Kes Harper

I've invested in over 300 startups over the last 5 years, and there is one common trait that nearly all failed early stage startups share - they don't run a proper customer discovery process. You can read about the importance of customer discovery all over the internet, but that practical application of it among first time founders is still extremely low. We look at over 10,000 deals each year Forum Ventures and I see firsthand just how few founders actually excel in this process. One subset of founders simply doesn't do it at all. It's a classic archetype - build product in a vacuum without running any validation cycles. Typically the founder profile here skews more technical/product where founder-led sales feels out of character and not an area they enjoy spending time. Often founders think they can "product their way" to initial customers, but more often than not that new feature set they are excited about fails to generate user demand, simply because they never asked anybody if they care about what they were building. There is a classic startup'ism - first time founders focus on product, second time founders focus on distribution - and it rings very true within this subset. The second group of founders actually understands the importance of running discovery and leans into it early in their build process. While they have the best intentions, ultimately they come up short because in practice they don't actually know how to run an unbiased process. Discovery that focuses around a feature/solution set will skew toward lukewarm positive responses from potential customers, "sounds interesting, let me know when the beta is ready". The reality is no one is going to tell you that your baby, in this case your product, is ugly when it's far easier to just smile and nod. Founders often take this false signal as validation and race to ship a product that ultimately falls flat on its face. There is an art to soliciting feedback from a potential customer. The process emphasizes questions on their existing workflows, bottlenecks they experience in their day to day, understanding what motivates them and how they measure success in their role. This is a critical area we emphasize when evaluating investment opportunities, and a process we are very hands on in assisting our portfolio companies. Having a strong network is a massive advantage when launching a startup but close network relationships have the potential to give false signals across a customer discovery process. There are ways to combat this by being very deliberate when once solicits feedback from their network, but there are definitely bonus points for net-new out of network customer validation.

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Causal is my 1st company. Here's what I'd do differently as a 2nd-time founder: 1. Hire an EA on day 1 — founders shouldn't waste time doing scheduling 2. Spend 25% of my time at conferences — this is where commerce happens 3. Fly business class — self-explanatory What else?

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1. how do I get customers, 2. how do I raise capital, were the most common things the current athena.vc cohort is asking about This all goes back to: 1. Do you have a 10x better product 2. and you're solving a very painful problem for which existing solutions are not very good. If you have a generic product that is solving a problem which isn't that painful. You'll have to be very good at marketing and sales. that's fine, refer to : https://lnkd.in/gVsEdWir and https://lnkd.in/grnSqpns for what we did at ContactOut BUT what is easier is to just make a 10x better product for a very painful problem. e.g if you cure cancer, or solve nuclear fusion, or figure out how to make humans live forever. You clearly do not need to worry about sales or fund raising. even if you are very early and just have a few unique ideas in this space, people will flock to invest in you. for example take a look at the types of companie sam altman is funding: fusion: https://lnkd.in/gdJnN9rr longevity: https://lnkd.in/gUUbkvXd list of all investments: https://lnkd.in/gFeutEcM they are all world changing companies. suprisingly solving a very hard problem is actually easier because you don't need to worry about sales and marketing. You can just focus on solving the technical challenges there is no market risk. worrying about sales and marketing is hard. so how do you get ideas about fusion, or longevity, or making a better search engine than google, or building a better GPU chip than nvidia: 1. talk to users 2. study competitors 3. talk to mentors / industry experts 4. read: science journals, text books, articles, podcasts etc, everything you can. As Sam Atlman says: you will be surprised at how quickly you can become an expert. Sam became expert in 1 year. There are 12 year old kids building nuclear fusion system in their bedrooms. Steve wozniak single handedly built the apple II - all software and hardware from reading textbooks and copies of MIT research papers. All self study.

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Great read, very relevant for all the marketers and decision makers. “Building audience the trusts you” is the missing link for most of the enterprises running behind quick success with AI. They forget that their customers also have access to AI and it’s not difficult to build a solution these days. Credibility and proven use cases can do wonders for businesses. Words of wisdom coming from a mentor. Thanks for sharing sir. ??????

