Here’s some advice all founders should take when it comes to getting product feedback

One topic that all founders are obsessed with (and if they aren’t, they should be) is Product. At the end of the day you can raise a lot of money, have a great team, but if your product sucks, you’ll be misusing both. While most of my posts tend to be about raising money at the Seed stage, I thought it was time to throw a product post into the mix since this is so damn important that it deserves some real attention.

When it comes to experts in the product world, one of the people I truly respect is Brian Norgard. Brian was the Chief Product Officer at Tinder and before that he was the founder of Tappy, a startup that was acquired by – you guessed it, Tinder. Before that Brian started Chill, a Facebook app that got 30M+ users…and before that, Newroo, which was acquired by FOX Interactive.

So, it’s safe to say that Brian knows a lot about how to position, grow, and get feedback about products. When Brian shares advice, me and many others listen, and today he shared some pretty solid advice about getting feedback about your product. Here it is:

Brian Norgard Product Feeback

Brian makes a great point here and it’s one that I don’t think many people think about. Be honest – when you want to get feedback about your product, how often do you find yourself asking people “Do you like my product?”

This is also probably why you feel like everyone loves your product. You showed your friends and family, people you trust, and asked them “do you like my product” and they said, “yes” so you assume your product is a hit.

The problem is, this question doesn’t really help you learn, instead it serves to give you the answer you want to hear, i.e. that people like your product. The first question Brian suggests is a great one, “Can you explain this product to me?” Think of how much you would learn if you asked someone that doesn’t have intimate knowledge of your product (like you do) to explain your product to you. They might screw it up, and how they screw it up should be super interesting to you.

Another great question – “How does this product make you feel?” I bet you’ve never asked anyone that…if you have, kudos to you.

The point here is a good one and it’s why me and many other people liked and retweeted Brian’s tweet. If you’re looking for feedback on your product, get creative, ask questions that you can learn from, not questions that will tell you what you want to hear. At the end of the day, you learn the most from feedback that you might not want to hear, but you probably need to hear to make a better product.

I’ve been failing at writing consistently for, but I’m going to change that

As a founder, I’m used to making mistakes, owning up to them, learning, and then moving forward in what at least I think is a better direction. One thing that drives me crazy is people who only talk about the things that are working for them. When I ask some founders how they’re company is going – they respond with something like, “we’re crushing it!”

I cringe when I hear this, first because it’s not very authentic, and second because it doesn’t open the door for us to have a conversation that’s actually interesting or productive. The reality is that yes – sometimes things are going well when you’re running a startup, and that’s awesome, but most of the time, you’re struggling, not with everything but with something, and being open and honest about that is so important.

This is an approach I try to take with everything in life, and no, I wasn’t always this way. I too used to be a “crushing it” kind of person who only talked about things that were going well. As I’ve gotten older, and maybe just a little bit wiser, I’ve changed my tune and the end result is that I feel a lot better about myself and about the conversations that I have with people.

So I’m having that conversation with you right now. When I started this blog and the corresponding podcast, I planned on watching it really take off…and that hasn’t happened because I haven’t been consistent. I do have a daily blog that I’ve been writing for almost 12 years now on, I am very consistent there and have really seen the results.

I could give some excuse like, “oh I’m just too busy to do this!” but that wouldn’t be true. It takes me about 30 minutes to write a blog post so if one day a week I have to spend an hour (a blog post here and a blog post on that probably just means during my downtime I’ll have to forgo an episode of Stranger Things (Season 3 starts tomorrow!) and that’s okay.

To kick-off my new consistent schedule I’m going to commit to writing a post here every Wednesday. I’m also going to really push to have a new podcast out every month, for the next three months that shouldn’t be too hard since I have three podcasts that I’ve already recorded that I just need to edit.

If you haven’t listened to any of my podcasts yet, you can check them out on Apple Podcasts here. The two interviews that I have up so far are with Hunter Walk from Homebrew and Joe Floyd from Emergence. These are two of the VCs I look up to the most and both interviews are excellent and definitely a must-listen IMO for founders at all stages.

