Ep 34 – Fast-Tracking Your B2B Startup



Vanessa has over 23 years of experience and a proven track record of value creation as a serial founder, operator, strategist and investor across SAP, Trigger Media and McKinsey. She is the Co-Founder and CEO of Sugarwork, a B2B SaaS company facilitating flexible, part-time arrangements for experienced employees and empowering employers to maintain the knowledge, skills, and relationships that drive their businesses.

She was most recently Vice President of SAP.iO, SAP’s early-stage venture arm, where she oversaw SAP.iO’s North American Foundries in New York and San Francisco, including programs devoted to women and diverse-led B2B enterprise tech companies, and recruited and accelerated 85+ enterprise software startups.

Prior to SAP, Vanessa was Chief Operating Officer at Trigger Media Group, a $22MM digital media incubator. She co-founded Trigger’s portfolio companies: InsideHook (digital media company & men’s lifestyle brand) and Fevo (SaaS technology for group experiences at live events). She began her career at McKinsey & Company and was an Associate Partner in the Firm’s Media and Entertainment Practice, based in Amsterdam, London and New York.

Vanessa currently serves as a Non-Executive director of Appen Ltd. (ASX: APX) and Goodman (ASX: GMG). She is also a board observer of Fevo and is an advisor or investor in start-ups including Bounce Exchange (Wunderkind), Crave Global, Grata Data, GroundSignal, Kable AI and Narrativ.

Vanessa graduated magna cum laude with an AB in psychology from Harvard University and cum laude with a JD from Harvard Law School. She was a Fulbright Scholar at Universiteit Utrecht in the Netherlands where she conducted independent research on the International War Crimes Tribunal for the Former Yugoslavia and the International Court of Justice. She serves as Past President Director of the Harvard Alumni Association (was President from July 2021 – June 2022).


What’s the one startup lesson that never changes no matter what your specific startup situation is?

How do you flesh out and test a B2B idea before spending a single dollar on building it?

What’s the surprising test to tell if you’ve priced your offering not too high, not too low, but just right?

In this episode, Vanessa Liu, Co-Founder and CEO of Sugarwork, talks about the biggest lessons she learned building and helping startups from the Netherlands to the United States, the one thing that’s critical for every startup to do, her go-to techniques to test every aspect of her product, how to get pricing right, and much more

Episode Highlights

  1. A simple recipe for more successful startups
  2. How to increase your odds in picking a great startup idea
  3. How to move quickly from idea to real world testing
  4. The biggest pricing mistake b2b startups make and how to avoid it
  5. How to understand value
  6. The art of customer acquisition in b2b startups
  7. Product development dilemmas in b2b and how to tackle them skillfully
  8. How to select and support your team pre-revenue
  9. “Are we there yet?” – Key milestones in the fundraising journey of your startup
  10. Why product market fit matters and the single biggest marker of product market fit
  11. How to pick the right investors as a first time founder
  12. How to surround yourself with the right kinds of support for your situation

Links and Resources

Sugarwork: The flexible work platform that Vanessa founded

Interview Transcript

Shubha Chakravarthy: Hello Vanessa! We are so excited to have you here today. Thanks for joining us on Invisible Ink!

Vanessa Liu: Thank you so much for having me, Shubha!

Shubha Chakravarthy: We have got a lot to talk about. Let’s start off with your early career. You spent quite a bit of time at McKinsey, but your experience there was not that of the typical consultant.

What were your biggest learnings there? What was your involvement and what did you learn about starting businesses while you were at McKinsey?

Vanessa Liu: Maybe I should just preface it by saying why I went to McKinsey in the first place. I was an aspiring astronaut for many years until I was almost about to graduate out of college, and it was only during my senior year that I realized, “Wait a second, I might be working on something very small for about 10 years on the research side and not be able to have the impact that I wanted.”

So, I started meandering. I came to business because I realized that there are so many instances of economic development and work that you can do to spur on economies and also to create jobs. That is how I came into McKinsey and the technology side was what I fell into during my third project. I was asked to work on creating a free internet service provider back in the day when that was a thing, and I was doing that for the Dutch market.

So, I was there crafting the business plan and trying to figure out what that could look like for the Dutch market and then when the client said, “Could you just go and build this for us?”

I started working with web designers and engineers so that we can get this off the ground. In eight months, we were able to launch the fourth largest free ISP(internet service provider) in the Dutch market, which was exhilarating. It was really exhilarating. That gave me my first taste in terms of what it is like to start a company.

