May 26, 2010, was the most horrible and the most wonderful day of my life to date.
I didn’t sleep the night before. I woke up to 900 words of notes in my BlackBerry (it was 2010, and ex-consultants like me had BlackBerrys), dream-infused and timestamped in 15-minute intervals, a physical record of how I had woken up, typed an idea rapidly into my phone, laid back down, and repeated the process over and over again.
A few hours later, I would compete in the final round at 2010 TechCrunch Disrupt (the first ever) and, in front of an audience full of press and investors, launch Betterment, an automated investing service that we felt sure would at least get funded—little did we know it’d have a chance to change the future of finance.
The stakes felt so high. And the competition felt unfair. We’d bootstrapped and had forgone salaries, while others of the 500+ entrants had already raised more than $7 million (something like $25 million in 2015 fundraising dollars). Our future depended on making a positive impression. We had to perform.
Disrupt was held in the old Merrill Lynch building on the west side of New York, 570 Washington St. It was a vast warren of austere, stained, and abandoned hallways, and looked as if no one had entered the office in 10 years before TechCrunch decided to host a conference there.
Toward the back, behind the Red Bull booth and through one windowless room, there was a smaller windowless room, no bigger than a janitor’s closet, for us to practice our pitch.
Our future depended on making a positive impression. We had to perform.
There were four of us in the company at the time. Anthony Schrauth, who led product, and I presented on stage. Eli Broverman, my co-founder, and Kiran Keshav, our head of engineering, answered our first customer support calls from the audience. Adam Langsner, our then-intern (now lead engineer) manned our exhibit booth in the lobby—it was his second day of summer work.
We presented, and we won Biggest New York Disruptor. Then, moments later, we went back to work—all of a sudden we had real customers, and so much more to learn and build.
The biggest value of TechCrunch was those initial customers—400 brave souls trusted us with their money in the first few days (the Disrupt bump is real). But for me, the validation was almost as important. Many who have started a company will tell you that it’s a lonely process. You spend a lot of time strategizing in your own head. You believe what you believe and, especially if you’re building something disruptive, not many others believe what you believe, yet. Otherwise they’d already be doing it.
We wouldn’t be where we are right now without having launched at Disrupt. We needed those early customers, and we needed the credibility. Launching there, in that old building, at the most influential technology conference in the country, was a pivotal moment for us, and we knew it—hence all the adrenaline and not sleeping. I’m not sure we would have gotten off the ground without doing it.
Sometimes I think about the irony of it, though, where we got started—in the belly of old financial services, in a space that had been vacated by one of the legacy incumbents.
How to prepare for the stage and how to set your goals for launch are company-specific. It’s all going to depend how far along you are, what you need most, what you know, and what you don’t know. But here are a few examples of what those things were for us, and what we might do differently if we did it all over again.
Preparing the Presentation: Sometimes Less Is More
We prepped as much as we could. There was a happy hour at the Tribeca Rooftop the night before our final presentation; we went with all the other companies. But the four of us from Betterment had only one drink, because we knew we were presenting the next day. We toasted, downed our drinks and went back to work.
I went back to work to go over the presentation again and practice about 100 more times. The problem was that I memorized it. I would never do that now. When I present now, I may have slides, or not; either way, I just tell the Betterment story. If I were to do a Disrupt launch over again, I would simply talk about what Betterment is, what it does and why it’s transformative.
Anybody who presents often knows to not memorize a speech. But if you’re not a regular presenter, the key is to know your three or four points and anecdotes, and tell them in a natural way that connects with the audience. At the time, I didn’t know any of that.
Raising Money: Be Prepared And Give Your Investors A Specific Call To Action
Months before we launched, I had read somewhere that it was good to have a call to action at the end of a presentation. So, at the end of our Disrupt presentation, we asked the audience to come by and talk with us at our booth in the lobby. That’s kind of as far as we thought about things: Let’s have some conversations with some investors and get to know people.
That was fine, but we may have left a bad impression with some of the investors, because we had no idea how much money we wanted to raise. It would have been more productive if we had been better prepared to raise money. We were so focused on winning, we forgot about the prize. Doing it over, I’d have confidently said, “We’re looking for $3 million, and here’s how we plan to spend it.”
Customer Growth: Plan For The ‘TechCrunch Bump,’ And Then Work Harder
Andrew Chen has written about the TechCrunch bump and subsequent Trough of Sorrow, which he says is what many tech companies experience after launching at Disrupt. We were no exception.
In June, the numbers trailed off, with 10 signups on a good day, and 0 on a bad day. By the end of the summer, we still had under 1,000 funded customers, and growth was stabilizing at a few signups per day, but slow.
So how do you launch, experience the bump, experience the Trough of Sorrow, and then get back on track? If you have a “viral” product, maybe you never have to worry about how to grow. But there are not many viral products out there. And many of those that were “viral” at a launch proved to be flashes in the pan.
We were so focused on winning, we forgot about the prize.
For any real business, you’ve got to build, you’ve got to understand customer acquisition, you’ve got to get the word out, and you’ve got to put the right blocking and tackling in place. It just takes a lot of work.
For us, that first meant using what we had learned from Disrupt to solidify our product roadmap. The advantage of the bump is that you have some real live customers who will tell you what would be most useful to them. We listened to them, and they told us they wanted an iPhone app, integration with Mint.com, and auto-deposits. So we set out to build those things, which hadn’t been at the top of our roadmap, and they became some of our most prominent features.
The next phase for us also meant getting the right investors, but to do that we needed more customers. To get more customers, we needed more employees.
We started by hiring in areas we felt were most important: engineers to build more features, and marketers to get the word out.
Especially in the early days and even after Disrupt, most people we hired were friends or former colleagues of our employees, and the marketing hires were no different. One of them was a childhood friend of Eli’s, and the other was the brother of one of my high school friends.
As we continued to grow the company, Disrupt was undeniably responsible for helping us get those new hires. Prior to the conference, we had just four people on the team and virtually no one using Betterment. That’s not exactly the most appealing scenario to good candidates.
An early hire is much more likely to take a leap of faith and work with you if he or she sees you have that kind of validation. And that’s what Disrupt gave us—validation, using a pretty substantial press article that we were able to send around and put on our website, and an award that indicated we were doing something innovative and disruptive. Having that stamp of approval is important. It’s a big deal.