Insights for Employees Ready to Launch Their Own Startup

You have to be good at building relationships. It requires for you to be patient and be a great networker and love people. If you have those kind of qualities, that's what sets you up to become that team leader. A team leader is somebody who supports his team and takes all the obstacles away that they cannot work together. So that's, I think that's the most important thing.

Let's go ahead and dive into some of the questions here we have today. I see we already have 2 questions. Both of them are around fundraising. I mean, inevitably the conversation goes to like, how do I find money to build my startup? We can get there, but I think that putting the cart before the horse a little bit. So Mia, maybe you could talk a little bit about maybe what, how you guys were thinking about your fundraising round initially, maybe some misconceptions you had, or maybe you had the right conceptions of what fundraising is and when to raise it, when you're at that early, early stage. I'm also happy to share some things that I've learned on my journey, but let's start with you.

I'll start with the misconceptions. I think there are plenty, and then Ryan, correct me where I'm wrong, but I feel a lot of founders associate raising money with success of the company, which is the biggest misconception there is. Just because somebody raised $25 million doesn't mean they won't— like Quibi is like the biggest example— doesn't mean they're gonna not die the next day. And if somebody's bootstrapped, that doesn't mean that they're not gonna be successful. So how much you raise, how early you raise, who you raise from, is not a measure of success. You are the measure of success, and what your product can do is the measure of success. So this need to show everybody that I raised $2 million because the guy next to me at Founder Institute raised $5 or like raised $1 million, uh, is the biggest misconception in my opinion. Secondly, the biggest misconception is you're raising money because you think that will fuel growth. Without knowing where you need to put the money in. So you're like the bar of how much money you're raising is what the other guy raised. That other guy's business model, guy or girl, that other person's business model is very different from yours. Just raise the amount of money you need because you're going to suffer if you raise too much. You're going to be in trouble later because you'll have your goals, well, the board will put different goals for you. So if you raise $20 million, Your goal cannot be $2 million in annual recurring revenue. It's going to be way higher. So you raise the money that you need and that's it. Dilution is a real thing and preserve your equity. That is like people always go like, you know, the Shark Tank deals are horrible and everybody's just after raising money. So people do not appreciate their equity upfront because money is more important. It should be the other way around. Equity is more important than the money. So those are the top 3 that off the top of my head.

Yeah, those are all really great points. You know, I think it also ties to something that James Taylor is saying here in the chat is how do you pay the bills while starting a company that has no income, right? And it's sort of that chicken and the egg problem, which is you need to build a product and a team and get some customers in order to raise money, but you need money to go and build the product and build the team. And so Like, Treya, maybe you could talk a little bit about that chicken and egg problem. Did you have that as a founder, and what advice would you have to founders who are maybe facing that right now?

Oh yeah, oh yeah. And I do also mentor some, um, uh, in my free time, uh, some startup founders. So reach out, feel free to reach out to me on LinkedIn. Um, money is not the solution. It sounds crazy, but it's really not. Money is actually, if I believe, if a startup gets too early too much money, and if we look at the history, it's gonna be more negative than positive in most cases. I'm not saying all, but most cases. What you need to do is focus on what I did was I started slow. I looked at what can I do to bring in the technology, bring in the team, build a team and how can I make it work without investing too much money. I looked for how do I get to revenue fast. That's why I started with the micro studio and we had paying customers. So we had revenue there. That's, I think the revenue should be for your first focus, not raising money. And I could not agree more with Samaya. Yes. The— I think there's way more important things as a founder you have to do first than raising money. Building a team, have clearance on your business model, really put an organization background backend together where you collect everything, where everything has a place, and where you can bring people in and participate and improve on your plans, that's the most important part. Money is the least of your worries as a startup. It is, it should be.

Yeah, again, good points there. I think there's an interesting question here in the chat. There's actually two. So one is from Anna. She's saying that she's got an idea to help visually impaired people navigate streets, but she doesn't know where to start or how to go about it. And it kind of dovetails into Rohit's question, but let's start with Anna's first. Samia, maybe do you want to talk a little bit about like, how does someone get started? I mean, if you just have no startup experience, but you've got an idea, like, do you have any best practices or things that based on your experience you'd like to share?

