Gritwell's study begins with an introduction from a guy who knows a guy. The founder CEO worked with a financial expert to help with P&L so that she could do the initial business modeling. She primarily needed help and guidance in product development, business modeling, and fundraising. These fell into my strengths, so we started negotiating about what this engagement could be. It lasted longer than expected because of the founder's previous experience of being burnt out on the one hand and the lack of cash, capital, or revenue on the other hand. One of the achievements was that Gritwell went through an accelerator and raised $50k (they invested it in starting the community of early adopters but still need to get closer to the next phase on the product side).
Treat the health problems at their roots and not the symptoms. The founder was passionate about finding a solution to the broken healthcare system, which was part of her life’s story she experienced firsthand during college. The team was on the journey to solve it for a broader audience using a functional medicine approach. We found common ground with clear milestones: to define objectives, design the product and a business model, draft a roadmap, and raise funds.
The realization of the challenges ahead came right after we dived deeper into the team’s progress since ideation. We identified that they didn’t validate the price ceiling or user experience through natural language processing, which was critical for a business model. In addition, as time will show, the scientific hypothesis didn’t have enough data to start experimentation to assess the feasibility of the proposed approach and, essentially, to start building intellectual property as a technology company.
We leveraged the existing community and client base, which were happy with the service they were getting (that was manually, but promised value delivered, so the clients saw the outcome), to confirm the newly formed hypothesis with clear goals to answer some of the questions:
In parallel, we calculated unit economics, how to scale, and how many customers we could handle at what coefficient of practitioners and coaches. These were the basics to put meaningful information in front of investors and to understand better what could be a sustainable business model ourselves.
Project-based mindset vs. product-led approach - this was one of the core challenges working on this particular startup. CEO had heard so much about project-based development that it was challenging to establish a common language and ground for product development. To provide a little context, project-based is when you have clearly defined requirements and specifications that will not change. You always come to a precise cost, “how much this particular piece can cost, and what is the approximate timeline.” In a product-led paradigm, you have a product development team budget. You stay agile and flexible, so you can iterate and test ideas, collect feedback from customers or end-users, and analyze and repeat, but you don’t have distinct locked requirements with the associated price. We worked through that, it was hard for a founder, but she handled it the best she could, and we persevered.
After testing different hypotheses with the client base and prospects, we had enough information for productive pitches, so we pushed hard on fundraising while trying to hit the necessary key performance indicators investors were looking for - traction! We had to show 30%+ month-over-month growth with signed clients and revenue while maintaining high customer satisfaction or stickiness (96+ net promoter score). It was a hustle for the whole team of 5 back then, but it united and pushed us to establish processes, discipline, and improve data collection (this was critical).
At the same time, I drafted the roadmap, and we designed the first experience for user testing based on the primarily existing manual process so we could optimize and serve more clients. The initial scope focused on client applications that could enable more clients with the same team. Following customer interviews, we realized that we needed to do more. We won’t get the desired outcomes because we identified another bottleneck - within internal processes that must be optimized for unit economics or business model to work. The grind on the go-to-market side of the business was getting some revenue, but we were burning cash that we barely had, calculating on every weekly 1-1 with the CEO how long we could last and the deadline to raise capital. We re-vamped the whole thing and got back to user testing. At this time, we were serving around 50 new (I don’t recall the exact numbers as of now, it has been a while) clients regularly and totaling active subscribed clients of a little over 130.
With the collected data, metrics, roadmap, and prototype design, we secured $2.6M. The story has just started; we achieved the milestone, and now to the next.
ID R&D started as one of those startups you read about in books and see in shows or documentaries. Co-founders secured a long-lasting project-based relationship with a significant...
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