So, I started doing that again and again. I stayed at McKinsey for 10 years, much longer than anticipated because I was getting this type of work with our clients, and it became almost like a drug that I just kept on going back to.

That was my time at McKinsey and my time since McKinsey has also been very similar, actually.

Shubha Chakravarthy: So, you know, that was a really unique combination of having the funding, but also the freedom to build something new, which you either get one or you get the other.

What were the biggest takeaways in terms of building new things that you took from that experience?

Vanessa Liu: I think so much of business building is just being able to get something tested out there and in front of customers. I think so much of the time, and I think corporates in general, are just nervous about putting something out there that it might not yet be fully baked. That is what I learned.

You just have to sometimes get something out there and it is okay in the beginning if you just have enough there so that your customers can touch it, work with it, and can see if it is something good. That was a very critical learning that I had. So, that was number one.

I think number two, in addition to bias towards action, being able to then try to get something out there with a small team especially when you think about innovation in a large company, there is so much of a desire to have everybody have a stake in it and to be able to have a say. I think that is the beauty of starting things that are new. If you are nimble, if you have a small team, you can get going all that much faster.

So, that is something that is a takeaway that I’ve always leaned upon companies to say, “Look, if you are trying to innovate from the inside, don’t choke it by having a committee because if you have a committee you can kill things. Try to give things enough of a runway so that they can try and see if they can surface and to build something very quickly and to have milestones so that you can get them to launch.”

Shubha Chakravarthy: Reminds me of The Innovators Dilemma, so we can talk quite a bit about that. So, after McKinsey you went onto a digital media venture fund, and you actually co-founded two portfolio companies. How did you get to be a venture capitalist and co-found companies?

Vanessa Liu: A venture studio is almost like a hybrid founder plus venture fund. My business partner and I raised $22 million to start our own businesses that were primarily in the media space.

When we went in, which was in 2011, my business partner had at that time co-founded several email newsletter businesses or had invested in ones and grew them to scale.

So, one of them was a company called Daily Secret, which back in the day, for women like us, was like a great email that you got into your inbox which would tell you what to do, where to go, and what to buy. Then Thrillist was another company that was launched on the back of it, but that was for men of a similar demographic in terms of age and then Tasting Table around food, and then Pure Wow for the older female demographic.

So, when we went in, we had a thesis. We had a playbook of “How do you launch these companies?” We were going to go in and launch several of these companies for different demographics that had been overlooked. We knew that for each type of business, if you put in basically two to two and a half million dollars of funding, you can get something off the ground. So that was what we were charged with doing.

We started our first business called Inside Hook and got that off the ground. But then very quickly in 2012 and 2013, the media landscape had changed drastically. So, we thought, “What we need to do is to start thinking about the second business”, which we were building already at the time, which was around helping millennials get together.

We just thought we have to go away from the email newsletter businesses because they were already getting disintermediated by social media.

So, our second business became essentially a way for millennials to get together and we were taking over nightlife venues during their off hours. That was the nature of our business because we thought that is remnant inventory that clubs aren’t using. Very quickly people on the sales side of the Yankees who were getting invitations to these events that their friends were hosting using our platform said, “Did you ever think about using your platform to sell group tickets on the live events side?”

We had already been thinking about this but that was the call that we were waiting for. I was CEO of the business at the time, I pivoted the business to that area as to what it is today. It is a series C venture backed company all around powering the group ticketing for a lot of live events, businesses, and about 85% of our sports teams in North America.

Shubha Chakravarthy: Congratulations! That is pretty impressive. It is funny because you said that the email newsletter business had gotten disintermediated.

Today we have the Hustle, the Trends, the whole Brew series. So, it is funny how things change and then they don’t, but that is a pretty fascinating story.

Then you had another startup experience, where you went on to SAP.iO Foundries, which is their B2B enterprise accelerator. Can you tell us a little bit about that? What was your mission there and what did you pick up through that experience?

Vanessa Liu: So, this is SAP’s early stage accelerators, and towards the end of my time, after six years of being a founder and being very tired getting these businesses off the ground and getting them to a specific scale, I decided that I wanted to have more purpose in the work that I was doing.

I had already seen first-hand that many people of color and many women were just getting left out of the funding equation. The reason why I knew this was because many of them were coming to me asking for funding. Even though that was not really the model that we had, we were not a venture firm that was handing out money.

We were starting our own ideas, but I was giving a lot of advice to these founders and essentially, at SAP, I was about to start my own fund to back women and people of color and to help them with their businesses.

When I got connected to SAP and it turned out that they were trying to do the same. They had a mandate to work with women and diverse founders, and so they asked me to run it. So, that was what I wanted to do.

