On Tuesday, November 11th, 2014, OLC attended fin-tech.orgs meetup at Cooley LLP firm in San Francisco, where Mitch Fox from GoodApril talks about how his venture was acquired before even launching.
GoodApril was started by Benny Joseph, CEO and Co-ounder, Mitch Fox, Co-founder and COO, Graham Hunter, Marketing director.
“Benny started working on GoodApril at nights and weekends while working at Zecco with me”, said Mitch.
What it felt like
- Exciting – roller coaster ride of ups and down, this is pretty typical for startups.
- Validating – seeing your product being validated by actual customers and other businesses using it or wanting to use it.
- Nail Biting – the entire experience was a nail biting trip.
- Vulnerable – the acquisition process can make you feel quite lonely. Big company, lawyers and the co-founders.
There’s Only 5 potential Co-Founders I would trust
- Capabilities - you must have complementary capabilities when it comes to finding your co-founder. You may not always agree and that’s fine.
- Trust - this stems from above, you may not agree on everything, but you trust each other to make decisions that are for the greater good of the company.
- Balance - finding the right balance between co-founders working relationship. You’ll be spending a lot of time together and you have to work well together.
It takes a lot of trust to start a company with someone. It helped that Benny and I balanced each other out. Benny was a, ‘no’ guy and I was a, ‘yes’ guy. It really helped us figure things out.
Product is King
- Attack your LOFA
- The Concierge MVP
- Design Matters
“For our business model to work consumers had to actually see value in our service and if they did, would they pay for it,” said Mitch.
The first Good April product was not even a real product it was a fake MVP. “What we did was people would upload their documents and we would have Benny on the other side typing in their info from the uploaded scanned documents into another terminal then email the customer their final results,” said Mitch.
Design really matters, not only for the consumers but for VCs too. This can help drive engagement.
- Thought leadership – share your insights
- Product – show up in your industry
- Data – show what you know
The acquisition happened because people knew about us. We were on the radar to a lot of big companies.
Mitch explained how they were not afraid to talk to these big companies about what we were doing. This could be a scary thought as these bigger companies could easier attempt to build what we were working on.
Go to the right events for your company. In this case, Finovate was a great place to start.
Use the assets you have to get others to notice you. Your company should have done research or have some data that people are curious about.
GoodApril used some of their data and others data to create an infographic and got picked up by a few publications.
Develop your network, and recruit
- Meet your potential investors early
- Show progress with meaningful updates
- Put recruits to the test
When you meet investors early you can ask for advice and also when you stay in touch with them they can see how you are hopefully progressing. It’s better to ask for advice first then money and they just might just offer you money if you don’t ask.
“We had a lot of failed VC meeting, when some of them wanted to stay in touch we were sure to keep them updated on an almost monthly matter, sharing the good and bad stuff,” said Mitch.
They would put recruits through a few week test. This would help let them know if they were a good fit for the company from the companies perspective and theirs. This helped them dodge two bullets. One guy left for reasons unknown and we had to let someone else go because their skills were not up the standards we needed.
- Build before you go
- Have proof of product / market fit
- Know where you need help
Accelerators are good for what you would think - scaling a business. They are not there for you to build your product. That’s an earlier stage. We wish we could have more of a product before joining an accelerator so we could iterate on more of the feedback we got.
It was hard for them to know where we needed help because they didn’t have much of a product to show people.
Once they got approached by Intuit, the accelerator really became helpful because they were surrounded by advisors and other people who had been through this before.
Why did we choose to Exit?
Risk vs Reward
“During the acquisition process we were told our product was going to be killed and we were going to be put onto another project. It was a very hard call. We thank Intuit for being transparent with us and letting us know,” said Mitch.