Good morning from San Francisco! This week we are participating in the 5th edition of the Holland in the Valley Bootcamp in Silicon Valley (organized by DutchBasecamp, The Consulate General of The Netherlands in SF, and BootUP Ventures). Eleven startups from The Netherlands are in Silicon Valley this week to meet with Silicon Valley founders, incubators/accelerators, investors and experts to learn about how to start and grow their company across the pond into Silicon Valley and beyond. Throughout this week, the team of StartupJuncture will be covering several stories about new insights & learnings from startup founders, investors and other experts in Silicon Valley.
Silicon Valley Founder experiences from DoubleDutch
There are different ways to start a company; you can start with your own problem, define inspiration and take it from there, or the third way: starting with a thesis, a.k.a. the MBA approach, in which you look for the growth markets and launch out from there. The founders of DoubleDutch (awesome name) took the third approach when back in 2011 they thought about starting a new company. Now, three years later, the company is backed by $38 MLN in VC Funding, employes 160 employees and operates in markets worldwide (they just opened their European HQ in Amsterdam). The typical Silicon Valley success story, right? We met with the CEO of the company, Lawrence Coburn and talked about how he built DoubleDutch from the ground up and is now using rocket fuel to reach for the moon. Here are a few of the take aways:
18 months of validating
Figuring out what product to build, who your customers are, and how to make money does not happen overnight. It took Lawrence and his team 18 months of validation before they found an answer to these questions and were ready to take their venture to the next level and raise more funding. How did they find out? Easy, by just looking at their key metric: revenue :). Why am I bringing this up? I am all about learning fast and failing fast but it also takes time (more than 6 or 8 months) to find out if you are on to something or not. There are a lot of things that can kill you but one of my take aways is that it takes time and perseverance to find your initial market and grow from there (keep in mind we are talking about enterprise products).
Sales development: data driven approach
During these 18 months of validation and beyond the team had to make a strategic choice between using a freemium model vs. enterprise sales model. Both strategies are used by startups operating in the space. DoubleDutch stated enterprise sales and did not go freemium (best choice according to Lawrence). Here is how their enterprise sales model evolved overtime: In the early days the founders were selling the service but when they hit the sweet spot and magic happened, they needed to evolve and turn their sales organization into a machine in which somebody else (not the founders) could sell the service. Here are the metrics and what they did it to make it scalable:
- Using a tight system: 7 touches before we go on the next client (calling, e-mail, phone).
- Making the call: the sales team is making 60 calls a day, to set up demo’s.
- The phone script: have a clear script for the sales team; reputable customers first, value proposition, call2action and next steps.
In his presentation, Lawrence made a case about the importance of building your own strong company culture and having all your employees feel and breathe it.
Not building a strong company culture could have killed the company. DoubleDutch for example documented their core values early on. After a weekend retreat at the beach the team set its beliefs: transparency, pioneers, curious, no assholes, passionate, fearless, personality are the core values driving this company and its employees. As a founder, you have a key position in building and maintaining this culture, so keep articulating the vision over and over again. To give some more insights into the life of a CEO in Silicon Valley, here is what Lawrence is doing next to articulating the vision: keeping the lights on (which means raising money and closing big deals) and bringing in new people.
Last week Salesforce held its annual Dreamforce conference here in San Francisco. Unlike some of the mayor sponsors that put in lots of money to have their name out there, DoubleDutch chose a different approach. Here they are all about hacking events. Just to give an example, during last week’s DreamForce the team developed an app named Partyforce. This app provided an overview of all events happening in and around the conference. When the official Dreamforce app went offline due to technical difficulties everybody switched to the Partyforce app which gave PR for DoubleDutch a great boost. What is the takeaway for your startup? If you have no marketing budget, think about ways to hack events to get free publicity. It worked out for DoubleDutch so why not use this strategy for your own PR, right? And if you do so, take it one step further and make it part of the company culture.
Hiring: building a startup university
Hiring is a big issue in Silicon Valley. Startups and the bigger companies like Google and Facebook are fighting each other over the top tier talent. Most startups can not afford the salaries paid by Google and Facebook so they have to come up with other tactics to get the best people on board. DoubleDutch’s answer is to position itself as the startup university. They want their employees to start their own businesses after they leave the company and will help you prepare for this if you come and work for the company (by the way, they’re hiring for their Amsterdam office!). Besides of course the opportunity to go and work for one of the fastest growing companies in the Bay Area.
Well, here are my take aways from our visit to DoubleDutch, I would like to thank Lawrence and DoubleDutch for their hospitality and openness. Stay tuned for more stories about our experiences in Silicon Valley.
Image credits: Kate ter Haar