They wanted me to start accelerators to find founders that were from Series C and to bring them into the SAP ecosystem. That was what I did across North America. I was running Techstars like cohorts, and I ended up running 12 of them over three and a half years and accelerating a portfolio of 87 companies, 80% of which were founded by women and people of color.

Shubha Chakravarthy: That is unbelievable. Congratulations! But I have to ask you, I love the idea of the fund. Was it just an opportunistic event that led you away from it, or would you even consider it today? What are your thoughts on starting that kind of a fund?

Vanessa Liu: I think as an emerging manager, if you are a first time fund manager, it is more about, “How do you find the people who can back you for it?” I was starting to talk to potential backers when the SAP opportunity came and at least for me, the way I was thinking about it was that I wanted to have a significant platform where I could make a difference.

I felt like with a company like SAP, a north of a hundred billion market cap company that is one of the behemoths in the enterprise software landscape, that would be a way where I can do that and I can also then hone the relationships I would have so that down the road if I wanted to go and start a fund that I would be able to get that. That was what I was thinking.

What has been great is that there have been so many funds started in the last few years from emerging managers, which with this type of thesis in mind, or at least thinking about where they are focused on trying to get diverse founders and underrepresented founders in general into the game because it’s not a pipeline issue and they’ve gone on to do quite well as companies.

Shubha Chakravarthy: Excellent. So, now you are coming fresh off all of these diverse experiences in the startup journey. Where is your mind at after your SAP experience and what were your biggest takeaways from that entire stretch, from McKinsey all the way to SAP?

Vanessa Liu: I looked at business building as a way of solving problems and for me I felt like my time at SAP was a way to see what was out there. What are the different technologies that are being used and how can you at scale solve some of the biggest problems out there?

I’ve been interested in longevity and aging for a very long time, ever since I was in college, and I just felt like that was an area that was being overlooked. I just didn’t see enough investment in the space. I felt like there was so much focus on youth right before the pandemic.

There is so much focus on millennials and Gen Zs and products and services targeted at them, and I’m like looking but wealth is concentrated a lot in people who are older, and there is going to be a very significant wealth transfer moment with baby boomers now aging.

When I was leaving SAP I knew that I wanted to go back to business building, and I wanted to focus on building a series of businesses around the longevity space. So, I decided that it was time for me to leave SAP. I had tested the idea of starting something new in the longevity and aging space with several different persons.

They said, “You should just go out and do this and we would back you.” When I left, I had several ideas to launch with and one of them is what I’m doing right now. So, ever since April last year, I’ve been working and creating an HR tech B2B software platform to help companies hold onto their experienced workforce with flexible arrangements and where knowledge transfer is facilitated.

So, that’s what I’ve been building, and I think that there are so many people now who have been working at companies for a very long time. They are now thinking about leaving the workforce or at least dialing it down. We are going to see a very significant retirement cliff and I’m looking to build software that could really help them hold onto this knowledge with these employees and also help these employees think about, “How do you keep on remaining purposeful and productive for a much longer period of time?”

Shubha Chakravarthy: It sounds exciting! Clearly the digital part of your new venture makes a lot of sense. That’s been a theme throughout everything that you’ve done.

Help me understand and the longevity idea as well. You could have gone into health; you could have gone into a whole bunch of other potential domains that are all around the longevity. Were there other ideas you considered, and if so, how did you evaluate those and why did you pick the one that you ended up with?

Vanessa Liu: I definitely have a roster of ideas and some of them are more healthcare focused. Some of them are more caregiving focused. I picked this one to start off with because when it comes to the future of work, that time is now, and I also feel like I want to think about this demographic, not as a demographic that is frail.

I want to think about this demographic as one that has so much wisdom to provide and to give. If we can create software platforms so that their wisdom can be passed on, that would have a tremendous effect on society.

So, that was what I decided to start off with. I wanted to have something that my parents, for instance, could use. They happened to be owners of their own businesses. My father runs his own law firm and my mother runs a jewelry manufacturing and crystallization business and she has like 30 people working with her. But they are in their eighties now and they are able to keep on working because they have created that for themselves.

I think the portion of the population that has an employer, they are not business owners, and how it is going to be very important to help companies think about “How do you keep this workforce agile?” If you see what is going on in Japan, you have people who are working well into their nineties and not because they have to, even though a lot of people might have to from a financial point of view, but because they want to.

It gives you connectivity on a human level and I think that is important. I think work is where I’ve derived a lot of satisfaction. It is the same with my parents. So, that was why I decided that the work-front was an area to start off with.

