Starting any company is hard. As an entrepreneur full of purpose, vision and optimism on the cusp of launching a new venture, it’s easy to forget how hard the first year will be. I wrote about the company purpose, my personal mission and the thinking behind the Zambesi business model in my previous post. This post is a more practical account of our journey and lessons learnt along the way.
In the spirit of radical transparency, I’ve outlined below how I approached building this start-up differently to my first two: how I chose a name, built technology (the MVP), funded the company, marketed with no budget and identified a cofounder.
A large proportion of our Zambesi community are company founders, leaders and start-ups. From the outside, everyone’s business looks impressive. We all put our best face on in public so people use our products and invest in our businesses. But behind the inspiring LinkedIn profiles there’s always a different reality.
I started Zambesi because I wanted to have impact. And I felt that Hey You was a six year MBA – it would be crazy not to actually practise. It’s been a year since I launched the company, and it’s been the hardest, happiest year of my life. Zambesi is still in its infancy; only time can reveal to what extent we get things right.
I hope this analysis of our first 12 months helps other founders in the early stages of their companies. I’d love to hear your feedback, or anything about which you’d like further info, in the comments at the end.
Choosing a name
In 2010, I spent $28,000 on the domain name ‘Posse.com’, buying it on a domain auction in the middle of the night. Next day, I felt crazy. How would I explain to my Mum that I’d spent the deposit I’d been saving for a house on a domain name?
Posse went onto merge with Hey You and the name and domain became irrelevant. But still, the investment was worthwhile. Having a name that sounded ambitious, that investors, potential team members and customers could imagine as a big company helped to get people on-board.
When we merged Posse, Beat the Q and e-Coffee Card, we worked with Sydney agency ‘The Hallway’ to create the Hey You brand and name. We developed a brand blue-print for the company and a lot of very smart and creative people produced ‘Hey You’. We were thrilled with their work.
This time, as a self-funded start-up, I didn’t have money to engage an agency. I tried to replicate as much of their process as I could and roped in some friends to help brainstorm ideas. Our aim is the transformation of the life-long careers and business education of entrepreneurs. I know the value of a good name and brand; my aim was to create a name we could grow into. We could change logo, fonts and colours as the company progresses but we’d have to live in our name for the next ten years or more.
I wrote out our purpose (‘why statement’), unique value proposition and values:
Why: ‘The world thrives when everyone does extraordinary work.’
How: ‘By giving everyone access to the most extraordinary practitioners in technology, marketing and leadership.’
We value: Learning before teaching, Authenticity, Extraordinary expectations, Community, Accountability
I took a stack of post-it notes, wrote words that came to mind when I thought about my vision for the business and posted them onto our fridge. My husband Rod participated too. ‘Flow’ stood out as a descriptor of how skills and knowledge would be shared from expert to learner to community to expert. As did ‘life’ and ‘eco-system’. I imagined a representation of these ideas as a river.
I jumped onto my computer and googled ‘biggest rivers in the world’. Amazon, of course was taken – but what a great name! As my eyes drifted down the list ‘Zambesi’ jumped out. Growing up in New Zealand, my favourite clothing store was called Zambesi. I entered Zambesi.com into my keyboard and to my surprise, found a generic affiliate sales site.
I looked up ‘Who.is.com’ and found the contact details for the owners – an affiliate marketing company with lots of high quality domains. I wrote an email to ask if they were open to selling Zambesi.com and offered $2000. I wanted to offer enough so they knew I was serious, but not so much that I’d over-pay. They came back to me almost immediately and by the next day we’d agree to exchange the name for $12.5K.
Before I completed the transaction, I engaged LegalVision to run a trademark search in all major markets (Australia, US, Europe). Lots of companies use the name ‘Zambesi’ (the clothing label, a mechanic etc) but none in the classes I needed to trademark. The trademark attorney advised me to go ahead. The following day I drew down $12.5K from our mortgage, bought the name and immediately filed trademark applications. These were granted several months later.
One year in, and I am in love with our name. It speaks to our purpose, it’s ambitious and it sounds like the next great global internet company. The investment in an expensive domain, for us, was worth it.
