Building A Startup — The New Era.
Today, founders have luxury. They have the luxury of leveraging infrastructure that has already been built, specifically to help startups scale. Relative to even five years ago, much of this infrastructure did not exist, and if it did, it was at its nascent stages.
Let’s take neonVest itself as an example. We have a very focused goal — to supercharge founders’ networks. We do this via a subscription platform that makes 1-on-1 video connections between founders and relevant operators/VCs. Through these conversations, founders build their network and gain specific domain expertise across areas like fundraising, growth, sales, and operations.
We benefit from a lot of different startup tools that exist today. I’d like to point to a couple of them in this article. The purpose of this is to explain that today, founders have the ability to identify a problem, and create a very specific solution. Founders today do not need to build everything from scratch. In fact, precisely because they don’t need to do so, the core functionality of the product they build, by definition, will be better (in most cases).
What’s out there?
Let’s start with our core functionality — using a tool to facilitate video connections. We asked ourselves, should we build this in-house? If there were no alternatives in the market, we’d have no choice. But why waste time, bandwidth and resources to build out a video-conferencing tool that will always be subpar to say, Zoom, which has spent hundreds of millions of dollars building out the same infrastructure? Which has a global team of a few hundred people (at least) consistently working on the tech-stack, and another few hundred working on new functionality? We’ve actually attended a few conferences where they’ve built out their own video-conferencing tools, and have personally experienced far too many glitches and mutual irritation by both parties. Just use Zoom, please.
Diving deeper into the same realm: We’ve begun to focus on content creation as an important part of our product offering. Recording our video sessions (with users’ consent) and creating a library of their past conversations, so they can easily access these insights in their own time. In addition, transcribing these conversations and building out analytics from them. Once again, Zoom to the rescue. Zoom allows you to record video and audio conversations to the cloud. Then other add-on apps (ie. Fireflies.ai) will transcribe calls for you. We’re exploring certain SaaS offerings that can analyze these transcriptions, create heat maps, identify positive/negative words, and do sentiment analysis based on these transcripts. None of this needs to be built by us.
On a different side of the business, we’ve taken advantage of revenue-based financing. For us, revenue-based financing is a game-changer. Particularly for companies with regular monthly subscription revenue, RBF enables you to get capital upfront (usually within a few days) to spend on growing your business. Sometimes, this can hit up to 60–70%+ of your ARR. Imagine making $200K in ARR, and receiving $60–120K in cash on Day 1. In our minds, this is a critical part of the new financial infrastructure for startups. Not too long ago, most startup deals were funded by VC funds and accelerators. Today, you have angel investors, family offices, venture debt funds, AngelList (and other syndication platforms), crowdfunding platforms, revenue-based financing and a host of other ways to get capital in the bank.
While VC is still important for startups, it’s no longer something that founders have to depend on, in order to survive. The best part about taking in VC money today is everything apart from the money itself. Today, capital is commoditized. But with a good VC fund on board, founders get branding, exposure, extreme network effects, validation, access to later-stage capital, and much more.
Startups are becoming an important part of the economy. And because of that, entire businesses and numerous products are being built to focus only on companies with smaller wallets. The world is being built for startups, while startups are building for the world.
Full Stack ain’t always Best Stack
The point here is this. There’s never been a more optimal time to build. If you’ve honed in on a gap in the market, there are enough tools around you, such that you can focus 100% on your core solution, and not worry about building full-stack, always.
That’s not to say that full-stack doesn’t have its own merits, or that everything that exists today is the best possible version that it can possibly be. It’s more to say that — you can focus on what you want to build, and not have to start from scratch. This is it: Founders enabling founders.
For us, value means enabling founders to access the one thing they can’t do in a scalable manner at the moment — network successfully to the right people. Connect to operators and experts that are incentivized to help them scale. The first founders’ network. That’s us, neonVest. Join here.