Shubha Chakravarthy: That makes a lot of sense. We hear a lot about what it is during the dark moments when you are going to face the challenges.

We have all heard the advice that you have to have a personal reason, you have to have some mission driven reason why you picked this. If somebody asked you that, what would you say?

Vanessa Liu: I think for me, I was building something where I knew that basically in a few years’ time, I was going to be in a demographic where I can experience ageism. I started hearing stories from people who were 5 to 10 years older than I am, and they were experiencing rampant ageism.

There was this one woman I know who has been an incredible marketer and a Chief Digital Officer, and she was looking for her next gig around the pandemic and she said, “You know, this one company told me that they were looking for somebody with more energy!”

She is one of the most energetic people that I knew, and I just started thinking that I need to work on this because women and people of color are disproportionately affected.  If I don’t work on this, there is going to be even more discrimination at that level and for some people. So, I just feel like this is an opportunity to create something that I would want to see in the workplace for myself.

Shubha Chakravarthy: I love it. I’m totally in support of the whole concept. So, you have the idea, you have talked to a few backers, you have got some sense that it has legs. What did you do then to test it? What kind of experiments did you run? Can you walk me through some of the early steps you took to validate the idea further?

Vanessa Liu: I only had an idea, but what I did was that I put it down on paper and I started testing this with a couple of CEOs and CHROs that I happened to know, just to get their feedback.

I was really lucky in that very soon I realized I had two companies who were willing to take a bet on me, and they basically said, “If you were to build this platform, we would find ways of using it.” So, that was what gave me conviction to go out and build this.

Shubha Chakravarthy: Now you have gotten almost like two orders, you have gotten enough legs to make sure that there is something in there. Then what happens? Walk me through the sequence of the steps, because B2B is a very different market than B2C and I think there is not enough knowledge or wisdom out there in terms of how you do it?

What did you do next? Did you come up with a business model first? Did you come up with a prototype? Did you put a development team together? Can you just give us some nitty gritty around how that all played out?

Vanessa Liu: The first thing I did was that I raised money because I just felt in order to do this well, I can bootstrap it, but I won’t be able to get the best type of engineers on board, and I knew that in order to get this out there, we needed to spend like at least half a million to a million dollars.

It made me realize that I should just go out and get funding. So, I started talking to a couple of potential investors I had been talking to, and they said, “We’ll back you”, which is great. I was just very lucky. I was able to raise my pre-seed round in a very short period of time.

Once that happened or I should say simultaneously, I brought on a co-founder. One of my work best friends from SAP was the SVP of HR and she was our Chief Diversity and Inclusion Officer and Head of Global Health and Wellness. She knows the HR buyer inside and out and, I couldn’t imagine anybody I would want to build this business with. So, that’s how I brought Judith on board.

After we got the money and we just started thinking, “Well, we have to build a team. We have to think about the prototype” –  I had to put down on paper what I thought that the actual product should look like and then set about going out there and finding engineers to work with and also people on the product and design side so that we can get into an iteration of “Let’s build the product.”

So, that took a few months and here we are about to launch our MVP very soon because we have a couple of our products now.

Shubha Chakravarthy: Congratulations! I’m excited to see where that goes. So, the engineering side is going on its way, but there are other components to the business model. How did you start thinking about the revenue model at what point did you start thinking about it? How did you test both the revenue model and the exact pricing strategy?

Vanessa Liu: We haven’t gone out there and we are still pre-revenue, but we have tested the pricing with our potential design customers to say, “Hey, what would you pay in this type of situation for this type of business?” Having had a portfolio of 87 companies at SAP whereby maybe about 40% of them were HR tech focused, I knew what pricing benchmarks look like and what companies would think about.

So, from there, I just decided, “Okay, I think that this could be a usage-based model and we can test what that could look like. “Also, just to see what the ROI is, we just ask companies themselves, “What would you pay for this? What are the analog types of services you are paying for? How much you are paying there?”

So, you get a sense of what is out there. The companies that I’ve worked with, I’ve always said when it comes to pricing, especially with enterprise that you have to price it based on the value that you are getting.

So, if you are holding onto an experienced worker, losing an experienced worker can cost upwards on average $350,000 for a company in terms of lost productivity, lost innovation, lost relationships. If I say, “Hey, I’m just going to take a fraction of that. You will be able to hold onto these people for longer, and for that knowledge transfer, I’m going to charge you X dollars for it. What do you think?” They will say yes.