Building an MVP: Technology as a non-technical founder
When I had the idea for Posse.com, I had no idea how to build technology. I hired a Sydney agency who outsourced much of the work to India.
At product design meetings I’d feel nervous to suggest that a button should go here or that I didn’t like a page layout. When I’d question why links didn’t work or why the product was taking longer than projected, they’d baffle me with complicated explanations. They were the experts and I was inexperienced. Who was I to question?
The first version of our website took several months and cost more than $100,000. I worried that I was getting ripped off. I worried that the team weren’t building a quality product. But who was I to question?
One Tuesday in 2011, I attended the Tech 23 conference in Sydney. At the lunchbreak I made a beeline for Lars Rasmussen, the cofounder of Google Maps. I described my idea and my challenge in building the technology. He agreed to meet and gave me generous advice. He introduced me to a star from Google who joined to lead our development team. Lars eventually joined the board and became a wonderful advisor and friend.
Much has changed since I built Posse.com. It’s now easier to launch an MVP without spending hundreds of thousands on technology. For Zambesi, my MVP was a WordPress theme linking to Eventbrite for sales. I drew up the wireframes on printer paper and asked the Fishburners network to recommend developers who could help me customise WordPress.
I received development quotes ranging from $3000 to $20,000 – for the exact same product spec! I selected a group called Coderoo who were based at Fishburners, specialised in MVPs and whose quote seemed reasonable. We negotiated and signed an agreement which outlined the scope of work and delivery timeframe, specified how code would be stored so I could access it at any time (important for when we want to stop working together) and assigns all the IP to our company.
Now I have experience working with a range of development teams, I’m much more confident and realistic in my approach. The website crashed the day we launched and again, the product took a little longer than projected. But the Coderoo team were always in communication and they worked really hard to get Zambesi up and running. We held a launch event at the end of October and the two lead developers worked through the night for several days to ensure it was ready.
Coderoo continue to develop Zambesi.com today. We still use WordPress with lots of customisation, we’ve integrated Mailchimp and soon we’ll add an existing learning management system to enable us to offer our community a range of learning and networking opportunities online.
It’s now quite easy to build a company enabled by technology (like Zambesi) by licensing and customising existing technology (WordPress, Mailchimp etc). That’s why it’s not important for these types of businesses to have a technical cofounder. It’s much harder when your business is technology – like Canva or Atlassian. Then, I’d suggest recruiting a senior technical person to your founding team.
For Zambesi, I looked for a technical partner that I could trust, who cared about our product and who I’d enjoy working with. Coderoo are perfect as they’re upfront about time and cost, they communicate well, they’re pragmatic and don’t get too frustrated when we alter designs (which is impossible not to do). The website occasionally crashes but they’re always available and fix it quickly. I can tell they work very hard and care about the quality of our site.
Building an MVP: Design
As I mentioned earlier, we couldn’t afford to engage a big agency to create our brand or web design. But I wanted to launch with a product that looked professional.
I advertised for ‘paid design interns’ on The Loop hoping to find a super talented design student who could create something great on a low budget. I recruited two excellent interns who helped design marketing collateral but didn’t have the experience to create a brand or high quality interactive designs for web and mobile.
I found an excellent agency called ‘Collaborateur’ who enjoy working with start-ups. They designed our logo, visual identity and created the first promo video on a very scaled back budget. The work still cost around $10K (total). It was a worthwhile investment as our product will compete with the training institutions that we’re disrupting.
We’ve now hired a more experienced designer who we also recruited using The Loop. She works with us one or two days per week which enables us to constantly build new product and test and update designs as customers use our site.
Funding
When I launched Posse, I’d made money from a previous business in music. Unfortunately, I spent a lot on the outsourced development team so it became clear that I’d need to raise capital. I organised a few meetings with people I knew. The night before my first pitch I called a graphic designer friend and asked ‘Do you know how this PowerPoint thing works?’ There wasn’t any pitching or capital raising classes like there is now.
I pitched the business more than 400 times before closing a Seed Round of $1.472M. The money came from 23 different private investors. The day the deal closed, I met our lead investor and lawyers at a firm in the city. It was raining outside. After a year of pitching and no after no, I’d finally done it.
