Ep. 9: How Do You Find Founder/Startup Fit?

 
Tacklebox_Podcast_Logo_FINAL.jpg
 

How Do You Find Founder Startup Fit? | Idea to Startup Episode 9 | Convert audio-to-text with Sonix

Download the "How Do You Find Founder Startup Fit? | Idea to Startup Episode 9 audio file directly. This mp3 was automatically transcribed by Sonix (https://sonix.ai).

Brian Scordato:
Hello. This is the Idea to Startup podcast brought to you by Tacklebox, the accelerator for super early stage startups, whose founders still have their full time jobs. And on today's podcast we're going to start a CBD company.

Brian Scordato:
Whoa. Brian why a CBD company? Honestly, because I've been pitched like 25 CBD startups the past few weeks and it seems like maybe I should jump on that trend. It's a new market that'll flesh out over the next few years and the X for Y pitches are coming in hot. Fill in the blank for CBD. Birchbox, Ali, Bulletproof Coffee, Uber. The reasoning for most of these startups is just that the products don't exist yet. I'll just pick an idea, build it and be swimming around in a basement full of coins like Scrooge McDuck in no time. That's how this whole startup thing works right.

Brian Scordato:
I'm obviously messing around. But I have gotten a ton of CBD pitches and we are going to start a CBD company today on the podcast. We'll leverage a framework that will help you ensure your idea hits what we call founders startup fit. Meaning you're the exact right person to start this startup and the startup will get everything out of you. It will leverage all your unique skills, whether your idea is organic CBD dog treats for golden doodles or something less ridiculous, though I think my parents would buy that one. I hope they're not listening.

Brian Scordato:
You hear a ton about product market fit or founder market fit. These are both great. Founder startup fit is what I'm most interested in. It's about understanding how the skills, unique knowledge bases and network from a founding team will play into the ideal longer term. I don't think enough founders consider this when they're picking their ideas. I think most founders are opportunistic. They look at CBD, they get excited, they think it's a thing and they say let's do it. I appreciate the optimism but honestly this approach is pretty lazy and it's not gonna work.

Brian Scordato:
The two things founders need to build something meaningful are first, specific knowledge and second, leverage. These are tricky, particularly leverage. Find me an email at brain@gettacklebox.com., if you're struggling on either of these and want to figure out how to apply them to your startup. Got some great emails the past couple weeks and we've had some fun chats I'm happy to keep on going. Today we'll start with the first of the two, specific knowledge. And to help illustrate I've got introducing one of my favorite Tacklebox founders ever Tejas and an incredibly valuable mental model Inversion.

Brian Scordato:
Tejas came to Tacklebox basically fresh out of college. He was also coming from Utah and combine this with the fact that he's just about the friendliest person I've ever met and he's got a little bit of a baby face. I may have underestimated him. It's rare that we work with founders that age, not because they can't start a great company, but because they often don't have a ton of specific knowledge that doesn't have to do with college age kids or bleeding edge tech they might have grown up with or studied those sorts of startups aren't my forte. So we usually work with founders with a little bit more diverse and longer term experience. That's my way for saying that a Tacklebox we live a good boring B2B Saas product. Luckily, that's exactly what Tejas wanted to build.

Brian Scordato:
Growing up Tejas' family owned an Indian restaurant. He was brimming with ideas on how to improve it. How to leverage all the tech He was fluent in, to make everything from the supply chain to customer interactions more efficient. He was as proactive a founder as we've had. He was chomping at the bit to test and sell everything. We've heard tons of ideas in the restaurant, food and delivery space. We've had a few successes but the biggest thing we've learned is founders need to understand the game they're playing. The margins are razor thin. Everyone is overworked and overstressed and no one has any bandwidth to try anything new. Since there's no bandwidth everything is zero sum. The ramp up costs just aren't worth it and the ROY always seems too far in the future. You want to put in a new POS system, it'll maybe help with loyalty points and takes 10 hours to get the hang of and it'll cost nine dollars a month for this restaurant. No thanks. We've got chicken going bad and avocado prices just doubled.

