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“I pitched 200 VCs in 10 months before I closed the round”

Published: Mar 28, 2011

I had the pleasure of meeting Sanjay Parekh a month or so ago, and I knew I had to share his story on The Startup Foundry. In this interview, Sanjay talks about how he pitched 200 Venture Capitalists in 10 months to secure funding for his startup. This 7 minute video is chalked full of great advice for startups raising money. Sanjay talks about the “highs” and the “lows” of entrepreneurship and lessons he has learned along the way. If you’re unable to view the video, I’ve included text highlights below.

1. Slides changed dramatically after 10-15 pitches. The first several pitches helped Sanjay truly understand what he was pitching.

2. Pay attention to the questions VCs are asking to learn what you need to improve on. If the same questions are brought up over and over again, you must improve that part of your pitch.

3. Raising money can take a while. If you’re going to commit, be in it for the long haul.

4. Understand why they said “no”, and learn from it.

5. A VC had to pull out because they didn’t have the cash. Sometimes crappy things happen to you that are out of your control. Keep pushing forward.

6. Raising money is hard work. Raising $41 million before you have any customers is the exception, not the rule.

7. There is really bad times, and really high times. Entrepreneurship is a bipolar existence.

8. You have a responsibility to your employees to keep pushing (even when you’re discouraged).

For more startup news, follow us on Twitter @startupfoundry.

3 lessons startups can learn from the infamous Gizmodo redesign

Published: Mar 26, 2011

Gizmodo shipped their boldly redesigned home page February 7 amidst a sea of controversy. The redesign was almost universally panned by it’s readers and traffic dropped significantly. I decided to dissect Gizmodo’s redesign and distill three lessons entrepreneurs could learn from their mistakes.

1. Communicate clearly to your users

To understand how you were suppose to use the new site, Gizmodo put up a tutorial. If you must explain how to use a news website, you’ve probably blown it. The infamous Gizmodo redesign happened when designers and coders became more interested in HTML then communication.

When you’re building the UI and UX of your app, make it as simple as possible.

2. Multiple small frequent iterations are better then one massive change

Gawker Media (Gizmodo’s parent company) shipped their CMS with glaring bugs. Many users reported that pages weren’t loading, the scrollbars weren’t scrolling, and the site was completely useless without javascript. They could have very easily broken up the redesign into several minor improvements and rolled them out one by one.

It’s better to have fewer features that are ultra-polished then a big bag of crap.

3. Treat your users with respect

I stopped reading Gizmodo when they started to cover up their main stories with slide-down dynamic ads. You had to wait 5-10 seconds to even read the title of the first story to see if you were interested in reading it.

As Paul Graham said “Users are hovering over the back button [of their browsers]”. Don’t give your users a reason to leave your site immediately by disrespecting them with obnoxious advertisements.

For more startup news, please follow us on Twitter @startupfoundry.

Everyone has problems. Your solutions make you special. – Bootstrapping Postmark

Published: Mar 25, 2011


I recently had the chance to sit down with Alex Hillman and Natalie Nagele from Postmark to give TSF readers an inside peak at this great transactional email company. In this interview we talked about what Postmark does, how they bootstrapped, Amazon entering their market, and customer acquisition. After reading this interview, be sure to checkout their website at www.PostmarkApp.com.

In one sentence, what does Postmark do?
Postmark helps other developers send important emails reliably.

What would be an example of an “important email”?
Marketing emails are valuable if they convert, but transactional emails are more valuable because they’re for your actual customers, not just random strangers.

If a marketing email doesn’t show up, it sucks. If a transactional email like a software license, receipt, invoice or some other important documentation doesn’t show up, you’re in trouble. We specialize in transactional email and, in fact, that’s the only thing we do with Postmark.

Were you bootstrapped or funded?
We are 100% bootstrapped. Wildbit has been doing design and development consulting since 1999. We built a R&D bucket and funded Beanstalk. Beanstalk grew and became the first product that had full time team members working on it. Beanstalk has been growing strong since ’07 and it gave us some runway (along with our existing knowledge and experience) to fire up Postmark in early ’10.

Amazon recently entered the transactional email business. How did Postmark react?
That was kind of a funny week. They had just released Elastic Beanstalk, a service totally different from OUR beanstalk app, but it had very similar branding. Then, a week later when they released an email delivery service we were like, “SERIOUSLY!?!?” Even their branding looked similar. It was pretty wild. Anyway, once we got past the initial OMG, it actually felt really good for three reasons.

