Yesterday I was reading the post Moderate Success is the Enemy of Breakout Success and saw the note that Jason Goldberg of Fab.com said that if a startup doesn’t breakout in a year, he moves one. Now, I agree with the author, Jason Calacanis, when he says that it takes more like 2-3 years to determine if something is going to be a big success.
That question got me thinking about our Pardot experience and whether or not we felt like it would be a breakout success at the end of 12 months. From day one of working full-time on it we had financing, so I’d consider it a seed-funded startup from the get-go whereas most startups would need 3-6 months to raise money if they weren’t able to do things in a scrappy (bootstrapped or capital light) manner.
Here’s the first 12 months of Pardot beginning when my co-founder and I started working full-time on the business March 1st, 2007:
- March – Get the basics together like a minimum viable product, simple marketing site, bank account, etc
- April – After several customer discovery interviews, decided to pivot from a pay per click bid arbitrage lead generation platform (like LendingTree.com for B2B tech lead gen) to a B2B marketing automation platform
- May – Hire an awesome lead engineer (I wrote code full-time for the first year as well) and build the product with direct feedback from Hannon Hill, the content management software company I had started seven years earlier
- June – Hire 11 full-time interns (eight programmers and three non-technical) (Note: this is not recommended and I wouldn’t do it again)
- July – Continue rolling out product features to production for Hannon Hill to use (everything about the product and company was live but there was no external sales or marketing)
- August – Start marketing the product publicly, begin recruiting for a sales person, and interns finish up
- September – Hire two full-time sales people (one doesn’t work out and the other works out unbelievably well)
- October – Give product demos to potential resellers that were already connected with Hannon Hill and start engaging with leads
- November – Enter into a few free trial relationships and start collecting more feedback and product ideas
- December – Sell our first couple customers
- January – Continue to receive excellent reviews from prospects and the number of customers grows modestly
- February – A handful of additional customers sign on and we start thinking about raising prices to reflect the product’s value
So, at the end of the 12 months, beginning from a cold start, we had an awesome team, product, and ~12 paying customers with strong market validation that we were on to something. I didn’t know if we’d be a breakout success, but all the indicators at that point were looking good and I felt we’d be successful.
What else? What are your thoughts on the first 12 months of a seed-funded startup?