Yeah, I think the most important is actually not to get started, but to validate your idea first. Startup is always a risk. But that doesn't mean we can't de-risk some of the risk, if you know what I mean. It'll always be like, but it doesn't have to be 100% of a risk. It can maybe be an 80% of a risk. So the first thing that you need to do is validate ideas for something that I've recently learned the term, not product market fit, but deep product market fit, which means there is an audience around you that requires it. There's an audience around you that can use the idea, whether it's user interviews, whether it's a really basic prototype, like something that gives you data that somebody is willing to use this. And more importantly, that somebody is willing to take money out of their wallets and pay for it. That is deep market— the product market fit. Product market fit is there's a problem, And then there's a solution and that solution fits the problem. But then they're taking it one step further. Is someone willing to pay for it? You know, it's the same thing. Like if Facebook was paid, you know, going onto the, on social media and pressing likes, would someone pay for it? That simple. So that's kind of what you have to think about. How will you earn money? And about what Treya said, that you need to get to revenue fast and you need to build your blueprint upfront about how will I get to that revenue fast without building the entire product. So there's a concept of minimum viable product that we all know, but we have to get to minimum testable product first, something that we can test, an MTP, and figure out that we can get to revenue. So though that is like actually one of the biggest mistakes I made, so I feel very strongly about it. We got to product and we realized that we've spent all of these hours for nothing. Nobody's buying it. Yes, there's a problem. Yes, there's a solution, but nobody wants to pay for it. So we had to pivot it entirely. Why go through all of that? So de-risk it up front. That's, I think, the first thing that I would do.

One, one follow-on question for you is, from like the date you started the company or started working on it to like your revenue or where you were in like a comfortable position, how many years did that take?

Uh, at least for me, at least a year and a half for us to start getting true revenue. And by true revenue, I mean that it's not a warm introduction. It's not that some VC or someone who knows going like, hey, these guys are cool, you're better, you should try them out. It's like you reach out to a person, you tell them, hey, this is our product, and they say, okay, cool, I don't know you, but I love this, I'm gonna buy. Like, that's what I call like true revenue as opposed to referral revenue where somebody already kind of knows you, you know, somebody's given an introduction. It took us over a year and a half.

Yeah, I love that concept of true revenue. Treya, what would you add?

Um, I— Samia summed it up so beautifully. I think, um, how do you start? You have to, if you have an idea, validate it, build a niche. So it's like if you are a cook, you cannot, uh, cook a 5-star menu from the get-go. You have to learn how to do that. So, but you can maybe produce a nice sandwich and ask around what is the best ingredients, where to buy them, who would like, what population you can sell that specific sandwich. Maybe it's a vegetarian sandwich, right? So that's the work you have to do. Define that really niche space that you fit in and then Look for people who can help you and bounce your questions and you take that journey with you, like Founder Institute or other on LinkedIn. There's so many mentors that you can leverage or so many groups that you can join. There are so many incubators in each city, accelerators, so that they have free sessions. I'm part of Tech Alpharetta. That's an incubator. So they have Wednesday and Friday sessions where everybody— you don't have to be a member— can join and participate, and you get feedback. You can present your idea, and there are experienced founders that have gone through, have exits, and they give you feedback. So that's the first You don't need no money for that. You can do that right off the bat right now.

Yeah, that's very true. I think there's some more questions here around like fundraising and what I really liked about what your comment was, Samia, was about how do you like shrink that gap between making the leap from employee to entrepreneur? And like back when we were, you know, running in-person sessions, we ran a lot of events called Making the Leap from Employee to Entrepreneur because At the end of the day, there is no safe, like 100% foolproof way to make that leap. You're gonna have to leap that and jump across that chasm. The question is, how big is that gap?

Right.

