How do you win Startup Weekend? Follow the money

Jerry Maguire's advice applies to startups. Photo via Hark.

I had the pleasure of mentoring as many of the 19 teams at Startup Weekend Redmond as our limited time and joint caffeine levels would allow, and let me assure you that this intense event is the only thing that could get this Capitol Hill girl over to the suburbs on a holiday weekend.

If I had one piece of advice that emerged from this installment of the 54-hour shower-optional marathon, it’s this: understand the difference between users and customers. 

As I sat down with the Carpool Carma team and they described an app that would make carpooling easy, I said to myself (and them): I’ve seen this movie, and it’s called Zebigo.  It sounded like they’d be engaging in hand-to-hand combat, battling for one user at a time, and that can be a grueling fight.

But when Boeing engineer and carpooler Ismail Robbana described the trials and tribulations of scheduling his commute with co-workers, the real value proposition emerged:

  • Carpoolers (bless them) are cheap, so squeezing money out of them for a paid app could not just slow adoption, but only eke out pennies at a time.
  • Boeing (and enlightened others) actually pay $30 per month per employee to carpool; by effectively tracking and maximizing carpooling, the company can realize tax benefits and can save on parking spaces—so these are deep (and motivated) pockets.

From parking-constrained tech companies in Fremont to Fortune 500 companies in Renton, employers stand to win, and have shown that they will pay for this service.  Carpoolers are the users, companies are the customers.  Shifting from a business-to-consumer app, to a b-to-b approach, Carpool Carma followed the money to customers who have the willingness and ability to pay, and Ismail and Zillow’s Nick Fitzer pitched their way to best business model. From where I’m sitting, they could hit the trifecta:

  • A per-user repeatable revenue stream from corporate customers
  • Access to thousands of users (carpoolers) through the employer channel
  • Clear return on investment to both parties!

Let me close with a public service announcement.  When you have 54 hours to build a demo (or when you’re a resource-constrained startup), focus on your customers’ pain and how much better their lives will be with your solution.

This weekend, a well-meaning mentor insisted that the way to win is to build 2000 twitter followers in two days.  My gut is that Boeing won’t care how many Twitter followers Carpool Carma has (as of this post, 15), but that they can save a boatload of money.

And when you create real value, the money will follow.

Congrats to top finishers  CarpoolCarma, PEACLO, Beat Machine, SaveGramps and HowBoutCoffee , to all the teams for sheer survival, and as always, to the Startup Weekend Organizers (fueled by Golazzo and the talents of Scott Nonnenberg and Kav Latiolis).

Rebecca Lovell is chief business officer at GeekWire, and a longtime member of Seattle’s entrepreneurial community. She writes occasionally about startups in her column LovelLetters. You can reach her at rebecca@geekwire.com or follow her on Twitter @Lovelletters.

  • http://www.puzzazz.com/ Roy Leban

    2000 Twitter followers is a sign of success? Unless you’re a company whose mission revolves around Twitter (in which case 2000 isn’t enough), getting more Twitter followers by itself won’t make you successful. Now, if you happened to get 2000 followers over the weekend without trying, simply by word of mouth, without any active campaign to get followers, that might be an indicator of some interest in your product — but it’s just an indicator, it doesn’t mean you’re actually going to get anywhere. You still need to deliver and make money.

    Puzzazz doesn’t have even close to 2000 Twitter followers because Twitter is mostly irrelevant to us. We have a presence there, our daily puzzles get tweeted, but it’s not part of our marketing plan. We’re concentrating on things that make money.

    In contrast, we released a video of our new TouchWrite technology and more than 10,000 people have watched it in less than a week (shameless promotion: youtu.be/TiZ75sPoTdo). That’s a nice indicator of interest and people who watch the video are more likely to buy.

    On Carpool Carma, I’m a bit skeptical that they can find enough customers. In particular, will medium-size companies sign up, or just big ones? But I definitely like their approach. If anybody can be successful in this space, it’s going to be by getting revenue from corporations. Good luck!

    • Anonymous

      Thanks as always Roy, for your $.02!  And I’m not knocking Twitter (really, honest!) just saying that one-size-fits-all advice in this regard doesn’t make sense. If you’re @zaarly:twitter and provide real-time location-based services, Twitter is your best friend.  But if you’re more like @Limeade:twitter and provide engaging online wellness tools for companies, then not so much with the need for Twitter followers. And hearing the initial pitch from @carpoolcarma:twitter I put them squarely in the Limeade camp!

    • Anonymous

      Thanks as always Roy, for your $.02!  And I’m not knocking Twitter (really, honest!) just saying that one-size-fits-all advice in this regard doesn’t make sense. If you’re @zaarly:twitter and provide real-time location-based services, Twitter is your best friend.  But if you’re more like @Limeade:twitter and provide engaging online wellness tools for companies, then not so much with the need for Twitter followers. And hearing the initial pitch from @carpoolcarma:twitter I put them squarely in the Limeade camp!

