Dan Martell
5x founder (2x VC funded Clarity & Flowtown) / 3x exits. International speaker & award winning angel investor
Discussion
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Dan Martell
@danmartell · Founder, Clarity
Hi there! So here's the dealio... I've advised more startups then my home town has people. I love talking about marketing, fundraising & scaling companies. I've invested in over 30+ companies from all different industries but mostly tech. No question is off limits.
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Ryan Hoover
@rrhoover · Founder, Product Hunt
Dan! Welcome. 😄
Great job with Clarity. I've taken several calls on the service -- it's a great resource for entrepreneurs. Why did you sell it?
Wesley Eames
@wesleyeames · Founder @ancestorcloud
@rrhoover Also interested in the answer to this!
Drew Meyers
@drewmeyers · Co-Founder, Horizon
@rrhoover Also curious on the answer. I've taken a number of calls on it as well & get huge value to the efficiency of the model, and actually just paid for a call with someone with strong Peace Corps ties this morning (Peace Corps is one of first target communities my startup is focused on)
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Dan Martell
@danmartell · Founder, Clarity
@rrhoover great and long answer.
The short answer is I couldn't see how we could build a $100M (revenue) company using the call structure without changing our focus from entrepreneurs as customers (my passion) to the financial industry (currently multi-billion dollar market for expert advice).
So in short, we could've pivoted a bit to make it work (into a market I didn't love) or added services (ex: Clarity Live) that started to look like other companies out there (Udemy, Treehouse, etc).
We had a GREAT opportunity come up from a few companies to get acquired but when the decision came down after meeting with several I felt Startups/Fundable was the best home and return for the investors + I knew it would live on and thrive.
... and on a small level, I had just had 2 small boys - 11 months apart and I thought timing couldn't of been better to be a great father to them.
So it was a bunch of things ... market, my passion, family, doing right by investors, etc... usually always includes those elements in making any decision to sell.
Hope that gives Clarity :)
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Ryan Hoover
@rrhoover · Founder, Product Hunt
@danmartell thanks for the honest answer. Before you started Clarity, were you confident you could turn it into $100M+ business? This is the bet many entrepreneurs (and investors) take when starting (or investing) in companies but I guess you really never know what it will turn into.
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Dan Martell
@danmartell · Founder, Clarity
@rrhoover 100,000% .. no doubt in my mind. Hellz Yes! That's why I took on investment ... at first I was just going to self fund it and keep it as a side project that I personally used and loved.
Unless believe it could be a big meaningful company you should never take the money imho.
Steven W
@mrwongsteven · Nice guys finish lunch.
Just watched your video "How To Raise Venture Capital For Your Startup" and the biggest takeaway for me was “Investors don’t want to meet you, they want to be introduced to you.”
So I was wondering, what is plan B if the startup can't find an introduction. Is there anyway that a startup can position themselves to be found by VCs?
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Dan Martell
@danmartell · Founder, Clarity
@mrwongsteven well, if you go through the process of reaching out to founder the VC invested in, then I can't see why that wouldn't work UNLESS you're idea isn't good - which should tell you something.
But since you asked ... I guess I'll answer.
3 ways I would get on investors radars would be:
1) Speak at an event they're at and share something smart
2) Reach-out to them in a way that creates value for them (maybe introduce them to a KILLER startup founder they don't know)
3) Write a blog post about their firm, highlighting something interesting
BONUS: Run Facebook ads targeting the firm with some great press / news about your startup. I've done this A LOT ... especially using remarketing pixels to be even more targeted.
Hope that helps... but I would suggest going back to the angle I shared in my fundraising video... it works best.
P.S. For everyone else, this is the video he's referring to (creator for portfolio founders I've invested in) http://lp.danmartell.com/fundrai...
Wesley Eames
@wesleyeames · Founder @ancestorcloud
Hey Dan, Thanks for the LIVE Chat! I'm excited to learn more.
