5 Ways Startmate Changed Us
We’ve just rolled out of Startmate 2017 and into our seed round, so before we get too caught up in the pitch I wanted to pause and reflect on how this experience changed our business.
For context, Startmate is Australia’s most successful accelerator, which for us took place between Jan-April in Sydney. The “us” here is Mentorloop — we make great mentoring available at scale for companies and their people. We’re a founding team of two, we launched last year and came into 2017 with a little under $4K MRR across 9 clients.
Yes this is a listicle — they’re fun — so without further ado, here are the top 5 ways Startmate changed us.
1. They’re not kidding about “accelerator”
For us, Startmate started with an injection of cash ($75K), a move to Sydney, getting thrown in the deep-end in SF, and the immediate doubling of the Mentorloop team.
The focus on growth brought forward two key hires, and a third before the program was finished. The “pressure cooker” experience of working from the same office as the other companies in the program prompted our whole team to perform at a higher level, and the relocation to take part in the accelerator allowed me to focus 100% on the business.
There’s no room to hide in Startmate — everyone is seeing you ride the ups and downs of your business’ growth. “Everything is awesome” or “we’re killing it” quickly gives way to raw intellectual honesty about the fact that the challenges you face daily may sink your business. You quickly learn that if you don’t acknowledge a problem, you can’t fix it.
2. Metrics: beyond MRR
As Startmate began, MRR (monthly recurring revenue) was our hero metric, and our thinking was that we’d sold Mentorloop into 9 companies, so surely it’s now just about adding more fuel to what we’d already been doing, and scaling up?
Turns out, no. Startmate taught us that:
- MRR is just a function of your sales activity, what’s really interesting are its drivers.
- Ecstatic clients are as important as revenue growth.
- It’s not just about the # of clients, you need to find your ideal clients.
So Startmate changed how we measure the health of our business — our dashboard for Mentorloop — and we now track across sales metrics as well as product & engagement ones.
We break down the drivers of our MRR, tracking prospects generated (inbound and outbound), product demos per month, CAC and LTV, and time to close. Our best indicator of client satisfaction is clients that have expanded their contracts with Mentorloop (negative churn).
And from a user perspective we track NPS for both program admins (our clients) and mentors & mentees (our end users).
We still track MRR. It’s an easy SaaS metric that we can all understand — and incidentally we increased ours by 35% each month in Startmate ;-) — BUT we now balance our sales & marketing metrics with product & satisfaction measures to avoid churn biting us down the track.
3. Product: onboarding & education over more features
We started Startmate with a LONG feature development list. We’d only just really come out of MVP stage, so our product dev roadmap was extensive.
One of our greatest insights from Startmate’s wonderful product mentors was that we actually needed to throw education, not functionality, at our user engagement problems. This insight was a pragmatic one too; education was A LOT cheaper and quicker for us to develop than functionality.
As mentioned above, we tracked NPS, and realised that while we had a very good score for our mentoring program admins (our clients), we had a shocker for our mentors and mentees (our end users). We learnt that it wasn’t so much about the individual user NPS scores, but rather the delta between the two. We’d built Mentorloop to sell it in to our clients, so it made sense that the end user experience was under-cooked.
So we integrated Intercom, and got chatty with our mentors and mentees. We now drip-feed them content to optimise their mentoring relationship, run pulse surveys, guide them through goal setting, and add value to their meetings.
Switching the product focus to our end users and delivering them better resources, tools and support for their mentoring relationships saw our end user NPS increase from -11 to +21 over a six week period. Changing user sentiment was a daunting task at first, but this was an excellent lesson for us in taking action swiftly and backing a hypothesis for positive impact.
4. Sales: don’t underestimate the Founder Factor
Our focus on MRR mentioned in (2), meant that we considered our next hire would be sales; let’s pour fuel on this thing and go!! Again, no.
The founders are always going to be the best people to sell in an immature product, in an emerging market. The fact is sales people just won’t care enough. It’s also important for Heidi and I to hear that pause in a sales conversation where a prospect decides they’re in or out — we need to understand intimately what pain point we’re solving for because that will inform our product development. We also need to know who the right clients are. It’s asking for trouble down the track to just try and ramp sales before you’ve reached product-market fit. We’re still learning too much.
Bonus changes relating to Sales:
4.a) Structure deals for cashflow. This year we switched from monthly invoicing to 12 months paid upfront. Now that we’ve got employees this was critical, and none of our clients batted an eyelid.
4.b) Our pricing is too damn cheap. We originally priced this thing so we would never lose a sale. Now we need to price it to reflect the value we’re delivering to our clients.
5. An amazing network, mentors and, well, friendships
Coming into a mentor-driven accelerator running a mentoring company gave us an insight into what we wanted to get out of those relationships, but nothing could have prepared me for the power of the Startmate network. We met mentors, fellow founders, and now have a lot more friends in Australia’s startup scene.
Connecting with people going through exactly what you’re going through — the euphoria, the self-doubt, the sense of failure and the excitement — is the single most valuable thing that Startmate delivered us. We will carry it with us for our whole lives.
For another founder’s perspective on Startmate please check out What I learnt as a non-technical solo founder in a tech accelerator program by my friend and mentor Gaby Howard.
Thank you to all the wonderful mentors who helped us during Startmate, and continue to give us their time beyond. Thank you especially to Nick Crocker for running a cracking program. And of course thank you to the teams who were in there with us, the founders of Morse Micro, Honee, Construction Cloud, Black.ai and Flaunter.
Get involved — applications for Startmate’s 2018 Sydney intake are closing soon.
