Podcast Summary
Starting a business with traction: Focusing on customer obsession and steady growth, even with just a few new customers per month, can attract seed investors. Having traction like a waitlist is desirable for early-stage companies.
It's an opportune time for entrepreneurs to start their businesses, focusing on customer obsession and steady growth. With as little as one or two new customers per month, startups can attract the attention of seed investors. Founder.university, a program by Launch, is designed to help early-stage companies build their product and decide whether to incorporate. Launch looks for builder-founder teams and favors marketplaces, consumer subscription, SaaS, and FinTech businesses. Even if you're just starting, having traction like a waitlist is desirable. Pablo from Big Rentals pitched a solution for small rental businesses, addressing their challenges with outdated methods and lack of technology. Big Rentals offers an all-in-one software to manage the entire business online, increasing bookings and revenue for Jeff's business by 53%. The platform also includes a marketplace to help rental companies find new customers.
SaaS marketplace commission model: SaaS company charges monthly fees to businesses for software use and takes 30% commission on marketplace rentals, appealing to small to medium-sized businesses with pricing ranging from $100 to $300 per month, successful customer generates $15,000 monthly revenue, growth strategy includes engaging in online communities and creating their own.
Big Rentals is a SaaS company offering software solutions for equipment rental businesses, while also operating a marketplace where rental companies can list their inventory for others to rent. The business model involves charging rental companies a monthly fee to use the software and taking a 30% commission on rentals facilitated through the marketplace. The software is appealing to small to medium-sized businesses and has already secured 12 paying customers, with pricing ranging from $100 to $300 per month. The most successful customer to date generates around $15,000 in monthly revenue and was acquired through Facebook groups. The team plans to expand their customer base by engaging in relevant online communities and eventually creating their own. The absence of SOC 2 compliance may pose a challenge for growth in the competitive B2B market.
SOC 2 compliance, Off-roading: Vanta simplifies SOC 2 compliance, saving businesses up to 85% on time and costs, while Wordwell connects landowners with off-roading enthusiasts, monetizing underutilized land and addressing demand for off-roading locations.
Vanta streamlines the SOC 2 compliance process for businesses, saving them significant time and money, while Wordwell provides a solution to connect landowners with off-roading enthusiasts, monetizing underutilized land and addressing the demand for off-roading locations. Vanta simplifies SOC 2 compliance, allowing businesses to achieve compliance in an average of two to four weeks, compared to the usual three to five months without their assistance. This results in hundreds of hours saved and up to 85% cost reduction. Additionally, Vanta offers automation for GDPR, HIPAA, and other compliance requirements. Wordwell, on the other hand, focuses on connecting landowners with off-roading enthusiasts through a two-sided marketplace. The company has seen success with five landowners and over 700 customers, but aims to expand its reach by capturing a larger portion of the $6.5 billion TAM. Their go-to-market strategy involves leveraging word of mouth and social media presence to attract both landowners and off-roaders. These businesses address distinct pain points in their respective industries, with Vanta streamlining compliance processes and Wordwell connecting landowners with off-roading enthusiasts to monetize underutilized land.
Land rental business, AI tool: Unique businesses like LandArc's land rental service and MyLens.ai's AI tool, led by capable teams and showing impressive growth, can benefit from a .tech domain name and opportunities like the Jam with JCal contest for exposure and feedback
Brittany from LandArc is leading a unique business that allows people to rent land for various outdoor activities, including camping and hunting. This business, which has a team of experienced founders and provides insurance coverage, is currently the only one of its kind. MyLens.ai, another promising company, offers an AI tool that simplifies complex information with clear visualizations, making it an invaluable resource for educators and researchers. Both companies are led by capable teams and have shown impressive growth. The use of a .tech domain name adds credibility and helps attract investors and customers. The Jam with JCal contest, which invites early-stage startups with under two million funding and a .tech domain name to pitch their business, is a great opportunity to gain exposure and receive valuable feedback.
Education market: My Lens, an AI-powered tool, prioritizes educators as customers due to their high engagement and value for feedback, generating $50,000 in annual revenue from 140 paid customers.
