Demo-Day + 27
Literally anyone can raise in this environment…
I’ve heard that from founders, investors, reporters, and armchair pundits. Over and over and over again. Countless times during the summer. I can feel it ringing in my ears. My throat is starting to close over. I stare at my blank calendar until my eyes lose focus. I can hear Romy and David chatting in the kitchen next door. I’m trying to muster the courage to go in and face them.
I’ve just finished my very last pitch meeting. The investor said no while still on the call. I don’t have any more scheduled. Our funnel of potential leads is empty. All of our requests for introductions and cold emails to VC firms have gone unanswered.
This is supposed to be easy. My head is full of anecdotes from our friends in the batch. One founder had to put his phone on airplane mode during the day because he kept getting unsolicited calls from eager VCs. Another had investors so desperate to get their attention that they received a bottle of wine out of the blue from an expensive vineyard in California. It had the name of their company printed on a custom sleeve, along with the caption:
“Can’t wait to crack this open and celebrate the fundraise. Let’s work together.”
The sharp, hot stink of rejection is overwhelming. I feel like crying but can’t push past the empty feeling of disappointment. My one fucking job. Our big shot. Blown. Demo Day is a distant memory. All of the excuses - Burning man, August holidays, a bigger YC batch - are long gone. No one is replying to our emails for one reason and one reason only. They don’t think we’re a good investment.
And that is all my fault.
Demo-Day (4 weeks earlier)
I was exhausted but we needed to keep working the crowd. The hall was packed with eager founders trying to nab an investor into a conversation long enough to get an email address and a soft promise of a meeting. It reminded me of the cringey teenage discos from my hometown in Dublin (Wezz for any of my Irish readers). A horde of socially awkward youths mustering the courage to introduce themselves to a special someone. In this case, that special someone was an investor willing to take a bet.
The investors, in turn, were participating in a weird sort of treasure hunt, trying to find and corner one of the buzzy start-ups, while aggressively filtering out the ”bad” ones. The hot startups were usually surrounded by a swarm of highly engaged VCs, nodding with encouragement and enthusiasm. Vying for closest position next to the lauded founders.
This effort was pretty futile. Most of these companies were in high demand precisely because of low supply - they had already closed their round. The smart investors already knew this.
I did another lap of the hall and found David and Romy engrossed in what looked like a detailed pitch. I waited for them to finish before introducing myself.
“Love what you’re doing but I’m afraid I’m no Investor, I work for AWS.”
I tried to hide my disappointment. It was like the feeling when you’re flirting with someone and things seem positive. And then they not so subtly mention that they’re in a relationship. Bummer. We politely chat for another few minutes about how great AWS is before he moves on.
“Any more cards guys?”
“Got one but they only invest in Biotech and B2B SaaS so not very promising. You?”
The adrenaline rush of the pitch was gone now and I was crashing hard. For an hour or so afterward, I felt like I’d just jumped out of an airplane. Now I felt like I’d just run a marathon. We got about 60 or so Likes on the YC Demo Day website which meant our funnel of potential investors seemed healthy. We only needed one or two of them to commit and we were off to the races.
But in the weeks leading up to the big day, we’d been drilled relentlessly on the importance of working the room. We heard countless anecdotes of chance encounters on Demo Day leading to last-minute fundraises. The successful companies did it. The unsuccessful ones didn’t. Ergo, work the bloody room.
“That’s them, the Monaru gang”
I heard the British accent of one of our close friends in the batch ring out from a few yards away. He was pointing us out to a squinting investor next to him. The man was wearing a blue polo, kaki shorts, and a serious expression.
“Ah yes, you folks were my second favorite startup. Monaru.” He emphasized each syllable of our name as he said it, like he was tasting the unfamiliar word. “Your startup is weird. Like, really weird. I can’t tell if it’s good weird or not. But it’s definitely weird.”
Those three sentences, and I cannot stress this enough, were the most extreme praise we had received in about 3 months. My mind was blank for a half second. Someone was actually indicating that we weren’t complete dog shit. I felt a little giddy.
“Hey, yeah that’s us!”, I nearly shouted.
The man smiled at then, a sort of cheeky grin. He strongly resembled Paul Graham, the creator of YC.
“Monaru, do you have the .com?…”
We spent the remaining hour of demo day engrossed in conversation with our new best friend, who continued to heap bizarrely qualified praise on our company.
