Episode 4: Succeeding in the World of Startups

Talking Startups

Today’s Banzai Pipeline Podcast features Shauna Causey, partner at Madrona Venture Labs. Shauna shares great insight into the startup world around Seattle and beyond. She highlights a few that she is super excited about and talks about the importance of customer validation when launching your product.  Below are the startup’s Shauna and Joe highlight throughout their conversation.

Comment and let us know what startups you are excited about.

Follow Shauna on Twitter @ShaunaCausey and learn about her latest company at www.relovable.co.

*Shauna is the founder of Relovable

* Joe is an investor in Legalpad

Read the full Pipeline Podcast transcript below:

Joe: Welcome to the Pipeline podcast today we’re here talking with Shauna Causey partner at Madrona Venture Labs and all-around startup bad ass marketing expert, etc. etc. I mean we could go on and on. Now You’re running a new startup of your own. So, Shauna, welcome.

Shauna: Thank you so much. What a fun honor to be here.

Joe: I mean it’s always a pleasure every time we get together. I’m just so excited that we convinced you to do this, it is really great.

Joe: You’re saying you were doing a Startup Week this week.

Shauna: Yes. This week is Seattle Startup week and I don’t know how many events, just dozens and dozens of events happening all over the city and really interesting speakers. I just came from a panel where Len Jordan from Madrona Venture Group was with Jonathan Sposato and Avni who’s the founder of Poppy. Talking about what it takes to start a company and how do you do that and how do you build your investor? How do you pitch? How do you think about funding? So it’s really neat because anyone could have had access to that talk today and usually it would be really hard to get that kind of intel from experts.

Joe: A lot of people have trouble getting in a room with any of those three people.

Shauna: I mean for all the startup founders I’ve met and advised over the years not only just getting in a room with them but working up the courage to understand that it’s okay to ask them for coffee.

Joe: Yeah. And all the questions that you were always too scared to ask. Like is it okay for me to not have a co-founder. I think you mentioned that earlier.

Shauna: Yeah. I heard that I have to have a co-founder to start a startup. Is that true?

Joe: They said no?

Shauna: Yeah, they said we’ve invested in plenty of companies with solo founders. One great quote from Len Jordan which was I think my favorite quote of the panel. Really the only panel I’m gone in and sat l in on. I’m speaking on two panels, but I just haven’t I haven’t been to a lot, but it was my favorite quote and he said I’m really impressed you know if you’re an impressive founder yourself. But I’m doubly impressed if there’s two impressive founders. It’s just like calling out the obvious in a really funny way and that’s true right. I mean you can do it. You can be the only founder and bring on a team where you can have a co-founder.

Joe: I don’t know about you, but I think every company I’ve started or at least worked at had at least one founder. At Avalara we had three maybe, three and a half.

Joe: Shauna you got your start, if I’m right, in sports and media?

Shauna: I did so I started working for the Seattle Mariners when I was 14 I tried out to be a ball girl. I got the job which at that time was like the most exciting thing ever. There were like hundreds of girls that went to tryouts and they hit balls at us and we got to field them and for some reason they hit pop flies at us too. I don’t know why because you’re not supposed to catch a pop fly when you’re on the field.

Joe: Yeah if you’re of these ball kids never run out of the field it gets a pop fly, they would fire you for that, right?

Shauna: I was like, should I catch it or should I run away? I was 14-years old trying to figure this out. Is this a test? There were only six of us that made it and I feel so fortunate that it was a really tough try out. I had to really be good on the field. They were hitting pretty hard at us. But that opened up the door to really every opportunity and since then and I got a chance to meet so many people through the Mariners organization. I got a chance to work in every department. I worked there for seven years so I started as a ball girl. I got to work and operations and marketing and PR. I opened Safeco Field with the team. I had a chance to see really this 360 view of how business works before I even got out of college. I attribute so much of my success to just getting a job when I was 14 and working really hard.

Shauna: Yes, I got my start there and then I went to work for Fox Sports Net which is the TV station that carried the Mariners and I got to work on the agreements. I got to work on contracts. So from there I went into really Fortune 50. I worked at a few different Fortune 50 companies and then my intro to startup world was really through Startup Weekend. A couple friends had bought Startup Weekend early on from a guy named Andrew Hyde and they saw this vision for Startup Weekend where it could be the intro for anyone starting a company and it was starting to be that time where 10 years ago or so you could actually start a startup company pretty fast. Like all of the technical pieces all of a sudden were coming together where you could do something in a weekend.

Joe: The tools were better; the frameworks were so much better.

Shauna: The speed at which you can launch a startup and learn to quickly validate. Even from a couple years ago, it’s just so fun to see how fast you can do things.

