UX for AI

EP. 78 In the Trenches: What Works (and What Doesn’t) When Partnering with High-Growth Startups

• Bonanza Design

Share episode

Send us a text

 In this episode, we dive deep into the world of early-stage startups and the challenges they face in bringing their products to market. We'll discuss the importance of speed, customer-centricity, and rapid iteration. 

Join us as we explore the evolution of Bonanza, a design and strategy studio that has expanded its offerings to include full-stack development. Learn how they've leveraged their expertise in UX design and product strategy to help startups accelerate their time to market. 

What we discuss in this episode:

  • The importance of speed and agility in early-stage startups
  • The role of customer-centricity in product development
  • The challenges of scaling a design and development studio
  • The art of effective pre-sales and client communication
  • The importance of process and infrastructure for long-term growth

Tune in to gain valuable insights into the startup ecosystem and learn how to build successful products, faster.

Interested in joining the podcast? DM Behrad on LinkedIn:
https://www.linkedin.com/in/behradmirafshar/

This podcast is made by Bonanza Studios, Germany’s Premier Digital Design Studio:
https://www.bonanza-studios.com/

So yeah, Bonanza has been traditionally a UX design and strategy studio, right? So because of my own background that. So my background is that I worked in Berlin startup scene and I didn't know it in the beginning, but I had this massive entrepreneurial drive and I wanted to just, you know, get busy and I was basically looking for trouble, good trouble, founding trouble. So I started in Berlin startup scene as a designer, UX designer. Because that was the closest job I could get in startup because of my education. I did the master in design thinking and innovation. So I wanted to do, I wanted to work in startup scene but you know, you need to be really useful in the startup scene. So I thought UX design could be the closest. So when I started working in the startup scene as a UX designer, soon I got to know my other side which would be my entrepreneurial drive. And by pool of the market I started working in early stage startup as part of our founding team. So I was part of two founding teams and you know, when you're part of a founding team of a startup, you don't do only design, you basically look into many different areas. So that helps me to become a well rounded designer, knowing a lot about tech and also knowing a lot about product. So at some point I was designing at the same time taking care of the product and actually for I think for six months I was interim CTO too because we didn't have a cto. So I was doing all the three at the same time. So fast forward, when I started Bonanza, our company, I brought all of my experiences in working in early stage startups. So by default we are offering really fast services, very well catered to the needs of early stage startups, right? So in a very short time span in within four years we worked with over 50 startups because basically we offer them speed and quality at the same time. So we try to get this combination really right. And the difference that we, the difference in offering our services is that we're also very customer centric. So basically we become fractional strategy and design team. It's something that it's embedded in all of our services and it's a very, very key value that we are offering, right? It's basically stickiness of our services because we basically become their team for a while, sometimes three months, sometimes six months, sometimes nine months, sometimes three years, right? And then we basically support them with different initiatives because we get embedded so quickly in their operation. That's why like, you know, we can drive a lot of impact, also help us to not having this walking, walk out clients, customers that they want something quick and they want to get it done and go away. We don't typically work with these kind of clients, so that's a history of bonanza. But over time in the past four years, what we've learned is that a lot of apps that we designed, either they didn't go to market at all or they went to market with delay and the delay was a year, two years, whatever the case. So again by market gravitation, market pool, we realize that there is opportunity here because we see that, well, if you look at the development world industry, there are many development agencies. But what we saw that, okay, our clients came into us, they designed their application, they get their strategy right, but they don't go to market. Seemingly there is something wrong with the development agencies that are working because they don't help them to go to market as fast as they need to be. It's a world of startups. The bottom line here, you need to be fast. It's. It's just, it's just that there is nothing else around it. You need to go fast to the market and start learning. Right. So then we realized that okay, if no one, no other agency does it the way we do it on the design front, we got to release the development offer as well. So we started working on our development package and released it to the market in April 2024. And well, so far we have been overwhelmed. Right. So now we go from research to strategy design and development. Again, we are a fast