My Lens, an AI-powered visualization tool, has identified educators as its primary customer base due to their high engagement and retention, despite consultants potentially having deeper pockets. The company's choice to focus on educators in its early stages allows for valuable feedback and learning opportunities. Currently, My Lens has around 140 paid customers, generating approximately $50,000 in annual revenue. The tool is built on top of Jupyter 4.0 and offers interactive visualizations that set it apart from competitors. While it's unclear which AI model will ultimately dominate the market, My Lens is committed to staying ahead by continuously refining its product. The user experience is also a significant selling point, with customers reporting delightful experiences even in the early stages. Prospers AI, the next presenter, focuses on helping businesses find new suppliers and streamline their data analysis processes.
AI in procurement: AI platforms like Prosperous AI enable businesses to search vast databases, unify data sources, ask simple questions, set material qualifications, and negotiate with suppliers, potentially leading to significant cost savings.
Prosperous AI is revolutionizing the procurement process by allowing businesses to search a vast database of contacts and companies using semantic search, unify data sources, ask simple questions, set material qualifications, and even have AI carry out negotiations with suppliers. Their pricing starts at $49 a month for BI analytics and $249 a month for full access to the procurement platform, with a $20,000 onboarding fee for a two-year contract. The team, which has been working together for 10 years, has a proven track record and is currently focusing on expanding into large-scale commodity purchasers within building materials. By using AI to negotiate and communicate with suppliers, Prosperous AI saves buyers time and resources, creating network effects and potentially leading to significant cost savings. The platform currently has five major buyers on board and is building its supplier database through web scraping. Prosperous AI's focus on negotiations and generative analytics sets it apart from other procurement SaaS solutions, making it an additive rather than a replacement. The high product velocity and high ticket prices of Prosperous AI's offerings make it an attractive option for businesses looking to streamline their procurement process.
Business phone systems: A dedicated business phone system like OpenPhone improves customer experience and sales team efficiency with features like shared numbers and affordability starting at $13 a month.
Having a dedicated business phone system, like OpenPhone, can significantly improve customer experience and sales team efficiency. OpenPhone offers a shared number feature, allowing multiple team members to answer calls from one number, ensuring quick response times. Additionally, OpenPhone is affordable, starting at just $13 a month, and Twitch listeners can get an extra 20% off. For businesses looking to expand, there may be opportunities to monetize through marketplaces or affiliate programs. The speaker also expressed interest in investing in Big Rentals, a company operating in the large and growing equipment rental market. Overall, the key takeaway is that having a strong team, a good product, and traction in a large market are essential qualities for investors. If you're a seed investor or high net worth individual looking to meet promising founders, consider joining Launch's Whisper network by emailing Kelly at launch.co. Lastly, the importance of hard work and customer engagement was emphasized.
VC's investment strategy: VCs aim to make their entire investment back in a few successful companies, accepting losses in others. They invest early for higher potential returns and consider charging for software or providing it for free based on market size and potential incentives.
Venture capitalists aim to return their entire investment in a few successful companies from their portfolio, while accepting losses in some. They prefer investing early in startups to potentially achieve higher multiples, even if it means longer fund maturation. Regarding business models, they consider both charging for software and providing it for free, depending on the market size, acquisition costs, and potential incentives. The decision can be tested through experimentation with different pricing models. Ultimately, understanding a VC's motivations and the potential impact on the startup is crucial for founders.
Costs, hiring sales team: Consider lower-cost options like virtual assistants or AI for sales teams when starting a business. Focus on customer growth and modest monthly increases to attract investors and secure funding.
Starting a business requires careful consideration of costs, particularly when it comes to hiring a sales team. A small customer base may not generate enough revenue to support a high-salaried sales team. However, the current economic climate offers an opportunity for entrepreneurs to access a large talent pool at lower costs through virtual assistants or AI. By focusing on customer growth and aiming for modest monthly increases, startups can attract seed investors and secure the funding they need to scale. So, in summary, be mindful of expenses, leverage available talent, and prioritize customer growth to position your business for success.