That’s how you gauge it and that’s how you talk to customers about it. I’ve always said that the moment you know your pricing is right is when your customer grumbles a bit, complains a bit, but still accepts.

Shubha Chakravarthy: I love that. I’m going to keep that in my little notebook for future. One other question on this. You had the benefit of knowing what the market was and knowing your domain very well in the B2B market. Let’s say there is someone else who doesn’t have that insight.

What recommendation would you give them? Let’s say it is a portfolio company in one of the cohorts that you oversaw during your SAP days. What advice would you give a founder in the B2B space, particularly the tech space, to get a better understanding of what potential pricing points could be?

Vanessa Liu: I think so much of this is about going out there and doing the benchmarking and thinking about your value and knowing what pain point you are solving for. I’ve seen so many companies build beautiful products but I’m always like, “Well, it is beautiful. What problem are you solving for your customers?”

If you don’t understand that, well then you can’t price it adequately. So, I always tell the companies I work with, you have to understand what it is that you are solving for, and to ask what their alternatives are for solving that. Then you could see basically, on the back of that, how much value you are probably providing.

The value-based side is so important. I know so many companies that go in and they are like, I’m pricing this at $500 a month. I’m like, “Why? That sounds so low. Is that all you are going to charge an enterprise? Just based on that?”

They are like, “Yeah, because we don’t want it to be too low.” I’m like, “How are you gauging this at all? I think you have to go out there and really understand your customers.” So, I think that talking to potential customers, understanding where they are coming from, there is nothing compared to getting that in real life.

Shubha Chakravarthy: That makes a lot of sense. So, is it fair to say then that at least in this B2B space, having domain expertise is more important than maybe a B2C space where you can come in and make it easier to gain a foothold?

Vanessa Liu: I think you have to know your customer well again, and you have to know what it is that they are willing, to do. I think domain expertise in B2B is so important. A lot of people think that B2B is unsexy because it is just not what people think about.

But I find it extremely exciting if you are solving a company’s very big problem for them. What is keeping them up at night. That is exciting. You could get six figure deals, and seven figure deals like that. That I think, is very exciting, but the sales cycle is much longer as a result.

Shubha Chakravarthy: To that point, how do you think about the customer acquisition model once you pass this beta stage and into more of an end state type of growth?

Vanessa Liu: So, what we are trying to do is to make sure that we can have something repeatable. The way that we see it is that in the beginning, we are lucky. We have four design partners that we are going to work with. So, we are going to see how it works in the wild within their companies. They are very forgiving. They know us and they would forgive us if we make mistakes.

Once we get that product down and we think there is something there, then we would just turn on and be like, “Can we sell this to other customers? Can we make them user studies and use cases so that we could take it to other customers?” That is what we are going to do so we could have something repeatable.

Shubha Chakravarthy: It sounds like that is a model that you could pretty much lift and shift into any B2B situation where you use each client as a use case. You collect the data you go in knowing that you have to be able to prove something to your next customer, and then you keep iterating on that and improving it with each new customer. 

That brings me to the question of collecting data and being very thoughtful and intentional about whether it is product building, design testing, or that you have to be very data oriented. Are there some general principles in terms of how a founder should think about what kinds of data she should collect or how she should go about doing it, so she doesn’t overwhelm either herself or her team in that process?

Vanessa Liu: The great thing is that you have so many tools out there to capture this data. How are customers using your piece of software? Where are people dropping off? Where are they spending a lot of time? You could use sites like “Keep” for instance, and they can, provide you the telemetry in terms of what is going on. So, I think it is very important to have those feedback loops in place.

We are going to be very data driven in terms of what it is that we are going to try to do. If we see people getting stuck, we are going to try to understand why they are stuck so that we can unpack that and remove the friction. So much of being able to hone software is understanding where the friction points are, like when you pick up and use Airbnb right now, it is so easy to use, but that comes from years of testing, of using it with consumers who are able to say, “Oh this was really hard for me to find” So, this is what I’m going to do to change.

Shubha Chakravarthy: Building on that, we have talked about some of the most critical, call it market facing  capabilities. One other piece that I’ve heard come up again and again, especially in the B2B enterprise market is the ability or the need to keep your customers happy because each customer is different. Each one is a pretty high-ticket deal, and everybody wants it a little different, and everybody wants it just their way and not somebody else’s way.

So, there are two potential product problems with that. One is in terms of product design, how each person wants it just their way. Then secondly, how do you keep this customer happy and serviced preferably over the long term. How are you thinking about those two aspects as you grow and build out to full?