By doing things like getting customer validation, building your team, building your product, even generating revenue before you quit your job, those are all ways that shrink the gap so that it's less risky. And I think it's time we have the hard conversation around fundraising. Which is that there's this huge misconception that you can just like have this idea and not have a technical co-founder and not really build anything and go out and raise like millions of dollars of investor capital. I had that misconception when I started back in like 2010 and it did not work out very well and it resulted in like being a starving entrepreneur for 4 years while I figured it out. And so the beauty of things like Founder Institute is they can shorten that learning gap so that you're able to figure out those things early on. And so what I wanna do here is going back to Rohit's question about what are some of the frameworks, that, or mental models that you need to have to like think about this entrepreneurship journey. And I think we should start with square one, which is that most of you on this call will either not raise money or in fact, probably 100% of you are not ready to raise money right now. So you should not depend on that. In order to make the leap. You absolutely need to build out your team, build out your product, and get traction before you should even be talking to investors. And so like this helps you level set because if you're not expecting to raise money to pay yourself a salary, you have to figure out a plan B, which is how can you sustain yourself while you're bootstrapping your company to revenue. And there's a really, really good page here. Akshay, if you could put that benchmarks link in the chat. I just wanna share this really quickly because I think this is really important for every single founder here to understand. So this is what we call our startup funding benchmarks. It's just fi.co/benchmarks. I wanna walk you through this really quickly. So there's a couple different stages of raising money. There's pre-seed, which could be anywhere from, you know, a $1 million or excuse me, a $25K to $1 million check size. There's seed, which is a bigger check size, $1 to $5 million. And then there's Series A, which is $5 million plus. And so for most of you, you're looking at pre-seed as your first round of funding. So if you're a startup founder, here are some of the things that you will need to achieve in order to unlock your pre-seed round. First of all, you need to have, in terms of traction, customer validation and early users. What does that mean? Means you have to have a product, you have to have some traction, and in order to get those two things, you need a team. And investors, especially at the pre-seed stage, invest heavily in the team. So it's not that you need to have, you know, $20,000 a month in revenue and like have a team of 10 people at this stage. It's okay to be early, but I would say the minimum team size, you know, it's like 2 co-founders, one of them technical. You gotta have an MVP. And like maybe you do have like a little bit of revenue, right? Somewhere between like $1,000 to $10,000 a month. And the reason why I'm sharing this is because if that is the criteria that you need to unlock your pre-seed round of funding, then your mental map and model right now should be, how do I get to that stage? So let me just stop sharing here. Let's talk about making the leap again. So if a founder is starting with maybe just an idea and they know that in order to unlock funding they need to get, let's just call it team of 2 to 3 people. They need to build an MVP of some kind with some traction. And ideally that traction translates to revenue. Let's call it between $1,000 to $10,000 a month. And the reason why I'm saying $10,000 a month is it's not a lot, but it's enough where you might be able to pay yourself a little bit. It's enough where you don't have to come out of pocket to pay for expenses of the company. So if that's the first milestone for fundraising, Samia and Treya, do you have any recommendations on where's the best place to start in order to kind of get to that point?

The first place to get to for yourself is to figure out in that trifecta, like you need somebody who's good at understanding business and the market. You need somebody who's technical, who can build the product. And then there's somebody who has to think about usability of the product because that's how you're gonna get users on. What's it gonna look like? You know, So you've got this trifecta, you need to figure out where you fit. That's number one. You have to cover one of the three. If you don't, then that's going to be a problem. So you need to figure out what are you the best at? What is your zone of excellence, as they say, you're good at and you like doing it. And then you need to find out, find the other two. Now, how me and my co-founder go way back, But when I start looking at people around me, usually you find people, you go to universities, there's a lot of master's students there, there's places like Founder Institute incubators like Che talked about. You find those other two people. These are people you can trust. These are people that are ambitious and motivated and who truly resonate with your idea as well as you do. And they work on equity. They work on a promise of the future where they say, hey, when we make money and when this becomes a billion-dollar company, and you have to believe it, then you're gonna get 25% of that or 10% of that, whatever the number is. You need to find those 3 people. That's how you start. And then of course, at this point, I'm assuming you haven't made the leap from employee to entrepreneur full-time. You're still an employee. So you do— don't have to worry about finances as much. And usually what I've seen is that the people that you find also have a job. So this is— they're doing it on the side to build the business to a level where you can make the leap. You're like reducing the chasm.

Treya, is there anything that you would add to that, or what are your— what are some of your thoughts?

Well, I am a— when I started Founder Institute, I had a co-founder. Guess what? I don't have a co-founder anymore. So also that happens. I'm a solo founder now, but I have a strong team that complements all the things that I don't have, that I don't know about. So I think as a founder, like Samia said, you have to be able to locate the people that know more in the areas you don't, you are not, no, you don't know so much about, and you have to bring them together, you to bring them in. You're not required to know everything for, for everybody. Focus on having those relationships, care about relationships, because it's not that you go like to a, to a network event or to a university and you find instantly that there's my there is my CFO, there is my COO. That's not going to happen. You have to be good at building relationships. It requires for you to be patient and be a great networker and love people. If you have those kind of qualities, that's what sets you up to become that team leader. A team leader is somebody who who supports his team and takes all the obstacles away that they cannot work together. So that's, I think that's the most important thing on the way. And fundraising on that topic, there's a lot of more ways than to require money to get financing around. There's SBA financing, so Small Business Administration financing. They also have SBADC, which is specifically for founders. Look it up. They— I'm sorry, they have resources. They have resources that will help you as a first-time founder or founder, and that does not cost you any money. You can do Indiegogo, those kind of things. So there's also non-dilutive equity fundraising. Look in those opportunities also.

