This past weekend, we held our first Cohort at Launch Academy’s co-working space in the heart of Vancouver’s startup district. As this was new territory for us, we weren’t entirely sure what to expect, but we are happy to report that not only was it *not* a gong show, it went incredibly well!
In total, eighteen candidates came out — everyone we invited — which was a bit of a surprise as we expected at least one post-Valentine hangover casualty. We started the day at the very reasonable hour of 10am. To kick things off, I gave a quick introduction to align expectations, then Blair Simonite – who teaches entrepreneurship and innovation at UBC’s Sauder School of Business – started in with the curriculum, a hyper-compressed look at product-market fit, and the basics of customer discovery.
Customer discovery exercise [10:45 – 12:15]
The plan for the day was to develop a case study business model for building a global, cloud-based network that would offer free, fast, and highly secure websites to anyone who wanted one. We had sent candidates primer material to work on, so we expected them to have some background coming into the session. After Blair’s presentation, we split the group up for a one-hour work/interview session, which gave everyone a ten-minute slot to speak with myself, Jon, or Mike, posing as prospective customers. Candidates provided us with parameters of the customer persona we were to emulate, and we did our best to take on that role.
This proved to be a great opportunity to observe how each candidate’s personal style governed their interaction with customers during this process. Some took a very relaxed, free-flowing approach, while others were nose down asking questions and taking notes. A few were way off base and clearly did not understand the case study, which admittedly may have been a bit vague, so I gently nudged them to pivot. For us, it was actually a lot of fun playing the role of a couple dozen different customers and imaging the answers they would give.
A few entrepreneurs even took the time to make outbound discovery calls and emails while they were waiting for us. I love to see that kind of initiative!
Revenue modelling [12:15 – 2:45]
Next up was the revenue model exercise. Again, Blair quickly delivered the basics of a revenue model over a working lunch before we launched into more one-on-one sessions. This time the goal was to explain in ten minutes how the revenue model for this company would work. This task turned out to be considerably more challenging. We tried to make it clear that charging the direct customer was not possible, but we may have been too subtle and didn’t communicate this as well as we could have. Many really struggled in the discussions because they didn’t understand the ecosystem and therefore couldn’t grasp other possible revenue models. One guy, however, nailed it in terms of drawing out the ecosystem and nailing the flow of money, but when pushed, he didn’t understand why people would pay and what value they would get.
Running the Q&A Gauntlet [2:45 – 3:45]
Finally the time came to split the entrepreneurs into two groups. Each had five minutes to present followed by five minutes of grinding Q&A. To ensure fairness, each person had to send us their slides before the presentations began to ensure later presenters wouldn’t have the unfair advantage of being able to make further tweaks. The fast pace of the day seemed to rattle a few, as participants seemed nervous and unsure. Some team members spent a great deal of time reciting back what the business case said, not really expanding much on what they were given, while others did an excellent job of citing customer interviews (the ones they did with us) to backup their hypothesis.
Choosing – No easy task
By this point in the day we didn’t see steam coming out of anyone’s ears, but everybody was ready to go home. We sent the candidates on their way, then the four of us huddled to decide who should continue. This was an incredibly difficult task. We were blown away by the overall calibre of the participants. We felt the screening process that delivered us this group had worked well, and that with the right scenario, we could work with all of these candidates. But given the types of companies we want to start, the level of customer discovery we require, and a few other factors combined with some basic “gut feel”, the most promising candidates were picked to come back on Monday to hear our ideas for the companies we want to start.
Sending out emails to inform people they didn’t make the cut is never fun, but we hope they came out of this experience having learned something. As for us, we’re looking forward to seeing what the remaining candidates can do in the next round.