to go to market product studio and because of our speed, we get a lot of different demands sometimes for a year or two. We did help some of our clients with demand generation and all the good stuff that you probably know more than me. But we de prioritize those initiatives because I'm really careful about offering services that we can really get behind. Right. So quality of delivered services is really important for me. So we realized that we don't want to invest on that front. Demand gen and basically filling up your pipeline, that's something we don't want to like really focus on because you really need basically, you know, we are a small team, we are a team of 11 people. You really need a team of another team of 11 people that equally obsess with demand gen to do a really good job on that front. So we deprive that. And you are now focusing on, on only research, strategy, design and development. Yes, you definitely get to market feedback. Market is most important to get as soon as possible and most Companies make the mistake of thinking they know how to make that product themselves and then just show it to their customer. Unfortunately, in a way you work with early sales startup, most of early stage startup are tech companies. So you would expect that the founders, they have that level of literacy about agile deliveries and agile development processes. Some of them do, some of them don't. Right? Second timers, third timers, founders, they understand this. They have better awareness about their weaknesses and strength. So because they have already gone through the founding process, so, so for them, when they want to start working on a new company, it's easy for them. I'm really good at these areas. I'm not really good at these areas. For these areas I'm going to ask for help. Right? Early first timers, first time founders, they have this delusional, I think they should, they should be delusional, otherwise it's a very tough road to go ahead. But with a bit of awareness and like having a good control on their ego, they could understand that. Okay, certain areas we're really good at. I'm a financier, I can do finance really well. I don't know so much about UX or development. I don't, my CTO is buried. To make sense of this new AI things. We don't have a good product team in house. I'm going to go ask for help, ask for partners. I think that's the awareness of the founders play crucial role to the success of the startups. Yeah, I've heard that before with first time founders it's less pleasant to work with them. I've heard, I've heard that before. Maybe that's not something you should clip for the podcast, but interesting that you said. The one thing I picked out of it is that you said we work much internally for three, six, sometimes even three years. And that's completely different from the designing you started with. Because designing usually is a one off thing. You just do it once and after that maybe if you do a good job you can do something else, but. Well, usually it's gone. And most interesting, like I'm interested in understanding how you actually position yourself as that partner before you start with the meetings. Because I can definitely see that it's easier to position yourself as that partner once you are in the meeting and you have started the collaboration. But what happens before that? How are you making sure that you position yourself that way? So here's the thing, we don't get 40 leads per month. Every business needs to make the decisions. I think for SaaS startups they need to have a lot of leads. Maybe that's the case. But generally the way we grew bonanza was through founder led marketing. I was doing founder led marketing before founder led marketing was a thing like six years ago, five years ago, I started my own personal brand. Right. So a majority of our clients come in because of my content on LinkedIn specifically. Right. So the education is already there. Right. So my pre sales calls is not actually about pitching how we work, it's about more discovery around what initiatives they want to pursue. Right. So a lot of my pre sales call is not about me proving my credibility, is more about them understanding what their needs are, what their goals are, who are their key investors, what they are typically on the initiatives that early stage startups pursue, it's a top down from the, from the investor. So they have to basically cater to those. Plus they have certain instinctual ideas that they want to pursue. So we have to always understand who are the key stakeholders, what's the risk of inaction. I think that's really important for the founders to understand. Okay, how long you've been trying to develop this app or develop this product or mvp, what are the obstacles that you have to go into the market really fast. So we try to basically understand what we can do, what we can bring to the table to help them to go to market really fast. So actually a lot of my pre sales call is easier than you assume. It's more about understanding where they are and how we can put together a team to get them to go to market rather than mean pitching for my credibility. Because our website is very clear, we have a lot of cases that is constantly posting on LinkedIn one or two, twice or three times a week. So we are trying to basically ease up the pre sales calls. We don't have too many leads per month, but the ones that