1. Amazon validated the market. Anyone who hadn’t been thinking about looking for an outsourced email delivery host was now considering it.

2. We were validated as their competition. This was rewarding. It would have sucked if they came out and nobody thought of us. When, however, Amazon came out with their service, a common question was; “are Postmark and Sendgrid doomed?” We were actually validated as top-tier competition. This was a huge morale win.

3. Amazon won the race to the bottom (in terms of price). It no longer made sense to compete to be the cheapest, as they’d win by a long shot. The team talked and we agreed that if we weren’t going to compete on price we’d compete on reliability, support, ease of use, and, of course, our flare for style.

Essentially, Amazon showed up and offered well whiskey. We want to be top shelf Bourbon. We do a TON of hands-on work with our customers monitoring and diagnosing delivery systems.

How has your acquisition strategy evolved?
These days customer acquisitions are a bit different than when we first started Postmark. When Postmark started not many people thought about using a service instead of their mail server. The issue wasn’t, “why do I need Postmark?.” They weren’t even generally aware that a service like ours existed.

In the last year that’s changed quite a bit. The competitive landscape has widened and Amazon showed up a few months back to kindly validate our market.

Do you have any advice for other entrepreneurs?

1. Focus on one thing:

Postmark is the only provider that is solely transactional email. We don’t allow bulk marketing email at all.

2. JFDI (Just F’ing Do It):
That’s not “do EVERYTHING”, mind you but at a certain point, you’re sure to be over thinking it. JFDI = no excuses. Your problems aren’t what make you special. Everyone has problems. Your solutions make you special.

For more startup news, follow us on Twitter @startupfoundry.

You’re not entitled to anything. Hustle for everything you’re worth

Published: Mar 23, 2011

I’ve received some very angry emails from founders that are trying to get their startup featured on TSF. For example:

“I submitted our startup yesterday, and you still haven’t written about us yet on The Startup Foundry! What gives? Is you head so far up your ass you can’t see how great our app is? You guys are exactly like TechCrunch!”

Typically I delete the email and setup a filter to automatically avoid any future contact with the person, but this time I felt compelled to respond to the founder (Perhaps it was the TechCrunch barb that pushed me over the edge) in public. I’m not going to write about his startup but I do want to share some universal advice with him.

You’re not entitled to anything. You must hustle for everything you’re worth.

The best way to get your startup covered is to have an awesome narrative, not a sense of entitlement. Writers are salivating to spread great stories about awesome startups. After all, everyone loves to root for the underdog.

Airbnb has one of my favorite hustling stories ever from a team of relatively “unknowns”.


The Airbnb founders came out of the summer 2008 Y Combinator class. They came to see us right after pulling a great stunt at the Democratic Convention in Denver (in which Obama was nominated). They bought a bulk supply of generic cheerios and made up these cereal boxes. They sold these Obama Os for $4 a box and sold 8,000 of them, raising $32,000 to provide seed capital for their startup. I asked them if they’d leave a box of the cereal for us and it has been sitting in our conference room ever since. Whenever someone tells me that they can’t figure out how to raise the first $25,000 they need to get their company started I stand up, walk over to the cereal box, and tell this story. It is a story of pure unadulterated hustle. And I love it.

– Fred Wilson on AirBnB

How could you even begin to doubt these guys determination? Sure the story is a little bit silly, but the Airbnb people are the type of people you can’t help but write about. I’ve also put together an article covering 5 ways to make your startup ridiculously easy to write about to get you started. I hope you check it out.

Build a great company, be kind, and hustle. These are the things you need to move forward.

I wish you the best,
Paul Hontz

For more startup news and advice, please follow us on Twitter @startupfoundry.

The difference between what you did, what you’re doing, and where you’re going

Published: Mar 22, 2011

There are 3 things that are critically important to your startup.

You must balance all three of these things to be successful.

1. What you did (the past).
2. What you’re doing (the present).
3. Where you’re going (the future).

What you did:

When I asked a founder why he thought his new startup would succeed, he claimed it would happen because his previous ventures did. Your past is a part of you, but it doesn’t define you. Just because you were successful (or your venture failed) in the past, doesn’t mean the same outcome will happen in the future. You can extrapolate data from the past but don’t let it blind you to your current reality. Previous experiences are nothing more than blueprints for us to build the future with.