Brian Scordato:
I've looked into starting a restaurant during business school but my professor cautioned me. He said "You know how to make a small fortune? Take a big fortune and open a restaurant." So Tejas had a tough road ahead of him. His problem wasn't that he wouldn't be able to build something that could help. It was convincing restaurants of the value of choosing the right initial product that would make such a big difference they wouldn't be able to ignore it, despite their shoestring budget and time constraints. He'd have to solve their biggest problem. Lots of founders with domain expertise struggle here. They see all the different ways that they can help and they try to either bucket all those together or just sell a product with all sorts of different value props. So in Tejas' case he might recognize that neighborhood family restaurants need to make more money. He'd ask How can I help them do that? How can I help them get more customers? Maybe we can try Instagram ads. Maybe we can swap promotions with another restaurant. We need more regulars. Maybe we can create a loyalty program. There's too much food waste. Maybe we can leverage machine learning to better predict supply needs.

Brian Scordato:
When you've got all this specific knowledge, a good way to figure out the most impactful initial problem you need to have laser focus on, is a mental model called Inversion. It's exactly what it sounds like. Invert the problem and solve the bad case. So if I want to exercise I shouldn't ask how can I exercise more. That'll lead me to a bunch of ideas around joining gyms creating accountability partners and a whole bunch of other things that probably won't work. I should ask how can I ensure that I don't exercise next week. The answer is pretty obvious. If I've always got something else to do, I certainly won't exercise. So step one for solving the exercise problem is to solve the calendar problem. For Tejas the most important question was, "how do we get more new customers?". The inverse then was, how do we make sure we never get another new customer. The answer that was clear. Hide the site so people can find it on Google.

Brian Scordato:
Tejas knew from his parents restaurant that the way most new customers found the restaurant was by googling "Indian restaurant near me" when they felt like Indian food or we're new to the area. So Tejas realized the key was to figure out how to show up first in all sorts of Google search rankings. After figuring out the low hanging fruit SEO stuff he realized that the key for all SMBs, small and medium sized businesses, was ratings and reviews. The Google algorithm is heavily weighted towards reviews and ratings on Google. The livelihood of these businesses then depend on their best customers writing reviews so they can get new customers. When's the last time you left a review at a place you loved? Ever? me either.

Brian Scordato:
So Tejas' plan was set. The problem he needed to solve wasn't how to get more customers. It was how to get the best customers to leave a five star rating and write a glowing review, that would move the needle. Specific knowledge is about understanding the space well enough to have a tight focused opinion. Other people can't have because they simply don't have your point of view. It's about knowing what the single most important or most annoying or most painful thing is for your customer. Then creating an obvious, clear short-term win coupled with a longer term vision that matches the way that customer sees themselves. In the short term restaurants would be hiring Google search ranking and get more customers. Longer term there is a clear path to connection and conversation with their best customers. This insight Tejas has is earned. Specific knowledge isn't a commodity. It should feel like you've been subconsciously working on this idea for years, separating yourself from anyone else. It shouldn't feel like you just noticed CBD was a thing and maybe you'll make CBD for X. When you truly recognize how important specific knowledge is, everything else opens up.

Brian Scordato:
I stress a lot about what I'm gonna say in these podcasts. Am I the best person possible to talk to you about pricing for your marketplace startup or about raising money or about finding a technical co-founder? I'm definitely not. But I am the best one to tell about Tejas as time at Tacklebox because I'm the only one who knows about it. I can tell you about all the experiences we've had with our hundreds of founders navigating the early startup world better than anyone else because I was there. If you don't show up with specific knowledge you've got to work furiously to get it or higher for it. Your unique point of view will drive everything.

Brian Scordato:
But I promised we'd start a CBD company. So where's my specific knowledge around CBD? It's nowhere. I know for sure someone will be successful creating some sort of CBD product for the sweet green and Soul Cycle crowd if they haven't already. They'll raise money, Red Antler will design it, they'll toss millions in Instagram ads, they'll have a store front in the West Village and we'll have a DTC strategy that kicks butt, that's just not gonna be me. I've got no specific knowledge there, I don't understand CBD or what those customers are looking for. So for me I've got to get small. Think about a cohort I know. If I were starting a CBD brand it'd be for me. It'd be outcome based.

