If you’ve started working on your tech startup, you’re probably aware by now that the road ahead is paved with lots of challenges. Talking with people that embarked on this journey and built successful businesses at global scale might help you overcome your struggles faster and find better solutions to the problems you’re facing. This is why we are grateful that Vladimir Oane, Co-Founder of uberVU, accepted our invitation to share the lessons learnt along his entrepreneurial journey with the MVP Academy Batch of 2016.
Back in 2008, Vladimir Co-Founded uberVU, one of the first all-in-one social media services in the world highlighting insights from billions of conversations happening on many social platforms (Facebook, Twitter, blogs, etc). They won Seedcamp in 2008, rapidly turned into the service of choice for thousands of customers around the world, closed two financing rounds and were acquired by Hootsuite in January 2014.
After the acquisition, Vladimir remained with the company as Director of Product, in charge with all Analytics products. During his career, he wore many hats, from product manager to technology chief or marketing guy and he led UberVU through various stages of growth, from the early days to scaling globally, the exit and beyond. Last week, Vladimir shared his story and the lessons learnt along the way with the startups in MVP Academy Batch of 2016. The story of uberVU is an insightful case study for early stage startup founders, and we are happy to share with you the key take-aways of the discussion.
uberVU – the beginnings
Before founding uberVU, Vladimir Oane, Dragos Ilinca and Dan Ciotu had a media agency. Passionate about tech products, they started considering their options to develop their own product. Their first idea was to build their own CMS, and then they decided to make a social media publishing platform.
Back in 2008, they attended the second edition of The Next Web Conference in Amsterdam in order to connect with relevant people and gather feedback for their idea. One of the first persons they talked to was Robert Scobble, American blogger, technical evangelist and author, a well-known figure on the global tech scene having worked at Microsoft, Fast Company, Rackspace, or Upload VR. His positive feedback motivated them to go forward.
After attending The Next Web, Vladimir and his Co-Founders took the decision to close the agency and go the product way. Said and done, they applied with their idea and a prototype at Seedcamp in London.
“We submitted our application one day before the deadline (and it was shallow at best). When the guys from Seedcamp called us, we decided to go to London. We pitched our product there and we won. Being in London was an interesting experience, but we did not really grasp what was happening with us. The biggest challenges we faced in the beginning were opening a bank account and finding an apartment to stay in”, Vladimir remembers.
They went to London without having a registered company and they incorporated afterwards, donating to the newly founded company the work previously done. Being a London-based company helped them later on in raising money, both from Seedcamp and from Eden Ventures, their second investor. This is because most VC funds invest in companies where they are familiar with the legislation (the reasons are not tax-related, but investment related – legislation in countries such as UK or the Netherlands provide all the required details for the entire process to go on smoothly).
“We initially raised 50k EUR from Seedcamp in mid-2009. After validating the technology and there were signs that we’ve got good chances to make it, we raised a new round from Eden Ventures, a London-based VC fund”, Vladimir explained.
Building a rockstar team
In the beginning, their team only comprised the 3 Co-Founders. One year later, they were 9 people working full-time on uberVU.
“Our objective was to build a team of super stars. We were very connected in the tech industry and this helped us attract exceptional people. For example Mircea Pasoi, one of our first developers, has later founded Summify and was bought by Twitter”, Vladimir said.
As straight-forward as it might appear, it was far from being easy and things did not go on smoothly. As they kept working on the product, they realized that its technical part was more complicated than they accounted for. The first uberVU version was a product where the users introduced specific URLs and uberVU created a content collection that was later on actively monitored and shared. However, their vision changed after pitching in front of people in the MTV marketing department while at Seedcamp.
“The guys from MTV told us that not only they do not create too much content, but they don’t know where is the content that it’s interesting for them. They just wanted to type in MTV and uberVU show them where they are mentioned. This is how we got to the version of creating sort of a search engine for social media: the technical version implemented helped users find all the stories they were featured in, as well as all their social media mentions”, Vladimir explained.
Besides the product-related technical challenges, they also had scaling problems with Amazon Web Services (AWS was also in the beginning in 2008, and their CTO was in charge of support and was talking directly with Vladimir to solve the issues that arose).
Pricing & business model
For an early stage tech startup, choosing the right business model and pricing is a daunting task. uberVU was no exception here. Being a SaaS, they went for a 37Signals business model: freemium version + monthly fee for more complex functionalities.
They started onboarding users successfully: uberVU had hundreds of new signups every month without any sustained marketing efforts. Their problem, however, was a high churn rate. Initially they believed the product sucked so they kept adding new features for half a year. When the churn rate kept being high, they realized they’ve got to stop what they were doing and go out there, talk with their users to better understand their needs.
“Up to that point we believed that “If you build it, they will come”. We started looking in our users database and talk with them: this is how we came to realize that we were loosing small companies (the ones that we were actively targeting), while keeping the enterprise clients. As a result, we decided to make a more expensive plan for the latter: 49 USD in comparison with the previously 29. For one year, we constantly raised prices for enterprise clients until we reached 499 USD / months. Our revenues went through the roof”, Vladimir remembers.