Regarding marketplaces & growth: In the early days (<10k users) what were some of the most effective ways you found to increase the demand side of Clarity.fm?
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Dan Martell
@danmartell · Founder, Clarity
@wesleyeames I created a framework call "Growth Engines" to help explain my thinking on this ... but in essence that's what I did.
http://danmartell.com/growthengine
Now, the specifics, well it was all driven from our supply side (Experts)
http://www.producthunt.com/live/...
Either via:
- Experts promoting to their audience
- SEO from Q&A and other content they generated (blog.clarity.fm, Clarity Live, etc)
We did test paid acquisition but could never make it work due to the business model of the calls (we only took 15%).
Supply side driven demand is typically the only way to make a marketplace work when the price is set by the supply side (vs. price being set by the marketplace and supply being cool with that).
Hope that helps.
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Melissa Joy Kong
@melissajoykong · Content, Product Hunt
Dan! So good to see you here. I remember a few years ago, you told me of the thousands of people you give advice to, very few keep in touch or follow up.
(1) Who's someone you admire for their follow-up?
(2) Any advice for how to be great at it/provide value to others through a follow-up?
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Dan Martell
@danmartell · Founder, Clarity
@melissajoykong hey Melissa!
Umm... no one person comes to mind, but I'm going to assume that my peer group are all examples of those kinds of people ... because they're all folks I met initially, shared advice and were still friends - which means they followed up :)
re: #1
So, I could list a bunch of people ... but maybe my favourite story is a guy that followed up after an event. (name slips my mind)
He offered to help me out if I ever needed anything... so I did.
I told him to go find me an old phone switch for our office at Clarity (the old type where operators manually connected calls).
After a few weeks he came back with a link to one on eBay for $1800 bucks... so we bought it.
That was cool.
A couple of years ago he launched a new startup and I shared it with my followers and I have all the time in the world for his questions... so yeah, just following up - creating value - gets you time with people that are typically "busy" :)
re: #2
I do have this concept called The Value Creator principle ... where essentially you think of the person you want to connect with (or follow up with) and you ask yourself what you think they'll need in the near future to succeed and then help them get that.
If you have a skill, maybe you create something for them (ex: Designers could build a landing page, or redesign an onboarding flow, etc). But it's all about where they might need help, connections, resources then you put in the work to get that for them.
I do this all the time... I just ask "So, any big initiatives over the next 12 months you working on?" ... then I listen.
If I can be helpful, I follow up with some thoughts / resources / intro's / etc.
Hope that helps.
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David Diamond
@david_diam · Product designer
Hey Dan, first off I love how personal you are with your investments, I really respect how human you make the process. Do you consider age a barrier when it comes to startup founders, I'm 15 and I'm starting my first startup and I'm afraid that no matter how good the idea is or how much traction it gains, that my age would be a big barrier when it comes to raising.
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Dan Martell
@danmartell · Founder, Clarity
@david_diam age doesn't matter to me... only thing that I would ask is if you're quitting school and how your parents think of that.
To me, #1 is you need to be ALL IN on your company. No moonlighting nights & weekends if you expect to have investors support you.
Bernard O'bien
@bernard_o_bien
@danmartell Hi there. Thanks for taking out time to answer questions. I just wanted to know what you look for as a VC when investing in tech startups? What will you advise some one with a tech -software background hoping to get into the VC side in a 5years+ horizon looking forward.
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Dan Martell
@danmartell · Founder, Clarity
@ben_java if you want to know specifically what I look for when investing, then it's easier to watch this video
That being said, if you want to be a VC in 5 years my advice would be to start today.
Why wait?
If you look at many of the associates at VC firms, many didn't have operating experience... they just applied.
Now, there's a bunch of ways to create value for the partners to even get on their radar... but that's a longer post.
All that to say - DONT WAIT.
Whenever someone says ... I want to do X so that eventually I can do Y ... I always suggest they go straight to Y.
Life's too short.
