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?
4 thoughts on “The First 12 Months of a Seed-Funded Startup”
Would love for you to make a future post about why you wouldn’t go the interns route again.
Reblogged this on Bag Lady Boutique.
Why don’t you recommend the 11 intern hire? Was it a thought to save money (opposed to full time salary) but ended up costing more in your time to manage the people and turnover? Or something else?
Disregard question about interns, just saw follow up post 🙂