“I think it might be genius, but maybe it’s stupid”
“You’re either the smartest people in the room or you’re complete idiots. I think it’s the first but I don’t know”
After 3 months of feeling like the biggest losers in yc, this was so incredibly validating I thought I was gonna start to cry.
Little Demo Day snap
Demo-Day + 3
The air conditioning in the car was on full blast but i was still sweating profusely. It was 9:58AM and we were racing through the sleepy streets of Palo Alto. I was about to be late for my first investor pitch meeting.
I tried to calm my nerves by flipping through the slides one more time, but this had the opposite effect. They felt more and more pathetic every time I looked.
And then there was the user problem…
Our user numbers had peaked on demo day at a pretty unimpressive 100ish level, representing \$2k in revenue. Not great. But something at least. And growing 50% per week!
What was more impressive (or so we thought) was that we had zero churn so far!!! The naiveté here is painful in hindsight. Of course we had zero churn - most of our customers had been using our service for a little over a month.
Anyway, in the 5 days since demo-day, we had about a 3rd of our users email us asking to cancel their subscription. Most of the rest weren’t using the app or responding to emails, so it was only a matter of time until they went too. We were doing mental gymnastics to justify why this was happening - this feature wasn’t ready/we messed up for that user etc. We were always only 1 week away from fixing things and then everything would work (spoiler alert - it never worked).
In the meantime, I just had to say something that sounded convincing enough to buy us time to turn things around.
Demo-Day + 11
“Do you know who I am?”
He knew I didn’t know. He could see it on my face. I was like a rabbit in headlights. I could barely remember his feckin’ name.
This was my 3rd meeting of the day, and I had 2 more after it. I hadn’t eaten in 5 hours - I was sitting at an angle to prevent my stomach rumbling. There was barely enough time to sprint between the various SoMa offices to get to each meeting on-time. I had risked a MacDonalds’s double cheeseburger while on the run the day before and arrived 7 minutes late for a 20-minute meeting. Not a good look. Hence the unintentional intermittent fasting.
He was obviously someone important. This was the fanciest office I’d been in so far. I decided not to speak - best pretend it was a rhetorical question. After what felt like forever, he finally put me out of my misery.
“Ok, well when I started Big-Early-00’s-Consumer-Co, we Famous-thing-thing-they-did-to-get-early-users. What is that gonna be for you? What’s the spark that’s gonna get this going?”
My mind was blank. The 15 or so rejections so far had poured cold water on any spark I thought we had. My mouth flapped open and I started saying words in an order that resembled a sentence.
“I get what your saying, and I do think that there is something like that needed, and I do think that we will find something like that…and I’m sure we will, I’m convinced we will, I just don’t know what it’s gonna be…and I know that this isn’t the answer you’re looking for but I really do think there will be something, I think…”
For a brief moment, he looked at me like I had just drowned a puppy right there in front of him. Then his eyes darted down to look at his calendar and prepare for his next meeting. It was like I had already left the room.
“Thanks, yeah, we’ll be in touch and let you know. Jessica will see you out.”
Demo-Day + 23
The Uber dropped us off at the address we’d been given. It was in the middle of downtown Palo Alto, flanked by a shop selling fancy scarves and a gadget store. The entrance was down an alley and up a flight of windy stairs. Weird place for an office, but at this stage, who was I to judge?
Romy was with me this time. She was there both for moral support (I was losing the will to live after 25 hard nos), but also to try and figure out what was going so horribly wrong in each of these meetings. Maybe the pitch was too long? Maybe it was too short? Maybe I was slurring my words, or my accent was making things hard to understand?
There was a little voice in the back of my head telling me that the investors weren’t convinced because I was finding it hard to believe myself. How could I expect to build confidence when I had none?
I took one last deep breath, pushed those thoughts down somewhere deep, and knocked on the door. It was quickly opened and we were ushered through to a stylish board room. Romy and I sat facing off against the two investors. The air in the room was heavy, and I could tell that we were one of many pitches that they’d listened to that Friday afternoon.
English was their second language. One spoke fluently, with a slight British accent. He was tall and had a sharp face that was frozen in a disapproving frown. Bad cop. The other had a weaker grasp, and bar a few initial questions, he relied on his colleague to translate for him. He was also constantly smiling at us, nodding whenever we said anything (even though it wasn’t clear he understood). Good cop.