Vanessa Liu: That is something that we are thinking about right now. Like, how do you work with your early customers where they might have a lot of requests? There is always going to be a question of, “Is this a request that is only going to be idiosyncratic for this organization, or is this going to be one that many other customers are going to ask for?”

Making that difference to say, “Hey, this is something we can do. That other bit we don’t see other customers using it. We might put that farther down on the roadmap”, but being able to be very open with them about it to say, “Does this work? What else do you need to see?”

Making sure that you have that open dialogue for feedback and where they are part of the design process, which is super exciting, but also where they can get first dibs on a particular product feature.

Shubha Chakravarthy: That is pretty helpful. Then coming back to a slightly different piece of the whole puzzle, this is a long process where you start off, after several months you have multiple folks who are in the picture.

How did you and your team hold yourselves accountable to the progress especially given that you took on pre-seed funding, to what extent were they involved in terms of setting the milestones and how often did you have to interact with them, internally as well, and then also with investors?

Vanessa Liu: Internally, a lot of the goal setting comes from my co-founder, and we basically said, “For the first year I know what it is like to get to the next challenge.” I’m like, “We have got to get at least 10 customers using this and to see how this goes.” So, that is really important.

In terms of investors, they provide feedback on the milestones that we provide and I’m really lucky in terms of having very understanding investors who are just like, “Yes, you know what it is that you are doing because you are an experienced founder. At least this is your third go around. So, you know what it is that you need to go after.”

Shubha Chakravarthy: So, you get a little bit of grace and a few more degrees of freedom than potentially a first founder. Then coming back again to the funding question, you have gotten your pre-seed funding and you need more funding. How do you think at the get-go? How did you think about funding? How are you thinking about it now and how do you prepare yourself for the fundraising that’s going to come down the line?

Vanessa Liu: So, the way that I see it, I know I’ll be able to take the business to a certain place before I need to raise again. I want to be able to have specific milestones in place so that I can then scale the team. It is always about “What do I need to do? What do I need to use the money for?”

It is to scale. In this MVP stage the whole idea is to make sure that we are able to launch a product out there that people will really love and will want to use. I know that it will be time to raise again when I’m like, “I just can’t manage all of the sales by myself.”

Right now, our team is pretty much product and engineers. In the moment when that happens, I’ll gladly try to hire salespeople because we are bringing revenue. “Can we step that up?” That is what we are going to try to move towards and think about the milestones.

I usually tell companies for seed, that means you have a product launched. You also have some type of traction with customers, some type of early signs of product market fit. When you get to an A, you have to have product market fit there and you have to have some type of repeatable sales process so that you can just scale that out. So, that is what I’m thinking of in terms of the tranches.

Shubha Chakravarthy: That makes total sense. Can we talk for one second about product market fit? I’ve read a lot of stuff on both sides of the product market fit. There are some who swear by it and won’t move forward. There are all kinds of metrics in terms of “This is when you have hit product market fit.”

There are others who say that this is just something that Silicon Valley VC folks made up. What do you think of as product market fit? What should a founder be shooting for to ensure that she has actually nailed product market fit?

Vanessa Liu: When it comes to product market fit, it is about your ability to put out something that is just not great, but something people are desperate to use. They’re just like, “Oh, I cannot imagine life without this.” That’s when you know you have product market fit, and I think it’s so important. I feel like the term hasn’t been around for all that long, but it is a concept that you think of.

You think of Sarah Blakely and when she first manufactured Spanx. It was like literally, “Let me just take some pantyhose and just snip it on the bottom and that gives me shape, right?” It is not like a very sophisticated product, but women were like, “I can’t live without this.”

That is when you know you have something that people really want and that is the “Aha!” moment that you are trying to look for. Do you have something that companies are like, “Oh, this is so good in comparison to how we would do it, beforehand.”

I think that is so key to look at.

Shubha Chakravarthy: Then there are two aspects to it? There is one where you as a founder need to be convinced that you found it so that you can then go ahead and scale that whatever that moment is, that inflection point.

How do you know that you don’t have false positives? Then secondly, what do you need to demonstrate to investors that you have indeed found product market fit?

Vanessa Liu: Having the repeatable sales process, I think here founder led sales can get you very far. I know that right now that is where we are in the business. I can call upon, I’m lucky, probably more than a handful of companies to say, “Hey, will you try my product?” They’ll probably say yes.

But, the true test will be approaching companies I’ve never met before to say, “Would you try this?”, to see if they love it. If you can have somebody sell the business who is not the charismatic founder, that I think is when you know you have something that is truly repeatable. I always look at how the companies have gotten their early customers.