Yeah, those are all really good points. I think that, you know, my personal favorite fundraising tactic is fundraise from your customers. They sell them products that they want and then generate revenue. Trey, you mentioned something really important, uh, that I think we should highlight here, which is relationships, right? Venture is the long game. And what that means is that the people that you're working with now, hopefully you'll be working with them later. The introductions that people make, you know, these are all people that could be your customers, your partners, you know, your biggest supporters, your teammates, your investors. And so you have to be very relationship-driven and realize that you're playing a very long game where if you're lucky, you'll be doing this for the next 10 to 20 years. And so you have to have that mentality and approach before you even decide you want to be an entrepreneur, because one thing is absolutely 100% for sure, it's going to take a lot longer and it's going to be a lot harder than you think it is right now. And so if you, if you honor those relationships though, that's one very important superpower that will help you along your journey. And so, um, on that note, one other model that I want to share here, again going back to like, okay, you need to get this certain level of traction to raise funding, but like let's just kind of— let's try to simplify things as much as possible. What is your job as a startup founder, right? And what are you supposed to be doing? Um, your first job is to build a team that can then build a product, and then that product can then get some traction, and then hopefully you get enough traction to where you could go and raise money. And then what do you do with that money? Well, you use that to hire people, to build a team, to build the product even more, to get more traction, to make more money, to then unlock that next level of fundraising. And so you're gonna continually do this cycle of build the team to build the product, to get the traction, to fundraise, right? And so there's no way to put the cart before the horse and say, no, no, no. First I'm gonna fundraise, then I'm gonna pay myself $200,000 a year, and then I'm gonna quit my job, and then I'm gonna go and do all these things. And while that might not seem fair, that's just the world we're in. The world's not fair. No one's gonna give you money so you can quit your job. You need to take that risk and do it yourself. But there's ways to do it in an intelligent way where you're not putting your family at risk. And the reality is that entrepreneurship is not for everyone, and maybe you should not make that leap depending on your personal circumstance. So Samia, let's start with you with if the first step is to Well, actually, the first step is to validate the concept. But when it comes to building out your startup, right, how do you find a really good team if you're not a technical co-founder? Like, I think Ana was saying, like, she needs to find someone who could build it. Like, where do you start and how do you think about team building?

Good question. I usually, again, like Tria talked about, you— it is built on relationships. I would start with my close network and circle first. If there is somebody that I already trust that already belongs to that circle that you can at least start off, I wouldn't make that person a co-founder upfront. I would always start with saying, hey, let's work on this. And there's— if you do really well, there's an opportunity for you to become a co-founder. Get that person motivated enough. This way you have an opportunity to test that person out See that person in that work environment and see if you have a working dynamic. I would apply the same thing for, you know, putting it out there on, for example, Craigslist. I've seen some people do that looking for a co-founder. There are plenty of ways. There are a lot of contractors. You have places like Fiverr and Contract, you know, all these places where people are available for this kind of work. You start with picking a freelancer. And you say, hey, this is a conversation that we should have. But you know, you can start with paying them a little amount. Paying them by the hour is always easier right up front as well. Like, you know, you have people who can code for $60 an hour and it's not that big because again, you're not working on this full time. Remember, you're putting about 4 to 5 hours a day maybe up in the beginning because you have a job as well. So getting contractors, starting them off and then making them into an employee is also a way of going about it. I've done it before and we found some amazing talent that way. But again, do not give them a co-founder title off the bat or give them 25% equity off the bat, but give them an opportunity to work in your environment so that you see if you vibe with each other. A lot of the times it does not work out. I think there's some statistic that says 50% or 60% of startups have failed because of a co-founder breakup. So you have to be really careful about finding the right people because again, like Treya said, she had a co-founder now, but not everyone's Treya. It's hard to get that company to grow on your own. So yeah, those are just some of the ideas I have off the top of my head.

