While some startups continue to dream of getting into the Y-Combinator, the Ukrainian startup AXDRAFT did it. Yes, it did not work the first time, but can you imagine how hard it was! By the way, in February, AXDRAFT attracted investments from the Overkill company with an estimate of 1.33 million euros.
How do they do that? This is a question we put into CEO of AXDRAFT Yuriy Zaremba and figured out what is the secret of a successful startup.
What is AXDRAFT and who is your project for? What is the mission of the project?
Thank you for inviting me to share my story with you. AXDRAFT was born from my experience as a lawyer.
There was a fair share of routine tasks in my legal life and I thought that there should be a better way to do it. With that idea, I approached my brother Oleg, who is an amazing software engineer. Together we have built AXDRAFT to relieve lawyers from routine work and advance commoditization of legal services. This is our mission, which we declare publicly on our website along with our values, such as:
– Be so good they can’t ignore you.
– Everyone matters.
– Don’t work with bad people.
– Never stop.
If your readers want to try how AXDRAFT works, they can always do it at business.axdraft.com for free and with no registration required :). I encourage everyone to try it and give us feedback.
In light of recent successful investments, it is especially interesting to find out about the failures that you faced during your project development and the way you managed all of them. Would you share your experience?
I wouldn’t say we had many failures, I would call them challenges because every mistake or failure is just an opportunity to get new experience, learn and get better. We had problems with a product, which were so complex we thought, we won’t be able to solve them, we’ve made mistakes in terms of sales and hiring, but I am not sure that the details would be relevant to your readers.
The main secret to going through challenges when you build a company is having a mindset focused on figuring out a solution to whatever trouble you are in and learning from it. Startups die, because founders give up, not because they face an obstacle, which is impossible to overcome. So, never give up 🙂
What is the story with TechStars London accelerator? Why it was so important for you to get there?
When we started AXDRAFT we thought that we will be able to figure it out on our own, but eventually, we learned, that we lack the necessary knowledge and experience, so we started looking for accelerators to teach us how to build global companies. TechStars London is the best accelerator in Europe, so applying there was a natural choice, but getting through the application process and to the first rounds of interviews was a total surprise for us. We thought we were not good enough to capture interest of the best accelerator in Europe.
Getting into a top accelerator is like a rocket launcher for a startup. You get to work with amazing mentors, who have built successful companies in the past, you absorb their experience to build your company faster and in the end, there is Demo Day, where you pitch your startup to hundreds of investors at the same time and, in most cases, get your first investments.
What did you not count on preparing for a speech, and during the presentation?
I believe there were two reasons, which prevented us from getting into TechStars London.
The first reason was that we were not able to make it to the interview in person, which put us in a huge disadvantage compared to other startups. At this stage, investors invest in teams, so if you don’t have a chance to make a personal impression on a selection committee, your chances of getting in are lower.
The second reason was that at that point of time I was not able to explain the competitive advantage of AXDRAFT over existing solutions in a compelling way. It is very important to show to investors that you have an idea about how to dominate your market and a probable path to your startup becoming and unicorn.
What was the hardest thing to communicate with Techstars London? What questions went unanswered, and how did you deal with such situations?
The TechStars wants to see that you have a solid understanding of your market and have thought about different aspects of your business, such as sales strategy, strength, weaknesses, buyer personas, competitive advantages, market size, future challenges etc. We tried to prepare really well to every call, we researched our market, we thought about every question possible and trained for it, but each interview was a bit of stress.
I believe that one thing that helped us get to the final round was that when we did not have a solid answer to the question on the interview, but got invited to the next round, we started a new interview with an answer to the question we missed on the previous one.
This showed TechStars that we are thoughtful and learn from our mistakes.
If you had one more chance to make the first impression on Techstars London, how would you prepare and how would you present yourself?
I think I would not change very much. I believe we did a good job. One thing that I would change is that I would focus more on giving a clear explanation of our competitive advantages over existing solutions on the market and explaining our long-term vision.
What is the wrong way to prepare for an important meeting with representatives of accelerator you are interested in?
Don’t be arrogant and don’t think that you will figure out the answers on the go. Come prepared, know your market and approach this as if
decision can make or break your startup. there
What would you recommend to other startups before such a big event?
The main task of every founder, who wants to get into top accelerator program is to prove to the selection committee that he or she is an expert in their field and are committed to making their company a success. This is not as easy as it sounds since you have to deeply understand your market and users. For me, one of the examples of good preparation is when you know your market size based on bottom-up calculation.
This means that you take the number of users that could use your product and multiply it by the price you want to charge for it.
This is a fair and thoughtful estimation of the market. If you are in
fintechand you say that your market is trillions of dollars worldwide this shows to me that you didn’t think enough about who is your customer at this stage of your company.
Why did you receive refusals from Y Combinator?
Because Y Combinator is the best acceleration program in the world. We learned from each rejection, iterated on it and finally on the third try have been invited to join Y Combinator class of Winter 2019.
What promotion methods are the most effective for your product?
We are still experimenting a lot with it. So far all our customers come to us from direct sales and warm intros from our existing customers.
How did you manage to get investments on 1.33 mln EUR valuation?
We got investments on 1.33 mln EUR valuation of our company. We got there by understanding our market, our users and being able to confidently and clearly show this to investors. This is still just the beginning and we are planning to attract more investments in the near future.
At what stage of development are you now?
We are considered to be early-stage startup, trying to find its product-market fit and looking for seed stage financing.
As far as I know, you are currently in the USA. Is this somehow related to AXDRAFT? What are your plans for further project development?
Yes, we have moved to Silicon Valley to continue building AXDRAFT on US market. We believe there is a high demand for our product here.
What is the most valuable business advice you have ever received?
Talk to your users and do things that don’t scale. Your users will help you build the product, which will satisfy an actual market need and this is the only way to success.