I co-founded a weed startup my senior year of college.
— Alex Milligan (@itsalexmilligan) April 28, 2022
Last year we did $40m+ in revenue.
All bootstrapped!
Here's how we did it, the struggles we faced, and the 10 critical pieces of advice I'd give early tech founders:
[My first 🧵 thread]
1. Earn & learn by selling a proven product first
— Alex Milligan (@itsalexmilligan) April 28, 2022
Back in 2014, before we started Nugg, ridesharing was just getting big.
We knew nothing about marketing, but convinced Lyft to pay us cash any time someone used our promo code to take their first ride.
We couldn't run ads, so we:
— Alex Milligan (@itsalexmilligan) April 28, 2022
-partnered w/ local businesses
-hired 1,200+ students to do the same in other markets
-built a bot to upvote our promo code on coupon sites
-scraped public FB event pages & hired freelancers to post our promo code in them daily
In 9 months, we brought Lyft 40,000+ users and made over $250k (seed money, baby).
— Alex Milligan (@itsalexmilligan) April 28, 2022
We learned to:
-experiment ruthlessly (what worked surprised us)
-create leverage by outsourcing repeatable processes
-find ONE channel/tactic that works, then put all attention into optimizing
Learning acquisition is hard.
— Alex Milligan (@itsalexmilligan) April 28, 2022
You need a reliable feedback loop to know that your experiments are failing/succeeding because of copy, creative, targeting, etc., and not because nobody wants the product.
Market a proven product to accelerate your learnings + earn startup cash.
2. Find co-founders, the right ones
— Alex Milligan (@itsalexmilligan) April 28, 2022
What to look for in a co-founder(s):
• shared aspirations
• overlapping attitudes/worldview
• similar work ethic (ability to grind)
• complementary skills (or a willingness to learn them)
Why you need a co-founder(s):
— Alex Milligan (@itsalexmilligan) April 28, 2022
• emotional support
• distribution of labor
• diversify your cultural imprint
• vet & improve your ideas/decisions
The right partners reduce startup risk and help keep you sane.
My take -- don't go it alone.
3. Have pre-existing criteria for the idea you'll pursue
— Alex Milligan (@itsalexmilligan) April 28, 2022
Every startup requires that you take a leap of faith.
But you should know why you're willing to take one leap over another.
It'll give you the conviction you need to stay the course.
Our criteria were:
— Alex Milligan (@itsalexmilligan) April 28, 2022
> solve a problem that we had personally
> that affected a lot of people
> in a category that was growing
> that if solved, would dramatically improve people's lives
> that could make us rich
> and would be fun even if we failed
You don't have to be a subject matter expert to feel conviction around your startup idea.
— Alex Milligan (@itsalexmilligan) April 28, 2022
You just have to be curious enough to become one, and admit to yourself what will motivate that curiosity.
4. Don't off-shore your early product development
— Alex Milligan (@itsalexmilligan) April 28, 2022
We set out to create the first curated marketplace for cannabis delivery in California.
Come launch day (4/20/15), we didn't have a working product, despite getting pre-launch coverage in the LA Times, USA Today, and elsewhere.
We were also out $35k.
— Alex Milligan (@itsalexmilligan) April 28, 2022
Our off-shore "dev" had given us the runaround.
After scraping our pride off the ground, we saved face by delivering free pizza to 400+ customers that had come to the site to purchase.
We have customers that are still with us 7 years later b/c of this.
It sounds obvious, but when you launch a product, make sure it works (mostly) as intended and that you can iterate quickly.
— Alex Milligan (@itsalexmilligan) April 28, 2022
When off-shoring, you'll face:
— Alex Milligan (@itsalexmilligan) April 28, 2022
a) language barriers
b) time zone hurdles
c) misaligned incentives
Especially if you don't have a technical co-founder, any of these can kill your momentum.
You want clear, timely communication with your devs and shared upside in the outcome.
5. Listen to your customers (no, seriously)
— Alex Milligan (@itsalexmilligan) April 28, 2022
Understanding why people do what they do is the most important part of your customer experience equation.
It's your job to get constant insight, feedback, and criticism so that you can build better products and experiences.