Joe: I always had this idea that like at some point like 30-40 years ago there were probably so many great opportunities and there just wasn’t enough people who knew what they were doing, enough capital to go after all of these opportunities. Today there’s so many more startups than there are good ideas.

Shauna: And so many more are working on the exact same solution to the problem. Yesterday I spoke at a panel at Startup Week and afterwards I talked to a few folks who came up and wanted to talk about their startup and I said you know I know someone who has the exact same pitch. I want to introduce you to them, so you can figure out if you can partner, do things differently, learn from each other. They were both really early in the stage. Really Interesting that a lot of other people are working on the same idea, it’s obviously the execution that matters so much.

Joe: Right. Yeah exactly and figuring out how to stand out and matter to your customers.

Shauna: I know we’re going to talk a little bit about social media and that was one of the things that I think you can learn so much by validation early, and social media channels allow you to get that almost overnight.

Joe: So tell me about that. That’s really interesting.

Shauna:  One of the projects I’ve been working on, the startup I’ve been working on is called Relovable. This is just an example. We thought we had a good idea, but we weren’t sure. We put out a survey in a Facebook group of moms and overnight, really within 48 hours we had 600 responses to the survey. I shared it with that group because if it’s not going to resonate with that group, that particular group who’s already doing these actions that I’m trying to make easier, then it’s not going to resonate with anyone else. That was the very first indication that we were on to something. The survey results showed very clearly that there was a path towards an idea that we were looking at. So that was the first step. Second step was what if we create a landing page and start sending traffic there and see what happens.

Shauna: So that’s another really quick way you can validate. We did it with the free beta and then we did it with a paid beta just to see if people are even interested in this idea. That would have been really hard if we used direct mail or billboards or some other very expensive and long-term marketing strategy or marketing plan.

Joe:  Right. But that social allows you to put it out there, put it right in front of that group of people who already know you or trust you or at least or second degree something like.

Shauna: Yeah and now it’s neat because there’s a Facebook group for everything. We were looking at an idea in in the travel space that kind of competed with hotel tonight. It was Hotel Tonight for Airbnb. I joined a couple Airbnb host groups. I am actually an Airbnb host, but I wasn’t in the groups, I joined a couple of those groups thinking let’s put the survey out there and see if they would actually use this product that we think is a good idea. And of course, you ask questions beforehand like how easy is it for you to rent? What problems do you have before you go into the actual idea that you’re working on just to see if the pain points there. And that was one we didn’t end up pursuing because we just didn’t get we didn’t get feedback that it was a solution that would work for folks.

Shauna: That’s a good point. I’m sure you’ve seen this to. So many startups do the wrong thing. They feel like they have to have a perfect customer experience or a perfect customer journey before they even, number one share it with investors because they want to keep their ideas secret. Or number two, even launch the product to their customers. And that just seems like OK. Do you want to waste six months? You’re going to waste six months because something going to change there.

Joe: I think about it as just like intentionality, right? Do you want to intentionally do something, or do you want to just get lucky? I was talking to a startup founder about this and I said, ok there’s three steps you have to take here. You have to identify the problem, identify the market and go build the thing, build the solution. And I said there’s one or two ways to do this. You can go build the solution and then try to hone-in on the problem and then go sell it in the market or you can do it the other way around. You can go just talk to the market, just sell them something that they want to buy that’ll tell you what the problem is and then all you have to do is figure out how to build it and that’s not that hard.

Shauna: Yeah, I totally agree.

Joe: It sounds like you guys at Relovable did this upside down and turned it on its head.

Shauna: I think it’s been helpful for me because I’ve been part of Startup Weekend and have advised something around 50 or 60 companies ongoing over the last several years. I can clearly see what I wanted to do differently when I worked on an idea. I decided that I’m going be obsessed with finding out how I can add value to the customer. I’m just going to be absolutely obsessed with that and then we can continue to figure out what price point looks like, what cadence look like, what the customer journey looks like, which we always want to keep improving. I was really obsessed with the pain points of how I can make things easier. That’s really how the idea started. I have a two-and-a-half-year-old and I realize that it’s really difficult to get clothing books and toys for him because he’s growing out of everything so fast. When kiddos are you know newborn to two and a half, three years old they double in size and triple in weight.

Shauna: I realized how hard it was to coordinate getting items. There are all kinds of things available in the neighborhood, but it was really difficult to coordinate a porch pick up or porch drop off and then figure out if there even a good fit. Like if their clothing would be something that I’d want for my son.