I love that. And Trey, I want to get your thoughts on this here because the co-founder, like going back to relationships, right? The co-founder breakup is one of the number one reasons why companies will fail, right? It's not even just co-founders, but just like if you hire the wrong people, if you bring the wrong people aboard, sometimes there's toxic people that are predatory and they cause problems. Like all of those things absolutely kill a company. So you have to be very careful. Again, going back to relationships, there's also statistics that I'll just share kind of from my perspective. When you find a co-founder, like, I would, I would strongly recommend everyone find a co-founder, one or maybe two. And there's a couple reasons for that. The first is that, um, it makes the journey a lot more fun. Like, again, you don't want to just rush into a co-founder relationship because, you know, Founder Institute said you should do it. You want to find someone that's like, I could build— I love working with this person. They complement my skill set. We get along really well. We have the same vision, and I want to build. There's no one else I'd rather be building alongside for the next 10 years than this person. If you feel that way, then that's a sign you've got a really good co-founder. Now, things can change. There's all sorts of things that can happen, but that's one framework you want to look at. Um, it makes the journey a lot easier because you have someone to confide in, and you have someone along the journey that's going through the same struggle. And unfortunately, if you're a solo founder, all of that pressure is now sitting on your shoulders and you don't have anyone that you can really, you know, you have to be, you have to be twice as strong, frankly, as a solo founder. And there's also, VCs know, and there's lots of statistics around this, solo founders, um, tend to not have as high of success rates. And so VCs, when they're looking at it, they want to see that team because they know the pressure can break someone, or it's not even breaking them, but like it's a single point of failure that increases risk. And so, Treya, like, I mean, you started off with a co-founder. I don't know if you want to share details, but like, what were some of the lessons you learned around bringing on the co-founder or not having a co-founder? What advice would you give to founders?

So when we started out, I had a co-founder. And I want to say we did not break up on bad terms. It was just startup is, is hard. So after some time, he just decided that this is not his focus. And I could feel it in his energy. We're still friends today. That has nothing to do with it. But what also helped us, we had a straight-up legal procedure in place for this, for this event. So you have to have, even if it's your friend and you like that person and you get along really great, the legal paperwork to have in place for those kind of events are really, really important. And that's something, uh, if I can help, uh, you with, uh, so, uh, we decided that it's best for him he wanted to pursue a different route. So that's what we did. And then I had another experience with somebody who was really excited about what we're doing and wanted to come on as a technical co-founder. And but the terms he was requesting were very predatory. So I knew from after a couple of weeks we talked and in the beginning everything was sunshine and roses. But then when we came down to this is what I want and put it in writing and how I said, this is not going to work. Those terms are not acceptable for us, but I wish you nothing but the best. But it creates a certain energy and you have to work through that. And I totally get it. Everything is Building a company is about de-risking every step of the way. So de-risking means have things in place that fall into place when something does not work out the way it is supposed to work. So, and a co-founder will take some of that risk away. I totally get it. But I counterpart in my situation, I counterparted with a really strong team. And that took some time to, to bring that team together. So that's another part that you have to be patient and put energy in. But for somebody starting out, I have with my team daily meetings, we meet daily and have different topics that we discuss and work on. So if you don't have that, as a startup founder, you need somebody you can bounce ideas and problems off of, and they can give you input. Um, and, um, even like, uh, Samaya said, maybe it's not the best fit for the long run, but if it's right now, that's what you're both agreeing to, have that paperwork in place. Make him or her and yourself safe that you have a Plan B when it doesn't work out. So everybody can spread and go different ways without interrupting the whole business in a very dramatic way.

So Mia, is there anything you want to add to that?

No, I think Trey summarized it perfectly.

