’t people acting the way they said they would?”.
This is where our investment in brand came in handy (shout out to the amazing team at Previously Unavailable!) in helping prospective customers understand our purpose as a social enterprise and inspiring generosity. But it’s important to note that good branding and storytelling isn’t a fix all for the behavior vs. intention conundrum. Customers not behaving the way you expected or wanted them to can be a sign that you need to fine tune your value proposition – which can be a gift in itself! What are customers doing instead? What would a product look like that serves the new behaviors you are observing? Don’t fall victim to the sunk cost fallacy – listening to your customers and pivoting early saves a lot more time and money down the track.
3. Don’t just know your customer, involve them
There’s so much information out there about charitable organisations, the climate they operate in and the challenges they face. However, nothing has been more valuable for us than speaking directly to charitable organisations and building Supergenerous alongside them. From early on, we were lucky enough to have partners like Childfund, Oxfam and One Percent Collective who were happy to share the good, bad and ugly about early iterations of our product. Was it embarrassing when we got it wrong? Of course! But what would have been more embarrassing is building an entire product that completely missed the mark because we thought we knew enough on our own. We continue to learn alongside our charity partners everyday – running workshops and testing proposed features with them in real time. Likewise with our users, we have collected feedback from day one which has been vital to not only the way we communicate but also our product road map.
The lesson here, is get to know your customers! Not through a market trends report but by picking up the phone, asking what they think and staying in touch. This can be hard when you’re a small team running at full speed to build out a product but even taking the time to create a basic feedback loop will save you many a mishap. It’s also a great move to build brand trust – making your customers feel like they are having a conversation rather than being talked at all the time.
4. Chase support, not money
It’s one of the most reported on milestones for early-stage startups: capital raising. And it’s exciting to have the funding to build a company! But what’s more important is having the right investors and advisors in your corner to support your startup’s growth. There are plenty of people willing to invest in a promising company but what else are they bringing to the table? Mentoring, experience and support? Or a hands-off approach and unrealistic expectations? If things don’t go well, will they have your back? It’s important to make sure any investment you take on is aligned with both your personal and company values to have the best chance of success.
We have been incredibly lucky to have the best investors, board members and advisers as part of the Supergenerous team. At the end of 2020 we went through the Akina Impact Investment Readiness Programme and could not recommend it more highly as a vehicle for finding value-aligned investors. For early-stage startups that aren’t in the ‘for impact’ sector, some advice we can give is to treat investor meetings the same way you would a job interview. Ask to speak to founders at other startups they have invested in, understand what their risk tolerance is, learn about why they are interested in your business. Any reputable investor will be more than happy for you to ask questions and will want you to feel comfortable with the terms you agree on.
5. Look after yourself and each other
Early-stage startups are exciting but can also be stressful. They’re usually made up of the craziest dreamers and builders, sacrificing their time, energy and salaries in the hope of creating something epic together. But no company or vision is worth sacrificing your mental, emotional, physical or spiritual wellbeing for. Startups come and go – we’ve all read the stats about how many don’t make it out of the trenches! But what does remain is the way you show up for work each day and look after yourself and your teammates.
For us, this looks like company-wide meetings where we share the good, bad and ugly of not only our day to day but also what’s happening outside of the office in our personal lives. We are all so much more than the work we do! It’s also regular team lunches, checking in on each other when we notice someone seems a bit low and creating a culture of psychological safety where we support both the wins and the learning opportunities. We have a dog-friendly office, are encouraged to take days off for wellbeing and can work as flexibly as we like. The lesson here is to prioritise wellbeing, in whatever way works for your team! Even if you’re an early-stage company, remember that culture scales as your business does so investing in your people is one of the best things you could do.
In conclusion, it has been a big year for us with lots of important lessons along the way. To my fellow founders out there – remove the expectation to get it right the first time! You don’t need to know it all. Instead, you need to be able to listen, trust your team and act quickly. The best startups don’t succeed because they lack obstacles, they succeed because they persevere despite them. Here’s to an awesome 2022, building on the lessons above (and learning many more along the way I am sure). And finally, a massive thank you to all our donors, partners and supporters. We wouldn’t be where we are today without you all.
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