Recently we managed to catch up with Custora Co-Founder, Jon Pospischil. During the interview, Jon introduces us to Custora while sharing some really valuable advice abut applying to an accelerator program and the startup process. Custora is a graduate of the Y Combinator accelerator program.
Custora is marketing software that uses predictive science to help retailers earn more from every customer. Marketers use Custora to quickly learn the long-term value of customers from every channel – and to discover the best opportunities to earn more from their existing customer base.
How did you come up with the idea for Custora?
My co-founder and I had been working together for a few years on a number of projects, but hadn’t yet found anything we were really passionate about. We knew we wanted to build a company together and were trying to decide what it would be.
Corey (my co-founder) was pursuing his MBA and was learning how probability models could be used in marketing applications (e.g. predicting customer lifetime value). I had formerly started an ecommerce company and had some first-hand knowledge of how valuable these kinds of insights could be. Two things got us really excited – first, there was no product on the market to deliver these kinds of insights and so only companies with immense resources could take advantage of them. We were excited to help level that playing field. Second, we saw how these insights could be used to deliver more tailored, 1:1 marketing. Since we receive as much batch-and-blast, in-your-face junk mail as anyone, we were excited to help improve that situation.
Staying focused on the right things — there are far more directions you can pursue than there is time to pursue them. For example, we started out with 2 products, one for subscription businesses and another for retail-style businesses. It took us a while to zoom in and focus just on the retail-style companies – we had to turn away revenue and some high-profile clients, and that was really hard to do when we were just getting going. We feel the benefits now as our product is more tailored for retail marketing needs – and therefore much more valuable. But it was a hard decision to make, and one that we certainly made later than we should have.
Every week, we need to ensure we’re working to answer the right questions for the business, working on things that will drive the most value. It’s easier said than done.
You were part of the Y Combinator accelerator program, what difference do you feel being part of an accelerator made to your company?
It made all the difference in the world, and I would do it again without hesitation. A few of the biggest things that come to mind:
- Advice/assistance from the partners: each and every partner added tremendous value for us — from things like helping developing our pitch (both to customers and investors) to introducing us to key customers, it’s hard to think of an area of our business that the team didn’t help with.
- The network: within YC we built lifelong friendships with a number of our batch mates, and I can’t count the number of times a YC alumnus has helped us get through a challenge.
- Credibility: Early customers had more confidence in us because we were part of the program. Additionally, the biggest challenge we’re facing now is hiring, and being part of such a great program gives prospective employees a strong vote of confidence in what we’re doing.
What advice would you give to entrepreneurs looking to start a company?
It’s an amazing experience, but it takes a tremendous amount of work. For that reason, it’s really important that the problem your company will solve is one you’re passionate about. There will be extreme highs and lows — without a very deep passion for the problem you are solving, it will be extremely difficult to make it through the lows.
What advice would you give to an entrepreneur looking to get their company into an accelerator program?
I think the thing that helped us most was the strength of the connection between me and Corey. We have worked together for years, built things together, and have a strong friendship. PG has explained why this is important – if you have a strong friendship with your co-founder, you’re less likely to quit when things inevitably seem impossible. Friendship will force you to stick on longer than a rational person would, and this is exactly what you need when building a startup.
Additionally, one thing I think helped us was how we went about validating the business — before writing a line of code, we had people asking us for what we were building. One of the biggest reasons startups fail is because they never build something people want — we weren’t at risk of going down that path.
What advice would you like to give to an entrepreneur thinking about writing their first business plan?
I wrote a business plan once, when working on my first company in college, and to be honest I don’t think I’d ever do it again. It’s more valuable to spend that time getting something out in to the world (some form of MVP (minimum viable product)), getting users, etc.
A massive thank you to Jon for taking the time out of his busy schedule to put down some awesome answers to our questions. We look forward to catching back up with Custora early next year to see how things have progressed. In the mean time check out their site. You can also follow them on twitter!