How CleverSpend started

Previously, I talked about why I wanted to start a startup and how I was looking for opportunities to start one.

I found that opportunity in a zero-day VC investor?Antler?who would invest in individuals even before they had an idea and let them build a company from there. They would let individuals come together, form teams, evaluate startup ideas, and fund them while they do so, and would fund them even further if it looks viable. It was such a great concept. I was very happy to get selected from 3000 individuals who applied. It was a great learning opportunity as I validated different problem statements and worked with very talented individuals to consider them as potential co-founders.

I ultimately found my co-founders in two brothers whom I knew for years. We often discussed different business plans, validated several startup opportunities, and worked on different projects. I knew they had grit and the attitude of putting all they had into making it happen. They were logical, had no ego, and would put the collective good before individual good. They really got the right attitude. It was such an easy decision.

Next: what problem do we work on?

We all had been observing the world around us and we naturally had a list of several problem statements we were interested in. So, we weighed them against these criteria:

1. How scalable is this problem?

2. Can a part of this problem be solved without needing many resources?

3. Do we already know/ can we learn enough about this industry to make a meaningful change? (i.e. founder-problem fit)

We validated many ideas such as matching therapists with people of similar backgrounds, helping people take control of how their data get monetized, and letting them monetize it themselves, and automated, intelligent IT support products to eliminate time wasted solving low-hanging requests.

During our research, we identified the sheer number of software products that were available for each use case. Do you want an email automation tool? there are 50+. Virtual telephony provider? there are 20+. I never liked having too many choices, it made it hard to evaluate and select one. It felt exactly like how I felt buying shoes online, with unlimited choices! Going deeper into it, we identified that people don’t just struggle with evaluating which tool to buy, but each one of them also paid a very different price for their contracts. They didn’t like sitting on back-and-forth sales calls which kept them away from their primary job. People mostly went for the first tool they did a trial with, because many of these tools were not easy to try and needed significant effort during their trial, and most buyers didn’t have that kind of time or resources. And these decisions were very costly, because if they onboarded the wrong tool, their employees can’t unlearn that tool and learn the new one at the drop of the hat, and the data now locked up in that tool would also take considerable effort to migrate. I had seen one such migration cost upward of $2mn and 1.5 years' worth of effort.

To validate this, we talked to several people who were responsible for purchases in their companies, which brought it all together. One important thing we did during our validation was that we never told upfront what we were trying to solve. Instead, we let them speak about their process of purchasing these tools, what did they like about the process, what they didn’t like, and what are they doing about it now. We let?THEM?speak!

We envisioned a product that, just like Amazon, that would let buyers make an informed decision while buying a software product. It would track all the tools a company is using at the moment, and based on what those tools are, what size the company is at, and the industry they are in, it would suggest which tools are they not using that a company of similar stage should be using. It would also provide unbiased, unsolicited experiences from the existing users. It would provide nuanced details on use cases that are dealbreakers while choosing such products. We would become the one-stop place to buy all software a company needs. SaaS vendors would get qualified leads and would reduce their customer acquisition costs, and they could pass on those savings to buyers in form of lower prices.?Everyone wins!

Future plans included providing a platform where all a software company had to do was build a product, we would take care of their marketing, sales, billing, subscriptions, pricing, etc so that they can focus on what they do best, building the product.

So we got started with building the first version, a manual platform that would help companies buy software better.

Things that we did well:

1. Approached selecting the problem statement practically. We were very aware of founder-product fit, our capabilities, and how much we can stretch ourselves.

2. Instead of leading our potential users in the validation phase, we let them speak as much as possible. We discussed each such interaction among us and updated our question set after each new set of learnings.

3. Most importantly: we didn’t waste our time in usual time sinks such as: how much equity, what should be the company’s name etc. We all were more or less contributing similarly and we didn’t want to nitpick a few percentages here and there, because zero of 100% is still zero, so we went with equal equity.

In my next post, I will walk you through how acted resourceful, prioritized well, and became cash positive without raising any outside capital.

This post is part of five post series that was intended to walk you through our journey of building our startup and shutting it down. Please find all the posts?here.

Originally appeared here