come in, they actually most likely want to work with us. You have made your own life easier that way. It took me six years to build that reputation, so it's not easy actually a lot of work like for many years I publish post daily to get understand what works and whatnot. And it's a never ending game, it keeps changing and I have to always like read the market, see how I can innovate on my content. Right. These days I don't have so much time to think about it. I need to probably hire some support to help me with that. But it takes time to build the reputation, to build your cadence, but it's going to really, really play a key role in the long Term growth of your business. Yeah, maybe saying you made it easy for yourself is not the right term. But I mean you've done the hard thing to make it easier for yourself instead of making it easy for yourself to eventually have a hard time. And it's interesting to hear that. You also mentioned the risk of inaction because that's the thing most people don't take into consideration. They think, oh, I can do this or I cannot do this. And they look at the benefits of doing it or not doing it, but they don't consider the risk of not doing it or what they are missing out of if they don't do it. It's always the case. I mean, you know, a lot of folks, they try to basically, you know, in the presales call, talk about hey, opportunities here, what you can achieve. But it's, I mean typically when it comes to human psychologies, humans are more adverse to loss than basically pursuing reward. Right. So in the early stage startup game, what's the reality here is every month you're losing money, losses after losses, you secure some rounds of funding, God bless you. You have some money in the bank account, but month after month, negative, negative balance, 30,000, 40,000, 50,000 overhead cost. Right. So you actually feeling experiencing cost of inaction on a monthly basis in your bank account, in your bank balance. Right. It's a better conversation to be had. They understand much better. Right. So basically the way, the way I see early stage startup game is if you don't act fast, you will run out of your Runway. Right. And that's basically the way I would like to lead my pre sales guards. Isn't it reversed with founders because usually founders are more optimistic. Well, that's the whole thing. Why they start well, they should be, but at the same time they cannot close their eyes to the reality of their business. Right. It takes between one to three years. They get to a point that they have revenue, they have cash flow and become at some point profitable. So it's entirely up to them and their decisions to reduce that from three years, two years to one year to six months. Right. So there is typically what I would typically suggest to early say to start up, forget building team, forget investing your culture, just work with bunch of, bunch of really, really experienced folks in certain key roles. Whether they are on the payroll as part of your founding team or whether they're external, you have a good deal with them, they can support you really well on long term basis. What you need to do in the first six months is to go to market really Fast, have a very solid mvp, define and then start learning. Because essentially, you know what I have been preaching on LinkedIn is that if you think that you can win with the first version of your product, you really understand what kind of game you're playing. Maybe your product becomes so, so, so desirable and wanted after several updates. Iteration over the course of one to two years. Not the first launch. The first launch is just the beginning. You get the ticket to play. The first launch is your ticket to play in the world of startup, in the premier league, right. So to speak. What you do after the launch is going to make or break it for you. So it's essentially can you go to market really fast? More importantly, can you start iterating on your ideas and the iteration on your product experience needs to be a functional collaboration. So you got to have some demand gen folks, some sales folks, some marketers. By constantly trying to sell this product, get feedback, you've got some product guys, tech guys working together, come up with new initiatives, iterate, iterate. And this needs to happen really fast. And you want that feedback loop to be as short as possible. That's also why they say it needs, you need 10,000 hours of practice to become an expert, right? It's probably the same for you need 10,000 iterations before having a perfect product. Could be, I mean I don't know about 10,000 iterations but a lot of iteration. Yeah, look at 10,000 might be overdoing it, but look at Facebook. It took a long time for them to get where they are. But what is the most common sales objection for you during, during the sales process once you have identified that someone is a good fit? Right now it's multidimensional. I think the pre sales calls is first of all what I would like to understand whether we can help them. So first of all I'm not going to call to sell, right? I'm blessed right now that we are basically at our capacity and we have to hand pick people companies. So first of all I need to see whether this project is the right fit to what we offer. If I see that for example, look, they have launched their mvp, they have introduced couple of versions and they don't have