I failed my first VC-backed startup — 100 lessons learned

For the last 2 years, I worked with a small talented team on meetric.app — an app to help managers have better meetings, through

We built a great product and had good traction: in 18 months, Meetric was used in 150,000 meetings across the world.

Unfortunately, we never found product-market-fit. The strength of our product was decupled when the whole team was using it. Unfortunately, team adoption was difficult. Managers often ended up using Meetric on their own. Eventually, many would go back to using the product that the whole team was using (eg. Google Docs, OneNote, Notion, etc.)

After 2.5 years on a tiny founder salary and an intensely competitive space, we decided to not raise a seed round and wind down instead.

Even though I failed and did not provide a good return for our investors, I feel very lucky for having been on that incredible journey.

My learning curve was exponential during that time and to keep this article interesting, this is my attempt in summarizing what I learn in bite-sized formats (each paragraph is unrelated to the next):

Space

Are you on the ‘right mountain’ = is the space growing + is the timing right + is it untapped enough?

Competition is good: it validates your problem, it builds solution awareness to the public, it gives you ideas, it challenges you to go faster.

You can beat competitors in many ways: faster/cheaper/better products, unique access to the market, built for a specific untapped niche, etc.

On why your value proposition is better than your competitors: have a crystal clear, logical answer — don’t BS yourself.

‘Saving money’ / ‘making money’ is one of the best value propositions out there.

Pay attention to the history of your competitors — fundraising, hiring, marketing, product — you’ll experience some of it.

There are people in the world who went through what you are going through. Find them and reach out to them — you don’t ask you don’t get.

Early in your journey, having 1 to 2 advisors you catch up with regularly is more than enough.

About potential advisors: if your feeling at the end of the first call is anything but “oh my god, this was awesome, when can we chat again”, don’t bother — he/she is not the right advisor for you.

Product

Find a problem worth solving: something painful, experienced by many, that you want to spend the next few years working on.

Interview 3 people in your target audience. Ask about their typical day and what frustrates them (in the space you operate). If none of them mentions the problem you aim to solve, then either it’s not a problem or you have the wrong audience.

Solving a clearly defined pain (“our app removes 5 hours of repetitive admin work, per week”) is a more powerful value proposition than improving a process (“it’s easier to do this with our app”).

Even though a painkiller is more effective than a vitamin — there are still millions of people who take vitamins every day.

To be successful, a painkiller needs to go from 0 to 1 — non-existent to existent. A vitamin though, from 0 to 10–10x better than its current alternative.

Once the problem is identified, your #1 goal should be to find product-market-fit (PMF) — nothing else matters.

MVP doesn’t mean it needs to look like shit. Loading speed, look & feel, ease of use — there is a certain expectation for consumer products today.

Don’t fall in love with your product (it’s gonna be hard) — fall in love with the audience and/or the problem you’re aiming to solve.

Before PMF, run experiments after experiments. Roadmaps, OKRs, 4DX — all that stuff doesn’t matter yet and it will slow you down.

Breaking user habits and building new ones is very hard and can take months of daily usage.

Beyond jobs-to-be-done, users often don’t know what they need. Don’t build a faster horse.

What users say and what they do is not always the same. Focus on what they do.

Integration requests are 90% noise. If you build one, only 1 in 10 people who requested it will use it.

Make users pay if you can. Everything will be easier: finding your target audience, building the right product, fundraising from VCs, surviving…

It’s never too early to make users pay. Some people have built landing pages in one day with a credit card step, just to test demand.

There is a right and a wrong way to conduct user interviews. Read The Mom Test to do it the right way.

If a feature is not widely used, kill it. Technical debt, bugs, product data, support queries — all of those you’ll get less of; you’ll go faster.

Onboarding can make or break the initial product experience — pay attention to it (but don’t spend too much time on it until user numbers are in the thousands).

Early adopters behave differently than everyday professionals. Unless your entire audience is only early adopters, build for everyday professionals — it’s a much larger audience.

When building, know what needs to be pixel-perfect and what doesn’t.

Your automated email platform is a great junior product analyst. It can bring you demo requests, onboarding issues, product bugs, user feedback, etc.

Segment + Mixpanel is all you need for product analytics. You can get them for free for years with startup discounts.

Sales & Marketing

Don’t overspend in marketing if you’re pre-PMF — you don’t know what you’re selling and to whom yet.