We all shook hands and signed the documents. I expected we’d have lunch to celebrate but everyone was too busy. As I walked through Hyde Park, back to my office in Surry Hills in the rain, it was silent. I felt exuberant, terrified and very alone. I was responsible for not losing all that money!
I hired a development team led by Alex North from Google, a marketer and a sales person. Before I could say ‘minimum viable product’ we were burning $80K per month.
The first version of Posse did work but it became clear quite quickly that we didn’t have the right business model. It would always cost us more to on-board new customers than we’d make in revenue. I didn’t want to let down our shareholders and employees by failing so we pivoted and then pivoted again, finally integrating with Beat the Q to form Hey You.
This time, with Zambesi, I didn’t want to take on external funding until I knew the fundamentals of the business worked. Instead, I applied for an MVP Grant from Jobs for NSW and received $25K. Zambesi generated revenue from day one so I was able to fund some basic development and design. I didn’t take a wage for the first 12 months.
We have now raised a small amount of capital from two excellent investors. We have a small team and we’re frugal with our cash. We’re still very ambitious but we’re building a business for the long term; not a start-up that may or may not hit. Maybe because I’m a parent now, I won’t take the same risks that I would ten years ago. I’m also not willing to take on the mental health burden of other people’s money without strong evidence that the business will succeed.
Marketing and hustling
30 minutes after switching on Zambesi.com and our associated social media sites I received an email. Someone was interested! The first words of the message ‘It’s so great to see…’ followed by ‘a group to celebrate the Zambesi river’! My initial excitement dissolved into reality. No one knew or cared that Zambesi.com existed. I would have to promote the site to customers one-by one, by myself with no money. 12 months of hard-core hustling ensued.
Here’s what worked:
We established a partnership with Start-up Daily. We helped to create two articles each week of insights from an expert on the platform. They linked through to the course page on Zambesi and offered a discount code for their readers. As the first articles were published we started receiving some website traffic, course enquiries and sales.
I tried to set up similar partnerships with some of the larger news publications. Everyone was ‘interested’ but I found myself wasting time taking meeting after meeting to find a decision maker. I tried another tactic: write articles myself and send them to journalists for publication. It worked! It turns out that journalists are stretched and love it when you send them good finished articles. Within weeks we had several articles in the Sydney Morning Herald all linking back to Zambesi.com.
I ran a launch event at Barangaroo and invited everyone I’d ever met. I had an Upworker trail through my personal email accounts for the past five years and sort every name and email address into location based spreadsheets. I invited more than 1000 people to our launch party and hundreds more on LinkedIn. 450 people registered and at least 350 came along. Five of our workshop experts spoke at the launch and we sold 62 tickets on the night.
We’ve since run dozens of community building events. These range from short large-group workshops in partnership with City of Sydney, free leadership events in partnership with KPMG, not-for-profit focussed events with Gilbert & Tobin, financial training events with Hall Chadwick and many others. We try to run a community building event each week. These have helped us to build momentum and our email database.
I’ve tried Facebook and LinkedIn advertising. I found advertising on LinkedIn very expensive and strategically using Sales Navigator much more effective. Facebook advertising is better but ‘interest targeting’ isn’t great. Re-targeting and Lookalike audiences are much more effective but we don’t quite have enough traffic to do this well.
We need to improve:
We built a Facebook Group with the intention of creating a community for members to ask experts and each other questions. The group has more than 1000 members however we haven’t yet done a good job of activating the community. That’s something we’re focussed on improving now.
We’ve built our EDM database to almost 10,000 and it works to help promote workshops. We can sell out most programs by featuring them in the newsletter. But I recognise that the newsletters we send don’t provide much value to readers other than to promote a workshop. As a result, the unsubscribe rate is higher than it should be. We’ve decided to stop sending pure promotion EDMs and focus on creating valuable content for our community.
Finding a cofounder
I’ve started businesses as a sole-founder and I’ve worked in partnership. The top reason start-ups fail is the founder giving up and the second is cofounder bust-ups. Cofounders are less likely to give up but sole-founders won’t fall out with themselves.