So for those of you who have been reading and wonder, “hey, what the heck happened to Morgan?” I’m here, and I’m sorry I fell off the wagon, now it’s time to get into a groove. Thanks for reading and look out for regular posts here every Wednesday. As Tom Cullen, one of the founders of Sonos used to always say to me when I made a mistake, onward and upward!

The fundraising dilemma so many Seed founders face

It’s a dilemma we faced ourselves, and one that I see so many other founders struggling with – pitching investors that you want to invest, but haven’t built any kind of relationship with yet.

For us, we learned this lesson the hard way by pitching a ton of investors and realizing that we just didn’t have the relationship yet to get them to invest. So we applied to accelerators and got into Techstars, that was where we finally were able to start building relationships with investors the right way.

Semil, a well-known investor and the MD at Haystuck Fund, focuses on Seed Stage Investments. He shared his thoughts about this topic on Twitter last week and I think his point is one that many founders (like me) do end up learning the hard way:

The point Semil is making here is a good one. While you as a founder are living in your company every day, see the progress you’re making, and likely have a couple investors onboard, building relationships with new investors takes time.

Unless you have started and successfully exited in the past, or happen to be good friends with someone who knows an investor you’d like to approach you’re likely starting cold.

Mark Suster talks about the concept of investing in lines, not dotes and does a great job of sharing this concept from the investor side.

The first time I meet you, you are a single data point. A dot. I have no reference point from which to judge whether you were higher on the y-axis 3 months ago or lower. Because I have no observation points from the past, I have no sense for where you will be in the future. Thus, it is very hard to make a commitment to fund you.

(Source – Mark Suster)

Accelerators like Techstars, YCombinator, 500 Startups, AngelPad and many others are great at helping Seed stage startups make those connections with investors that can build more organically over time.

The reality is – Seed stage founders do need to do something to kick off a relationship and that something shouldn’t be asking for money. How you get to that first meeting is up to you but don’t be surprised if you pitch 50 investors that you’ve never met before and all 50 say “no.”

Just know that it might not be that they don’t like you, or don’t like your startup, it might just be that they haven’t had enough time to collect enough data to make a good investment decision.

Is it silly to combine years of experience in a pitch deck?

(image source – Robinhood Ventures)

When we were first putting together our pitch deck I can remember looking at dozens of other pitch decks. Just about every pitch deck has a team slide, if it doesn’t then it should. 

Most pitch decks I’ve seen, and created, have a team slide that shows key team members and a bit more information about them like where they worked, went to school, etc.

Every once and a while I have come across a pitch deck that says something like, “a combined 40 years of experience” and I’ll be honest with you, it seems a bit silly to me. 

Well it looks like I’m not alone as Leo Polovets from Susa Ventures shared a similar sentiment on Twitter…and a LOT of people seemed to agree.

The point Leo makes here is a good one. Combining years of experience doesn’t really tell an investor much. Suppose you have two engineers with a “combined 25 years of Python experience” well you could have one person with 24 years of Python experience and another with one. Or maybe you have two balanced people, one with 12 and one with 13 years of experience.

It’s confusing and like the title of my post says, I think it’s just silly. At the end of the day you’re trying to put your best foot forward when you’re pitching an investor and doing this IMHO makes it seem like you’re trying to over-state the amount of experience your team has. 

While it’s great to be proud of your team (I’m damn proud of ours!) it’s also not doing justice to your team members to highlight what really makes them special. Investors really want to understand if you have the right balance of skills on your team to execute and this doesn’t do a great job of articulating that.

I don’t like to give advice on my blog because I’m a first-time founder myself so I’m not sure I’m in any place to give advice. That being said if there are ways you can mitigate risk while pitching, I’d try to avoid doing things that either bugs or confuses investors, and combining years of experience certainly seems to be one of those things.

If you’re looking for a little pitch deck inspiration, one of my all-time favorite blog posts about pitch decks is from Reid Hoffman the founder of LinkedIn. You can read his advice about pitching as he goes through the LinkedIn deck and pick up a few nuggets that will likely help you in refining your deck.

Happy pitching!

Raising a Seed Round with a high cap can come back to haunt you…

I recently spoke with a founder who was ecstatic, they were able to get a handful of investors to commit to their Seed round at a $15M cap. While they didn’t have any revenue yet, they told me they were confident they would be closing deals left and right and easily would be able hit growth targets.