At frequent intervals, you need to understand:
— Alex Milligan (@itsalexmilligan) April 28, 2022
• who your ideal customer is
• where can you find more of them
• what are the main benefits your product provides them
• how you can improve their experience
Look at user behavior, run surveys, & have conversations to get intel
This info should guide your product roadmap.
— Alex Milligan (@itsalexmilligan) April 28, 2022
And it's key that you build for a specific type of customer -- one who really likes your product, but doesn't love it yet.
Your job is to make them love it.
Rinse and repeat by taking the next group of customers from like --> love.
We eventually pushed a working product, but in talking to customers, learned that we had overlooked a major pain point.
— Alex Milligan (@itsalexmilligan) April 28, 2022
You needed a Dr's approval to legally buy medical cannabis, but the process for getting it was so uncomfortable that many consumers never entered the market.
So we made it easy and enjoyable.
— Alex Milligan (@itsalexmilligan) April 28, 2022
We launched a cannabis telemedicine platform, right on the heels of our delivery marketplace, where *almost* anyone could get their medical card online in ~15 minutes.
It was a 10x better experience than what came before, and it caught fire.
6. Get to PM-fit as fast as possible
— Alex Milligan (@itsalexmilligan) April 28, 2022
Before over-investing in brand, customer acquisition, geo expansion, etc., you need to know that enough people get so much value from your product that they'll keep coming back.
You need "product market fit."
Key indicators of PM-fit include:
— Alex Milligan (@itsalexmilligan) April 28, 2022
• strong retention (varies by category)
• organic growth via referrals / word of mouth
• feels like the market is "pulling" you forward
• 40-60% of customers would be "very disappointed" if they couldn't use your product.
With our telemedicine service, we had PM-fit in spades.
— Alex Milligan (@itsalexmilligan) April 28, 2022
WoM exploded, and we carved out a footing in organic search.
It became our growth engine, allowing us to acquire customers profitably and then funnel them into our delivery marketplace.
Having strong PM-fit gives you superpowers when scaling.
— Alex Milligan (@itsalexmilligan) April 28, 2022
a) It accelerates acquisition.
The longer customers keep coming back, the more they share, invite others, create content, etc. This sets off a cycle of acquisition that builds upon itself.
b) It accelerates monetization.
— Alex Milligan (@itsalexmilligan) April 28, 2022
The better you retain customers, the more you can earn from them and the longer you can keep them around, increasing LTV.
c) It creates a competitive advantage.
— Alex Milligan (@itsalexmilligan) April 28, 2022
As you increase organic acquisition and monetization, you can pay more to acquire new customers.
This lets you push competitors out of acquisition channels, expand into new channels that were previously too costly, and grow faster.
7. Nail your hiring process early
— Alex Milligan (@itsalexmilligan) April 28, 2022
As we grew both businesses simultaneously, we were soon crushed under the weight of our newfound growth.
All three co-founders were manning support 12 hours a day.
Opportunities were being ignored and we needed to hire.
Unlike other aspects of running a company, hiring can be made 90% science, 10% art (or intuition).
— Alex Milligan (@itsalexmilligan) April 28, 2022
You need the right candidates and the right process.
Here are the fundamentals that have helped us hire 150+ excellent people:
A) Be prepared
— Alex Milligan (@itsalexmilligan) April 28, 2022
You’re going to be hiring for roles you’re not super familiar with.
Research the hell out of them.
Turn this knowledge into a well defined job description and interview questions.
Use open-ended question formats (i.e. "describe a time when...")
Being prepared also means knowing which traits / experiences will make someone a strong culture fit.
— Alex Milligan (@itsalexmilligan) April 28, 2022
What type of person is likely to excel at your org, and who is likely to fail?
Write it down. Ask questions that will uncover these details.
DON'T compromise on culture fit.
B) Use multiple recruiting channels
— Alex Milligan (@itsalexmilligan) April 28, 2022
Post on job boards.
Ask your personal network for referrals.
Invite your CUSTOMERS to apply.
Create a referral incentive for employees.
Host events that attract smart people.
C) Run a metric-driven process
— Alex Milligan (@itsalexmilligan) April 28, 2022
1/ conduct two skills-based interviews, a take-home assignment, and a culture fit interview
2/ ask the same 25-30 questions of every candidate
3/ take notes on each answer
3/ score answers on a 5 point scale
4/ score the take-home out of 30 points
No comments:
Post a Comment