basically they haven't done enough on sales and marketing and they want to work with us. I would say keep your budget, go find some folks that help you with that first. Get some learnings and come to us so we can help you build it. Right? So actually a lot of times I turn down because you know, I just really want to make sure that I can help people. I think that's my mentality. Can I help this company? Can I help this founding team? Right. That's the first factor. Second factor is what kind of people they are. It's very important to me. We have some clients that we have the smoothest, really collaborative, really productive, energizing collaboration and we have clients that they suck our energy dry one call after another. Right. So it's very important for me what kind of people they are. Right. That's why we do not promise basically a longer term engagement before we do work with them for a month to get a fee. Right. So we often give basically for the first month of collaboration, try to work on a smaller project, design, Sprint, depending website development in case they need a website to just get a feel. So that's very important. But in the pre sales call, my antennas are very sharp in terms of like reading the room and understanding who they are, what they're doing, what their vibes are. If there's opportunity to meet face to face, I will meet them wherever they are. If their schedule fits, I will try to have a face to face. Third and most important is the money talk. Can you afford us? And for me it took me a long while to get around talking about money, but now I'm like really relaxed about it. What's your budget? We typically have a budget range. I always like share it. If you are not sure whether you should talk about money in the first call, do it. It saves you a lot of trouble. You know, for us, when we develop MVP4 startups, it typically fall between 25 to €30,000 for the first version, including research, design and development. So I'm not shying away from it. Say hey, here's our, you know, ballpark. What do you think about it? I really need to understand whether in the pre sales calls we are the right fit. We can help them with the, with their needs. Second, they're you know, founder, personality, whether it's a good fit, whether they allow me to talk and make my point without cutting me. It's a simple thing. If they keep cutting you in the pre sales calls, it's absolutely no go. Just get out of that project. Because essentially you end up with a client that doesn't allow you to or keep cutting you without allowing you to make your point. And then money talk. Interesting that I recently made that switch in my mindset. Like it's not, you're not trying to sell, you're trying to help someone who has a problem, which is a big mindset. Shift. And that's also why you need to talk about money part, because you cannot help properly without knowing what the actual budget is. Because maybe you just have to refer them to someone else who's cheaper. If that's their fit, who knows? Yeah, I mean if, you know, if I can come into a call and clearly tell you how much our services cost, you should be able to tell me what your budget is. If you're like being evasive and not talking about it is actually a noble red flag for us. And it's not, you know, we're grown ups here, you know, it's a business. I'm not talking about how much your personal wealth is. It's not a personal question. It's a public company. You probably could look up your, you know, last year taxes, it's not a big deal. I mean, just tell me. Your budget is a completely different topic. But if you had a magic wand and you could wave it to solve one thing within the company, what would that one thing be? My company? Yes, good question. I would say processes. You know, if I had the magic band to make a problem completely go away forever, that would be our processes. And it's very crucial early on in a, in the growth phase of a business. You don't feel it because you're just basically trying to create momentum and you know, get awareness, create awareness, you know, sell some, you know, make some revenue, you know, create a, create a place for yourself in the market. But at some point that, you know that if I don't do, if you don't do anything, you make, you know, half a million, a million, 2 million because of your place in the market, then that's a need for, that's a call for setting up your business for long term success. And that means tools, processes and culture. And that's where we are right now. We are heavily investing in processes and making sure that basically if we can, if we have to hire tomorrow, a person has to join the companies the day after tomorrow with a week to a month of investment, we can onboard them. And that's a big problem. Any type of company would say, especially the fast growing ones because you hire someone and then they come in, they're confused, it takes them three months to start producing and like actually contributing. And that's a loss, you basically lost, lost a lot of time. So for me I think processes is something that we have been investing in it heavily in the past months. But it's going to, first of all, it's going to be a never ending work. I think from now till future till forever, we have to invest in it and update it and improve it. But if there was a magic van that could make any problem go away, that would be the process.