Aaron Patzer of Mint.com – Idea to $170mil aquisition in 3 years @ FOWA
- February 23rd, 2010 /
Aaron Patzer – Mint.com – How to Take Your Startup to the Next Level @ FOWA 2010
Idea to $170 mil acquisition in 3 years.
3 Phases of a Startup
- Garage – <$100k in funding
- Validate and idea
- Create a prototype
- Seed < $1mil
- Launch and alpha product
- Scale > $1mil
Garage – Rapidly Validate an Idea
Original Idea: Goal setting software
Talk to as many people as possible. Don’t keep your business idea inside. Don’t worry about stealing the idea. Talked to 50-80 people. He found that the money component really resonated. People had issue with existing tools like Quicken & Microsoft Money. Customer feedback before even building the app.
Solve a real problem that exists now and 5-10 years from now. Don’t build a feature, build a business. In 5 years, will this problem still exist. Is it a transitional problem?
Garage: Goal = Prototype
Pre-revenue Valuation solver:
- + $500k / engineer = prototype development
- - $250k / business guy = idea, but not much to do
They built a real UI, and real prototype in July 2006. A prototype that is real and tangible will get you seed funding.
Garage to Seed: Raising Funding
- solve a real problem
- in a large market
- real revenue potential
- sustainable advantage – patents, people, user interface. need to be able to be leader
Seed: Proving revenue … before you have any
- The hockey stick looking curve is total BS
- Per transaction / per user revenue is much more important
- And a huge market opportunity
Competition: Quicken & LowerMyBills
- Lead-Gen & CPA Opportunity: $30+ /user / yr
- Business Model: Referrals & Lead Generation
- 7% of 16Bil online ad market
Seed Result – raised $750,000 and built prototype
Funded: Scaling People
- Train yourself to hire
- Hire better than you… then let them work
- Recommended book – Topgrading – sequential interview process. In interview questions “the why is always more important than the what.” – looking for pattern recognition. You can spot gaps, you can see true colors.
Funded: Beta -> Big Launch
- started blog ecosystem – find people to write guest posts
- private beta builds demand
- use exclusivity
- user feedback is key
Mint had 20,000 email addresses 1 month before launch. If you put a badge on your site, we’ll give you priority access to Mint. 600 people did it. Also gave great pagerank. The alpha users got velvet rope treatment.
Beta Product: Jul-Sept 2007
Saw scalability issues come across with the real users. Focus on building architecture. Hiring marketers properly. Scaling marketing by building the blog outreach.
Funded: The Big Launch
- Venue: TechCrunch 40
- Aggressive PR – hire an agency
- Have a presence
Mint mojitos. Everyone in t-shirts. Rent adjacent space. People’s choice award winner. Result: Mint wins TC40 People’s Choice Award. Off to the races.
- Q – Validate your idea?
- A – Talk to people. Is it a real problem? Would you actually use it? People will poke holes in it. Find out other services that exist. Don’t be super secretive. Talk to parents friends, non early adopters. Write down “concept statements” – go to train station, normal people. What do you think of this concept? Try different positioning statements & feature sets. All on paper before you built anything?
- Q – Story behind domain name?
- A – Original domain – MyMint.com – he bought himself originally. It must be easily spelled. Have all its vowels. Don’t chose your brand name based on availability. Couldn’t afford Mint.com until series A round. He bought it from a hedge fund investor.
- Q – Where’d the Mint interface come from. UI is critical.
- A – The way that it was perfected was putting it in front of real users. Take people off the street for a Starbucks $10 gift card. Mixture of ages, men, women, screaming babies. Hire designers with very specific background Photoshop, CSS/HTML, and UI. Designers make tradeoffs themselves.
- categories: Entrepreneurship /
