Building a Big Startup One Step at a Time, Interview With Rami Essaid, CEO Finmark

Essaid provides tips on how to iteratively grow a startup by focusing on customers, growth, prioritization, and cadence.

PEOPLE

TAKEAWAYS

  1. Try to break down your steps into as small time increments as possible. A lot of people think annual and quarterly, then realize they have missed the mark. Break it down into monthly and weekly — that’ll let you get feedback more quickly to avoid big course corrections. Nothing you dream up will hit the mark the first time; the less distance you have to go to adjust, the better. 
  2. Make sure you have a solid team you’re working with. Early on, it’s all about the core team. It helped us accomplish things at a much faster rate.

NOTES

  • 01:15 – Can you provide us an overview of Finmark? Finmark is financial modeling software for startups; we want to make it really easy for companies to manage their  runway, hiring cash, understanding unit economics…just like Carta moved cap tables out of Excel — we want to do the same for financial modeling. Most people outsource financial modeling and eventually they bring it in-house by hiring someone but even though it’s very easy to make mistakes. We made a painful mistake at Distil Networks when we thought we had more money coming in — because of that mistake, we had to lay off 57 people. After selling Distil, I realized the problem still existed, so I decided to fix it.
  • 03:00 – So, how do you go about building a startup, one step a time? Essentially, you build something a small amount of people love, then iterate quickly. Start with the big picture, then boil it down to as small of a piece as you can cut off, then get going on it. Think of SpaceX, their mission is to get to Mars but they started with satellites, now they are carrying people to the space station and eventually will get to Mars. At Finmark, we spent two months building the MVP to get the product into the hands of people. Then we iterated on a monthly cadence since then, with milestones then measure and iterate.
  • 04:10 – Did you interview other startups before or after building the MVP? Yes, I wanted to have conviction in my head that this was as big of a problem as I thought it was. Before the MVP, I spent two months interviewing founders and investors. I spent a lot of time talking to founders of small and growth companies, CFOs, and investors, to get their perspective on this problem, before bringing a team of people in.
  • 05:05 – After raising money, how do you resist the push from investors to scale quickly? Depends on your measure of success. I set expectations with investors that early on we won’t make a lot of money since I’m focused on user growth. As a YC Alum, we’re indoctrinated with startup=growth, so you do want to create a North Star KPI/metric — for us, that’s user adoption, not revenues, so that helps investors think of scale in a slightly different way.
  • 06:08 – What should founders focus on, very early on (e.g. MVP, growth)? The nice thing about focusing on growth as the North Star, it unlocks certain behavior that ties back into the customer’s problem. If the growth isn’t there, then your product might not be meeting customer’s demands or it’s not a big market. You could build a product just for a big market or build a great product for a small set of customers but then you don’t have a great opportunity. Using growth metric as your guiding star, you optimize for that and you solve all the other issues along the way.
  • 07:40 – How do you get started from ground zero? First step is to believe in the product then build a vision and thesis around it — that’s when the customer interviews came in to help me understand the customer’s perspective, which was important to me. I decided to raise money earlier since I had an exit under my belt. Then, recruit a founding team to supplement your weak areas and make the journey a lot less lonely and more pleasurable. From there, build a basic MVP, get into customer’s hands, then keep rinsing and repeating, till you get a bigger and bigger customer base.
  • 09:28 – How do you view pivots? Do you see them as failures? I definitely don’t see them as failures but it is a change in direction. Many people fail outright, so pivot to me just means that you get a second at bat with the same company. I commend people that can pivot; it’s the hardest to pivot and come out of it successfully.
  • 11:08 – How do you manage your cash tightly, so you can manage your runway to allow for pivots? That’s literally what we’re building at Finmark. One of the very first charts you see in our software is runway; if you have 12 months of runway, you can work backward from that to see what you want to accomplish. Every month, you should be looking at yourself and your goals to determine whether to change expectations or change course. Also, make sure the goals/milestones make sense to others and aren’t just ones you are impressed with (i.e. validated with investors, customers).
  • 13:05 – How far do you personally plan out (e.g. annual, quarterly)? I dream 3-5 years out — that’s the foundation. Then, I break that down into years and then months. All that changes over time but you need to have a big vision as  your North Star, so you don’t stray too far from the path. That’s also why I brought in a CTO that thinks more short-term such as monthly cadence, to help me achieve the big vision.
  • 14:35 – How do you personally prioritize? The customer! Listening and talking to customers is how we prioritize everything and goes back to the growth driver. I look at our business and think: will the next month of work bring more of this type of persona/segment, make them buy from us or help us expand our product to new types of customers? Eventually, you want to focus on core customers to avoid churn. It’s all about, take the big vision and bring it down to something people really-really want and keep expanding that over time by adding features.
  • 16:15 – Takeaways (see above)
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