While I’m an optimist so I’d like to say, “yes – you’re going to hit it out of the park!” I’ve also become a bit more grounded over time, especially when it comes to being able to predict revenue growth when you’re still a pre-revenue startup.

The challenge is, for founders who raise at a high cap, the bar gets set so high, so early on, that it really is almost impossible to hit the targets that VCs are going to expect going into your A Round. Ash Rust, Managing Partner at Sterling Road recently wrote a tweet that I thought highlighted this issue really well:

It seems I wasn’t alone in liking this one as Micah from Founder Collective and 212 other people seemed to agree.

In the past I’ve heard founders say things like, “well if you can raise at a high cap, why not? You’ll keep more of the company.” Sure, at this very moment in time you might feel like you’re on top of the world. Fast forward a year later and doing a down round to keep the company alive doesn’t quite feel as warm and fuzzy.

On the flip side, I met with a founder a few weeks ago who raised at at $10M cap pre-revenue. Things were going great, they had huge companies signing up for POCs, it felt like things were really going to tip. But, like most things in startupland (or life really) everything took a lot longer than they expected. 

So they went out to investors who now felt that $10M was too high. They were stuck, either do a down-round or try to hang on and make it work…when I spoke to them they had four months of runway.

While I totally understand that founders with multiple exits can raise at high caps and probably just keep on raising. First time founders, normal people like you and me, can’t really get away with that more than once. 

Keeping your cap grounded in reality and on-par with other companies at your stage gives you a fair shot at setting and hitting realistic goals. Sure, you can still shoot for the moon, we all should, but when you have $0 MRR you don’t quite know even where to build your rocket, what kind of fuel it takes, and a lot of other things that you’ll need to understand first.

I personally think that pre-revenue startups in the SaaS space should be happy with a valuation in the $3M – $6M range if they’ve gone through an accelerator like YCombinator or Techstars. No accelerator, then it might trend lower, maybe in the $2M range. 

At the end of the day, as a founder I’ve found that I can’t just think about how my decisions will impact me today, I have to think of how they will impact me a year from now if things don’t go exactly according to plan…because that’s often how it goes.

What do you think? Comment below and share your thoughts!

Mark Suster surprised me last week with this article about the decline of Seed Investing…

Mark Suster, the MD of Upfront Ventures (and blogger at Both Sides, one of my favorite VC blogs) wrote a really interesting article last week about the state of Seed. The title would certain capture anyone’s attention, “Why has seed investing declined? And what does this mean for the future?”

I have to admit, I was pretty shocked when I saw this since lately, all I’ve been hearing about is how Seed rounds are growing in size, more investors are jumping into Seed, and more companies are raising seed rounds than ever before. 

So here I am feeling wonderful about the state of Seed, then Mark comes in and rains on my parade.

“Seed investments are down by any measure (funds, deals, dollars) over the past 3 years in deals < $1 million AND in deals between $1–5 million. What gives?”

(Source – Both Sides)


Well, it turns out, ever year Mark and another VC from Upfront Ventures, Chang Xu, get together every year and do a deep dive into VC data. This year they uncovered that financing for “Traditional VC” is pretty much flat over the last five years, but the Venture Industry as a whole grew massively mostly thanks to big tech company IPOs.

The trend that jumped out at them the most though is a major decline in seed financing over the last three years. 

So why did this happen? Luckily, Mark spent the rest of the post trying to explain why we’re seeing this decline. I’m no Mark Suster but I’ll do my best to break it down for you in a short, digestible, 3-minute overview:

