Holly Rockweiler, Co-Founder & CEO of Madorra on how to demonstrate traction with non-financial metrics

As part of the Hive Founders expert series, we spoke with Holly Rockweiler, Co-Founder & CEO at Madorra on how to demonstrate traction without revenues. Below are insights from that conversation. If you're interested in joining our community, you can apply at www.hivefounders.net

Demonstrating traction is a key part of raising investment, whether you are raising a pre-seed round or in series B and beyond. With a built and launched product, traction typically focuses on revenue, sales or customer/user growth. But what about products that have not yet launched? How do you show investors that you are moving forward when your product is not yet in the market?

Holly Rockweiler, Co-Founder & CEO at Madorra faced this exact challenge. She has successfully raised over $7M to continue building her innovative technology that addresses postmenopausal vaginal atrophy, a condition which affects 50-70% of postmenopausal women.?

Holly is just about to start raising her Series B round - but the strategy she has used across all previous rounds has been the same: successive derisking.

Regardless of what you are building, risk is an inherent part of all startups. But investors hate risk - and they should! Your job as a founder is to show investors that you are continuously and strategically derisking critical aspects of your business.?

If you think about it, even traditional financial metrics like sales and revenue are about derisking. For instance, when you demonstrate product-market fit, you are demonstrating a reduction in the risk that no one will buy what you’ve built. The same approach can be applied before your product is ready to go to market.?

In Holly’s case, the first risk she had to address was clinical, that is, demonstrating that the solution she was proposing actually delivered the benefits she was promising. Using a ‘hacked’ off the shelf solution, Holly was able to confirm this – reducing the first clinical risk. With these results, Holly was able to raise her Series A round.?

With this funding, Holly built and improved the first Madorra device and prepared herself for the next stage of derisking - regulatory. Holly’s challenge is now to obtain FDA approval to get the device to market. She is preparing her phase 3 trials to accomplish this derisking effort, with a view of raising a Series C to commercialise it.?

So what can businesses outside the FemTech space learn from Holly’s experience?

The good news is that every business can and should take a successive derisking approach to demonstrating traction, whether they have a product in market with revenues or if they are still in concept stage.?

The key is to look at your product journey and identify which risks investors will be worried about, then finding ways of addressing these risks. Each journey will be unique, but you should start by looking at your product development strategy and thinking ahead about how you’ll demonstrate an increase in value or benefit over time. Every decision you make should reduce your risk - from building your product, to crafting your business model, to what channels you use to commercialise it.?

What do you do if you don’t know what your product or business’ risks are? Talk to other founders or to investors and get their perspective. Your job as a founder is to be the ultimate risk reducer so use whatever strategies you can to identify and mitigate against these risks. And make sure you measure them before, during and after so you can benchmark success.?

Thanks again to Holly for coming to speak with us! If you’re interested in joining our community of women founders, you can apply at www.hivefounders.net.