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🦠 From Pandemic to Pivot: The Stream Club Saga (Part 2)
Lessons learned starting a company during a global pandemic
If you haven’t read part 1 of this trilogy, start with 🦠 From Pandemic to Pivot: The Stream Club Saga!
If you’re looking for wise startup advice or clever market insights, this likely isn’t the right memo for you. This is the unfiltered story of a startup struggling to find product market fit (PMF), an essential milestone in every startup's existence. I wrote this because I’ve met many founders who often face the same unavoidable struggles.
Finding PMF is hard. There are no silver bullets. You have to build features, show them to users, throw them away, and build different features. Over and over again. This memo is about that grind. Keep reading, though, because there is a happy ending.
Execution (June 2020 - November 2020)
When you start a startup, you have to be all in. That’s why as soon as we closed our first fundraising round, we moved to a brand-new city across the country. Moving to Chicago together would enable us to completely focus on building, a necessary endeavor as we began our hunt for product market fit.
Stream Club was building virtual event software in June 2020, at the height of the pandemic. This was an extremely competitive environment, and at one point, ten other venture-backed startups were building in this space.
To even have a chance, we needed more hands-on keyboards. We hired three interns for the summer (Gabe, Leyton, and Darian) who jumped at the opportunity to play a major role as the first engineers at an early-stage startup. They moved in with us, too sleeping on air mattresses and taking turns cooking team dinners.
We were moving so fast that we opted to track our tasks via sticky notes on the living room wall because it was faster than updating an issue tracker. Whenever a customer had a feature request, we aimed to build it for them as soon as possible. The whole environment had a hacker-house feel, with our monitors encircled next to each other. We worked day and night.
Because we were living in an Airbnb, we were month to month. So to keep things fresh, we picked a new city at the end of each month. Gabe said he’d always wanted to go to San Diego, so we headed there next.
When we arrived in San Diego, it felt like we had execution down. We knew how to set up a productive working environment quickly.
In July, our largest customer hosted an online symphony series that blew our previous attendance records out of the water. This was extremely motivating! At the same time, we were having trouble scaling up our customer acquisition, which was concerning.
I didn’t realize how important momentum would be when building a startup. The highs can be so high, but the lows are extremely low. In July, I was feeling particularly low, so I wrote a “morning list” to remind myself why I was doing this:
I would never have known if this was or wasn't for me until I tried it and learned.
Even if we fail, this is not a net loss. Everything I learn, the networks I build, skills I gain, will pay dividends in the future.
This is my first opportunity to get that 100X return I've always wanted.
This is my first opportunity to see just how much I can achieve when I’m not limited by an existing structure.
I will always move the goalpost toward something better. That's who I am. If Stream Club becomes a billion-dollar company, I'll still want more. Take a breath. Enjoy the journey.
When I put too much pressure on myself, I become less creative, and less effective; too much pressure and I will actually go SLOWER. When I feel overwhelmed, I need to step back, set realistic expectations, and be strategic.
Our last month with the interns was in Portland, and we wanted to make a big push. When we started Stream Club, we did so with a Product Hunt Launch. These big launches were an opportunity to go viral, and with that, we might have a chance to turn around our slowing customer acquisition numbers.
August was also the first month we made a major push on growing revenue. This month, we added our "Pro" plan and started tuning the product to convert customers to pay at certain key points in our funnel. This was necessary to justify our rising paid ad costs, as the previously affordable keywords just a few months ago were now much more competitive.
Our plan was to add monetization, launch big, and see if our growth numbers turned around. Everything came together quickly, including a big press piece with Business Insider.
We did our big launch, held our breath, and waited. While we did get to the top 10 spot on Product Hunt, it wasn’t enough to reignite our growth engine. It was clear that the market was oversaturated with virtual event products, and we needed to take a step back and rethink what we were working on.
A common saying in startups is “First-time founders are obsessed with product. Second-time founders are obsessed with distribution.” In retrospect, I believe we were too obsessed with product. The virtual event SaaS space quickly became commoditized, and we couldn’t maintain feature parity with larger, well-funded players like Hopin. Combined with our inability to build a strong viral loop to fuel growth, Stream Club (at that point) was stuck.
Pivoting (September 2020 - January 2021)
In my experience, pivots don’t happen quickly. For most founders, it’s very hard to let go of the initial product you’ve invested in. It’s easy to say “One more feature will fix this” and waste another month trying to turn things around when it’s already too late.
Moving in a new, unknown direction is even harder than letting go of your initial idea. It means you have to go back to first principals and get all of the founders (and investors) aligned on the new direction.
Thankfully, we had the right fundamentals in place to take on this challenge. Lan found a great deal on an office in the Mission neighborhood of San Francisco. 660 York St would become our creative space, where we would talk late into the night about what problems we should solve.
Progress didn't happen right away. We didn’t agree on most ideas. It took several iterations and disagreements to figure out what would be the most logical next step. This might have been the hardest part on me because there was no clear choice.
Eventually, we converged on a key insight. When reviewing customer feedback, we realized customers often used our product to host “live streams”. But instead of using existing live streaming software, our customers would use Zoom, and host massive video calls where 99% of the attendees had their camera off.
Why were they using video calling software designed for small groups for their one-to-many live streams?
It was because live streaming software is bad. Zoom is easy to use. And going live is too hard.
We tried every live-streaming software available and were consistently unimpressed. The interfaces were clunky and they were oriented towards a completely different segment than the customers we previously targeted. And using Zoom meant giving up features that our customers desperately wanted, like graphic overlays or layout control.
Our new direction was set: Build better live-streaming software for creators. Easy right?
R&D (January 2021 - May 2021)
We had clear constraints from day one: A browser-based live streaming studio with graphical overlays, customizable video layouts, and co-hosting. There was only one problem: none of us had ever built a video application before.
We wanted to do things nobody else had done, so there was very little reference material. I knew we were on the bleeding edge when my Google searches frequently returned with zero results.
In hindsight, our naivety of video was a huge advantage. We couldn’t declare certain features impossible to build, because we didn’t know what was or wasn’t possible. We were video outsiders bringing a new perspective, which resulted in us trying new things our competitors hadn’t (or wouldn’t) and giving us a differentiated product.
I’ll never forget the moment when we had our first live stream. Captured in this video below, you can feel how excited we were to see our hard work pay off.
After proving out that we could build the fundamental product we thought the world needed, we were back in execution mode. Little by little, the ever necessary momentum that startups thrive on was returning to our team. After several months of being in “ideation mode” it felt amazing to be running in a clear direction.
At this point, we were coming up on the first anniversary of starting Stream Club. Even though we shared the same name, Stream Club in 2021 was a completely different animal than Stream Club in 2020. With every continuous step forward, we were learning and becoming better founders.
With momentum on our side and a new product we loved, we were heading into summer 2021 with our heads up high. We were optimistic, but it’s safe to say none of us could have predicted what would next…