by Y Combinator1/20/2016
In this episode of startup school radio, host Aaron Harris first sat down with Chris Finneral.
Finneral is the co-founder of SketchDeck, a service that provides designs on demand by allowing businesses to outsource their presentations to professional designers. Later in this episode is Diego Saez Gil, the co-founder of smart travel products startup Bluesmart.
In the below excerpt, which begins at minute 13:17, Chris Finneral talks about how SketchDeck veered off course early on by investing all their time in trying to build a platform suited to the needs of one customer — and how they got back to basics to focus on growth.
Aaron Harris : How did you actually start getting people to use it at first?
Chris Finneral : Yeah, this is a fun story. Our previous company, [for] nine months, we didn’t generate a dollar of revenue or a pound of revenue in that whole time. And so we thought, we have to change this with this new startup.
So within the first few weeks, I was just out, getting in touch with everyone I knew who I thought might create presentations, and I was just like, “I will make you your presentations for you. I am only going to charge you one pound per slide. Do you have anything that I can make for you?” And most people said no, but eventually, I found one startup in London. They were preparing for their pitch deck and they had to put content together on a slide and they said, “Sure, if you can turn this around for me, I’ll pay you.”
And we started off with that, someone sending me their rough sketches. I stayed up overnight, just making the slides, and they PayPal-ed our business some money the next day. That was our very first sale.
Aaron : …Did that make you say, okay, now we are going to go after a lots of startups? Or was it just back to the drawing board, of, “Okay, now we are going to talk to everyone else we know and try again.”
Chris : So this is where we actually went wrong. What we should have done, we should have said, “Great. We found one person now that wants this. Let’s find more of these people and also see if they want more work,” and basically build the business from that point.
We didn’t do that. We actually stopped at that point and said, “Okay, we’ve proved that people want this. Now we are going to fully automate this and build a very scalable product.” So that’s what we did for the next few months which was kind of the wrong thing to do.
Aaron : So you went and build now a perfect machine to address this one tiny use case, rather than trying to figure out if it’s actually a use case?
Chris : Exactly. Exactly. We were too eager. We were like, “Wow, okay! Proved the idea. Now we need to build the super scalable tech product that can deliver every single presentation in the whole world.” And that’s hard. You can’t just get there in one step.
Aaron : Hard might be an understatement there.
Chris : So unfortunately, we actually spent two months trying to build this thing without growing and without trying to get some more clients. And then realized that, that was the wrong thing…
Aaron : What made you realize it was the wrong thing?
Chris : This is funny. Fast forward from September 2013 when we started the company, to January 2014, when we arrive in California [for Y Combinator.] And it was our first office hours meeting we had actually with Kevin Hale in YC. And he kind of looked at what we’ve done for the last few months and was like, “OK guys, this is fine, but what happened to the growth?” And we explained what we are trying to do.
And he basically said, “Look. Maybe this will work, but it’s going to take you another year or so to build, and you are not going to grow in the meantime. Go back to what you were doing before. Start from there, focus on growing that number and that will be a great thing to do.”
Aaron : This is such an easy mistake to make, you get your first, like, inkling of goodness. You got a check from a customer, you got paid. Someone is willing to pay for the service that you dreamed up in your head. And then you say, “Off to the races, we are going to be a huge company!”
But really, what you have to go back and say is, “Wait. What defines the success of a startup?” It’s not necessarily that we have a beautiful product, it’s that people want what we have and are using it, and in the case of a paid product, that they are paying us.
So Kevin tells you this, [asks] “Hey, where is the growth?” What does that actually change about what you are doing? What happens next? I mean, you’ve been working on this beautiful product for three months now.
Chris : Yeah.
Aaron : How did you get back to getting customers?
Chris : So we actually spent the next few days after that in a little bit of a denial. We were like, “Kevin, he doesn’t know anything.” …And we kind of thought we could continue on. But then it did seem to sink in and we were like, “Okay, he was right.”
So we pretty much parked the product. We basically said, “Actually, this is not the right thing to be spending time on now. Let’s go back to what we were doing,” which was finding people who needed this, who needed presentations designed, and we will design it for them. So we went back to that.
…And what we did is, we said, “Each week we are going to grow this.” So actually, first, we would manage to get a $100 [order] from someone. So that was our kind of baseline. That was our baseline and we said, “We are just going to grow this number each week.”
Y Combinator created a new model for funding early stage startups. Twice a year we invest a small amount of money ($150k) in a large number of startups (recently 200). The startups move to Silicon