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This 2% conversion projection is brought to you by ‘Optimism Inc. Let’s talk financial projections. I build mine grounded in real numbers, tracking down to every API call, because after years in metric land, I know where actual conversions come from. And I’ve seen it too many times: someone tosses in a '2% conversion' assumption, but when you do the math, that number should be closer to 0.3%. Yet with that magical 2%, suddenly we’ve got a gold mine… until reality hits, and it’s more like, 'Oops, things aren’t as rosy as we pitched. Time to dilute and hit another round.' Investors, are you really swayed by unicorn dust? Wouldn’t a real, grounded plan be worth more than another 2%-of-something illusion? Let’s end the hockey-stick fantasies and get back to what’s real. #RealMetrics #NoMoreHockeySticks #FinancialReality

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What sets product-led companies like Calendly, Dropbox, and Slack apart from the crowd? Let me break it down for you! After signing up for more than 50 product-led growth companies, our incredible team at ProductLed has identified some key characteristics that these top-tier companies all share. Here's a quick overview: 1) No more email verification walls These companies prioritize user convenience by eliminating the hassle of email verification. They understand that time is precious and want users to dive right into their product without unnecessary barriers. 2) Transparent pricing Product-led companies believe in being upfront about their pricing structures. By providing clear information, they build trust and demonstrate their commitment to creating a fair and open relationship with their users. 3) Complementary free product These companies know the power of a great first impression. They offer a complimentary free product that showcases their core value proposition. It's a fantastic way to engage users and prove the worth of their offerings. 4) Tight feedback loop Listening to customers is a priority for product-led companies. They establish a tight feedback loop to gather valuable insights, allowing them to continuously improve their product based on real user experiences and needs. 5) Frictionless signup experience Simplifying the signup process is crucial for these companies. They prioritize a seamless user journey, making it effortless for individuals to create an account and get started. Curious to see these characteristics in action and learn how to implement them in your own company? Check out the link in the comments to see the full guide. I dive deep into each characteristic, providing practical examples of how these companies excel.

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A lot of companies are still dealing with the fallout from the 2019 growth at all costs. Many overhired without really knowing how to use all those people, and now we’re seeing layoffs as they try to fix that. Lot's of good people on the market. Now, with copilots of all sorts boosting productivity I think companies need to be smarter about hiring and focusing on real value. Building smaller teams of more senior and motivated people.

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Big one: over the course of 4+ months, we helped Fondue scale pipeline by 22% while saving 9 hours every week. Hyped to pull back the curtain here: 1. After getting acquired, Oren Charnoff + co wanted to scale demand gen 2. There were a TON of levers to pull, but he knew content was part of the mix 3. Because he'd partnered with Verbatim before, Oren reached out to our team 4. Fondue needed full-service execution + a deep understanding of ecommerce 5. Our model was a perfect fit, and we hit the ground running to start shipping 6. After deploying case studies, lead magnets and original reports, Fondue saw: + 22% pipeline growth + 17% revenue increase + 9 hours saved per week In Oren's words: “Verbatim’s speed of delivery and 24/7 support is phenomenal. If something comes up, they’re all over it in minutes across Slack and every comms channel. Verbatim genuinely feels like an in-house content team.” Full case study here: https://lnkd.in/gGMSywNk

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Great post Santosh Sharan 1. If I am reading this correctly, you were in line with what Peter Drucker repeatedly said in classes I was blessed to have taken "Focus on market share and revenue (margins) will follow". 2. I always encourage Startup Clients from Concept through Seed phases: 1. Solid Data Supported Market Analysis (Total Market, SWOT Analysis) 2. Methodical, Low Cost, Essential Features and Fast MVP 3. Traction & Market Share Naturally, I encourage building the business plan immediately and continuously strengthening it. Thanks again for this great launch testimonial!