Yeah, Trey, you, um, one thing that, you know, you, you highlighted, which I think is really important, is like in the very beginning when you have no team and no product and no traction and you're just like, I'm trying to figure it out. That's actually where a co-founder becomes very valuable. But to your point, I mean, you've grown the company to a point where you don't have a co-founder necessarily, but you've got a great team surrounding you and you can use that team to bounce ideas off of and share. So I think that's where it becomes de-risked is it's more about having a great team rather than having that co-founder title per se. Although VCs will look at it from an investor perspective of who on the cap table has enough ownership alongside the founder that will motivate them to continue building the startup if something happened to that founder. And so, but to your point, the journey, just having the team becomes a lot better. Um, someone is mentioning networking here. I do want to remind everyone we will do a networking session right after this, so we're going to end this broadcast around 11 Pacific, so in 15 minutes or so, and then that's when we're going to start the networking session on Airmeet. So stick around. This is actually a great opportunity for everyone here if you're looking for a co-founder or trying to meet other people. Again, you're going to be constantly networking as a founder. You're going to be going to events, virtual, in-person, trade shows. Like, the more you network, the more successful you'll be. So I highly recommend people stick around to meet some of the people that are joining us today from all over the world. Maybe we could move on to the next piece of the equation. So we talked about the founder and the team, right? Let's talk a little bit about the product. Samia, let's start with you. What— where was the product at? Maybe you could give us like a status of like, where were you guys when you raised your first round of capital? Was it MVP? Did you have customers?

Yeah, so we— when we, we raised a pre-seed round That was our first ever, you know, fundraise, and we raised $120,000, and we were really excited because the company was now worth $1 million.

What?

So it was a little— it was really exciting. But when we raised, it was me and my co-founder. That was a very big checkpoint for a lot of pre-seed VCs. If you're looking to start networking, you know, to get ideas, we raised from Mucker Capital. That was very big thing for them, that who is your co-founder, is one of them technical? That was a checkmark. We had that. The second one for them was you need to have a product that works, and we had that. So we were at a product— we had our minimum viable product, we had an MVP already there. Granted, it wasn't the prettiest, and granted, there were a few bugs that, you know, were more than noticeable, but it was there. Um, and then we had our first 5 customers. So we were at about $50,000 in ARR, I want to say. So not a lot, but about $50K in ARR. So that was where we were when we raised our first round. And then we had a few like LOIs and, you know, our VCs actually took referrals from 2 customers. They said, we want to talk. So there is no VC who will give you money without talking to a few customers. So they wanted to talk to 2 of our customers and they didn't talk about the product in the current state, but they talked about the product in terms of what they thought the potential it would be and how it would solve the problem. Like, why did you pay? Like, did they beg you or did you really think that there would be a value in it at some point? So those were the top things that where we were at when we raised our first round.

Yeah, that's really helpful. And one thing I'd like to point out too is like, so you guys, when you raised, you raised $120K somewhere around a million dollar valuation, which would be considered low for a lot of standards today. But I would argue based on the traction that you guys had at $50K MRR, you guys were de-risked for that valuation. And so I'm just highlighting this because the founders here, it's like some of you might, as you're thinking about fundraising, you might try and go in with this really high valuation and low amount of traction. And what that will do is enable you to not fundraise. What you want to do is come in with a reasonable valuation with strong traction. That is what's going to make you appealing to investors because their entry point into your round, the amount that they're investing at what valuation, is going to set the terms for them and the ability for them to be able to provide a venture return to their investors. And so that's a whole other discussion point here. But I thought it was really interesting that even for pre-seed, you guys were doing really well, right?

Yeah, we were the biggest. And just so I can add to that, the biggest issue for our VCs and the reason why they almost said no was we were young and first-time founders. At least in the US. So they couldn't, we had no track record. And that was the reason why they came in low. We know that we were lowballed, but we knew that there was no other way. So if you're a first-time founder, you don't have traction, like all of our businesses were built in India. We never built something in the US. So for them, we were clean, we were like clean slates. We have no idea. So that was the reason why. Again, your previous, just like we're trying to find product market fit, VCs are trying to find founder market fit. That's their goal. And they didn't have a track record of that. So that is the reason why we had a lower valuation, which we were actually pretty happy with because we didn't know where this was gonna go.

Yeah, no, I think that's a really good point too, because again, there's different levers and scale to this right now. I'll give you an example. So a lot of VCs know that second-time founders will outperform first-time founders. And so they look for that. And now, especially because of how mature the startup industry is, there's a lot more second-time founders out there raising money. And so it's easier for investors to find second-time founders than it is first-time founders. So how do you get a VC or like just an angel investor, let's say, to invest in you as a first-time founder? Versus this like super experienced second-time founder? And like the short answer is you have to outperform them based on your traction. So if there's two different companies, one is a second-time founder with whatever, $1,000 in revenue a month, and they— but it's a big opportunity and they've, they had some success in the past versus a first-time founder, but they're at $10,000 a month in revenue. What is the better opportunity? And there's some kind of equation that investors have in their head to balance that decision out. That's just an example of like, because you're a first-time founder, you have to be able to outperform and actually do even harder work and more work to be able to make your company successful. Treya, for you, you're building hardware. And so let's talk a little bit about your journey going from like, okay, you got your team, now we need to build the product. Share some stories around how you thought about building that product and where was sort of the inflection point of success for you where it's like, okay, we got the product and we're selling it to X amount of customers. What does that look like for you?

