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Andrea Barrica at Startup Istanbul 2015: 5 Lessons on How to Bootstrap a Startup After $1M

Andrea started with the story of inDinero, that although they were growing rapidly with a huge press support, traction and over 20k business customers, they weren’t making money. Steve Blank, one of their investors, gave the following advice: “Now that you know you failed, you can do something about it”.

Don’t Look Back

After she told her experience, she started with the first of the five lessons, “Don’t look back”. They had to make lots of difficult decisions, once they figured out what exactly wasn’t working. They needed to have difficult choices to preserve the little amount of money they had left to begin again. They fired everyone and delete all data for non-paying users.

Go Back to Basics, Find the Pain

Her second lesson was “Go back to basics, find the pain”. They asked their old customers and friend why they didn’t pay or convert to premium model, and they found out that their dashboard was good but they had some accounting, invoicing reasons. Therefore Jess, one of the founders got licensed for tax returns and Andrea started doing all the bookkeeping and payroll for all the customers. Willingness to pay varied from $500 to $6000 per month. After they found the pain, the question was how to grow with the right business model.

Empathy Pays

Her lesson3 was “Empathy pays”. Although Andrea didn’t know much about digital marketing she knew how to delight customers. Because of the amazing experience of customers from the previous model, they had referred customers. The cheapest and fastest way to get early customers is to delight them and make sure you understand their pain to give them best experience ever.

Beware of Metrics That Don’t Matter

Her next lesson was “Beware of metrics that don’t matter”. Early metrics of InDinero were number of users, transcriptions/month and processed dollars. However know the metrics are paying customers, growth rate, and retention rate. Metrics that matter are revenue, growth rate, CAC vs. LTV, % referrals, WAU/DAU and metrics that inform on unit economics. The founders should track these metrics.

Find Pain First, Then Worry About Scale

Andrea’s last lesson was: “Find pain first, and then worry about scale”. Although the start of inDinero was unscalable business, through the life of company the technology was implemented to be more scalable. Furthermore, they knew they were solving a real pain. It is important to solve a real problem, otherwise scaling would not matter at all.

Diverse Teams Win

She finished her words with a bonus lesson: “Diverse teams win”. Having people that think different, with different backgrounds, personalities would bring success. The team should involve women, minorities, introverts, high empathy, all ages. Best team is balanced.

─ October 12, 2015