Shauna: We thought what if we could take away every hurdle that there is with getting everything you need for your kiddo. What if we could actually help other parents in the process who might not be able to afford clothing and books for their kids. We launched a service that matches you with local families in your neighborhood that have the same style so that you can get clothing that they are ready to pass along. Clothing, books, and toys that are ready to pass along. It really creates this neat network effect within the community. We did a free beta and served 20 families. We had about 100 on the waitlist and then we did a paid beta. Our goal was to get 50 customers in two weeks. And we thought well that’s a pretty hefty goal being that nobody knows about us yet. We’re brand new. Starting from scratch. We exceeded that and have hit every milestone. It’s really interesting to test all this out and see what we can do and how can we continue to add value. Now people want us to take their strollers off their porch and resell that for them. Now other ideas are popping up where we can add more value while we’re already at their house.

Joe: You’ve been involved with a lot of other startups locally. What are the startups that you’re see in in your role at Madrona? What are the things you see that are interesting?

Shauna: There are so many and there’s a couple that immediately come to mind that are in stealth mode because they’re just finishing their fundraising round. I’d love to mention them, but I did know you have to say so. I was thinking about the female startups you know female led startups that I’ve been following, and I thought you know there’s something I don’t know about, so I asked on Twitter yesterday before coming in here today and I’d love to share a couple of those. I think those would be really totally fun to talk about. I’ve Even learned about a few of these myself. One of them that is interesting is called Vishion. This woman named Sam Smith is the founder, it’s out of Charlotte. Here’s why I like the startup. If you think about searching for home decor. There are just a million different options.

Joe:  And 95 percent of them are horrible.

Shauna: Yes. I mean scrolling, just tons of scrolling to the point where finally I think you just give up. So, I didn’t find what I wanted. There are many different ways to tackle this problem. There’s actually a whole bunch of different startups in this space but what I like about this one is you can search for decor or home furnishings by color. I can you can say you know we’ve got a pale-yellow wall here. I’d like to get something that’s a little bit different or even the exact same color. It lets you immediately search by a different search function that’s available and I think that they really looked at what’s important when people are looking for home decor and tackle it from that specific angle. I really like that one. What’s important to the consumer? Then how can we create that type of funnel experience so you don’t have to scroll through. You know 90 different items.

Shauna:  One that’s local and she’s actually a good friend of mine, Amy Nelson. You’re probably familiar with her too. She started the Riveter.

Shauna: She’s got a coworking space that’s focused on really making it a great place for female led companies with at least one founder who’s female. She’s not only creating that, but she’s creating this community which a lot of people say they create a community. But she is actually really changing the startup environment for women and it’s been so fun to see her do that over the last year she’s opening new locations all over the country. Seems like every month there’s one or two new ones and it’s only been around for about a year.

Joe: I think what she’s doing is really an interesting experiment and seems to be working. I think it’s working even better based on what I’ve read about her work, even better than she originally envisioned.

Shauna: You know there’s another company called Backstage Capital that I’ve been following. Arlan is the founder. She was just on the cover of Fast Company and I think she’s tapping into that same sentiment which is really coming to light right now which is like there’s hardly any money in venture capital that goes to women and that just makes a tough environment to actually be successful. It’s trying to open doors to say, “hey when there’s a diverse group of founders, oftentimes companies are actually 20 percent more successful, like there’s actually numbers behind why you should do this but it’s almost like you have to make sure that they create a pathway for them to be able to help them do that. Because it traditionally hasn’t been there. Backstage Capital invests in minorities and women. I think they’ve made a hundred different investments and then they’ve just raised a new fund and there’s just so much momentum behind those. Which is interesting too because for deal flow, if you’re a woman working on a startup you’re going to go to a place where you feel like you can be supported and that listened to and you can see yourself there.  I think that’s really one of the main ways that these companies, these venture capital firms that are focused on diversity are really standing out and it’s going to be so fun to see what the returns are in the next few years because their deal flow is looking really good to me from what I’m seeing them get.

Shauna: Well I’ve got two more that I was going to mention. Kieran Snyder Textio. I know you’re familiar with Textio they’re out of Seattle. I’m just giving you ideas for future guests on your podcast. Future guests, future investments. This is great.

Shauna: We are going to solve all of the Seattle startups problems.

Shauna: They use augmented reality to take job postings and really change them around. I think we talked a little bit about this before the podcast. \So that’s a pretty big space when you look at recruiting and hiring and how that can have a really cool impact on that sector and they are local to Seattle which is neat. The other one, so she was just on this panel that I came from at Startup Weekend, she’s also a friend of mine and I’m really having a lot of fun watching what she’s doing, Anvi. Her company name is Poppy, and she connects families with nannies. You think about latent asset, or different resources in our community that aren’t being used. She takes people who aren’t necessarily already expert nannies and helps them realize that there’s an opportunity here for you to have a really cool job and connects people with the right positions. She doesn’t just look at filling her pipeline with existing talent but she’s looking at where she can get talent externally as well.