Shubha Chakravarthy: It almost feels like you should be ready to almost hand it off to an external salesperson, I mean external to you. That feels like a good test for, if they can do it and still get companies to sign up, then you probably have something that is not reliant on you as a founder or your passion or your energy in terms of bringing orders to the table. Is that a fair characterization?

Vanessa Liu: I think so. Also, where you’re just like, “Hey, I can see this. This has happened before. I can see this go again and again with different customers that are in the same place”.

Shubha Chakravarthy: Now I’m going to ask you about fundraising and sources of capital. You have had experiences on both sides of the table in terms of helping other companies raise as well as you potentially raising in the future.

How do you think about a company developing a capital stack? What should the considerations be and how should you come up with a stack that says, “I need this much, I get this from X, Y, Z sources, whether it is angels, VCs, dilutive, non-dilutive?”

Is there a high-level approach that you could lay out that a fund founder could use to develop a capital stack?

Vanessa Liu: The way that I always think about it is in terms of the stage. Of course I think if we are thinking about the stage earliest on getting the first checks into the business is usually the toughest, for a first time founder because you are asking people to take a bet on you, you don’t have a track record just yet.

I always think about trying to go for as supportive of an investor base as possible. That is the first and foremost thing that I look for. Then I start thinking, “How much do I need? How many investors do I actually want to handle?” Because you don’t want to have so many investors to speak to because that is a lot of work.

A lot of investor management would waste your time. So, I think it’s important to get that right. So, if you are raising a million it makes sense to me to be like, “Hey, I’m going to cap the investors at, say ten so the average that the check size is a hundred thousand.”

Now not many people can write a hundred thousand dollar check, so that’s just something to keep in mind. But if you are asking for that type of money, you probably have at least something to prove to go out there with.

So, that is how I would think about it. I also think about getting investors on board at the get-go, who can help you with the business.

I happen to have incredible angels who are in areas that I know I’m not great at. I’m not a technical co-founder. I’m not somebody who has been an engineer before, but I have somebody who is the CEO of a company, but he has essentially been their head of product.

I have another investor on board who is a CTO of a very large e-commerce business. I have somebody also on board who is an incredible tech recruiter. So, they are able to help me because angels in the beginning want to help you because that is part of the fun of being in a business in the first place. So, thinking through strategic angels to bring on board is very important.

Shubha Chakravarthy: That triggered another question, which is in terms of this board of advisors, some of which can be your angel investors. Do you have any thoughts or suggestions to founders on when they should bring on a board of advisors and what they should keep in mind? Who makes a good advisor, who doesn’t? How does one compose that team together so that they have the best shot at scaling this?

Vanessa Liu: I actually think about putting together a board of advisors from the get-go. That is what I did, because these are people who can help you in areas like somebody who could help you think about the product and the engineering side.

Somebody who could help you think about sales and marketing if you need that. Somebody who could help you think about customers, and that is another area. I think it is so important to have that from the get-go. It’s a very tough way of starting a business without having those types of people in your back pocket whom you can lean on for relationships.

Shubha Chakravarthy: How do you know if somebody is going to be a good advisor or not a great advisor? What is a test for that?

Vanessa Liu: I don’t offer people advisory roles from the get-go. I need to get to know them. It has to be people that you trust. It has to be people that you think could really add value. That is so important.

Also asking other founders, “Have they worked with these people before? What is their reputation?” It’s so important. I work with people that I tend to know, or I know other people who have worked with them. It is a very tight knit type of venting that I have.

Shubha Chakravarthy: It works for you and I can certainly see why it would work. It definitely de-risks a lot of the volatility you’d face early on. Coming back to your journey as an entrepreneur in this entire setup, was there any other support that you discovered or realized that you needed along the way? If so, what was that kind of support and how did you get it?

Vanessa Liu: For me, whenever you’re building a product it is always about getting the constant feedback, getting people out there, because it is my third go around, I knew what it was that I needed to do, like stack the chips, have advisors from the beginning and to work with them.

I think though, no matter what, when you are putting together a new team and you are thinking about the dynamics, you just never know. When you are working with people for the first time, on the engineering or the design side, are they going to fit with you culturally and what’s going to happen there?

So, giving yourself the leeway to work with people because you won’t really know how you gel until you start working with them and planning for that because sometimes the first people that you get on board, sometimes they are great, and they are the right hires and sometimes they’re not. So, just to be aware of that is very important.

Shubha Chakravarthy: What have been some of the challenges that you’ve faced? Clearly you come to the game from a very different place than what I’ll call a typical first time or even a typical founder. Are there still challenges, and if so, what kind of challenges have they been?