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Sydney Liu
@sydney_liu_sl · Co-Founder of Commaful
@danmartell
Hi Dan,
Thanks for doing this AMA! Congrats on all the successful investments and companies you’ve founded!
Clarity doesn’t seem inherently viral and not everyone is used to getting consultants vs. mentors. How did you approach growth? Which strategies worked and which didn’t?
Thanks,
Sydney
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Dan Martell
@danmartell · Founder, Clarity
@sydney_liu_sl our growth engine was traffic generated by the experts (supply side) of the marketplace.
Our core metric was EDS (Expert Driven Signups) ... so that meant we optimized all the flows and provided the tools (and education) to get the experts to promote their profiltes to drive more awareness about the product.
We did this in 3 primary ways
1) Expert onboarding / education
2) Tools for experts (ex: Profile Widget, etc)
3) Growth features (ex: Clarity Live, Clarity Answers (similar to ProductHunt Live)
Once we cracked that, then it was about scaling the right side of the demand for us (50K+ experts).
To do that, we "hacked" against Slideshare :)
That was our true growth hack imho.
Most would've tried pulling people from Quora / LinkedIn but the beauty of Slideshare is you know the person loves to share / teach and the last slide on their presentation contained their contact information.
Boom!
Hope that helps.
P.S. I learned about supply side driven demand from Micah (Founder of Fiverr) using Clarity https://clarity.fm/micha :)
For other marketplace experts on Clarity https://clarity.fm/questions/952...
Leigh
@lemd · Director at Mediumrare
I'm working as a product lead for a music startup in Calgary. We've identified that what we're building solves an industry problem and are now building out the technical solution. We know a number of our prospective audience are on mobile devices. With that being said, with the teams you've worked with do you build to prove the model on a single platform (ie web) or have you seen teams dive full in with resources to answer the problem on both web and mobile apps for initial launch?
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Dan Martell
@danmartell · Founder, Clarity
@lemd I prefer to focus on one platform (mobile seems to win lately). The other option - what we did at Clarity - was build a mobile reponsive UI and just wrap that for our mobile app.
Allowed us to test and build faster than having to maintain both.
On that note, I'm a HUGE fan of Clikable prototypes and would start there before building anything.
http://www.gv.com/sprint/
Tys Bradford
@tysbradford · App Developer & Founder of BlueTropical
G'day Dan! It appears you have invested a lot of time into creating and nurturing yourself as a brand. Do you think this has made life as an entrepreneur/investor much easier? If so, what actions do you think others can take to build their own brands with the greatest ROI (e.g blogging, events, etc.)
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Dan Martell
@danmartell · Founder, Clarity
@tysbradford 100,000% ... and it's why I started.
When I first moved to San Francisco in 2008 I didn't know a soul.
I started to noticed all the "noteable" people in the tech world were blogging ... that's what got me started.
I personally think EVERYONE should work on their personal brand... doesn't have to be a big investment, but atleast have your name domain, some articles or talks you've given, etc.
As for places you could spend your time, it all comes down to your gifts.
Some people are great speakers (or want to learn and become like me) so maybe offer to give talk.
Others can write ... so blog.
Others are funny and interesting... so Twitter might be the best (see: https://twitter.com/levie )
It all depends on what you'll keep doing.
All that being said, I think people should treat social media with respect as it can eat up all your time ... so here's a few tips.
- Schedule your content
- Work in batches
- Schedule time to interact / respond
- Turn off ALL notifications on your laptop / phone
- Repurpose your content in many formats & networks
Personally I've evolved over the years from blogging, to Twitter and now I'm ALL IN on YouTube
https://www.youtube.com/danvmartell
That's probably where I'll stay and then share that content via my other channels.
Something about video that I find super hard and extremely powerful when it comes to building connections with your community.
my2cents.
P.S. I do have a framework I'll be teaching during my keynote at Converted called The Authority Engine - more info:
http://blog.leadpages.net/dan-ma...