Pre-PMF, user research and sales are the same things — don’t limit yourself to one when talking to people.

‘Hustle’ is the best strategy to get your first 1000 users.

There are only 1 to 2 channels that will drive most of your user acquisition. To find them, run acquisition experiments the same way you run product ones.

If the problem you solve and/or the service you sell has high search volume, consider bidding on its keywords in Google Ads. Then, for the keywords with a high conversion rate, build long-form content to rank organically for them.

ProductHunt is worth doing, but it’s not an acquisition channel, it’s a marketing stunt.

You need to know where new users are coming from. If you can’t figure it out from the data, ask users during onboarding.

If you know your audience, build a community of it, in one spot (Slack, Reddit, etc.). It’ll help with user acquisition, product feedback, partnerships & more. Also, investors highly value businesses with strong communities.

Once you find PMF, you need to find a way to grow customer acquisition by at least 20% month on month to stay competitive.

Get your unit economics right — if 99% of your user base doesn’t pay, you can’t have a $10 CPA. If you sell to enterprise customers with a $10k ACV, that’s another story.

From the most to least expensive ad platforms: LinkedIn, Facebook, Quora, Reddit, Twitter. Twitter ad clicks are often bots. You get what you pay for.

SEO is a long game but if you stick to producing good content, it will pay off sooner or later.

Content creation can easily be outsourced for cheap: ContentRefined, ContentPit, Content Gather, Constant Content, The Hoth. Use the Gunning Fox Index to check writing quality.

Don’t pay for backlinks or guest posts — it’s a waste of time and will hurt your organic ranking.

Put extra effort into your public website — it sets the tone for your whole offering.

Don’t get a .ai domain or over-mention AI on your website. It’s often of poor taste and sometimes a negative signal for users and investors.

Selling > building initially. If you don’t have a good marketing copywriter in the team, get one.

Find out how users describe your product to their friends and colleagues — the exact words they use. Put those words in your marketing copy (website, ads, etc.)

Offering an internship is a great way to expand your marketing capacity for a few weeks while also finding potential full-time hires.

In the era of influencer marketing, don’t build the social media of the business, build the social media of the founders.

It’s not unheard of for influencer marketing to be the#1 acquisition channel for a SaaS business.

Posting once a day on LinkedIn or Twitter is a great way to build a personal brand, for you and your startup.

Fundraising

In the long term, your equity is the biggest leverage to control your business — keep as much of it as possible.

If you don’t need the money, don’t raise. If you do, don’t do it too late.

Money for equity isn’t the only option. Check out R&D tax credits, government grants, MRR-based financing, etc.

If you have a clear, short path to profitability, take it. You can still raise later but your leverage and survival rate will be maximised.

A good accelerator will give you money, exposure, app deals, a founder community, a network of coaches and an investor list. Consider it.

If you have to pick one accelerator, choose YCombinator. It’s like going to Stanford for startup founders.

Raising money is nothing but a business transaction, between a buyer and a seller.

Be clear on what you’re selling: yourself? the team? the vision? the product? the results?

A great salesman/saleswoman can raise money with no product, no team, and no results.

If you’re not a great salesman, convince them with results: revenue, user numbers, speed of execution, track record, etc.

Fundraising is a great feedback channel for your business: you’ll know where you stand based on the interest of smart, experienced investors who know your space in great depth — are you unto something truly exciting or…meh.

Get feedback on your pitch deck from investors or from founders who have raised money before. Practice makes perfect.

A big name on your resume is a ‘positive indicator’ for investors — Google, Amazon, Harvard, MIT, etc. Mention it.

Build relationships with potential investors early on. An existing relationship with investors can get you a meeting you otherwise wouldn’t get.

Another good path to get an investor meeting is through an intro from their boss, friend, respected colleague or founders in their portfolio (by order of efficacy).

Over-communicate with your investors — they value transparency and honesty and will more likely help you.

Don’t lie to investors, even for the good of the company. Or it’ll come back and bite you.

When a potential investor says ‘keep us in the loop’ or similar, they’re not interested (at least not today).

FOMO is real. 3 term sheets from 3 amazing funds > $500k committed from 1 good fund > $0 committed after fundraising for 6 months. Play it right.

US VCs have a massive pipeline of startups that need funding, with amazing teams, products and results. Your 10% w/w growth won’t impress anyone.

Angel investors back people and ideas. VCs back businesses.

