Yesterday we introduced you to the Lucidchart team. Now, here’s the interview with them! Lucidchart is seed-funded by 500 Startups and has been noted as an app to enhance your creative genius, as well as mentioned in a Google keynote. The Lucidchart founders share some startup wisdom with us….
Elements from this interview appear in the book Accelerate, which launches August 11th! Accelerate is the first comprehensive guide to the fast-paced world of accelerator programs featuring 230 accelerator programs spread across 46 different countries. Included in this book are responses from over 150 entrepreneurs whose businesses have benefited from participating in an accelerator.
Tell us what your company is all about.
Karl: Our goal here at Lucid is to create graphical web applications that are every bit as good as, if not better, than desktop applications. Our first product — Lucidchart — is a collaborative diagramming application that can be used to create flowcharts, wireframes, mind maps, org charts, and many other types of diagrams. Most people are surprised to learn that diagramming is a billion-dollar market and we’re aiming to capture a significant chunk of that over the next few years with Lucidchart.
When you ask what our company is all about though, I think it’s much broader than that. First, we are looking to constantly push the boundaries of what’s possible in the browser. We’re excited to use cutting-edge technologies to deliver the best possible experience for our users and continually prove that using a web app does not have to be a second-class experience. Second, we’re passionate about assembling an incredible team. With the combination of fantastic products and stellar people, we’re confident about what the future holds for Lucid.
How did you come up with the idea for your company?
Ben: A few years ago, I was working at another startup in the health benefits industry which is subject to quite a few regulations. The team was mapping out all of the processes and regulations that we were required to follow. The problem was that Microsoft Visio is really expensive so we could only afford a license for one person in our small company. So that single license holder would make some changes to the charts, send a PDF version out to everyone else, we’d all scribble our suggested changes on it, email it back, and then he’d have to make sense of and consolidate 12 different versions.
Can you walk us through some of the early stages of starting Lucidchart?
Ben: I used my nights and weekends to build a working prototype that we started using at my other startup. Because we felt the pain ourselves, it was an ideal opportunity to validate the idea with a real potential customer. Once I had worked out the most glaring issues, I released a free version publicly. It generated quite a bit of attention and thousands of users signed up to start using Lucidchart in the first couple weeks which was pretty exciting.
From there on, I was constantly listening to users’ feedback and turning around fixes, updates, and improvements as fast as possible to build trust with those users. When some of these users started to *ask* to be able to pay, I knew I was on to something. At that point, I decided it was time to put together a team to help Lucidchart fulfill the need that desperately exists for millions of users.
You’re part of 500 Startups, how have they helped you? Why 500 Startups?
Karl: 500 Startups made a lot of sense for us because it was clear the value they would bring was more than just financial. I’m a believer that there isn’t nearly as much sharing of best practices among startups as there could, or should, be. That’s one of the key ways that 500 Startups has been a tremendous resource for us. It’s a vibrant community of startups that are consistently looking for opportunities to share best practices, provide key introductions, and generally support one another.
With hundreds of bright and talented entrepreneurs in the portfolio, it’s also a great place to seek out advice on a variety of topics, from some critical strategic questions all the way down to mundane administrative issues. 500 Startups brings even more depth to this by lining up literally hundreds of mentors who are willing to pitch in on their areas of expertise to help propel forward portfolio companies. Similarly, even though there are now literally hundreds of companies in the portfolio, Dave McClure and team still do a great job at making themselves available to help.
What advice would you give to an entrepreneur looking to get their company into 500 Startups?
Karl: Since Lucidchart did not take part in the incubator process, we can probably speak better to landing a seed investment generally. There are 3 basic tips that we would give:
- Build a great product in a compelling market
- Be able to show some initial traction
- Network for the right introduction
The first two are pretty common these days, but traction seems to be more important for 500 Startups than for most seed funds. As far as I know, 500 Startups still does not have any application process. Rather, they rely on their mentors and other portfolio companies to recommend high-quality startups and entrepreneurs that they have interacted with personally.
For example, there is a great company called IconFinder that we’ve actually integrated into Lucidchart to allow users to quickly find icons and images they can use in their diagrams. Our interactions with the IconFinder team had always been positive, the product worked great for us, and we knew that they had quite a bit of traction. As a result, it was a no-brainer to put in a good word for them with 500 Startups when they started looking to raise some funding and we’re glad they’re now part of the 500 family.
What progress do you hope to make in the next year?
Karl: At this point, our goals center around increasing awareness of Lucidchart. We have a rapidly growing customer base who love Lucidchart. While most of these customers have abandoned similar desktop or online applications to switch to Lucidchart, there is a very significant customer group for which Lucidchart is their first experience with a diagramming application. So our challenge is to both market to existing diagramming users who may be using Visio currently, for example, but also those who may not have even thought about using a diagramming application yet.
With regards to Visio users, in particular, we have made significant strides this past year. For example, Lucidchart is the only web app that can import Microsoft Visio documents’ native format, as well as export back to Visio. This has made it significantly easier for companies to transition to using Lucidchart from Visio because they don’t have to recreate everything.
In the coming year, we will be significantly improving Lucidchart’s support for mobile. It’s been amazing to see the increased demand, from individual users all the way up to enterprise, to be able to use Lucidchart on mobile. It’s clear that productivity is really taking hold in the tablet market.
Because Lucidchart is built on HTML5 and using web standards, it’s always been basically functional on tablets. Over the next few months, however, this will transform into a first-class experience. Aside from customizing the UI to be tablet-focused, there’s a lot of performance enhancements in the works. We’re excited to show what’s possible with the mobile browser!
What advice would you like to give to an entrepreneur thinking about writing their first business plan?
Ben: The first piece of advice would be to do some initial validation on the idea before jumping headfirst into the business plan. And talking to friends and family doesn’t necessarily count — talk to the people who you believe will be your actual target customers. When writing the business plan itself, be sure you can clearly articulate a real pain in the market and how your product’s approach to solving that pain is not only better, but also clearly differentiated, from the existing products.
Next would be to start thinking early about how to build the best team possible. And absolutely do not settle for mediocrity. An outstanding person is at least 10x more valuable than a great person, and a great person is at least 10x more effective than a good one. So choose wisely because these are the people with whom you’ll be experiencing some of the highest highs and the lowest lows over the coming years, and who will likely make or break your company’s success.
I’m incredibly proud of the team that we have assembled here at Lucidchart. Along with being the brightest group of people I’ve ever worked with, everyone is also fun and down-to-earth. I love coming to work every day because I believe in what we’re doing and enjoy who I’m doing it with.
What were some mistakes that you learned from?
Ben: Don’t always work on the things that are technologically the most intriguing. Do a little research ahead of time to be sure that users actually want what you’re going to build, and that you can actually deliver a good product. We spent a vast amount of resources building an offline mode for Lucidchart, only to find that the browser support was spotty and the user demand was much lower than we expected. We’ve since dropped support for the feature entirely.
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