  • Anonymous

    Here is the link to Carpool interactive pitch http://9slides.com/Talks/CarpoolCarma

  • Ty Wolfe-Jones

    I love this article. I have been regularly confused as to how everyone can be building apps and sites, and Facebook credits (or something similar) is the revenue model. We all want “eyeballs” and all plan to get them, but we know that few do, so why bet on that.

    Find a real revenue source and then maybe FC can be a lift for you.

    I think it’s a great idea to go after the big customers – we’ve found that big customers lead to more big customers, more small customers, more users, and faster revenue – and Roy, good criticism, but remember you don’t need as many of the big ones, especially if they’re big enough :)

    • Anonymous

      Thanks Ty!   Though Seattle has a rich history of b-to-c (Starbucks, anyone?), let’s not overlook the powerhouse of the enterprise customer. It’s a risk as it certainly can be a more binary strategy (if there are only a few big fish in the pond, you better catch one of them). But as I think you’re suggesting, beta with smaller businesses, prove the product and the market, give customers the features and benefits they want, then do your best to move up the food chain and hook the Boeing-type whale. 

  • http://www.consultengh.com/blog Lindsey Engh

    Hey Rebecca – this is especially food for thought for me, because I’m (with Hub Seattle) hosting another Startup Weekend-inspired event this weekend – Seattle’s first socially-focused meetup, called #SocEnt Weekend (www.socentweekend.org). It’s interesting to think about what success really means for these 3-day old businesses, especially with a profitable social idea – the MVP is the same, but the results from a 54 hour event are going to be slightly different, as in more need-based research and customer verification, I’m guessing. Great post! 

    • Anonymous

      Thanks, Lindsey. Looking forward to serving as a mentor for next weekend’s event– great group lined up!  Having run non-profits too, it’s still about sustaining a business through delivering customers real value, so understanding your customers and monetizing your business is not just the domain of the for-profit world. :)

  • http://www.jayweeldreyer.com/ Jay Weeldreyer

    B2B projects are rarely if ever pitched or pursued at these events, which is unfortunate.  I love the fact that Carpool Carma was able to find a problem that was currently being addressed with messy and inadequate solutions, and with a payer that has a reasonable incentive (additional, easy profit) that they are also already aware of.  Should be interesting to see how far these guys take it.

  • Rufusd

    It took me all of 2 minutes to check the android app store (52 carpool apps) iphone app store (267 carpool apps) and a quick glance through them to find one that already does what you claim is so brilliant about carpool carma (www.icarpool.com). I’m sure there are many more. Hey, here’s an idea for your next weekend, how about an app that let’s you search for your ideas on the app store before you waste time on them. Oh, you mean they already have that one too? Dang.

    • Anonymous

      Hi Rufusd. I think what you’re saying is that to succeed, companies need a differentiated value proposition, and to be able to credibly state they do “___” better than anyone else. I don’t disagree!  Clearly, competitive analysis is part and parcel to this assertion. The point of this piece, however, was about knowing your customer and finding ways to monetize and sustain your idea.

      Not sure if you’ve been to a Startup Weekend, but the larger mission of these events is to inspire entrepreneurs (it’s rare that sustainable businesses are created in 54 hours, as it turns out that entrepreneurship is hard work).   I’m just a mentor/judge/advisor for the organization, so be sure to share your thoughts directly with @startupweekend.

    • Mike Mitchell

      So true, at my last SW in Portland, we did just that – Triaged the competitive position, and pivoted that night.  That said, often it not what it does, but how well it does it, and for whom it is targeted. Reaching the right customer is something they may have done better than all the other apps that played ‘Build it they will come’.

  • Justin
    • Bethvyse

      Peaclo rocked it!…they should have won

  • Anonymous

    How about a little love for runners-up @bed4ted:twitter ?  :)

  • Mike Mitchell

    Great article and I think Startup Weekend judges should explicitly heed the advice. Identifying the direct beneficiaries of the problem you are solving ensures your product can be valuable without selling out exclusively for ad revenue, which is a business model that has worked for some, but failed so many others. 

  • Anony Mouse

    Sad that the only thing you learned at SUWE was the difference between customers and users.

    That’s the sad thing about SUWE… they don’t teach anyone about business.  It’s a bunch of project people with nothing else added.

    No education, no resources… the resources only come from the people that are there.

    …but Marc Nager is making a lot of money!

  • MarkfromHam

    The whole new startup weekend and pitchfest mentality is a sideshow. Somebody got comedy and commerce confused.