I launched into the pitch. I was keenly aware that Romy was watching so I gave it serious gusto. Every once in awhile, Bad cop would ask a really tough question that risked de-railing things but I managed to parry them somewhat effectively. We were about 2/3rds of the way through when I noticed that Bad cop appeared to be deep in thought. His head was bowed, his eyes were closed, and his hand was on his chin. I kept talking, but I braced myself for what could only be a pitch-ending question.
Then, barely audible at first, but growing louder with each breath, I could hear him start to snore.
Ladies and Gentlemen, I give you:
I caught Romy’s eye and nearly burst out laughing. Her face was stuck in a contorted grimace, trying to hold back her own giggles. The sound was getting louder and louder. Good cop had noticed at this stage and started to panic. When I finished the slide, he nodded even more vigorously.
“Very good, this is a very good idea, I like it very much!” he exclaimed, with enough force to stir his neighbor. Bad cop jolted awake and it took him a half-second to regain his bearings. He then started to stare at the screen as if he had been looking at it the whole time, nodding lightly.
After another 10 pointless minutes, we left the office and emerged onto the main street. We stood in silence for a few seconds before Romy casually remarked:
“I’d imagine they’re not going to invest so…”
We laughed and laughed and laughed until my belly hurt and my eyes watered. My hands were shaking so much that it took us ages to order an Uber. When we arrived home and told David, it set off another wave. The laughter was tinged with sadness though. It felt like the happy-go-lucky nature of our adventure was finally knocking against reality. And reality was winning. Maybe the YC partners had made a mistake?
Demo-Day + 28
I sat at my laptop with a lump in my throat. David and Romy were sitting at theirs across from me. We all had the Mixpanel analytics dashboard open. Today’s 3 active users included:
- My Mum
- My Dad
- Someone who was trying to cancel their subscription
It was only a matter of time before the remaining 30 or so paying users did the same. And then we would have no paying users.
“Ok so, yeah, that’s really not great, is it? I guess the new contacts page didn’t work…” I almost whispered.
“Did we really think it would?”, Romy responded quickly, impulsively. David said nothing - he was staring into space, ashen faced.
“Guys, I think it’s time to call it. We all hate working on this. No one is using it. We’re not making something anyone wants. I think it’s time to Pivot.”
The words hung in the air after she finished. Heresy. We were supposed to persevere. Our heads were filled with stories of all the founders that just kept pushing, just tried one more thing, and then it worked. Was pivoting not just another form of giving up? Throwing in the towel?
The sunk-cost fallacy at play here is obvious in hindsight. We had put so much work into Monaru - nearly 3 months straight of working from the minute we finished breakfast until we could no longer keep our eyes open after dinner (Sidenote: This is a dumb thing to do and actually held us back. Take breaks). Hours and hours of debugging bits of code, conducting user interviews, building landing pages, servicing customers - all thrown away if we just gave up. And then we would have nothing to work on, no safety of an idea to hold us together. It felt fragile - like we were dangerously close to unraveling.
It took me some time to see that this is entirely the wrong framing - all that work was valuable and taught us 2 very important lessons:
- No one wanted to use our MVP
- We hated working on it
The second of those 2 is the more important one. We hear a lot about Product-Market fit, but no amount of work can solve an even more fundamental issue: Founder-Market fit. We were miserable.
“I think we should talk to one of the Partners…”
“Ok, ok, slow down. Say that last part again.”
I was on the phone with one of the YC partners. The original reason I booked the call was to ask for advice about fundraising, but it was now centered around the idea that we might pivot. I had breathlessly raced through the last month of failed pitches and churning users.
“It’s just, well, no one is using it, and to be honest - we really hate working on it…” I said guiltily, bracing for the rebuke.
“Wow, yeah, that sounds like a pretty good reason to pivot to me. At least you folks gave this one your best shot. Let me know when you want to talk about whatever your next idea is…”
I held the phone in stunned silence after we said goodbye and hung up. The relief washed over me. We were free, free to work on something else, free to do absolutely anything else. My only regret was that it took us so long - and that I let my fear of criticism cloud my thoughts.
My new optimism was laced with doubt. We now had about 8 months of runway left (assuming we ate pasta for dinner and stretched every penny). Just 8 months to figure things out before the dream was over. And we were back at square 1. It felt like our adventure was nearing a painful end.