Akshay Kothari and Ankit built Pulse, tested pricing in cafes, and charged $4 for the first version. They sold 250,000 copies in six months and hit a million dollars. Key lesson: validate your product before fundraising, keep building while you raise, and consumer startups don't need as much capital as you think.
Chapters
First was I think Ankit and I built Pulse and we said, okay, we're going to push this out for free. That was the first thing that I think most people think like, oh yeah, it's the Valley, push things for free, get lots of users. But we had a professor, Michael Dearing, who said, why are you giving such a beautiful product for free? And I think we were thinking, well, this looks really ugly, nobody is going to buy this. But he said no, I think we should ask people. So we actually went out to cafes and asked them how much would they actually pay for it. We got people actually saying that they would actually pay $3 to $5. So the first version of Pulse actually had a $4 price tag, which was awesome because suddenly we— I think in the first 6 months we sold about a quarter million of these copies, so that was our first million dollars. Where we did not have to actually ask investors for money. And then we had enough traction and we were ready to kind of expand beyond that, where investors were actually asking us whether they could invest. So it's a very enviable position and I think we got a lot— we got really lucky, we got really fortunate with Pulse. But in general I think we can talk offline in terms of exact dynamics that you should think about if you are going out fundraising. In terms of what are some of the things that work, do not work. But if you stay focused on product, hopefully like people will notice that. And in today's world actually you don't need that much money to start things, unless you're actually building satellites, which I know a couple weeks ago somebody spoke about that. But I think with a lot of consumer startups you don't need that much money. So I think start something out there, push it out there, see if it has wheels, before you actually really think about raising money.
And the other thing that I would add to that was it was very good when we did fundraising because Akshay was more focused on that, whereas I was still focused on the product. And usually it's the case that when you're fundraising, your product suffers. And if you let that happen, then it impacts your fundraising negatively also. So it's always very important to keep the product going however you can. While you're in fundraising.
