Behind every startup's story of raising millions in venture capital, there are the real stories of long nights, pivots, failed ideas, declining revenue, and struggles of finding product-market fit.
In our opinion, those are the stories we like to hear.
When you make it out of chaos and learn from it, real growth happens, and somehow you find yourself scaling your business. Unfortunately, these stories are rarely told. For this reason and more is why we were so excited to talk with the cofounders of Lendtable. The cofounders, Mitchell Jones and Sheridan Clayborne, met with us to talk about their journey acquiring customers, finding product-market fit, and the lessons they learned while building their startup.
But first, what is Lendtable?
Lendtable is a 401(k) cash advance fintech company that allows employees to take full advantage of their 401(k) match all at once without needing to use any of their own money. Once their money is vested, Lendtable then takes a portion of the profit earned.
"Lendtable is a product many of us wish we had at some point in our careers – accelerating wealth creation by making it affordable to take full advantage of a 401(k) employer match and ESPP without losing a chunk of your paycheck," SB Opportunity Fund Managing Partner Shu Nyatta said about Lendtable.
Growing up, Mitchell and Sheridan saw how many people were unable to save or financially plan for their futures.
"As a Black-founder, I saw this problem in my own family and community," Mitchell said. "Very few people were actually saving for retirement, not because of a lack of interest but a fundamental inability to part with their money. Women, minorities, international employees, are all significantly less likely to take advantage of their employer's benefits. So we at Lendtable help to bridge that gap."
Since launching, Lendtable has raised over $26 million in venture capital, and has disbursed over $2.4 million in match benefits to employees.
Getting their first few customers
As an early-stage startup, quickly building your customer base can mean the difference between succeeding versus failing. To get their first set of customers, Lendtable did what most founders do - they did things that didn't scale and also tried traditional methods of reaching customers.
"We would post on Facebook and LinkedIn and say things like 'Does anybody have a 401(k) match they’re not using? If so, I would love to talk to you.' We also cobbled together a Squarespace page and added a Typeform to survey our audience. The early days were very, very hacky, but for most companies, that's how they start. It’ll be slow, but then it gets bigger and bigger from there," Sheridan told us.
In addition, they also had their friends sign up and would use the media as a brand awareness strategy.
"Usually in the early days, the lifecycle of how you get users is that you try to get your friends to sign up. If you can't get your friends to sign up, then you're gonna be looking at a very interesting journey ahead," Mitchell shared. "At Lendtable, we really got customers, brick by brick. We would work with other startups that had blogs and get Lendtable on their blog. As we got bigger, we realized that we needed to consistently get to where our users were, and that’s when we hired a marketer. Once we hired a marketer, we really started to grow."
"Since hiring our marketer, she’s helped us consistently use the channels that our customers were on to speak their language and to meet them where they were. Doing this has helped us grow significantly since we first started. Now, obviously, there's more to do and more to go, but the biggest thing for us was to get those first few users. To do that, we were doing every single thing. We were posting on social media, calling them up on the phone, messaging them, and pretty much doing whatever it took. From there, we focused on building more of our product, and people started organically signing up. Also, we focused on speaking the language of the people we were serving. So many startups don't invest in understanding their user. For us, we knew we needed to use the mediums that our target audience was using and needed to communicate with them the right way," Mitchell said.
Determining the best customer for right now
No matter how dope your business idea is, everyone isn't your customer - and that's okay. You can't please everyone and can't be everything for everybody. But, how do you determine who your ideal customer is? How do you figure out who is the best person to go after in this moment?
"At Lendtable, one of the things we had a strong opinion on was we should go to where there's the most pain. Because of our product, we knew that employers would benefit from our product, but the biggest pain was with the individual (the employee). As we all know, there is nothing more painful than saying, ‘Hey, I could have had $5,000 more every year to go towards my retirement. But instead I'm not going to get that because I have student loans.' There's nothing more painful than that," Mitchell shared. "At Lendtable, our goal was always to go and solve the pain. When you think about how you grow the fastest, you go to the buyer who's willing to pay for you to solve their pain and their problem. While targeting employers in the beginning would’ve made sense, it’s a strategy that we’re looking into now as we continue to grow."
"Also, when you’re just starting out and need customers, you should always go after the lowest hanging fruit. Then as you grow and build up the product, it’ll be easier to attract bigger clientele. For example, if we had 1000 people working at Walmart using Lendtable, it’ll be far easier to pitch Walmart corporate because some of their team is already using us," Sheridan added.
Finding product-market fit
Investor Marc Andreesen defines product-market fit as "Being in a good market with a product that can satisfy that market." As a founder, when you identify a need in the market and have built a solution that customers actually want and will buy, you've found product-market fit. Finding product-market fit is crucial for any business to grow and survive. Some founders never find it, some find it fast, and others find it slow.
"I actually think that product-market fit is a moving target and that it looks different at every stage of your company. At Lendtable, we’re always looking for product-market fit because we’re still growing," Mitchell shared. "The really good companies are always finding a renewed product-market fit. If you look at the big guys like Amazon, Google, and Facebook, you’ll see that they're never slowing down. You could argue that they have product-market fit on their core product, but they’re always looking to create new ones. For us, it's a similar thing."
Advice for founders
During their time growing Lendtable and navigating previous business ventures, Mitchell and Sheridan have learned a lot.
When asked to share their advice for founders, here's what they had to say:
On going from idea to prototype
"If you can't convert customers when you have nothing or when you’re not where you wanna be, you won’t be able to convert customers when you have a full blown app. For this reason and more is why you should rapidly build out your prototype or MVP, but don’t overly build and spend too much time or money on it. Build the simplest thing to get people in and to get feedback, and then grow from there," Mitchell shared.
On earning revenue
"When you’re building your business, the most important thing you can have is revenue. You need to be very critical about why your revenue numbers aren’t ticking up, and be intentional with your goals. If you’re pre-revenue and you’re using some other kind of metric for success, you need to be ultra critical about that progress too," Sheridan advised.