Brian Scordato:
I'm a washed up old college athlete who likes to relive the glory days. I know how frustrating it is to not be able to do things I used to be able to do and still try and do them. I'd sell CBD to me. CBD cream for ex college athletes with sore muscles who pretend they're 20 twice a week and need to be able to wake up for work the next day. CBD droplets to help us morons addicted to the few moments that remind us that we used to be good at something to fall asleep after a 9 p.m. game on a Wednesday with an 8 a.m. meeting the next day. Is that enough specific knowledge? Not really. Since I don't have much specific knowledge coming in, the race or specific knowledge would begin. I need to understand exactly how my customers treated their pain now and how they think about CBD. I need to research strains for sore muscles and sleep.

Brian Scordato:
I need to educate myself in general so I'd immediately find the top 50 CBD brands and reach out to each. I'd find the manufacturers understand the supply chain. I'd try and figure out a point of view. That way I could start layering on my circles in a Venn diagram, pushing to make my knowledge more unique. I kind of understand X athletes, particularly the cohort that live in New York City and might be injury by CBD. I understand pain and how 34 year olds treat it. I can potentially understand how CBD sleep boil in the supply chain work and once you layer those circles on the Venn diagram is starting to get somewhere. I still have no clue if this is a viable business but at least I've got something targeted that I can start testing to learn about. Specific knowledge is about giving yourself a thoughtful place to start. A specific opinion to test, so you can get feedback and build transparency.

Brian Scordato:
Now it's time to talk about leverage. One of the most common questions I get from solo founders is should I get a co-founder. There's a ton of baggage with that question. Looking at it in terms of jobs to be done, people could be looking for lots of different things. They could be looking to add accountability. They could be looking to remove accountability. They could be looking to spread out some of the risk. They might just want someone so they feel less lonely. They might have imposter syndrome or they might want to acquire a skill set that they don't have, like a CTO. There are probably lots of other reasons I'm not thinking of. The real question to ask, when you're deciding if you need a co-founder or not is "can I create leverage without a co-founder?".

Brian Scordato:
You need specific knowledge and a big lever to spread it early on. Those are the skill sets you need in a founding team. Sometimes that's done with one person but usually not. Naval Ravikant has an interesting podcast on leverage you should check out where he defines for different types. For founders I think in terms of two forms of leverage, network leverage and product leverage. Leverage means that each new customer is cheaper to serve than the last and ideally they're free. Additionally the product should become better with each new customer that joins without you building any more tech.

Brian Scordato:
Let's start with network leverage. An exercise I'd like to do with founders when they're considering solving a specific problem is to start with a big piece of paper. Draw circles for all the networks that they would need to become famous too for this idea to work. So for Tacklebox I'm working with super early stage founders. For us to reach our potential as the first stop for people when they think "I've got a startup idea", I need every leader stage accelerator program to be familiar with me. I also need every VC, every angel, companies like Amazon, Stripe and WeWork. I need newsletters that early stage founders to subscribe to. I need podcasts for early stage founders. I need the writers at publications like Wired, Tech Crunch and so on. I need startup schools like General Assembly, I need them all to know exactly what we do and to understand and appreciate our value.

Brian Scordato:
How will that create leverage for my specific knowledge about early stage startups? Easy. If an early stage VC meets a founder they like, but they're simply too early on maybe they'll point them my way. Perhaps accelerator programs will put a note in their rejection letters to companies that were too early for them that maybe they could try Tacklebox. We could get those companies some traction and send them right back. If they trust us and understand our value it can be win-win. For our CBD company for athletes, I'm far less sure of the network I need. Probably gyms like Equinox maybe marathon or triathlon clubs. Not really sure how to find these people, which again shows a lack of my specific knowledge for the customer. Someone that would be able to amplify our CBD product which I'm calling Calm Down. That person definitely isn't me.

