What I learned by talking 2 hours 1 on 1 with Steli Efti

For the past two years, I´ve been getting a ton of value from Steli Efti. Mostly by listening to The Startup Chat, the podcast he and Hiten Sha put out at least twice a week. There´s also a “Daily Sales Motivation Video” he puts out on YouTube well… daily! and of course there´s the close.io blog, the company where he is CEO.

When I heard he was coming to Mexico I sent him two emails. He replied to the second. The subject line was: “Will pick you up at Mexico´s city airport”. Why? because I JUST wanted to meet him and thank him personally for all the help he puts in the internet as content. But Specially for the Startup Chat, which I highly recommend you to listen to. He replied: “let´s do it”. So I took a plane to Mexico City, stayed at the airport around 5 hours, so I finally got the chance to talk to him. We rode an uber since I don´t have a car in Mexico City. That´s where the talk began. It felt like that Startup Chat but without Hiten.

I was kind of surprised he was asking me a lot of stuff about my company Misión Admisión. On the ride to his hotel, I explained to him with enough detail what was going on in our company and also realized he was listening carefully to what I said, but also watching how I said it and behaved. Then two days later we went out to grab some lunch. We kind of got lost, so while we found our way to the restaurant we talked some more. He listened carefully again. And after arriving at the restaurant, once again, he listened.

So here´s the advice I got which I´m more than happy to share. While this advice is specific to our company I will make annotations that might make sense to adjust and apply to your own Startup.

Crowdfunding campaign

After I told him we´re about to hit the fundraising trail his first suggestion was for us to launch a crowdfunding campaign besides talking to funds and investors. He first asked if there were crowdfunding platforms specially for Mexico and if so, if I knew any founders that had successfully raised a campaign there. I replied both questions with a yes. So he advised me to do just that: to explore a crowdfunding campaign and to talk to founders who had done it successfully about all the things that they did to pulled it off.

Besides the crowdfunding campaign, he explained a trick to me: using the successfully managed campaign to raise investors awareness outside the campaign as a way of generating FOMO . How? well the investors outside the crowdfunding campaign will be watching how we keep getting more money every single day . He described them like keeping an eye on the campaign, seeing the money we´ve raised day by day, each day incrementing until they say “holly shit, these guys are going to get funded” which would cause a positive opinion on the angel investors so much that they´d be more likely to invest or at least be more inclined to invest.

Establishing a time window to fundraise

4 week preparing and 4 weeks executing

I talked about this with Santiago Zavala as he approached me to see what I was up to. Santiago is a 500 Startups partner and head of the 500 Startups Mexico City acceleration program. We grabbed a beer, and he walked me through his own fund raising process. Funny thing is Santiago uses close.io CRM (Steli´s company) to do so. So after showing me how he does his own fundraising job and hearing the advice he told me here´s what I set out to do in the 4 weeks of preparation-time window Steli suggested:

1. Getting the materials ready: a killer deck and financials.
2. Speeding up our sales to show even more traction. In order to do that we need to execute marketing campaigns faster.
3. Gathering all the emails, names, getting intros from other founders, acquaintances, pulling back business cards, doing linked in cross over checks, speaking to anybody I know from the education world and making connections among other actions. In a nutshell: constructing a pipeline.
4. Using close.io to automate and nurture the investors pipe line. (Santiago was kindly enough to show me how he´s using it, but not only that, he shared and became clear to me the amount of insane work he goes through and I´d have to go through to close on the investors.
5. While listening to Steli, he perfectly stated that I would have to market the shit out of the crowdfunding campaign, so having the marketing ready before launching the campaign would be crucial, and would also required once again, a ton of work to get it done properly. For instance, the first thing I did, was schedule a call to a 500 Startups founder, Ceci Ezquerro who successfully raised money from a crowdfunding campaign for her company Leco. What for? to pick up her brain and know what she did to pull it off. This by the way, was advice from both: Steli and Santiago.

4 weeks executing

So Steli set it out like this: I would have to divide the execution in 2 parts, the firs two weeks I will be talking to 50 investors, funds and regular people interested in investing through the crowdfunding campain. “You want to spend 8 hours a day promoting the campaign and the last two weeks trying to close it” then he said:

“you´re going to do this a lot more agreesively than you should do it” because… “you´re not moving with the necessary urgency and agression” “ten hours a day you´re going to hustle the shit out of it”.

Then he went on

“with fundraising you do it fast and agressive or not at all”

That same night in 500 Startups office, Santiago told me exactly the same thing, of course with other words.

“Show me your deck!”

Back at lunch, I pulled out my laptop because I wanted to show Steli our product as I intented to go over it with him, but the internet from my phone wasn´t that good to router. I wanted to show him what makes us proud: the product we´ve build and the content we´ve created. So I left the laptop opened and I started telling him about a distribution strategy that we ditched last year. He stopped me right there and requested me to see my deck, which of course I did, only to receive not just feedback but, once again, great advice.

