The Three Stages of a Startup

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Back when I was a seed VC I was fond of telling folks that they didn’t have a company yet. I wasn’t trying to be mean. I was trying to instill ruthless focus. Seed rounds are small and runway is measured in iteration cycles. How quickly can you iterate till you have product / market fit?

In my books there are three stages to building a startup. And only the last one has anything do with a company.

Stage 1: Project

You have an idea. You research to test and validate hypotheses and find a pain point in the market. You start building wireframes and mockups. You maybe start collaborating with someone. At this stage you have a project.

Stage 2: Product Read More

The new customer support

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Who are these handsome people you ask? A small part of FreshBooks’ award-winning support team receiving Stevie Awards for outstanding customers support.

Once upon a time customer support was relegated to outsourced call centres, where the focus was on cost minimization and maximizing efficiency, with little consideration of actual customer experience. You still see this today inside old school, sleepy giants in the banking and telco sectors.

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Going after Established Markets

5317299290_b5d2ffcb1d_bHistorically, one of the building blocks of great startups has been the presence of a large, untapped market to go after. Only large markets are worthy of VC$. I’ve spent countless hours in prior startups sitting in front of my crystal ball trying to predict how large our market was and when it would start to happen. In the most extreme case of this, my 2nd startup – a company named Hexago that built network infrastructure – was a whopping 10 year ahead of the market. Needless to say it didn’t work out that well.

While wide open markets are great, it seems that the biggest action these days is in mature, established markets. No one would have thought there was an opportunity in the taxi industry before Uber and Lyft came along. While Uber is the runaway winner, both are worth billions and still attracting more and more capital.

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BD is like VC

Screen Shot 2015-02-11 at 10.08.54 AMI won’t pretend to be the best business development leader out there, but for a brief period of time at FreshBooks I oversaw our BD efforts in addition to finance (always with the intention of handing it off to someone who actually knows how to do BD…). Here’s the thing with partnerships:

  • We all do them
  • Most don’t work out
  • At the end of the day a very small number of your partnerships deliver meaningful results

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