So for me, I had a good blueprint around the product because I let actually a competitor in FDA clearance because my product is a medical product. So there's already a hurdle for somebody to come in. And so I successfully led them to a US market launch and through their FDA clearance. But that was the first part. The second part is, yes, Ryan, it's hardware. Not a lot of investors want to touch hardware because it costs money, it's inventory, you have to distribute, distribution. There's a lot of moving parts that have to be considered. And you have to keep in, not only is it hardware, but to successfully raise money, I mean, Samaya, congratulations because you are first of all female, that's, I think they get $2 or $3 on $100 funding. So it's really hard for female founders and then minorities, another strike. So this fundraising is not for the weak. And what we did is, so we did strategically develop the product to become a software company. So, this is what we're doing now. We do not— we license our hardware, we don't produce, that's somebody else, and we provide the software as a service to our B2B customers, to the activewear brands. So, that's a total— we change that because After sleepless nights and a lot of discussions, I said, I cannot do this anymore. This is not working. We're— me and my team, we said we have to go in different directions and to make that much easier on us. And we have to look what is fitting into the market that will give us that possibility to scale and have a big market opportunity. So it's, it's a, it's a lot of sleepless nights. Yep. And, uh, uh, pushing. I think perseverance is one of the biggest, um, uh, attributes you have to have as a startup founder. Push, perseverance, not giving up. Something doesn't work, pivot. Um, yeah, that's it.

Yeah. I think that's, it's worth noting that. And, and, you know, where you find that perseverance really comes down to why the why of your company, like Why are you putting in all this time and energy and pain and suffering? Why are you doing it? Right? Is it because you think, oh, I'm going to make money doing this thing? You're going to fail, right? Because you don't have the true motivation. You have to be in love with the problem. You have to love your team. You have to be super passionate in order to really push through those obstacles that you're inevitably going to face as a startup founder.

Absolutely. 100% correct, Ryan. Yes, that is, uh, you have to have that energy and you really eat, we eat, sleep, and wake up. I dream about my problems at night and sometimes I wake up and actually write down solutions that I dreamed about. So yes, you have to have this, the passion for it.

Yeah, that, that makes a ton of sense. And so I think one thing that we've, talked about and have highlighted here is fundraising is not your goal. The, like, fundraising is not an indicator of success, nor should it be what your goal is if you're going to start off on this journey. Because even if you crush it and you do really well, you still might not even be able to raise money. So how do you then figure out what is the right way to think about making that leap from employee to entrepreneur? In my opinion, the best thing you can do is build a product that people want that you can use to drive revenue. And once you have revenue, you have optionality. You can pay yourself, you can bring aboard team members, you can pay a product development shop to build the product out. But at the end of the day, if you do, if you end up not raising any money and making $1 million in revenue, like that's an incredible success and you should be proud of that and you should go and follow that pathway. But more likely than not, if you're following that path versus chasing investment dollars, you're gonna become a very compelling investment target for investors. 'Cause they're gonna say, look at Trey, look at Sumaya, they're doing really, really well with their company. They're at $20,000 a month in traction and now they're coming out to fundraise. So again, the North Star is not the funding, the North Star is the revenue. And so bringing this fully back here, right? So we talked about the team, talked about the product, and now we need to talk a little bit about the traction. Which is how do you get to that revenue? What are those things that you need to do? And so, Sumaiya, maybe you want to talk a little bit about how did you get your first customers? What was that experience like? And then share a little bit more about that.