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Trying to get from $0 to $1M ARR? Find your PMF. Obsess over identifying a problem that a big enough market urgently needs solving. Talk to your customers about their most painful problems and validate your assumptions. Not all feedback will be valuable. Focus on insights from your early adopters—they become your ICP and shape your product. Stay true to your core customer profile. Chasing revenue or artificially widening the PMF dilutes your product's effectiveness. Your product can only meet so many needs. Tailor every feature to your ICP. Your first version is your Minimum Sellable Product (MSP). Make the MSP easy to use and beneficial. With customers using your product, continually collect feedback to improve: 1 - Offering 2 - Marketing messages 3 - Sales calls 4 - Pricing structure 5 - Demo flow If you reach $1M ARR, congratulations! Your product has real demand. Next, it’s time to think about scaling to $10M ARR. More on that soon.

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Next week, I’m hosting 15ish B2B seed stage founders to talk about what’s working and not working in GTM. Some of the things I’m hearing from other founders who are at that sub-20 customer stage have to do with growing beyond their network. Everyone seems to be able to find a couple customers or early design partners but how do you move beyond with limited resources? One of the founders I spoke to who is in AI, is leveraging the brand of AI to get conversations through cold outreach. A broad message of?“We do AI for X generating Y results" where X is your niche audience is getting conversations started. These types of insights and the detail that goes with them are the things we’ll be discussing next week. Join us.?https://lu.ma/x3k6v4dn

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Stop assuming VCs are smart. You're giving us too much credit. Over 70% of founders get this wrong... They assume we'll: ??Get your product ??Know your industry ? Grasp your GTM playbook ??Understand your business model But it usually isn't true. ?? Your goal: Minimize the logical leaps a VC must make to see the world like you do. How? Leave breadcrumbs... Identify data points that SHOW you're right: ? Customers love your product ? Your market is growing ? CAC is very affordable ? Flywheel is spinning When you use external data, you're borrowing credibility from the source. The VC doesn't believe? They're arguing with the source, not you. The more objective your pitch, the faster you'll fundraise. Proof > Opinion __ Was this helpful? Please ?? like and ?? repost it to help other entrepreneurs.

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For most SaaS founders, this summer probably felt like a wild ride ?? Seasonal slowdowns like this are normal, as consumers and employees alike take time off to travel (and buy less software) However, *this* summer slowdown was far from normal... ?? It lasted for over 4 months, and... ?? There was even a "false" recovery, before SaaS crashed back down It's difficult to determine an exact reason for this summer's volatility, but its likely that 2024's strengthening economy gave consumers the confidence to take longer vacations and travel internationally for the first time since COVID. (But if you have any of you own theories about this summer's slowdown, I'd love to hear them in the comments!) All that said, despite the volatility, September's ProfitWell by Paddle growth data brought great news - the summer slowdown is finally over, and SaaS has rebounded! ?? B2B SaaS averaged 5.3% CAGR, up from 0.3% in August ?? B2C SaaS grew to 12.7% CAGR, up from -5.3% last month The good news doesn't stop there either. B2B has much more room to grow, with new sales still ~5% lower than their pre-slowdown average, and downgrades still elevated by ~15% above their average. Taking this into account (along with the Fed's September interest rate cuts) SaaS is set to have a stronger Q4 than we originally forecasted, surpassing our estimates of 11% & 8% CAGR for B2B and B2C respectively. So, for the SaaS founders in my audience who struggled this summer - give yourself a pat on the back for weathering all this craziness. You made it! It's all uphill from here ?? P.S. If you want to watch the full breakdown of this September's growth data, check out the latest edition of the SaaS Market Report, with myself and the great Karthik Puvvada ?? https://bit.ly/4faD9fr

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One thing that I've come to believe is valuable early on at an early stage startup is measuring the right metrics. Even if you don't have MQL's, define them, measure them week over week. It'll make you start wanting to improve that number. Even if you don't have any active opportunities in deal cycles, measure them week over week. It'll make you want to improve that number. What I've seen happen when I open my mind to a new area of measurement or metric is that becomes something that improves over time. "What get's measured, gets accomplished"

