Tag: Founded and Funded

Building Marketplaces is Hard, Mark Britton Shares His Tips for How to Succeed

Seattle is known for marketplaces, Expedia, Amazon, Zillow, Redfin, Rover.

“Building them is REALLY hard.”

If you are looking to build a marketplace based company – you inherently have two sides and two potential customer groups for whom to optimize. In the latest episode of Madrona’s podcast, Founded and Funded, Mark Britton, the founder of AVVO, talks about how he approached this at AVVO; the opportunities founders have to create meaningful marketplaces and the common mistakes they make.

One of these mistakes comes from misjudging who your most important customer is.

“The touchstone is the consumer – you have to really understand the consumer and solve their problem in a very unique way.”

Since a marketplace is a flywheel, you need to get it going and that is not easy. Mark suggests get started by limiting your geography or the product in a way that makes it possible to generate the supply side in a meaningful way for your very first customers. For AVVO that meant a practice area of law and a geographic region.

With most marketplace businesses, the big tech companies will start to encroach. One example is the Trips service from Google released earlier this year that offers a search for vacation packages, flights and more, all of which have been traditional fare for travel marketplaces for years.

“Every single e-commerce model that is informationally driven; Google believes they should own that.”

Mark suggests that entrepreneurs who are thinking about a building a marketplace, focus on the community they have a passion for. Google is trying to capture everything about the world, you know a community or a specific market, so leverage that focus and lean into it.

Build out the tools to increase interactivity on the platform and keep your eyes open for when the competition from big tech companies heats up. Your focus has the opportunity to prevail against big tech.

The addition of AI and ML related technologies is another challenge for startup marketplaces – the big companies have teams, compute and the technology to help make the connections and matches in a marketplace. Even if they do so incrementally, they will be doing it at scale.

This all comes back to your unique love of the community and ability to understand and build it in a way that is not possible from a Google or an Amazon.

“Building community is such an art – Google will not be your tight community.”

 

 

Mark is a Strategic Director at Madrona Venture Group and Elisa La Cava is a Senior Associate. You can contact them by emailing or connecting through LinkedIn.

 

 

How to Choose Your Early Customers with an Eye to the Future, with DocuSign Founder, Tom Gonser – Founded and Funded Episode 4

In this episode of Founded and Funded, Madrona Managing Director, Len Jordan speaks with the founder of DocuSign and Seven Peaks investor, Tom Gonser. DocuSign is a Seattle success story – and Len was an investor during his previous role at Frazier Technology Partners.

DocuSign was founded during a time when installed software was the name of the game and the DocuSign team recognized that using the web to enable secure access to documents was going to be how the tricky problem of document signing was going to be solved. It just took persistence to convince the market.

Tom and Len discuss how a company that is changing a process that is both regulated and used by small and large companies alike is a complicated process. You have to start with one industry (real estate in this case) but then recognize when there is the opportunity to broaden the customer scope. This is often realized through selling to small companies initially to provide low levels of monthly revenue and product feedback so that you can level up to larger scale enterprise companies that will provide confirmation to the broader market that the solution is needed – as well as the revenue to grow.

While DocuSign had some early fundraising success, Tom reflects on how the middle years were the hardest. During this time the team was working on the product, the market was experiencing a recession, and their revenue and progress stalled somewhat, but this was also the time when their focus on creating a solution for smaller companies sustained them.

Len and Tom also talk about how you build a successful team from zero to a billion. Tom made the unusual decision to not be the CEO early on. Tom’s experience in previous companies had shown him that his passion was product and customer experience and he pursued that at DocuSign. Tom addresses how the most important element to growing a company is making sure you have the right people in the right roles as you grow – and recognizing when a role has outgrown a person or vice versa. Finding people in the early days who can be flexible in their changing roles as the company grows is crucial to retaining the corporate knowledge and culture while also enabling the company to grow as it needs to.

Product roadmaps are often influenced by existing customer requests for features. Tom and Len talk about building customer engagement and the balance between charting your own product future and building to customer expectations. Many companies struggle with this and Tom admits that sometimes DocuSign got it right and sometimes they didn’t.

Listen below or on any of your favorite platforms and let us know what you think at [email protected].

Founded and Funded – Building a Customer Satisfaction Team (and a lot more) with Oliver Sharp

In this episode of Founded and Funded, Tim Porter, speaks with Oliver Sharp, co-founder of Highspot about the journey of building the company. They talk about the inspiration behind Highspot (corporate content you need for your job should be as easy to find as a how to YouTube video), building a culture of customer satisfaction from day one, and how people from large companies transition (or don’t transition) to startup life.