Joe: Yeah. In a way it’s like expanding that market like a Rover where most people on Rover didn’t already run a kennel or a dog grooming service.

Shauna: It’s been really fun to help advise Rover a bit over the years. They call it a shadow market. And I think you could almost have this investment thesis where you look for shadow markets, so things that are already happening. That’s kind of what we did with Relovable. Things that are already happening in the community that you can take advantage of and make easier.

Joe: I remember the founder of 99 Designs talking about this and saying that we saw people already doing this, like they did a design contest, and somebody wins a prize and the companies put up the money. He said that they saw people already doing this in forums and we thought gosh there’s no way to make sure you get paid and there’s no like nice structured way to vote on stuff and for everyone to submit their things and so we just thought we could make this so much better, but we already knew it was happening.

Shauna: What startups are you watching right now.

Joe: What startups am I watching? That’s a really good question. I’m an investor in a startup called Legalpad. I think it is really interesting. It’s automating work visas. I think it’s a really cool idea because in this country in general but also just around the world, we have a huge talent pipeline problem where there’s just too many jobs chasing not enough talented people. We could talk about all of the systemic things that are causing that. Like long term sustained underfunding of public education for one or some of these issues that you’ve brought up like diversity and gender issues for another. But be that as it may like we’re pretty much screwed as a country if we can’t figure out how to bring really bright people into this country. Thankfully they really want to get here. Work visas are a huge way to make that happen. Companies are already spending about five and a half billion dollars a year in the U.S. just to bring people in either temporarily or long term. And that’s a massive amount of money. It’s this long complex process and it’s all lawyers and you know how  hard that experience usually is. So, this is a tool that automates ninety five percent of the process makes it super painfulness. They can churn out a visa in less than a day instead of like weeks which is the normal time.

Shauna: That’s amazing. Are they available nationwide?

Joe: Yeah, they only do U.S. visas right now. Just H1 B. I think over time they’ll expand and hopefully do other countries and other visas and stuff like that. Yeah, so it’s pretty cool

 Shauna: Yeah, I’ve heard that from almost every founder I’ve talked to you about how hard that process is and a huge complaint. If somebody could just make this easier.

Joe: You know a lot of people listen to this are either earlier/mid career and they’re trained to think like geez you know Shauna has got this amazing career that obviously you’re just at the beginning of still but how can I do that? What’s some advice that you would give to yourself if you could rewind the clock to when you were like 20/25 years old. What would you tell yourself?

Shauna: Yeah one of the ways we talked about this was if I knew I wanted to be an entrepreneur, what would I do differently? I think that’s maybe a good way to think about it, if you know what you want to do. If I had known that earlier, because I really had to get introduced to Startup Weekend and start having a chance to see myself at some of these events. But if I knew that earlier, I wouldn’t have spent so much time trying to work my way up or trying to prove myself in big companies. I learned so much by doing that, but I would have gone straight to a startup. Straight maybe even to a family owned business to just see how everything operates. See how can you make the financials work? How can you acquire customers? It’s so different. Like we talked about when you’re at a big company doing that versus when you’re at a small or brand-new company doing that. As well as just learning inside and out the financials and how that works at a company. I would have spent a lot more time on that. I think just in general some of the things that I did that worked well that I would do again was in every position that I was in I would do everything I needed to do and then I would think about what else do I want to do. What other experience do I want to get while I’m here and I would walk over to that person’s office who are overseeing that department and I would say hey I’d really like to help you with this. All of a sudden, I’ve got experience in a different way, in a different area than I’ve had before.

Shauna: So many times in your early or mid point in your career. Not everybody, but so many times you have this slight competitive streak with other people or with other companies. There’s a lot of good to that because competition can really help you. But If you can instead have this mentality of just like we’re all in this together. What if we can all be successful? How can I help you be successful? How can you help me be successful? I think that will really go a long way as well and I wish I would have done even more of that earlier in my career I think. I had to see other people, other senior leaders who were really successful operating like that to realize that you don’t have to be cut throat and yell and scream and just be somebody that people don’t want to be around. You can actually be a really prolific, fun, generous person in a leadership role and be wildly successful with that mentality.

Joe: Shauna how can people find you? How can people get in touch with you?

Shauna: Yeah I’m really open to Twitter and LinkedIn and I’m active on both of those and on Twitter I’m @shaunacausey and same on LinkedIn.

Joe:  And your company is relovable.co?

Joe: Thanks so much for doing this with us.

Shauna: Yeah really fun. Thanks for having me.

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