  • First – how did the Seed Market start? Between 1999 – 2005 the cost of starting a technology startup went down by 90%, from 2005 – 2010 it went down by another 90%. With lower startup costs, VCs were able to invest less money and create the Seed round that we know and love today
  • With the Seed market in full swing, investors started raising their second and third funds and realized a few things about Seed deals, mainly that they wanted a bigger piece of the pie, which means writing bigger checks
  • As the Seed market matured, median deal size went, as we all like to say, “up and to the right” as you can see from this handy chart:
  • You might think this increase in deal size is because valuations went up, but the reality is, it’s really because as Seed funds matured they started to realize more and more the importance in ownership rights when it comes to driving returns
  • Everything was going great until 2015…then things started to change. Here’s another handy chart compliments of Upfront:
  • Mark notes that this decline isn’t due to an overall decline in Venture Capital, late stage deals actually grew by 60% so this really has been a Seed-specific decline 
  • So now let’s cut to the chase…why has Seed declined? Mark says that one of the following factors would need to hold: Series A and B investing would need to be up, Seed deals would need to scale without needing more capital, or Seed deals would need to bypass A and B rounds and go right to a growth round or IPO. None of this has held true.
  • More and more Seed deals now can’t get to A which means Seed Extensions have been growing like crazy:

And when seed deals have no where to go you end up with “seed extensions” where seed funds and angels are buying an extra 6–12 months of runway to try and reach a phase that can attract traditional venture. You can see this trend in the excellent data from Cendana below where the number of seed extension rounds has gone up dramatically in their portfolio and the time from seed to A has extended. This data seems pretty consistent with what we’ve seen across the industry.

(Source – Both Sides)

The good news here is that Seed investing is still going strong, it’s not going away, and Seed stage startups as solidified as a stage that will be here for a long time. We are seeing a bit of a cooling off, and that’s probably okay, so don’t panic, just keep on keeping on. 

If you want to see Mark’s deck that goes through this and a lot more information, you can check it out on Slideshare using this link: download the full deck it is here

HUGE thanks to Mark and Chang for putting all of this together, it was a super interesting read and I hope I’ve done it justice trying to condense it down for my readers.

3 mistakes founders make in Seed pitch decks

While I haven’t seen nearly as many pitch decks as most VCs or Angel Investors, I have seen probably close to 100 by now, and it feels like we made close to 100 ourselves when we were raising our Seed round.

Last week I was talking to a friend who is getting ready to raise his Seed round and he asked me for a list of things he should avoid doing in his deck. After sharing a few things that came to mind he said, “you should share that on your blog!” So I’m doing that right now.

If you’re putting together a Seed deck, here are three simple mistakes to avoid:

  1. Showing a TAM that is unrealistically too large – this is #1 for a reason since it’s something that can make investors think you don’t really understand how big your actual addressable market is. I’ve seen TAM numbers in the 100 billion range, which is crazy. Know that every investor has heard the same pitch of, “our market is X Billion, imagine if we just got 1% of that.” The reality is, you should really be showing TAM, SAM, and SOM to clearly illustrate how big your market is. If you don’t know what SAM and SOM are, read this.
  2. Creating projections that show rapid hockey-stick growth – some people might argue with me on this one but I prefer to see realistic projections if you’re going to have projections in your deck. While it would be great to go from $0 to $100k MRR in your first six months, that’s probably not going to happen. It’s a lot more powerful IMO to show that you know your unit economics but either hold off on projections, or if you do many projections, make them grounded in reality vs. setup just to show an investor how you’re going to be the next unicorn.
  3. Being untruthful about anything – this is a great point that Joe Floyd brought up in my interview with him. If you lie in your pitch deck, sure it could get you another meeting, but once an investor goes into diligence, they’re going to find out that you lied and that’s pretty much going to be the end of that conversation. It’s never a good idea to start any relationship with a lie, so don’t do it with an investor that you want to have on your side through thick and thin.

Interview with Joe Floyd from Emergence Capital

I had the chance to meet Joe for the first time about three years ago after getting an introduction from Kyle Porter, the founder of SalesLoft. I actually hadn’t heard of Emergence Capital before I met Kyle, but after talking with Kyle about his experience with them I realized, this must be one incredible firm.

I met with Joe at a coffee shop on Market Street in San Francisco a few years ago while we were both at SaaStr. It was clear almost immediately that he was incredibly bright, plugged in, and really cared about understanding our business.

Some VCs are checking their phones or rushing through pitches, not Joe, he was listening carefully, clearly interested, and really took the time to do a deep dive into what we were doing. Since meeting Joe I’ve had the chance to meet more of the team at Emergence and I’ve been equally impressed.