What you’re doing:

If you only get one thing right, make it this one. You can at least tread water if you’re successfully capitalizing on the present. Focusing on the present allows startups to focus on real world issues immediately and you can actually start selling your product. As Steve Jobs said, “Real artists ship”.

Where you’re going:

It’s important for startups to have a dream that they can barely see. A goal that you have to be crazy to believe you can reach (but you and your team try for it anyway because you believe in it so much). I would rather achieve 50% of the extraordinary, than 100% mediocracy. This line of thinking is huge for teambuilding as well. One of my favorite quotes is: “If you want to build a ship, don’t drum up the men to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea.”

What do you think?

Get in touch with us by leaving a comment or following us on Twitter at @startupfoundry.

From Freemium to Paid, to the cover of Hacker Monthly. The Bidsketch story.

Published: Mar 21, 2011

I met Ruben Gamez in Miami at the SuperConf after-party. The day before the party, Ruben gave his 2 week notice at his “real job” so he could work full time on his startup, Bidsketch.

Bidsketch a web based proposal app for designers. Most designers write proposals using MS Word believe it or not. It’s completely old school and backwards. Bidsketch brings all this online and lets them do things that weren’t possible for them before. Rubin’s main vision is to change the way designers present and sell their services. So far, he’s happy with the results. Ruben agreed to an email interview and the transcript is below.

Paul Hontz: Ruben, talk to us about launching Bidsketch.

Ruben Gamez: I launched Bidsketch almost a year and a half ago. I had a day job so I worked nights and weekends to launch. It was a decent launch considering I was bootstrapping and had no connections or audience. I had a pre-launch to my mailing list and had over 20 paid accounts before it was officially live. In beta I also somehow managed to acquire (somehow, because I didn’t have money) my main and only competitor at the time (long story there and probably off topic). Editors Note: We’re going to bring you back and have you tell this story.


Paul: You initially launched as a freemium service. How did that work out for you?

Ruben:
After I launched I discovered that the freemium model was a major failure for me. After weeks of pulling my hair out and trying everything I could think of, I experimented my way out of the freemium model and have seen excellent growth since. I actually did a guest post on Rob Walling’s blog about that: Why Free Plans Don’t Work (It also made the cover of Hacker Monthly which was pretty exciting for me)

Anyways, over the next few months I got a fair amount of buzz (plus writeups) from the designer community and saw some nice growth. Funded competitors and teams came into the space which seems to have been a good thing because I’m growing faster since then and I outrank them in Google which brings in great traffic.

Paul: What strategies have you used for user acquisition?

Ruben: My strategy has been a combination of word of mouth, relevant writeups, SEO, and some content marketing (I don’t advertise).

At this point it’s become profitable enough to cover all my living expenses (which are pretty real expenses considering that I’m married and have a mortgage). A couple of weeks ago I quit the day job; So now I’m officially 100% full time on Bidsketch.

Paul: What’s next for Bidsketch? How are you doing on revenue?

Ruben: I’m very excited about what’s next. Aside from being able to devote some real time to working on what I love, in a month or so I’ll be releasing version 2 of Bidsketch which has some pretty neat stuff that’s going to knock the socks off designers.

Our monthly recurring revenue has more than doubled in the last four months.

Paul: Do you have any advice for solo-founders?

Ruben: Just giving an overview like this makes it seem like it’s been a walk in the park but the truth is that it’s been hard. It’s hard work consistently grinding it out after-hours for over a year as a single founder. Along with many of the highs there were definitely some rough times. Hard work but totally worth it — especially now that I’ve come through the other side.

To checkout Ruben’s company, check out Bidsketch.com. For up to the minute startup news, follow us on Twitter @startupfoundry.

Don’t yell at waitresses. You look like a jerk and it blows investments.

Published: Mar 20, 2011

“$40k for 15% equity” Cooed the smooth talking angel investor. “We will take over the world together and I will make both of us very rich”.

It was a cold dreary day and as “Entrepreneur X” sipped his coffee, he contemplated selling a stake in his company to the smoothest talking angel investor he ever had the pleasure of meeting.

The percentage looked fine, the terms were great, but something didn’t feel right.