Vanessa Liu: I think for me it is always about the people. I want to make sure that we are cultivating a culture of excellence and that we have a team that is just working so well together. So, I think in the beginning my big challenges have been on the people front, like are we getting the right hires?

It always it takes you longer than anticipated. So, that has been the challenge. I certainly have seen over the last year; it has gotten a little bit easier now that the tech market at least is a little bit more founder friendly because so many people were just going to the large fangs and being very well compensated.

There is now a lot of talent available, but it is still hard to find, and so being able to navigate that has certainly been our number one challenge.

Shubha Chakravarthy: What has helped you navigate that, and what have you learned about picking the right people or getting the right people outside of external market forces?

Vanessa Liu: For us, it is actually having the people to help you vet. So, that’s what I lean upon our advisors for. “Can you suss these people out? Can you just give me a perspective of what you think about them?”

Shubha Chakravarthy: Have there been any inner challenges in terms of dark moments when you have been tested, and if so, how have you overcome those?

Vanessa Liu: Not this go around, thank goodness because I feel like everything I’ve seen, I’m like, “I’ve been there, done that.” So, nothing really fazes me.

Shubha Chakravarthy: On the flip side, has there been any moment in this journey, which has been like a highlight that you feel really good about that you didn’t expect going in?

Vanessa Liu: Nothing that I didn’t expect, but nothing feels better than showing your product to a customer for the first time when they say, “Wow, this is great! I want to use it.”

It’s a high that I get every single time. You want to keep getting that high, right? You never want to get desensitized  to that high.

Shubha Chakravarthy: As an Asian and as a woman of color, what would be your comments in terms of the founding journey itself and any bits of wisdom that you would offer to others like you?

Vanessa Liu: I lean upon so many other founders, like for this part of the journey and like I’m a part of a couple of women’s groups and women founder groups and they are great because sometimes it feels really lonely and I think like being in then and realizing that you are not alone and there is support out there is very important.

There are like a lot of opportunity to get help from large corporates. They have great programs, so that is just something to think about as well.

I happen to be part of a group called Gold House Futures. So, Gold House is an Asian focused community, and they also are just bringing founders on board. It has been great just to meet other Asian founders.

I’m also part of this group called Dreamers and Doers where we are in the beginning that you might be like, “I need somebody to look at copy right away.” You could just ping the group and be like, “Hey, do you know anybody? You can do this. So much of that is great and so having that is wonderful.” So, that is like what we have now.

Shubha Chakravarthy: Fantastic. So, is there anything at all that you wish you knew at the start of this journey? Already came to the starting line well equipped, but was there something that you learned along the way that you didn’t know to start with?

Vanessa Liu: Just being flexible. I knew that going in already, but just being open to flex and think about what to launch with is very important. I just saw that here, like what we are building is to help companies hold on to employees with flexible arrangements that to facilitate knowledge transfer at the beginning we just thought, “Oh, let’s go in with the flexible arrangement side.”

But now as you know, economy has turned to cost cutting and layoffs. The knowledge transfer piece is actually even more important.

So, remaining nimble, is something really important. I just feel like being able to have that going in to be like, “What if, what are the black swan events that could change your business?” Being very clear about that is important.

Shubha Chakravarthy: Have you discovered any ways of figuring those out and developing better intuition and judgment around those black swan events. What would help you hone your skill?

Vanessa Liu: I think it is more just being aware of what is going on, being aware of the trends, talking to customers, and having that be something constant. To get that input is really important.

Shubha Chakravarthy: So, to conclude, what one piece of advice, one takeaway, would you give to others listening in who want to follow in your footsteps?

Vanessa Liu: I just think that it is so important to follow something that you have a deep conviction on, and so if you have something that you can’t let go of, go for it. So many people say, “I’m so risk averse”, and I always say, “Well, what is the downside?”

The downside is that you’ll just default to do something you’ve done before, but if you have an idea that you are very passionate about, why not give it a try? It is one of the most exhilarating journeys you can ever have in your Lifetime.

Shubha Chakravarthy: Fantastic. Is there anything you wish I had asked you but I didn’t?

Vanessa Liu: I think you covered a lot.

Shubha Chakravarthy: That’s what I’d like to hear! This has been an absolutely amazing conversation, Vanessa. Thank you so much for taking the time. I know that I learned a lot and I’m pretty sure others will learn quite a bit too from this. Thank you for being so generous with your time and insights.

Vanessa Liu: Thank you so much!