So I was incredibly honored when Joe agreed to be on the podcast and in December I went over to the Emergence offices in SF for the interview. You can listen to the interview below, and scroll beyond it if you’d like to read some of the nuggets before diving in. In the interview we talk about common mistakes founders make when pitching VCs, the problem with raising too much money on convertible notes, what to look for in an investor and much more including a fun fact you probably didn’t know about Joe…but you’ll have to wait until the end to learn it!

Nuggets from my interview with Joe:

  • Financing mistakes that Seed stage startups make – raising small rounds on notes each at a little bump up. Better to not stack convertible notes, at some point, just price the round.
  • What should founders look for in a Seed investor? Someone who will help them in the specific stage they’re at, and with solving the problems they aren’t as good at solving.
  • The biggest mistakes startups make when pitching – exaggerating or stretching the truth because in diligence, those investors are going to find out the truth, and breaking trust at the beginning of a relationship never goes well.
  • Seeing a startup have a Seed 2 round, good or bad? Doesn’t bother Joe, in fact, in some ways he sees it as a sign of maturity.
  • A mistake that many first time founders make – putting up a front that everything is going well. Investors see through this and they would actually rather have everyone come to the table to solve the problem then pretend everything is a-okay.

Thanks for reading and listening!

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The Series A Bar Is Now Set At $150k MRR for SaaS startups

Last year I wrote an article about how the bar for Seed Rounds had gone up dramatically over the years. Well, not surprisingly Seed wasn’t alone, the bar for A Rounds has also gone up a lot and like the title says, in 2018 the average startup had an ARR of $1.8M going into their A Round according to a new study from Tomasz Tonguz from Redpoint Ventures.

I can still remember back to 2014 when we were first raising from VCs and the generally accepted MRR for an A Round was $50k. I can remember having that ingrained in my head, “we need to get to $50k MRR to raise our A.” 

A couple of years later I can remember talking with an investor who said, “the companies we’re seeing get A Rounds now have an MRR of $80k or higher.” Well, while that sounded like a high number at the time, that number is now almost double, sitting at $150k MRR and growing, fast.

Before you panic, here’s the silver lining.

Almost a quarter of the companies in Tomasz’s study raised their A Round with an ARR of $0. Which goes to show you that while $150k of MRR is likely going to solidify your A Round, there are plenty of companies out there with much lower revenue numbers that are landing A Rounds. 

That being said, it’s clear the bar has gone up quite a bit over the years, and Tomasz shares his thoughts about why this has happened:

There are two reasons for this increase. First, the science of building SaaS companies is better understood today than in 2014. Consequently, more companies are able to reach $1M in ARR than in the past because they can be more efficient with their capital. Second, round sizes at the seed and the A have increased. More money enables startups to achieve greater milestones before raising the next round. Both of these factor work to increase the ARR at Series A.

(Source –

While I do agree a bit with his first point, I also disagree with it. I’m not sure that having the science of SaaS better understood necessarily makes it easier for founders to start and grow SaaS businesses. In some ways I actually think it’s gotten harder because the reason why the science is more well-known is because there are more SaaS companies than ever before so a lot more competition. This, IMO, also makes it a lot harder than in 2014 when you likely had a lot less companies doing what you’re doing and competing for the same contracts.

As for his second point, I agree there – round sizes have gotten a lot bigger and there are a lot more companies raising “Seed Rounds” when they already have $100k in MRR which makes getting to $150k a lot easier than starting at zero.

All this being said, no matter how you slice it, the reality is that Seed Stage founders do need to hit a much higher revenue and growth benchmark today than they did just a few years ago. I don’t see this trend slowing down either so it wouldn’t be ridiculous see the average MRR at the A Round to go above $200k this year.

What does this mean for Seed stage founders?

I go back to Tomasz’s second point – the bar is higher because Seed rounds are getting bigger. This means that raising a $500k or even $1M Seed likely won’t get you where you need to go. Let’s be honest – do you really think you could scale up to $150K MRR off of $1M? Maybe you can but I certainly don’t know how to do that!

This makes me think that if you’re a first time founder raising a Seed round for the first time in 2019, I’d say raise as big of a round as you can. You might have to give away more of the company that you expected, but given how high the bar for an A Round has become, and how likely it is to keep going up, you’re going to need more money to get there, period.