As Entrepreneur X gazed out the window, mindfully mulling over the decision, the waitress came back and refilled their mugs. The investor took a sip and began screaming at the waitress. Apparently she accidentally gave the investor decaf instead of regular. The child-like behavior of the investor brought Entrepreneur X crashing back to reality. If the investor cracked that easily over coffee, how was he going to handle things if shit hit the fan with his venture?

“Entrepreneur X” immediately stood up and apologized for “his friend”, left a huge tip (my favorite part of this story), and walked away. He ended up bootstrapping the startup himself.

Taking an investor onboard is a lot like being married. It’s something that can be fantastic, it can improve your quality of life, and it can be a great source of encouragement if you “find the one”. On the other hand if you settle for someone because it’s easy, it can be hell.

My question for TSF readers is “Have you ever had to turn down funding”?

Please Stay in touch!

You can follow us on Twitter @startupfoundry. I would love for you to share your stories in the comments, or get in touch with me personally at paul@thestartupfoundry.com.

Great ideas aren’t forged in a vacuum. Remember to learn along the way.

Published: Mar 19, 2011


Often times it’s easy for me to get focused on “the next big thing” and it’s difficult to meditate on past experiences. Entrepanuers need to be forward thinkers, but great ideas aren’t forged in a vacuum. Paradoxically, we need to reconcile these two competing lines of thinking.

Growing up, I was a PC fanatic. I built all of my own computers, I worked an I.T. job, and I did some light consulting on the side. In 2007 my needs changed. I was moving to South Africa for 6 months and I needed a laptop that I could do heavy video work on. I picked up a 15 inch MacBook Pro, Final Cut Pro, and a couple external harddrives I could use for a scratch disk. I unboxed all of my equipment on the kitchen table and began to install all 40 gigs of Final Cut Pro. My nieces were visiting and were quietly playing in the other room.

I got up to grab a water across the room and play time suddenly shifted to the kitchen. In slow motion I watched my Niece race around the kitchen table (where my laptop was) and she came face to face with a freshly unboxed MacBook Pro. Instead of tripping over the cord and pulling my laptop to an early demise, the cord simply popped free and my laptop sat on the table unscathed.

I can thank MagSafe for saving me several thousand dollars. For those of you not familiar with MagSafe, I have embedded a video below. Notice how the MagSafe connector stays in place unless it force comes from an angle (for example, a running child).

Fast forward to Apple’s unveiling of the iPad 2. Introduced alongside the new iPad was an accessory called the “Smart Cover”. It’s really cool tech that allows you to add or remove a case. It can also be used to double as a stand.

Apple has been working on the iPad 2 for over a year but work began on the smart cover when they started experimenting with magnets for MagSafe. Apple was able to leverage it’s past learning with magnets into future thinking products. The past is a great source of inspiration for the future.

What past experience can your startup leverage?

Please Stay in Touch!

You can follow us on Twitter @startupfoundry.

Make your Startup ridiculously easy to write about. Put Together a Great Press Pack

Published: Mar 18, 2011

I’ve looked at close to 500 startups in the last month and a half that were looking for coverage and I thought I’d share some insight on what separated the good startup pitches from the great ones. I boiled it down to 5 things with the overarching theme being “Make yourself ridiculously easy to write about”.

5 things you need to have in a press pack

1. One sentence description of your startup. Place this at the beginning of the email. This gives context for the rest of your pitch.

2. A Story. It’s all about crafting a narrative. Stories are easy to remember and can help make the main points of your pitch stick. Just be sure you respect the readers time and don’t be too verbose.

3. Logo with background as a transparent PNG. Because you goal is to make it as easy as possible to write about your startup, it’s very important you include your logo with a transparent background so news sites can quickly make your logo fit in with their own branding.

4. Video. If you have a 2 minute video showing off how to use your product, be sure to include it (and make sure they can embed it in their post if they choose to write about you).

5. Numbers – When a startup leaves out numbers I assume it’s because the numbers suck and you’re trying to sound bigger then what you really are. If you’ve just started out and the only people using it are your friends and family, tell us. There is no shame in that. People love rooting for the underdog.

What has worked for you?

If you have any more advice for putting together an awesome “Press Pack”, please share them in the comments!

Stay in touch.

For more startup news and advice, follow us on twitter @startupfoundry.