Small Changes That Helped UserVoice Raise $800,000 From Investors. – With Marcus Nelson
on May 19, 2009 - 3:17 PM PSTIf you read the recent announcement that UserVoice raised $800,000, this program will help you learn the small changes that allowed them to do it.
Marcus Nelson, the company’s co-founder, came to Mixergy to talk about the changes so his experience could help you if decide to raise money.
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Video excerpt
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About Marcus Nelson
Marcus Nelson is the co-founder of UserVoice and is responsible for the company’s business development and marketing. UserVoice helps companies harness their users’ feedback.
Text excerpt: 3 of the changes that helped them raise $800,000
Change 1: They broadened their story
Before: In the beginning, “we only had one avenue of our story,” says Marcus. “We were basically the online suggestion box for product development. But that was a very limited scope. It’s only talking about people who are developing products–which is a very narrow corridor–and most of the people who are building stuff, don’t have a lot of money.
“So we were stuck in a pigeon hole where, we’re going to target startups who don’t have money. And we’re going to sell something to somebody who doesn’t have money to pay it. Where is the revenue?”
After: With experience, UserVoice learned to broadened their story to include bigger customers. Marcus says it allowed them to to tell investors, “‘Intuit and Nokia, they’re starting to test our product. Sony BMG, Sun Microsystems.’ All of a sudden we had these reputable names that were using our product, that we could actually send a link and point to and say, ‘Look, this is what we’re doing.’”
Change 2: They quit their side jobs
Before: The co-founders took on side jobs because they thought the extra money would be good for the business, but “it was a very difficult choice,” said Marcus. “Because you’re doing all of these things that you really don’t want to be doing. But that’s what we did for a couple of months. If you want to find a good way to burn yourself out, that’s the way too do it. I appreciate and commend anyone who does it for a long time. It takes a large stamina to keep that kind of pace.”
After: “In the end, I just had a real heart-to-heart with my co-founder Rich,” says Marcus. “And I just said, ‘Rich, this isn’t working. You’re exhausted. I’m exhausted. If we’re going to do this company, let’s do it. And so pretty much the next day, we quit our side gigs and just went balls to the wall. We started kicking it out and building product. It’s amazing because the more effort we starting putting into the project, the more stuff starting coming out of it. All of a sudden we got more calls and more interest.”
Change 3: They started asking investors for referrals
Before: “We went through a series of meeting with of these venture capitalists and we didn’t really realize how to use those connections to our benefit. So what we’d do is meet with them, say our thank yous and then go back on our merry way. And we never really asked them, ‘Is there someone else we should talk to?’ Or, ‘If you’re not interested, do you know someone who would be interested?’”
After: As an example of how they later learned to ask for referrals, Marcus says, “A potential adviser called us and said, ‘Come to New York.’ We went to New York, and he had a cold and couldn’t meet with us. So here we are in New York, we had a hotel room, what are we going to do? So we called investor Howard Lindzon and said, ‘We’re in New York. I know you’re from here. Who can we talk to?’ Within an hour we had 6 meetings lined up, and suddenly we’re connected to all his friends. And that’s how you’re going to get any attention from VC’s.”
Full program includes
- How connections that you don’t realize you have can help with funding.
- The role that confidence plays in the funding process.
- How a single conference helped Marcus open doors.
Suggested comments
- Did my text excerpt give you enough value?
- What else helps companies raise money?
- Who else can I interview on this subject?
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May 19th, 2009 at 4:01 pm
Hey Andrew –
Always a pleasure to hang out with you – If anyone wanted to see more context, I'd suggest a quick read from our Scrappy Start-Up blog post: http://blog.uservoice.com/2009/04/17/the-year-o...
It's been a great ride so far, but there's still so much more ahead, but thanks again for the opportunity to share another angle from our story. Hope to share again soon!
~marcus
May 19th, 2009 at 9:26 pm
Another great interview!
You asked for feedback on whether you pushed enough or too much…
What about experimenting with holding off on the “pushing” until the second half of the interview? Both parties tend to me more relaxed by then (even if you've done a pre-interview) and of course the real art is to get the info you want without it appearing that you're pushing or digging or whatever you want to call it at all. Once everyone is relaxed, that's gotta be easier.
I love how you got the name of the Japanese investor, I thought you were going to go in for his phone number and address as well :)
I wrote a lot of really useful notes whilst listening to this, but bizarrely they aren't really about this particular interview. They relate to snippets of ideas from previous interviews that all came together whilst listening to this one. I think mixergy for me is turning into a kind of remote brainstorming session. In some respects the energy is more important than the specific interviews.
Keep up the good work, thanks Andrew and Marcus
May 20th, 2009 at 5:50 pm
Cool, cool interview! Thank you!
Can't wait to re-heart it. All I can say is that Chance Bernet is a reservoir of ideas and you really need to bring him back at another time. I can see from his response that he had so MUCH additional things to say but time was the enemy.
Nice find!
Mo.
ps: What I am curious about the concept of “landing page”? I got the point that you need to test (google ads) but when people go to your page, is that page just a single page? filled with what? Or the landing page (others ads??) Or is just the homepage of a regular site/blog? I see pages that seems to be just parking lot of links but I am assuming that's not what Mr Chance is talking about right? I am confused?
May 21st, 2009 at 6:58 pm
Regarding pushing, I think you pushed just enough. Your pushing to get *concrete details* is really what separates your interviews from others people's interviews I've heard or watched. I, for one, appreciate your inclination to ask the “taboo” questions…that everybody wants to ask but are afraid to ask. Thanks.
May 21st, 2009 at 7:10 pm
Very interesting to hear the background story behind Uservoice, and how you went about raising funding.
May 22nd, 2009 at 12:09 pm
Andrew – you rock! Love your interviews. Keep up the great work.
TK Stohlman
May 25th, 2009 at 9:11 pm
Thanks Marcus.
By the way, I did an interview with Matt of 99designs.com and he raved about
you guys. UserVoice is a key reason his company can respond to his users'
needs, he told me.
May 25th, 2009 at 9:16 pm
Thanks Paul.
I always worry in the beginning of an interview. I need to relax and trust
more.
May 25th, 2009 at 9:17 pm
Thank you!
May 25th, 2009 at 9:18 pm
Thanks Matt. It's great to know that you've been seeing my work on Mixergy.
You helped me get here by giving me an interview when I was just starting
out.
May 27th, 2009 at 9:43 am
I really dig what your doing here. Great job.
BTW, saying up front that you regret some tongue-tied moments and then having such a clean interview makes me feel like a loser. If that's what passes for tongue tied when a camera is on you, then you're in very good shape my friend.
Some people say the camera adds ten pounds, but with me it steals fifty IQ points (which puts me in negative territory).
Keep up the good work.
May 31st, 2009 at 6:05 pm
I feel the same way you do. I sometimes listen to one of my interviews and
say, “That's really what you asked?! And that's how you said it? What
happened to the great deliver you had prepared when you were prepping for
the interview?”
But screw it. If I give into those concerns, I'm never going to get
anywhere.
You and I have a mission right? All the rest is petty in comparison. I've
seen dumb people get far in life because they kept at their vision. And
smart people wonder “why him and not me?” because they knew all the ways
they weren't perfect.
February 7th, 2010 at 9:12 pm
Phenomenal work Andrew! I'd recommend this interview to all my fellow entrepreneurs.
- Daniel
http://www.linkedin.com/in/chudaniel
February 8th, 2010 at 4:12 am
Phenomenal work Andrew! I'd recommend this interview to all my fellow entrepreneurs.
- Daniel
http://www.linkedin.com/in/chudaniel