Discovering the market: from SMBs to enterprise clients
As they kept raising prices, they realized that their company was no longer the business they wanted to build. Up until 2011, uberVU turned into a company that sold to enterprise clients, without having the adequate infrastructure to do so (in terms of security, uptime & more).
“We had no sales team and our marketing was just hipster land with lots of creative ads then and there. Looking back now, our strategy failed miserably: we targeted SMBs and only had enterprise clients. The SMBs market did not exist and will probably never do: all our competitors that targeted SMBs either filed for bankruptcy, went through all sorts of acqui-hires or simply changed their product”, Vladimir remembers
2011 was the year of wake up calls for uberVU, not only in terms of market discovery. They realized that uberVU is no longer a small company and they have to change the way they were operating in order to scale and build a successful global business.
“We started by hiring people in London and then we realized that we have to move in the US since most of our clients were there. We didn’t choose San Francisco since it is very hard to manage teams that work on a 10 hours time difference so we ended up with too choices: NYC and Boston. The first was too expensive for us, so we went for the latter, also considering the SaaS startup culture there. We kept the engineering team in Romania and we moved our London operations to Boston, starting fresh in the US”, Vladimir explains.
Leading a startup through its growth phase requires lots of business experience. The question Vladimir had to answer was whether to do this by himself, or hire somebody to help him out. After considering his options, he decided to recruit an external CEO. Finding the right person to fill this position was challenging for the 3 Romanian Co-Founders.
“The biggest problem we faced was a cultural one: we were some guys from Romania trying to recruit people that had several exits, were part of VC funds, etc. The roles we had during the interviews were reversed: we were the ones that had to pitch potential candidates and convince them why leading uberVU is the right choice. Add this to the fact that their financial expectations are exorbitant: to make it count for them, you have to offer fabulous amounts of money. We ended up hiring Mark Pascarella in 2012 and we started growing in Boston”, Vladimir explained.
“From now on the story gets boring: you hire sales people, you do marketing, you constantly optimize the funnel. We grew uberVU until 2013, when we started discussions for a new, bigger round of funding. Meanwhile, we started to receive different acquisition offers”, Vladimir remembers.
In order to make sure they keep their focus, uberVU hired a company from NYC to handle the acquisition offers and only send them the ones that might be interesting. Hootsuite’s offer was the best match since they were going to integrate uberVU’s product in the Hootsuite portfolio to bolster their analytics offering. Said and done, they closed the transaction in January 2014 and Vladimir remained within the company as Director of Product.
“We didn’t have an exit strategy in mind when starting out. However, when raising money you have to consider this option as well. A business is a business: I didn’t have any regrets after selling it. What I do today is more about understanding, discovery, and customer development, and less about vision and trying to be Steve Jobs. It should have been like this from the beginning and I advise the startups I mentor to do so”, Vladimir explains.
Some of the lessons learnt
Focus on a problem & try to solve it the best way you can
“We started with a visionary approach, building solutions in search of a problem. We didn’t find our clients, they found us and we were lucky! If I were to start again from scratch, I’d do things the other way around: I’d start by talking with the clients we target, understanding their problems and finding the right solutions for these specific problems”, Vladimir said.
Build stuff people want
“For us it was an accident in the grand scheme of things. When we exited we were no longer the kids from 2008 and, looking back now, we lost the first two years building spaceships and, by chance, somebody actually needed them in the market (we did not know who these users were). What you have to do is to solve a clear problem for a clearly defined market! There are no other problems than this: raising money, exits, everything is solvable, even if it’s cheaper or more expensive. But if you don’t build stuff people want, everything else fails!”, Vladimir advises.
Learn to cope with ambiguity
“Risk and ambiguity are very different concepts. Corporations generally try to minimize risk. As a startup, you’re coping with ambiguity and hence you have to build different strategies. You cannot see too many steps ahead: just plan for the first, analyze the results and then decide where should the second step take you. When coping with ambiguity, you just focus on what you do best, irrespective of the market conditions”, Vladimir explains.
Follow the right KPIs
“Beware of vanity metrics! In the beginning, we followed different financial and growth-related indicators, such as reach, who were completely irrelevant. We were looking at vanity metrics and interpreted them as product metrics. Leave them aside! In the beginning, just look at how many happy clients do you have and define “happiness” by looking at their behavior when using your product and the extent with which it solves them an actual problem. Follow growth by looking at quality and usefulness. If I’d be an investor, I’d be more interested to see 3 users super-excited of your product, than 100k names in a database.”, Vladimir said.
In the end, doing a startup is damn hard!
One of the most successful Romanian-founded companies, uberVU has made it into the startups wall of fame. But getting there came with both internal & external struggles, as Vladimir remembers, and it involved lots of hard work, team collaboration, endless flights, lots of difficult decisions and personal sacrifices.
Vladimir considers that uberVU’s success is partly explained by the fact that they started early, when there were not so many tech startups out there and the ecosystem was booming. However, this is also the reason they had to do it by themselves, without having community support and the access to know-how that is available today. All in all, uberVU is a great case study for early stage tech startups out there, and we’d like to give our special thanks to Vladimir for joining MVP Academy to share his story!
The MVP Academy accelerator continues so stay tuned: we’ll get back with insights from our workshops and sneak peeks into mentoring, pitch practice sessions, and the dedicated activities we’re going to organize in the next weeks!