I'll go one step back where I read this book that kind of changed my world. It's called Measure What Matters, and it is about setting OKRs for yourself and goals for yourself. You can't boil the ocean. It just never happens. You need to be so laser focused on what you need to do as an early stage startup in the next month. Then it becomes a quarter. And then when you become like an Amazon, it becomes the next year, but you need to start figuring out what you need to do next. And for us, when we started getting to customer acquisition, the biggest thing that kind of worked for us is evaluating channels. What we always decided, and that was an OKR, that we want to get predictable revenue. That is kind of where we started with, because again, it's a predictable revenue is an excellent barometer for does your product actually work. So if I go to my dad's best friend and say, hey, you, can you buy my product? And then you get— go through these warm introductions and start getting revenue, it is non-repetitive one-time revenue. You won't be able to tell everyone. So our OKR for the quarter was get to predictable revenue. So to land the first customer, we ended up first focusing on our pitch. So at that point, you start going into the realm of what I love to call product marketing. Who is your ideal customer? What are their behaviors? How do they— what problems are you trying to solve? There's a framework called the Jobs to Be Done framework, and I would really encourage everyone to go through the motions. Even when you're at your ideas, it helps you get into the brain of the person who will buy. And we started applying that and we started figuring out where do these people buy? Do these people read emails that have been blasted out? Do they read newsletters? Are they on Instagram? Are they on LinkedIn? And we started testing each channel, and our entire goal was we're gonna get our customer to come to us and say, hey, this sounds interesting, we want to buy. And our first customer, and I still remember, their name was Singularity University and they're based in the Bay Area. And they were the sweetest people who dealt with every product issue because they wanted the product that bad. Like they were willing to forego things not working, something just broke randomly because the vision of the product was compelling enough and they wanted to pay for it. So they came in and I still remember the person's name. Her name was Jessie and she was absolutely awesome. And she worked with us and, you know, got it up and going. So our entire goal was predictable revenue, understanding your buyer, who is going to pay the credit, you know, put that credit card or sign the contract, whatever it is, depending upon your business, you need to get into the mind of that person. And be compelling for that person.

Yeah, I love it, and thank you for sharing that, that journey that you went on to get the customers. Um, it also shows a lot that they were willing to put up with bugs and like issues, you know, so that's a really, really great sign. Treya, what about you? Like, any advice on like the revenue side or getting the first customers, lessons learned?

Uh, it's almost impossible to add anything because some may She put everything so perfectly in place. So what we do, I just can't tell you what we do. So we're looking at where we at first. So Atlanta, Georgia, the state, the city, the area, this is our first playground. That means for me as the founder, and I have sales in my blood, Sales is my daily bread from— I think I was 8 years when I first sold my first little knickknack to everybody in the community. So look and go and do the legwork. Go to exhibitions, conventions, and connect with— in my case, it's B2B— to the companies that you would like to become your customer. Talk to them again, build relationships, understand where you can fit in, what you can do to increase their revenue. Everybody loves money. If you increase their revenue, they're going to talk to somebody and tell them, hey, can I show you how I can increase your revenue by 300% and it does not cost you a dime? There you go. That's a good opener for a conversation. So, and then you go from there. You just have to do the legwork and do it locally. Like Samaya said, have that one-on-one relationship that you can really fine-tune your product and your process with these first customers. Then, then when you get ready to scale, I think that's Most people say, oh, I jump in and I skyrocketed. That is definitely not the way to go. You have to make sure everything works or that, that scaling can fall flat very fast. So take your time, understand your customer, build the backend, build the operational system, have everything in place, fine-tune, take the time. To understand your customers, make them happy. The first, it's the first rule is make them happy and everything else falls in place after that.

Yeah, I love it. Well, I know we're out of time here today. You know, I really want to thank Treya and Samaya for joining us. This was awesome. Such a dense conversation. I hope it was as valuable for the founders here as it was for, for me. I just want to reemphasize we are going to start the networking portion of the event. So when we end this broadcast, you'll be brought back into the room. You can join a table, you can meet with some of the founders that are here today. And again, like, if I were to take everything we talked about and distill it into like the formula or the pathway that some of the founders were talking about earlier, it's find a problem that you're exceptionally well suited to solve, that you are super passionate about. Validate that problem with customers, finding out like that Are they willing to pay for a solution around it? Build a team of world-class people around you that love what you're doing as well, that you can inspire, that you want to work with for the next 10 years. Go out and build that product, sell it to the customers. And then once you get to like the $10,000 a month in revenue, once you achieve that, then worry about fundraising and doing all of that. But until you get to that point, do those first 4 things and you will be successful. Thank you everyone, and we'll talk to you soon. Oh, and apply to Founder Institute. We run a great program. We'll help you along the way. All right, thanks everyone. See ya.

Thank you.

Bye-bye.