Brian Scordato:
The second type of leverage is product leverage. This is the one I've refused to give enough credit to over the years. I always think I can be a pseudo consultant and figure out how to scale later. That's a path that just doesn't work. There's a lot of tension here as Paul Grant has popularized the whole "do things that don't scale mantra" early on to understand the true value of your product before you sink too many resources into it. I think you should definitely do that. But I think you should also be realistic and cognizant about whether your product will actually have leverage or not down the road. Does your product have low or zero marginal cost. Does some part of your flywheel, the way you get customers attention, deliver value, create retention, get them nearer for new customers have zero marginal cost. Does your product amplify your specific knowledge in a scalable way?

Brian Scordato:
Let's think about Tejas. There doesn't seem to be a ton of leverage with this company view. He'll help restaurants and he's quickly expanded a few types of SMB is increased their page ranks, but what then? This actually encourages other SMB is that compete with the companies on his platform to use his platform as well. They'll need to keep up in the SEO battle. There's kind of a network effect here. From a pure product perspective he's built a software solution. Software as you know scales beautifully and has recurring revenue and once it's installed it's way easier for him to continue to layer on all the features he thinks can be helpful. These might not be impactful enough to spur the initial sale but once he's earned trust they'll be ad on features that he can definitely sell. The last type of leverage he has is actual sales. He's built on an early sales team with managers who were sold to SMB as before and with young driven sales associates who happen to have cut their teeth on their Mormon mission. People he met while he was at BYU. This isn't as scalable but since the product itself has network effects and is sticky his sales team will have a huge impact far beyond their hour per sale equation.

Brian Scordato:
Now, for the CBD idea. What would my product leverage be? As a physical product it'd have to be word of mouth or viral coefficient would have to be really high. We'd have to figure out visibility or understand influencer marketing or something like that. I'm just guessing though. Maybe this whole CBD thing isn't as easy it'll making it out to be. The world's a very efficient place. You don't have a strong perspective on your differentiator and on the leverage you'll apply to amplify it, you're in big trouble. You're simply not going to beat out the crowd. You won't be the one who does the simple beautiful CBD.

Brian Scordato:
There are more channels for leverage now than ever. Be creative. I'm using one now podcast. It's a great lever. For years I created custom content for my founders and I spoke with them in a room with the door closed. I now create content for this podcast and I get in front of thousands of people. It's a great lever. Look for leverage at each stage of your funnel. Leverage for acquiring customers converting them delivering your product to retaining customers and helping your customers refer other customers. This will help you create a flywheel that'll free you up to work on your system of knowledge and leverage, rather than frantically in that system.

Brian Scordato:
There's a startup out there for you. Something meaningful you can build. Specific knowledge that you can apply a lever to to amplify. Don't settle here. Find something that has true startup founder fit. Then we'll test it all out. That's what we're going to do next time. Also I'll be launching "Woof", beautiful simple CBD for dogs. Have a good week.

Convert audio to text with Sonix. Sonix is the best online audio transcription software

Sonix accurately transcribed the audio file, “How Do You Find Founder Startup Fit? | Idea to Startup Episode 9” , using cutting-edge AI. Get a near-perfect transcript in minutes, not hours or days when you use Sonix. Sonix is the industry-leading audio-to-text converter. Signing up for a free trial is easy.

Convert mp3 to text with Sonix

For audio files (such as “How Do You Find Founder Startup Fit? | Idea to Startup Episode 9”), thousands of researchers and podcasters use Sonix to automatically transcribe mp3 their audio files. Easily convert your mp3 file to text or docx to make your media content more accessible to listeners.

Best audio transcription software: Sonix

Researching what is “the best audio transcription software” can be a little overwhelming. There are a lot of different solutions. If you are looking for a great way to convert mp3 to text , we think that you should try Sonix. They use the latest AI technology to transcribe your audio and are one my favorite pieces of online software.

Episode Description:

You need two things to build a great startup: Specific knowledge and a lever to amplify that knowledge. On today’s pod, we’ll start a CBD startup with specific knowledge and leverage mind, and hear how Tejas (a Tacklebox founder) was able to build a great business on the back of a mental model.

Show Notes:

Tejas Konduru, Tacklebox Founder | Via

The Naval Podcast | Product and Media are the Leverage of the New Wealth


You can find this and all future episodes on iTunes and here on gettacklebox.com/idea-to-startup.



Brian Scordato