“11 startup lessons I learned in 2012 while raising € 550 000 in funding”
(This is the story of Mavenhut, told by founder Bobby Voicu. We reproduce it here, slightly edited for brevity and structure, from a post Startupbootcamp, with the permission of the author).
Here’s my story of 2012, the year that started with me and two friends at Startupbootcamp, and ended with us getting funding. So much happened this year, that it almost feels like three years rolled into one. Here’s what I learned about startups this year.
Lesson 1 : Join an accelerator – seriously
We spent the first 4 months of 2012 at Startupbootcamp Dublin, as one of the 10 teams accepted there.
We were 3 cofounders (Bobby, Elvis and Cristi) working day and night on one single project. I don’t think we ever got to the same level of effort and efficiency afterwards. We were eating, drinking and breathing Mavenhut and Solitaire Arena, without being plagued by any distractions. (Except maybe one major distraction: a girlfriend of one of us “fell through the cracks”, because she couldn’t cope with being alone for so long back home.)
If there’s one reason I insist that the founders teams should sign up for accelerators, this is it: for 3 months of your life, you won’t be doing anything else. You’ll dream about your project at night. And 3 months of living together will conclusively show if you’re able to get along with your partners for a long period of time. Trust me on this!
Lesson 2 : “Pivot” is overused, but “Lean Startup” is extraordinary
Along the way we learned that pivot is an overused word, but that Lean Startup is an extraordinary concept. We had an idea for a multiplayer solitaire game. We tested the idea by placing a form on a website and sending 200 people to it through Facebook ads. Guess what? Multiplayer solitaire isn’t a bad idea – on the contrary!
Creating a “lean startup” was great fun. The first workshop we went to in Dublin was with Ash Maurya, the author of ‘Running Lean’. That really helped us understand the principles and practicality of it. After Eric Ries’ Lean Startup, Running Lean is the book you should be reading when you’re creating products or thinking about starting a new business.
Lesson 3 : You can’t iterate too fast or too often (we did 400 in the first month)
Elvis (cofounder and main developer) made 400 deploys in the first month of Solitaire Arena – about 15 on any given day. That’s how fast the learning and implementing cycle was. And yes, most times there was a bug solved per deploy, but that allowed us to immediately learn something new from our players. And we repeated this again and again and again.
Lesson 4 : Learn how to rock Demo Days – be MEMORABLE
Speaking at conferences for the last 6 years doesn’t help at all when you have to compress as much as possible in just 5-6 minutes, the time you have for a Demo Day event. Especially when you feel that investment in your company depends on that. It took me 3 weeks of continuos improving and repeating to reach a so-so version of the pitch. And that pitch was then messed up by the fact that the mic went out. Twice.
But during that same presentation I also found that entering the stage like a boxer in the ring, wearing a hoodie and some sort of gloves, with the team behind you, is a sure way for potential investors to remember you.
Add the disfunctional mic, a fantastic “recovery” that made everyone laugh, great numbers on the slides and there it was: each person in the room remembered us. You can see the video here:
I still remember the first day after Demo Day. Really tired and quite upset because we didn’t receive any investment proposals that night, even though we talked to lots of people. But that changed in the day after that. In the next week we got 8 offers! In the mid to high 5 figures for a seed round. Everything looked a lot better, all of a sudden.
Lesson 5 : don’t negotiate on an empty stomach
In May, we returned to Bucharest to regroup. 35 degrees Celsius outside, in an office with no AC whatsoever. Picture continuous discussions with the investors with whom we had already started talking to and other discussions with new investors. The offers were still in the seed money realm, which wouldn’t help us too much in the long run. We wanted more.
The summer became even hotter when reality his us: we had been living mostly out of our savings for the past 6 months. Savings have a particular characteristic: they don’t grow if you don’t generate any kind of income. An older website we sold at the right time bought us a little more time, but one of the lessons learned was that you don’t want to negotiate an investment (or anything, for that matter) while on an empty stomach.
Lesson 6 : it pays to keep your options open
Fortunately, we won the Competitive Startup Found, an Enterprise Ireland competition that offers € 50.000 to 15 Irish startups, each trimester. We didn’t take the money in the end. But it offered us an additional safety net, and it allowed us to keep negotiating with our potential investors, only this time feeling more at ease.
Lesson 7: investors love hard numbers and demographic data. Track them from the very start
Meanwhile Solitaire Arena was growing. Users played more and more, and we showed more traction every day. This meant that we finally could discuss numbers when we met with the people interested in investing. I don’t think there was anything more important to these discussions than the fact that we could say: “80% of our users are women over 25, who play, on average, 10 games a day”.
We later found that startups in our situation (early stage) often had no clue about this kind of data most of the time. But we had Cristi’s previous experience: he spent 5 years analyzing these kind of stats daily and understanding how important is to follow and measure everything, from the very start.
By the time summer ended I had started getting more and more into it, considering that I was in charge of the business development, the legal stuff and so on. The talks with investors were more specific and tangible, the lawyers started to play their part, the costs and incomes estimates started having more and more sense, numbers began to be substantial.
Lesson 8 : you CAN have too many users if you’re not prepared
So we entered the 3rd year and final year of 2012: fall. And with it, the first, small round, of the SOS Ventures investment. It was a small amount at 50.000E, but so important in the big scheme of things. The question was: were we able to scale the business, once we had some money to spend? Well: yes.
Here’s when we learned that too many users in a too short period is NOT a good thing if you’re not prepared for it. Our server crashed 5 times in 3 days. But we pulled together and, in just 2 months, we delivered the KPIs we had established with SOS Ventures. Afew days later, at 1 am, I sent the magical sms to my cofounders: our lawyer had just announced that all the signatures were on the contract and that the money would be transferred the next day.
Two days later we announced the investment on stage at How To Web. Good times!
Lesson 9 : raising money requires you to spend effort and to trust
The main lesson of these last months? The investor can be a very good partner, if this is what you want and you’re willing to put in the effort. I learned that we need to communicate constantly, to avoid having to explain 3 months of efforts and in 30 minutes. I learned you can say “I have no idea what I’m supposed to do here”, without it meaning that you’re no longer getting the investment or that you’re a bad entrepreneur. And Bill Liao, the partner we work with at SOS Ventures, really put in the effort to help us.
Lesson 10 : people DO play online games at Christmas
2012 ended well. Without any vacation during the holidays, because, in spite of our initial beliefs (that people don’t hang around their computers on Christmas), we had lots of traffic. And people ready, willing and able to play as many games of Solitaire as possible.
Lesson 11: success brings Good Things
The guys at The Next Web pushed us to the Romanian Startup Awards 2012 finals. And that’s where you should go and vote Mavenhut for Startup of the Year (obviously, if you also vote Bobby Voicu and Solitaire Arena in the other sections we’re competing for, we wouldn’t mind). Because we believe we deserve it!
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