Get an experienced lawyer before you get a term sheet or it will slow things down (and you don’t want that).

Leave your ego at the door — most investors won’t be interested in backing you. It’s nothing personal; they also don’t know everything and neither do you.

Hiring

Hiring remotely is 4x faster than hiring locally. The pool of candidates is 1,000x bigger and the interview logistics are 3x faster.

There are tons of sites to find great remote talent: Angel List, 6Nomads, Startup.jobs, Himalayas, Remotive, WeWorkRemotely, Linkedin.

You can build a great culture even 100% remote, but it will never be the same as being in the same office.

Don’t scale the team aggressively if you’re pre-PMF. It’s easier to pivot with 3 people than with 15 people.

Is it a nice-to-have or a must-have? Don’t hire for a role unless it really hurts.

Learn how to build, market and sell your product yourself. When you hire someone to do it for you — you need to know the skillset you’re hiring for.

Don’t over-engineer the interview process — you’re not Google (yet) — people won’t bother.

Hiring when you’re an early-stage startup (=offering salaries below market rate) means you’re also selling candidates on joining your business. Be clear on what you’re selling and highlight it: the team, the culture, the equity, the career path, etc.

When giving equity to employees, use the Paul Graham equation — it’s fair and non-debatable.

Put together a simple doc to explain equity vesting, valuation and scenarios like an acquisition (eg. single/double trigger acceleration) to answer any employee’s question. A common question is “how much money can I make with X% equity?”.

Give candidates a proper exercise during the interview process (a task they’d do if they’re hired) and rate it from 1 to 10 — don’t hire if it’s<6.

If you hire several salespeople or engineers, get a couple to start on the same day. You’ll see what ‘great’ looks like and can let go of anyone under that benchmark within 4 weeks.

Hire for motivation first, skills second, experience third.

Management 101: hire people smarter than you, give them room to grow, nurture initiatives & new ideas.

Assume your coworkers are head-hunted all the time by more charismatic leaders offering higher salaries. Check in with each of them often — make sure they’re happy and have everything they need.

Founding team

Programs like Antler or EntrepreneurFirst are great paths to meet co-founders.

When meeting potential co-founders, follow your intuition, it’s often right.

Ignore potential co-founders you don’t enjoy spending time with.

The 50-questions exercise is a great way to see if you’re a good match.

1 founder: simpler, harder, slower. 4+ founders: many ‘big hats’, too easy to fight on different things. 2 or 3 is the magic number. 2 will feel like a partnership. 3 will feel like a team.

Be clear amongst yourselves who should be CEO and why. Get everything out in the open early on.

Initially, all founders are on the board, so you should make important decisions together. But the CEO should also be trusted to make the final call in case of a stalemate — otherwise, you probably don’t have the right CEO.

Get everything in writing with a lawyer: IP assignment, employment, founder shares vesting (4 years with a 1-year cliff), etc. It will save some pain later.

As co-founders, you are colleagues first, friends second (one day, you might need to let one go).

Get a simple communication structure in place early on — it will create stability and remove stress in the team.

Always be clear on the #1 goal the business needs to achieve (‘get to PMF’ should be at the forefront for a while).

Co-founders need to believe and trust each other that they’re the best person in the team for that role (eg. product, engineering, etc.).

It’s like a marriage: you like spending time together, you need to respect each other’s space, your personalities need to fit, you need to easily get over an argument.

It is common for a founder to not be fit for his/her role after a while. Being the CEO of a 5-people startup is not the same skillset as being the CEO of a 500-people company.

A divorce can happen: the skillset is missing, the trust is broken, the passion is gone, etc. It will be an extremely difficult time but you and your business can survive it.

If a founder leaves the business, aim to buy back as much as its vested equity as possible. Whatever he/she keeps will be considered ‘dead equity’ — not good for the business.

Founder harmony comes and goes — the longer you work together though, the stronger you’ll be as a team.

After PMF, power up your senior management team (the founders initially) — get each a professional coach, get NEDs on the board, take a course to refine your management skills, build your personal brand.

Tools we loved: Notion, Segment, Mixpanel, Xero, Webflow, Mailchimp, Figma, Zapier, Bitbucket, Docsend, Typeform, VideoAsk, Meetric.

Tools we thought we loved but were wrong: Intercom, Jira, Smartlook.

I hope this was useful.

If you’re an early-stage founder, happy to have an advisory call.

If you’re fundraising, happy to roast your deck.