Derek Andersen, founder of Startup Grind, built custom community software that spun out into Bevy, which raised $6M. He discusses how early customers like Atlassian and Duolingo drove growth through customer-to-customer marketing, and shares lessons on scaling, white-labeling, and persistence as an entrepreneur.
Chapters
Startup grind. As we started to scale, we started to run into all these technology problems because no one had ever built an organization quite like this. And so we were using all these tools and Frankenstein duct taping them together. And so I met with my co-founder. We were dealing with these issues for probably a year and a half. And I met with my co-founder one day, and we finally said— I looked at all the software that was available. It was going to cost us hundreds of thousands of dollars. And it was going to solve about 60% of our problems. And so we just made a decision we would make an investment in our community. And so we started to build a software tool that would solve 100% of our problems. And through that, I started to learn something, and that is that generally speaking, the way that people are buying products has significantly changed. From where it's been over the last 10, 20, or 30 years. You know, it used to be you'd get somebody in a suit, they'd fly into town, they'd take you to a nice dinner, and they'd sell you a big expensive software product that was going to cost you millions of dollars. Then they would get on the phone with you. Then they would hit you up with an ad. But today it's so easy to learn if a product actually works or not. It's so easy to get information on products that, you know, what do you do when you want to know if a movie's going to be any good? You go to Rotten Tomatoes. What do you do if you know if you should buy a product or not? You look at the stars on Amazon and read the best and worst reviews, right? And this is the same with digital products, but sometimes products are complex and they require— almost always actually are complex and they require more hands-on. It may require a 5 or 10 or 15-minute conversation to really understand how to use something, and we call that customer-to-customer marketing. And the best products build this into their product where they can get their customers sharing and basically selling for them because they get something out of it, but also to create engagement with prospective customers, existing customers, with other customers. And so as we started to build this product, we sort of start to see this trend, and we launched it for Startup Grind. And a month into launching it, I showed it to a friend that was running another community. And he said, that's awesome. Can I use that? And I was like, no. How are you going to use it? It's ours. He's like, well, can you make it so I can use it? I said, I don't know. Maybe. And he said— I said, well, how much would you pay for it? And he said, well, just tell me what it costs. I said, I don't know what it costs. What will you pay? He's like, well, just make up a price. I said, I don't know, how about $20,000 a year? And he was like, done. Yeah, do that for sure. And I was like, dang it. I mean, $40,000. But so we're like, wow, OK, cool. So we white-labeled the software, and we made it for their company. And we got them on, and it worked. And then another company came along, this big public company called Atlassian. And they were looking— they were having all the same problems we'd had with Startup Grind. Actually, because Startup Grind's problems— because we were so global, and we had so many nuanced issues. Our problems are here. Most other people's problems are here. So the problems we've solved are already way up here. And so this big public company came to us and said, well, can you help us solve this problem? We're like, we don't know. Here's what we got. How does it look? And they're like, better than anything else we've seen. And so they became our second customer. And then from there, we signed up another and another and another, and then realized, oh my gosh, this is a thing. This is its own company. And this is its own product with its own goals. The product helps StartupGrind, but it's sort of a different thing. And so about a year ago, we spun out this product, which we call Bevy. Which we believe is the world's best, or even first, customer-to-customer marketing platform. And we now run events in community for companies like Duolingo and MuleSoft and universities and Docker and Fiverr and other companies like that. We just announced this last week that that Bevy has raised about $6 million in funding to scale that product. StartGrind's bootstrapped, profitable company, and Bevy is sort of taking a different approach to building a business. But I think, again, it just sort of shows, and I hope what you get out of this, telling the story, is that 3 years ago when opportunity knocked again for us, We listened. Now, I don't have time to tell you about the hundreds of other opportunities that I looked at that didn't work out, or that cost me tons of money, or cost me tons of time, or tons of pain. Just know there are literally— since I quit my job 9 years ago next month, there are literally hundreds of things that I have looked at and tried to do, and only 2 appear to be working. They haven't worked. They're working. They could break at any time. And, but just think about that. So if you're like frustrated because either maybe your idea hasn't taken off like crazy, or you're still trying to figure it out, or you're still trying to— it takes time. You've got to stay in the game. What's the most important thing you've learned in your career?