Highspot has raised $120 million with their most recent round of $60 million announced in June of 2019. Highspot is a sales enablement platform that helps sales people find the content they need to close deals.

The team came together at Microsoft and the transition to a startup was a return to their roots as hands on learners. Though senior contributors and managers at Microsoft, as Oliver says “a startup doesn’t care how senior you are – you have to learn it all yourself” and they all had to re-learn the hands on work of creating and marketing a product. Customers were at the center of this.

Some lessons from this discussion:

  • Customers have crucial insight, though you have to figure out which ones to pay attention to early on. Oliver talks about how they learned more from the customers who passed than the ones who bought the product in the very early days. The ones who passed had reasons they didn’t and understanding those were key to building the product.
  • But while focusing on the product is crucial it’s not the way you succeed. You have to take your technological masterpiece and tune it to the customers’ needs.
  • And the words are important – How you define the problem may not be how they define it. Highspot originally set out to create the best content search out there to help marketers and sales people identify the best content for a given situation. But your customers “don’t think about search problems, they think about the making more money problem.”
  • So you both need a great product and you need the story you are telling your customer to fit with what they are looking for, or the pain they are feeling. You aren’t selling search (in this case) you are selling the solution to their problem (which you know is mostly search.).
  • CSAT or Customer Satisfaction measurement is not a new thing in business but with SaaS it is more tightly woven into the software renewal cycle. And it’s so much easier to measure and to react quickly. SaaS puts more emphasis on the customer satisfaction as a direct ingredient in sales.
  • Building a successful CSat team starts with the product creators. Start with the people who helped design the product. Those people are the most invested in what the product is now – hearing from customers is the most powerful way to learn where you went wrong.
  • Other topics of interest are building a team from junior on up – how hiring college grads has worked out extremely well for HIghSpot – and Oliver covers what not to say in a startup interview!

You can listen here or on any of the platforms you prefer – iTunes, Spotify, Google Play, SoundCloud, and Stitcher

Building a Team and a Culture at Amperity with Kabir Shahani – Founded and Funded Episode 2

Our second episode of the Founded and Funded podcast features the founder and CEO of Amperity. Amperity works with brands like Starbucks, Alaska Airlines, MGM Resorts, Gap, Planet Fitness, and Brooks Running to help them understand their customers. The company launched in fall of 2017 and from the beginning was purposeful about their company culture. Shannon Anderson, Madrona’s Director of Talent, talks to Kabir Shahani about the process they used to develop their values amongst the founding team and how they have kept it updated over the last two years of growth.

Listen below or on any of your favorite platforms and let us know what you think at [email protected].

Earlier this year, when Amperity moved into a new space, they created a book about their story and that book inspired this podcast (which is not available on Amazon – you have to join the company to get one).

Kabir talks about creating and living a company culture, what he has learned as a manager and CEO about management, and the romance of being a creator and entrepreneur. One of the elements Amperity’s team used to create their initial set of values was a personal philosophy document. Below is the process that Shannon Anderson uses with our new companies who are not looking to spend a lot of time thinking about these big topics.

This should take only 1 hour. If you take longer, you are over-analyzing.

Step 1: Pull together everyone from your founding team for one hour. Set the time. Each person works silently to write down six single word adjectives that reflect your personal values at work (how you personally like to work with your team and your customers, how you like to get things done, and the behaviors you value in working with others). (10 minutes)

Step 2: Each person writes each of their adjectives on a sticky note. Paste all the sticky notes on a common wall. (5 minutes)

Step 3: Step back as a team. Reflect on what you see and then collaborate. Do a values sort, refining all the sticky notes into six categories of adjectives. Invent a new adjective, as needed, to reflect the meaning of the collection. These are your company’s six core values. (10 minutes)

Step 4: For each of the six core values write down the signals and noise. Signals are “what this behavior looks like in action”. Draw these signals from the adjectives in step 3, and from people in your life who model this attribute. Noise is not necessarily the opposite of signals but are sometimes confused with signals. For example, someone who is unwavering, dogmatic, inflexible might be mistaken for passionate and committed. Or, too much of a signal (works hard, simplifies and gets things done) might be noise (works hard, creates complexity or works on the wrong things). Again, pull from the model of real people in your life where you have seen noise that looks like signal. (20 minutes)

Step 5: Thread this language into your everyday meetings, performance reviews, interviews. Hold each other accountable and demand that everyone behaves congruently with these values in good times or they will not serve you when the going gets rough.