This is my old deck and the feeback Steli gave me SLIDE by SLIDE

First Slide

Here I told him the story of how Misión Admisión was born, and that we are a mission-driven startup. He had nothing to say about it.

Second Slide

The name of the game: getting a high score on the test.

Nobody told me before that the way that slide is designed doesn´t help to read properly as the reading gets unnecessarily cut.

At the bottom of this slide in a very discret way it says “2,000,000 students per school year take these tests”

There I explained that in many universitirs for example 2,000 students try to get into med school and only 200 actually make it. So he told me to put it exactly like that: “2000 want to get in only 200 make it” and then say “Because we improve their chances they´re willing to pay money and invest time with our product”

Third Slide

Learning should be fun.

That´s all that was in the slide. He told me that it didn´t impplied anything more than “hey, we make fun videos” instead he told me we´d had to re-phrase it in order to answer why is this good for our bussiness, with better statements like these:

“We have proved that learning should be fun and it translates to money to our bussiness”

he went on: “If it´s better than regular videos, tell me how or tell me why”

But! not only that, he wanted facts: “Prove to me it is popular”

Fourth Slide

This says that we sell b2c, directly to students using on line channels. He had nothing to say, until he saw the next slide.

Fifth Slide

His feedback here was an eye-opener. I told him that we chose to sell directly to students and postpone the B2B sales, specially to private highschool because it would only help students that might already have a good education and a better chance to pass the admission test to the university rather than underserved students. But that was not it, in the next slide which for obvious reasons I´m not going to post here, it clearly showed that the projected B2B chanel sales were way higher than the ones sold to students. And I suggested that we would have to let go of them because it was interferring our mission, which is playing the level the playing field among students. You see, our ultimate goal is to help students have the propper preparation to compete for a chair in LATAM´s universities. But I was taking a wrong approach. He told me that I didn´t need, to sacrifice a market because of selling just because It would hurt the others.

“You need to be finantially sucessful, and make finantially sound decisions, then impact the world in a better way” “you can´t help the poor by being poor yourself”

This got me thinking a lot. A couple of days later I had lunch with a friend and talked to her about this, It was interesting to discuss it with her because she´s involved in social projects, we came up with several ways of getting money from “A”, that is students in a better position to “B”, underserved students. I can´t discuss it here, but it has do it with special disccounts and scholarships among many many other ideas that might work to 1) make our company finantially successfull 2) sell to everybody, regarding the money they have in their pocket, wether they pay a lot of money for their education or not.

Sixth Slide

I passed this one quickly, but he asked me to go back. At this point of the lunch, we had been talking for quite a while now, I had layed out our ideas, plans, things that went wrong, and a whole lots of information.

For him, we have had a lot of ideas, and very little validation for some of them, that´s why when he saw this slide, he onced again stopped me, told me to go back and he looked me in the eyes and told me this:

“You don´t need more ideas, you need execution”

So we are changing these slides and get the new deck ready before the fundraising campaign starts.

Another of the last slides

So we continued going to the deck until we reached the slide before the very last one. It simply show what do we want more money for, so that´s two thins: marketing and product. Not according to Steli:

“You need to focus on revenue, 90% of the money should go to marketing and sales, and then earn the right to re-invest that into the product”. Then he went on telling me that raising money to build a product, well that´d be a sure path to failure, because we would only continue to focus on building a product and not shipping. I half agree. Here´s why: In Mexico there are 8 important tests that add up to the 2 million students that take standardized tests to pass to the next study level, that is from middle school to highschool and from highschool to university. And we only have one. But I totally get that first, we have to show massive grow with the product we already have. I know we will do better marketing, so yes, the money we´ll ask will be mostly for marketing and sells, and then we´ll take that revenue and invest on our next product.

“To prove a thing you don´t need to build a shit”

He told me this while we suggested an afilliate program for students to get a discount, I told him that we haven´t been able to work on that since the engineers have other things to do. So that´s when he said that I could do that with just email… yeah just by using email.

While going from the airport to Steli´s hotel, I told him how much the Startup Podcast has helped me but feared I didn’t stress that enough. I just wanted him to know that it is helping me big time. Not only that but i felt it was like my obligation to do something about it. So I offer to design the podcast t-shirt which I will, then I asked him to also thank Hiten for sharing so much, to my surprise, he grabbed his iphone and said, “why don´t you tell him yourself?” so I did: I told him that it was amazing how they´re connecting at a human level with people they might not ever meet in their lives, but that were in fact affecting those lives in such an amazing way, and in that moment I realized how lucky I was to tell both, on behalf of thousands of entrepreneurs around the globe: “thanks for what you guys are doing”, for shedding some light in some of the darkest passages of entrepreneurship. And I did it with Stelli holding an iphone right across the table for Hiten to listen.