Posts on Feb 2015

We Raised Series A and Then Joined An Accelerator

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LISNR was founded in March 2012 and launched its first product a year after, at the end of February 2013. I joined the company right before that release, becoming a first (if not the first) employee amongst a small team of founders. I saw the company through significant business milestones, ones that supported our Seed stage ambitions and eventually solidified our Series A position. By May 2014, we had raised over $4M in two funding rounds. LISNR had weathered industry storms, changing markets, early adopters, and a few small pivots, but the aforementioned history can be leveraged as evidence that we had a defensible business and technology, supported by bullish investors representing the industry vision we intended to fall in line with. So it makes natural sense that in October 2014 we were accepted into the R/GA Accelerator, a connected devices startup accelerator powered by Techstars, one of the premier pre-/seed stage startup accelerators in the country.

I hope you caught my sarcasm there.

What was a post-Series A company doing entering a seed stage accelerator, never mind applying and hoping for acceptance into one? Some of these answers are deeply personal to our business and have to do with the particularities of the R/GA Accelerator focus: in order to understand the viability of a hardware business and its team, companies need to be further along than their softer brothers and sisters, even in just the prototyping phase. So for a company that’s obviously not hardware, what can we say we got out of the experience?

Let’s explore the more universal answers to these questions, so maybe we can help you consider your own unconventional startup resources on the path to success. Because sometimes you can get off the ground, you just need a little jet fuel to fly.

Why An Accelerator? Why Now?

  1. The Power of Brand

Techstars and R/GA are leaders in their respective industries and powerhouse brands to be reckoned with and recognized. Even when competitors speak of them, you can hear the reverence in their voice. With that said, LISNR needed a little shared brand equity. We have the unique opportunity to define a product, create a market, and build a business around a proprietary technology that we ourselves have perfected. We were sore for some awareness, vertically and horizontally across markets and verticals. Being backed by these brands fortified our own brand, in the face of our target market, end users, clients, potential investors, and even competitors.

2.   It’s Not Too Late for Fundamentals

Do you ever see your company how it could be more often than what it is? It’s a great concept, you have a great team, the product has sold and is getting traction, but things could be better. Maybe management isn’t talking enough, or stepping up to the plate. Product market fit doesn’t seem to be informing your decisions as you expect, and the product roadmap is stalled by conflicting goals and interests. Maybe it’s time to take a step back and find the cancer, something very hard with a business that has already put the rubber to the road. This is a chance to revisit some of the fundamentals and the early issues that could be coming back to haunt your success. If nothing else, for a later stage company, going back to the basics and applying some foundation principles to growth and scale might just be a perspective you need.

3.   Going Fast and Slow

Since we knew we needed to revisit some fundamentals, we then also knew we needed to be conscious of the business that was already in motion. Joining R/GA and Techstars enabled us to focus on growing and strengthening LISNR without absorbing the risk that comes with having more than one company focus. We are a client-oriented, sales driven company. If everyone from the CEO to the intern is not aligned under that culture, business suffers. R/GA and Techstars provided us the support and the roadmap to take on business and product development that we would have had to have done ourselves, alone and without guidance, opening us up to derision and possible detriment to the company.

What Did We Learn?

1.   You Are Not An Island

Techstars is a mentor-driven startup accelerator. It differentiates and prides itself on providing startups with what they really need to succeed: a little cash and mentorship from individuals with deep industry, investment, or entrepreneurship experience. For a long time, LISNR operated as an island. We did not leverage the large network we had amassed strategically or intentionally. It wasn’t done with ill will: sometimes when your head is down, and as an entrepreneur you’re used to doing things by yourself, it’s hard to know when and how to ask for help. Forming to the Techstars model, we had have and use mentors. The growth and knowledge base thus far has been exponential. LISNR curated four top mentors across verticals and channels that speak directly to our market. We are in the process of closing deals we would have never had the access or insight to do before.

2.   Prospects Won’t Buy Your Product, You Have To Sell It

LISNR didn’t intend for this, but after two years of being intimately involved with a pretty cool inaudible “data over audio” smart tone solution, we started expecting our prospects to buy our product without us selling it. We would barrell into meetings and talk about sexy features and functions, but forget to speak to the target about their problems and how we were a solution for those needs. We weren’t placing ourselves in the market or in their value chain, and the results saw inconsistent sales targets and closes. By refocusing on the art of selling, we were also able to catch some superfluous product features, strengthen our roadmap with more aligned product offerings, and find a better pricing model that lets us better predict income.

3.    Align Your Goals Across The Whole Business

The core offering R/GA brings to the relationship with Techstars is the ability for the startups to partner with the R/GA services teams. These are the same teams that work with global Fortune 500 companies and help build multimillion dollar brands. Our services team had a business objective and a product objective, but made it clear that goals of both projects needed to be aligned in order for one to support the other. To be transparent, we rallied around “shortening the sales cycle” and then built a business solution and a product solution that worked in tandem to support that end. It really helps in moments of decision making, across all of our functions, to go back to that one goal as ask ourselves, from the CEO to the intern, “is this getting us to a shorter sales cycle? How?”.

If you want to learn more about our experience in the R/GA Accelerator, our thoughts on the accelerator model, or learn more about Techstars, drop me an email: jillian@lisnr.com

LISNR is a high frequency, inaudible technology; a new communication protocol that sends data over audio. As the leaders of the Internet of Sound, we use inaudible sound waves called SmartTones™, to transmit information.  LISNR essentially transmits customizable packets of data every second that enable proximity data transmission, second-screen functionality, authentication and low-fi device to deviceconnectivity on any LISNR enabled device.  We enable this functionality better and more efficiently than bluetooth (proximity), ACR (2nd Screen), and NFC/RFID (authentication). As an integrated software partner, LISNR can power devices to connect with world around better than ever before.