Of course, that’s just my two cents. As I’ve said many times here, I’m not an expert, I’m not a serial Entrepreneur with a bunch of exits under my belt, so what do I know? I want to hear from you, comment and let your voice be heard!

What I’ve learned so far about Angel Investing, and Angel Investors

One of the things I’ve learned pretty quickly since I started Angel Investing about two years ago is that there seem to be two types of Angel Investors.

  1. The “know-it-all” – I’ve found that the most junior Angel Investors tend to fall into this camp. Many have never run a startup themselves but they make $250k+ in a corporate job or had a big win in the past and now consider themselves startup experts. They rarely invest and mostly waste founders time and say incredibly obnoxious things about startups and startup founders. Suffice it to say, this category of Angel Investor makes me sick and the second I find out someone is in this category, I stay away.
  2. The “givers” – the second category of Angel Investor I’ve encountered is those who want to do everything they can to help a startup whether they invest or not. Whether they’re big time millionaires or not, whether they invest in ten startups a year or one, they are deliberate about the meetings they take and they value founders time. Suffice it to say, this is the category of Angel Investor that I try to spend my time with.

So back to the title of this post, as a new Angel Investor I’m not trying to pretend I’m something that I’m not. First, I am not a “serial entrepreneur” and I don’t have any exits, instead I’m a founder and someone who has been in the tech world since the mid-90’s. At my core I’m an Engineer so more than anything I’m really interested in building cool things.

When I started Angel Investing I realized that there weren’t many resources out there for getting started with Angel Investing. I went to a few Angel Investor MeetUps but found that they were full of investors in category #1 listed above. Recently I went to a particularly obnoxious one where they invited a handful of founders to pitch but gave them only two minutes. When I asked why they gave such a short time limit the response I got was, “who wants to hear a founder talk for longer? My attention span is less than two-minutes anyways.” (Ugh, well that was annoying and a waste of everyone’s time)

So as a new Angel Investor I’ve found it harder than I thought to learn the ropes, until I made one breakthrough last year that made a huge difference, I found a mentor. 

Last year I met a very experience Angel Investor in SF and we started meeting for coffee every couple of weeks. He would share with me some of the deals he was looking at, what he thought about them, and more importantly, how he thought about them as investments. What really inspired me about this investor is that whether he invested or not, he did everything he could to help the founders he met with. Oh, and he also showed up 15 minutes early to ever meeting and yes, let founders talk about their business for a lot longer than two minutes.

I asked him if I could join him for some of his pitch meetings so I could hear the kinds of questions he asks, understand why he meets with certain founders, and what he does after the meeting. This has already proven to be one of the most valuable things I have ever done when it comes to learning more about Angel Investing. 

Going into 2019 I’m trying to do more of this – connecting with experienced Angel Investors in category #2 and shadowing them in meetings, learning from how they conduct their investment habits. If there’s a way I can help them in any way, I’d love to do it, but for now I know the best thing I can do is to listen and learn as much as I can.

My biggest takeaway about Angel Investing so far is that unfortunately there are a lot of bad players out there, a lot of people in category #1. I hope that in my own way, over time, I am able to get some of these obnoxious, egotistical Angel Investors to stop wasting founders time and to be more honest with themselves and those around them. While you might think you look impressive, you actually just look like a clueless jerk, and wasting founders time, IMO is one of the worst things you can do and shows how out-of-touch you really are.

I don’t mean for this post to come off as an angry diatribe. At the same time, it has been interesting trying to learn the basics of Angel Investing and meeting so many people that consider themselves experts. Isn’t it okay to not be an expert? Can’t we just focus on why we’re all really doing this? There are easier ways to turn money into more money, I want to invest because I love building things and I really enjoy supporting people building incredible things for the right reasons.

In 2019 you won’t see me at an “Angel Investing MeetUp group” or any upscale private clubs in San Francisco drinking martinis with the “Angel Elite.” I’ll stick to my people, the ones who take the bus around the city, or ride the Ford Go Bikes (my main method of transportation in SF), don’t brag about money/things, and who, like me, love talking about innovation and the incredibly creative people who have dedicated their lives to it.

What do you think? If you’ve read this far I’d love to hear what you have to say. Comment and let your voice be heard!