I bootstrapped with $150k and we're back near the start a year later: A Pluck 2021 Retro
It's as bad as it sounds. Maybe worse.
Here ye here ye! Gather round children, and let me weave you cautionary tales. Cautionary tales that should be taken with a grain of salt as life is a chaotic dynamical system and everyone and every startup and person is different. I’m sure some people are going to enjoy armchair quarterbacking this one, and to that I say: have at it. I’m already saltier than pretzel tossed in the sea.
[Quick shameless CTA: if you have any sort of aspirations for growing your own food, or already are: sign up to help us test!]
TLDR:
It’s been just over a year now since I started Pluck. I’ve put in $200k of my own funds—in some sense much more since I used Bitcoin collateralized loans taken out at the peak of the market that later had margin calls placed on them…ouch. Spent most of it. Haven’t yet raised (we did try!) and we’re very much at a prototype-type still with a handful of testers. The three biggest learnings I’ve had in terms of what we did wrong:
We didn’t do nearly enough user research
Fundraising was a massive distraction
I should have had conversations with VCs earlier
All three are “yeah, no shit”-type stuff at face value, some of which I even knew going in, but I cannot stress just how difficult it is to really internalize and act upon until you’ve been through the gauntlet…and even then.
I think a lot of this experience also points to the pitfalls of an MVP approach, and illustrates the value of developing with a Riskiest Assumption Test (RAT) framework in mind.
For the purposes of this retro, I’m going to focus on what went wrong, but here’s some stuff that I think we did right:
We kept our product development and user research focused (despite the massive inefficiencies)
We didn’t overengineer (much)
We experimented with marketing from the start
We got fantastic advisors
I got a wonderful co-founder that gave us solid product-founder fit
Where we started: an edible gardening service that comes onto your property and grows all your food for you. All you have to do is *Pluck*. You can read the full backstory here.
What we’re building: a service that removes all of the cognitive pain of needing to be self-directed when it comes to growing your own food. I’ll write a follow-up post going into more of the details of this sometime in the near future. In the meantime, pop on our waitlist here.
Now, let’s get into it.
1. Do your $&%*ing user research
Let me repeat that. Do your user research. 5 people is not enough. Get like…30+ people. *Before you spend any sort of material amount on product development. I knew user research was important. Not just from reading oft-cited books like “The Mom Test” and “Talking to Humans” I even had past direct experience with this at my last startup, Neosensory.
At Neosensory, we spent a lot of effort producing prototypes of our wearable vests—what we thought would be our first product. The vests would take sound from the environment and convey it to the wearer’s sense of touch with enough resolution to understand speech (or most of it). We were going to help Deaf people obtain a new sense of sound and understand speech through these devices. After many late nights building over-engineered prototypes, we sent a bunch off to testers. The feedback we got a few weeks in: “this is cool and all, but we get by just fine with ASL. However, I love being able to feel the sound of my children laughing and know if I left the water running.” An important learning that started to point us to wristbands instead of vests.
We probably could have come to the same conclusion with a handful of user convos over a several week period instead of wasting thousands of dollars and engineering hours over what was probably a 3 or 4 month period.
Well guess what: shame on me. I pretty much made the same mistake again. My thought process this time around was:
I have a product I know I really want that doesn’t exist. The product (service) is not that expensive to develop (this ended up being an entirely wrong assumption), so let’s just go ahead and build and test the market
🙄🙄🙄🙄🙄🙄🙄🙄🙄🙄
I should have given this all some pause.
The problem with building something you want for yourself: The unstated caveat is that you need to be OK with you being the only customer for the amount of resources being poured in. I thought there would be way more people like me out there, but it turned out this is not the case. Most people as it turns out want to actually garden. I didn’t—or rather, it was just really low on my list of interests: behind building things, making music, gaming, etc.
I had the self-awareness to know I couldn’t maintain a garden. Most people do not have this. Growing food is physically easy. The problem is that the work is relentless. And it takes a decent degree of self-directed research, which is tiring and overwhelming for anyone who’s not a geek about it. For people who come to this conclusion (a) they need to have a good degree of self-awareness and (b) probably have attempted and failed at gardening in the past.
After testing and user research, we came to the conclusion that the combination of customer needs/desire coupled with pricing and the local and physical nature of our MVP made getting any sort of traction exceedingly difficult. The customer requirements looked something like:
Self-awareness of limitations
Past experience of trying and failing at gardening
Physical space and layout to support growing food outdoors (our MVP was focusing on raised beds).
