The dos and don’ts of building an early stage startup
In 2019, I spent 3,000+ hours starting a company. During the process, we’ve hosted over 150 in person gatherings and painted a dream.
From knowing absolutely nothing about what it means to start a business, diving straight in with little startup experience but a lot of courage, to now knowing perhaps a thing or two to potentially derisk my next venture by a small bit.
I come from a design background, the realm of practice that puts experience and aesthetics on the pedestal. As a result, I had little awareness of the business, growth, and finance side of the picture. In the past year, however, I made my best effort to shed some of my designer identity to learn to think in terms of P&L, cash-flow, and marketing conversion metrics.
After a year, despite establishing a small stream of MRR (~$2,000/mo), I still cannot say that I have reached product market fit (my retention rate hovered at around 35%, when long term retention rate for consumer subscription products should get to around 50% according to best practices around growth metrics).
What I can say, however, is that I now feel comfortable with the process of coming up with an idea from scratch, launching a product, to getting early paying customers.
In this journey, I’ve met amazing minds whom I otherwise would never have had a reason to reach out to; learned a million things going out of the Comfort Zone.
Here, I want to summarize all that went right and those that went absolutely wrong after a year of running Socialhaus, both as a reminder for myself and as learnings for all who are reading this post to avoid making similar mistakes.
A bit about my startup:
Socialhaus is known as “your city’s living room,’’ a unique space dedicated to the meeting and gathering of friendly strangers, an inviting alternative to a bar, and a Third Place beyond home and office. It is a place where one will spontaneously walk in, and meet over coffee, tea, and board games those whom they otherwise would never have met. At Socialhaus, we bring together people who thrive on deep and intellectual conversations and those who wish to build purposeful relationships.
What went well
- Talked to users religiously — 1:1 user interviews, robust user onboarding initiatives, focus group studies over group dinners (which turned out to be highly effective both for obtaining actionable feedback and building a community amongst early users)
- Started generating revenue quickly — consistent events as an effective funnel for membership conversion
- Branding & storytelling — got people really excited about the concept, many buy-ins to the idea itself, and many really wish it to exist and pulled out their wallet just to donate to the cause; there was an organic spread via word of mouth
- Data tracking — fully aware of the power of data, had tracked attendance and engagement since day 1
- Strong community — many members have told me that Socialhaus has changed their lives, and that without it their life would have been very different and offered to help in various capacities; had a team of dedicated volunteers who helped from beginning to the end because they saw the benefit and hope to see it thrive (these are the things that I will forever be grateful for)
What didn’t go so well
- Not enough iteration — found one thing that seemed to work and was not aggressive enough with experimentation from both a product and marketing perspective (i.e. open vs exclusive model, fewer but more variation in event formats); did not analyze cohort data effectively for meaningful action steps
- Zero email marketing — no email newsletter sent to Socialhaus subscribers or event attendees and thus did not stay on top of mind or take advantage of repeat users
- Little external communication — no updates sent to any Founder friends, potential investors or advisors; minimal networking with industry thought leaders
- Tried solving multiple problems — to this day I could not decide if I was solving the problem of “meeting new people” vs “deepening relationships”, and I realize it is most important to focus on solving a single problem really well
- Bad unit economics — probably the biggest mistake made was pricing too low and failure to think through a viable business model at inception; had users pay below market rate without a clear path to better monetization, to the point that I was stuck in a system that was extremely difficult to scale
How I would do things differently
- Compelling business model and clear path to profitability
- Sell the product before building; experiment with different distribution channels to reach the right audience
- Find the right team who will help derisk the business given relevant industry experience and expertise
- Build relationships with people who can help
- Obtain more granular data on each interested user and segment user base for marketing retargeting
- Host events only if they are scalable (customer LTV to offset CAC in regards to labor/venue rental cost)
- Utilize no code tools for automation to save time from operational responsibilities
- Monthly reflections and newsletters, to change and abandon processes quickly as opposed to living in the “perceived doing something” / ”illusion of progress” mentality
- I was often swayed by what others want and letting those who are most excited about the idea dictate product direction. I realize in the end the importance of staying true to my personal mission statement.
- Despite Socialhaus being a very deeply community driven product, I couldn’t help but had a very transactional approach. Towards the latter end, I started to invest in building lasting relationships.
Aside from these learnings, I had the best conversations I’ve had in a while at Socialhaus; I met four friends in the process whom I still do weekly hangouts calls with and now they’re a big part of my life.
A few months after I had paused the business, I saw this quote in my inbox, reminding me that this is what we did for them —
“There’s this feeling that we should be self-sufficient, islands on our own, but secretly, introvert or extrovert, we all crave finding ‘our people’ and physically hanging out with each other… Why can’t someone gather all of us up with a big net and put us in a cozy pub with a fireplace and feed us nice snacks? Why must talking about loneliness and breaking out of it be so hard?”
Many things could’ve been optimized, made more efficient from a startup perspective, but the connections built at Socialhaus are real.
I never stopped believing in Socialhaus. I’ll bring it back one day when the world is ready for it, because it must exist in this world, in one way or another.
(If you’re curious how Socialhaus came to be — The story behind Socialhaus)
Through a year of experimenting and iterating on what problem space I care about and can try to solve, I’ve discovered an ever stronger passion in innovating on the built world and how the way our space and cities are designed has such a powerful impact on the ways we feel and connect. I find companies like Sidewalk Labs, Space10, Backyard, and Culdesac absolutely fascinating, and would love to meet the minds thinking in that space. Please reach out if you’re interested in brainstorming for a better future on building towards more livable cities! firstname.lastname@example.org
Thanks to the thousands who came out to support Socialhaus in person. Thanks to friends and teammates who believed in me this entire time.
Reach me on Twitter @cocobliu