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Perfecting your product and GTM strategy are surely important. But Box CEO and co-founder Aaron Levie argues there's one factor that outweighs all others in startup success: recognizing and capitalizing on tech and macro tailwinds. Fighting against them? You're setting yourself up for failure. Our full conversation here: https://lnkd.in/gEAPFR-A

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At Y Combinator the rule was "Make something people want" -- I guess Blotout we just gave a lot of developers a faster way to get there without the build the plumbing option ... with the launch of our CDP for SaaS product any developer/company can now focus on building applications and stop worrying about having to build the nults and bolts. Two companies were already born on Blotout CDP for SaaS SDK, lets get the next 1000 companies can go live faster and build low cost applications that benefit the fast growing D2C space. Great use cases; 1. Site Personalization SDK for SaaS 2. Server Side Tagging for your existing SaaS 3. Fast DB access for AI development 4. Adding ID and/or Consent layer to your existing SaaS 5. Building a new company or product idea Get started today ?? : https://lnkd.in/genzChUB DM me so we can discuss. https://lnkd.in/ggVynPuy

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I've been an avid consumer of OpenView's SaaS and Product Benchmark Reports - as an operator, they were guiding lights for best in class metrics, and shared/referenced frequently in my exec meetings, team meetings, Slack threads, etc. High Alpha partnered with OV this year on the SaaS Benchmarks Report (Mercury helped boost the survey) and once again, the data is compelling. Some observations from 800+ founders and execs surveyed: * Despite tough market conditions, SaaS buyers have increased their spend by 9%. * Gross margins = growth: high gross margin companies grew 18% faster than low-growth margin companies. * Unsurprisingly, AI dominates the conversation: 50% of companies launched or tested new AI features. 68% of respondents reported that expansion opportunities are driving their AI strategy. * While 70% of respondents are predominately or full-remote, in-office saw a 50% YoY growth compared remote, which grew 39%. * The thing that keeps founders up at night? GTM execution (I feel this ??) - 76% are more concerned about this than product execution, cash burn, competition, or their AI strategy.

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The founder of Clearbit (acquired by Hubspot for $150M cash) told me, “VC, as we know it, is dead.” What makes this so nuts??He runs a big VC fund! Here's why the model is broken: 1. What VC money used to be deployed at doesn’t work anymore - Large GTM teams are losing ground to more effective, leaner motions - “Growth at all costs” has given way to “be capital efficient” - The math doesn’t work at 20x revenue 2. The VC playbook erodes great brands by forcing them to overcharge - Product-market fit generally happens at a compelling price-to-value ratio - VC/PE funding forces GTM motions that require wildly increased prices - Brand slowly erodes as investors hope and pray for their exit - Or as he said, “Every year we were forced to look at accounts paying $40k and try to figure out how to charge them $500k” 3. Small teams can be AI-native and get lots done in a very short time - It’s easier to start companies than ever - You can sell, support, and serve people without humans 4. Influencer-led distribution is 100x capital efficiency gain (if done right) - Believe me, this is true, I am living it 5. If portcos were free to operate as they wanted, they wouldn’t need more $$ - Portcos can get way more done with fewer resources than 3 years ago - They could (and would) operate profitably if they were allowed to TAKEAWAY: You have to ask yourself: If companies were free to operate how they wanted to… And that way of operating WOULDN'T require venture capital… What the hell does that mean for the future of the Venture Capital market? Amit Vasudev thinks it means the whole thing could just evaporate. His words, not mine. Tomorrow, Amit and Santosh Sharan are hosting an LIVE workshop on the new playbook to?create, fund, and operate a startup to $10M ARR. Listen in and ask questions about running a lean, high-growth company, and the future of VC. They're going LIVE at 3pm ET. Register here: https://lnkd.in/g75yRmzW

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