Even though I’d started Zambesi alone, I knew from the outset that I wanted a cofounder. To be clear, I wanted an equal, not a senior support person that I’d still be the boss of. I’ve had fifteen years of experience working in my own companies and I’m aware of my weaknesses. And the road of a sole-founder is very lonely. My most vivid memory of pitching in Silicon Valley is of sitting in a hotel lobby having a glass of wine or in a salad cafe by myself at the end of each day. It’s no fun! Running a business takes so much of your life. It should be fun.
I looked to the most successful cofounder relationships I know well (Canva, Atlassian etc). I mapped the personality traits and skills of each founder and created the perfect founder profile. It would be impossible for a single founder to possess all these qualities as often the conflicting attributes lead to the best decisions. For example, one founder could be extremely diligent and compliant with rules; the other scrappy, fast with an ‘ask for forgiveness not permission attitude’. Both are important. I crossed out my own personal traits and skills and developed a profile of my perfect match.
From previous experience, there are other important considerations in choosing a business partner. It’s important to have different perspectives, attitudes and skills where it makes sense. It’s also important to have a lot in common such as vision for the business, culture and values, worth ethic and work quality. It’s hard to know whether or not these things will all click until you start working together.
Armed with a very clear profile, I started taking meetings. Friends and advisors made introductions and suggestions. It felt a lot like dating. I met lots of wonderful people but none felt quite right.
I met Kim randomly at one of our community events in February. She was a senior executive at NAB and we arranged to catch up. It was clear from the first meeting that we shared the same values and passion for the purpose of Zambesi. It was also clear that she was exceptionally smart and not afraid to challenge my strategy and assumptions. Kim offered to help out in her spare time. She was diligent and worked hard. We started meeting every Monday and agreed what we’d each do that week. We’d both always follow though – nothing slipped.
If you’d keyed my detailed ideal cofounder profile into a computer, it would have spat out a photo of Kim. It was a perfect fit. But most importantly, it felt right. I knew she was someone I’d look forward to hanging out with every day.
We had the hard conversations early on: equity split, roles, decision making rights etc. We negotiated with each other seamlessly. We listened to each other’s perspective and compromised when required. I think the way people negotiate is a big indicator of the relationship that will follow. No matter how well you know someone or how much pre-vetting you do, building a business with a cofounder is always a leap of faith.
I’m thrilled to report that 12 months from switching on Zambesi.com for the very first time, we are making good progress. There’s now extraordinary 40 experts leading in-house and public programs on everything from cybersecurity to performance marketing, public speaking to tech team leadership.
Our signature programs are 12-person, one-day intensives with an industry leader who can give feedback and advice on the participant’s individual situation. It’s so valuable to spend a day with Andre from Canva and to ask questions about your growth strategy. An online course can never provide this.
Half of our business is in-house training where companies will engage an expert or a series of experts to provide training or consulting for their team. We also regularly program conferences including Blackbird VC’s ‘Sunrise’ event, customer events for NAB and in-house talks for teams such as Fairfax, Finder and Tourism Australia.
Looking back, we’ve achieved a lot in the first 12 months, but progress always feels too slow. We secured a partnership with WeWork, launched our first programs in Brisbane, Melbourne and Auckland and hired our first team member, the wonderful Alyssa, who you’ll hear from when you take any of our programs.
We owe a huge thank-you to everyone who has supported us so far. Thank-you to everyone who’s come along to our workshops and community events – I recognise these have not all been perfect and we’re working hard to establish a framework that will create a more predictable customer experience. Thank-you to the experts who have trusted us with their reputation and have put so much care and work into developing and leading programs. Huge thank-you to Sebastian, Luther, Leo and the team at Blue Chilli who provided us with office space and boardrooms as we established the business. You guys are such great supporters of our ecosystem. Thanks to David Kenney, Bianca, Alicia and the team at Hall Chadwick for your partnership and support. And our other generous partners: KPMG High Growth Ventures, Start-up Daily, City of Sydney, Gilbert & Tobin, Sydney University, Blackbird VC and WeWork.
This is just the beginning…..
Source: Zambesi