Willingness to pay $150+/month (give-or-take) for an OKish, but not exciting (~50%) margin under a D2C (not marketplace) model, which isn’t a no-brainer pricing territory.
Places high-value (social/environmental/culinary) on what gets grown as (in our configuration) the output is significantly more expensive than the grocery store.
Put together: it’s a small SOM that’s tough to scale out the gate. And we could have flagged this if we had just spoken to a bunch more people. We also would have figured out our “pivot” (more of an evolution TBH), too!
There were a number of other problems buried here, too. At face-value it sounded reasonable to “just” build this: you can build a decent raised bed and get growing for < $500 (easy). We found a part-time gardener who we paid a pretty fair $18/hour (for our geo) with a 30hr/week guarantee. We screwed up a lot here:
We offered testers 6 months of free service (WTF were we thinking, right!?). Not only was this stupidly generous, it also meant—at least for testers—it would take 6 months to see if they’d even convert to paying customers!
Part of the reason we offered 6 months of free service for testers, was to be able to provide a full seed-to-harvest experience (even 3 months would have sufficed for this, though). While there may be some value to watching stuff grow, we should have first just tested with mature plants to see if there was indeed value to the primary value proposition: being able to harvest food on your property and use it without needing to do any of the work growing it (more on this later).
I got far too distracted with fundraising (more on this later, also) when I should have instead been spending more time chatting with our testers and understanding the product and market.
In the end, this led to around 10 highly inefficiently utilized months. I won’t say “wasted,” but we could have achieved all of these learnings in maybe 1/3rd of the time. But that’s 10 months of largely unnecessary burn: gardening materials, a gardener salary, a material co-founder salary, expensive insurances (because we’re coming onto peoples’ properties and wanted to do it by the book), and a Ford F-250 we purchased to haul stuff.
That’s how you get $150k down.
One thing I’ll add: I believe VC/startup Twitter is unhealthy for Founders and their startups. Of course, it doesn’t stop me from swallowing it up like an alcoholic reaching for the bottle. Not only am I pretty sure it does to founders what Instagram does to teen girls’ mental health, but listening to 280 character aphorisms without the deeply rich underlying context can easily construct distorted views. This happened to me. I was all “YEAH, let’s build this thing and get to market as quickly as possible so we can test it!” and “FORTUNE FAVORS THE BOLD” … Nope. Not in this case.
The idea of “just build it” really needs to come with disclaimers of:
You understand just how much time and money could be wasted building it to only discover something that only you or very few people might want
YOU SHOULD HAVE CONSIDERED DOING YOUR USER RESEARCH BEFORE TRYING THIS.
Did I mention you should do your user research? DO YOUR USER RESEARCH.
The benefits far far FAR outweigh the costs.
2. Fundraising was a distraction (and know thy self)
Fundraising and making fundraising preparations were an inefficient use of time, though it at least came with the consolation prizes of good learnings and expanded networks.
When we booted things up (October 2021), the pre-seed market was “frothy.” But by the time I actually started to hit the fundraising trail after months of prep (should not have prepped so hard), the great pullback of 2022 just happened.
More importantly: I didn’t have a good grasp on where I stood in the market as a founder, and how that would translate to my time and effort spent fundraising.
I’m a 38 year old who’s married with a newborn (did not help this year’s situation!) and a toddler. I live in Houston, Texas. I have a PhD in Electrical & Computer Engineering from Rice University. I previously co-founded a company, Neosensory (as CTO), based off my PhD work with my former PhD Advisor, David Eagleman (CEO) — a famous neuroscientist and author who’s now on faculty at Stanford. As far as Pluck goes, I have a great co-founder, Helen, who brings the founder-product-fit with our combined experiences.
To the untrained eye, this might sound not-too-shabby. Maybe bordering on mixed bag as I don’t live in a sexy tech hub and am no longer an unconstrained bright-eyed 20-something. Rice is great, though it’s no Stanford/MIT/etc. when it comes to brand recognition and networks.
Cutting through all that, these are the real issues I’ve come to conclude.
From a VC-perspective, I don’t have stellar track-record or attached name.
My VC and founder networks were/are (overall) pretty weak-sauce going into fundraising.
My current life situation makes (especially this past year) expanding my networks a slow process.
Track-record: Despite having co-founded a venture-backed company that got a product to mass market, which is fantastic experience, I don’t actually have an amazing track-record. My former co-founder has the main recognition from my research (*to be clear, he’s been perfectly great about crediting me). My last company is still around, it hasn’t exited, and it is fair to say that it does not hold a recognizable unicorn-like brand status. I’ve never worked at a startup that previously got acquired or went public. I’ve never worked at a GAppleMetizon. As I came to learn: in the current market, this is a big factor for VCs investing in pre-seed rounds that are just ideas or sketchy proto-services with no traction.
Weak-networks: Trying to fundraise in an efficient and focused manner—as is recommended by many experienced founders—is practically impossible unless you’re already well networked with your warm intros lined up. It’s almost like giving the advice, “the easiest way to get rich is to be born rich.” I suspect most people are going to have to slog it out when it comes to building up their fundraising network the first time—including most of the founders who espouse that wisdom.
Life situation: When you don’t live in a startup hub, you have to travel a lot more to build your networks. There aren’t so many local events where you can meet investors and other well-networked founders (not to say there aren’t any in Houston!). I’m also married to partner who is currently the primary bread-winner in our household. She has a demanding work schedule. Because of this, a lot of the family obligations fall on me. We also have a toddler and now a newborn. Going into 2022, my wife was also pregnant and we decided to move houses to support our growing family. Suffice to say, 2022 has been challenging for getting out and about.
What this amounted to: I slogged it out over a period of about 10-months straddling product and getting to about 10 pitch meetings (with a ton of preparation), which all had very similar feedback. This work was a huge distraction from product and user research. It was a major factor in how we burned through so much cash.
If you’re aghast that it took me 10 months to get 10 meetings: again, I wasn’t 100% focused on fundraising. I was spending about 33% of my efforts working on fundraising, 33% on product, and 33% on family. With a limited network at the outset. From a non-tech hub. With intense familial obligations that made getting out (especially traveling) exceptionally difficult this past year.
Taking together all of these factors about ME, I concluded that my time is better spent—at least for now—focusing on going back to basics with research and building and distribution instead of fundraising.
We’re lucky to be early and nimble. We’ve been able to cut our burn back significantly and time is on our side. I’d rather focus on what matters and pitch from a position of proper strength, which will hopefully make fundraising slightly less of of a slog.
Would I rather take 12 months to fundraise with nothing great to show and maybe get a luke-warm deal after 100+ meetings? Or—especially in this market—would I rather take the next 6-12 months to build something incredible that achieves solid traction (while building up my networks in the background) and then spend 3-6 months fundraising or perhaps have the luxury of not needing to.
You may be in a different position where it could make sense to just focus on idea/proto-stage pre-seed fundraising:
You have a solid track record or brand recognition
You have great pre-existing networks for fundraising
You have a personal situation that enables you to rapidly grow your networks
You have top-rate on-the-fly storytelling abilities
I’m not trying to dictate whether or not one should fundraise. I just now believe that it’s worth taking serious stock of the situation prior to jumping into fundraising at a pre-seed stage. What do you and your team’s cycles look like? How much of an impact will it have on your product development? How long will it take you to raise? How much could it cost you in burn and time. Get feedback from good founder friends and VCs if you can.
Now all of this being said:
3. VC convos are still valuable
I wish I hadn’t put any effort into fundraising and instead just tried to have some casual conversations with VCs early on. This is what our awesome advisor, Laura, suggested and I really should have listened. Instead, I spent loads of time building memos, decks, practicing pitching, and trying to get the product to an exciting state.
Of course warm intros and the legwork to get them are needed, but the effort is nowhere near as demanding on one’s time as putting together fundraising materials.
Despite my fundraising frustrations, we got some great (and of course some B.S.) feedback from VCs. Most were great about pushing us on our personas, business model, distribution, and path-to-scalability.
Helpful rejection feedback centered around concerns about our physical component, pricing, and scalability. By itself, I certainly would not have let this input make us change course—especially with only a handful of meetings. However, when taken together with the outcomes of our user research and little traction despite our marketing efforts, I took this input more seriously.
4. Going forward
I’m going to try to get better and more rigorous about testing risky assumptions and user research
Now that I’ve burned so much of my personal funds, I’m thinking a lot more about capital efficiency
I’ll write a follow-up post in the near future to reflect a bit more on our successes, along with some tips about acquiring early testers along with tools we found to be useful.
In the meantime, if you have any sort of aspirations for growing your own food, or already are…