In 2009, coming out of Techstars, SendGrid set out to raise a seed round. The original target was $300,000. They ended up raising $750,000 in that round. Eight years later, they went public at around a $1B valuation. Shortly thereafter, Twilio acquired SendGrid for $2 billion.
Great success stories have humble beginnings. This was true for SendGrid.
I hope you find this deck useful or at least entertaining to see. In looking back at it a decade later, I notice two things:
1) The deck is remarkably similar to the business they built.
As a seed investor and accelerator, we often see major changes from the seed round pitch deck to what the business actually ends up doing. This was not the case for SendGrid. The founders stayed true to their original vision, which is somewhat unusual.
2) The deck isn’t overly stylized.
Today, we see people spending a lot of energy making their decks look super beautiful. SendGrid didn’t do that, but there’s a lot of substance. While design does matter, the content of the pitch and the business are by far the more important things.
When it comes to your pitch deck, substance matters a lot more than form.
If you want even more commentary on this deck, here’s a video where we break down the pitch done by Isaac Saldana, co-founder of SendGrid, a few years after their Techstars Demo Day:
And if you want to know what a founder does after a $2 billion exit, you can read all about what Isaac’s up to now.
Want to learn how to #domorefaster and give a great pitch? Learn more about Techstars mentorship-driven accelerators.
A version of this post appeared originally on David Cohen’s blog.
Techstars Studio is Isaac’s Way of Giving First & Giving Back
Ever wondered what a startup founder does after their company is acquired for billions of dollars?
Isaac Saldana, Co-founder of SendGrid—which was acquired by Twilio for $3 billion in an all-stock deal in October 2018—isn’t lounging on a beach. He’s helping other entrepreneurs create companies, using everything he learned by building SendGrid. And he’s returned to Techstars, the company that taught him how to build SendGrid, to do it.
Just months after SendGrid’s headline-grabbing exit, Isaac has a new job, as Chief Technology Officer for Techstars Studio, a new Techstars offering that will empower members of the Techstars worldwide network to rapidly envision, validate, and launch disruptive startups.
Techstars For Life
“When I started building SendGrid, it was to solve a problem I had. I wasn’t thinking about acquisitions or the company going public.” Isaac says. “I had a problem, I thought I could fix it, I tried, and I couldn’t. And because I couldn’t, I became passionate about trying to solve it.” Isaac was on a mission to help businesses solve the problem of email deliverability, and he ultimately did it so well that by the time SendGrid was acquired, the company was the world’s largest email delivery platform.
But back in 2009, Isaac knew he needed help to build SendGrid into a successful company. His first company had a great idea and a great team, but failed for lack of funding. His second company had a great idea, a great team, and funding, but didn’t have the right mentorship. “We didn’t know what we didn’t know,” Isaac says. “We didn’t know the right questions to even ask.” That company failed as well. So when SendGrid was just starting out and Isaac saw the opportunity to apply to a Techstars mentorship-driven accelerator program, he jumped on it.
“Techstars really, really helped me get SendGrid started,” Isaac says. “I attribute a lot of the reasons for SendGrid success to Techstars.” The benefits lasted far longer than the three months of the accelerator program. Over the years, Isaac hired from the Techstars network, and formed partnerships through the network as well.
Give First, Give Back
Returning to Techstars as a key player in Techstars Studio feels to Isaac like giving back—and an opportunity to be even more involved in Give First—the core Techstars value that encourages all members of the Techstars network to give of themselves, of their time and expertise, with no expectation of receiving anything in return.
“I feel so thankful to the network. I’ve experienced the value that it provides first hand,” Isaac says. “Techstars makes a difference to entrepreneurs, and Techstars Studio was a great opportunity to get involved in the mission and contribute to it.”
To Isaac, Techstars Studio makes sense because it makes use of so many of Techstars strengths: a network of top quality talent, experience building successful companies, access to intelligent funding. “People used to think that you only needed a great idea, or great entrepreneurs, or great engineering,” he says. “Now they realize that you need more. Techstars has everything you need to build great companies from the ground up.”
For himself, personally, Isaac is looking forward to working with the amazing people in the Techstars network. “I want to work with the great talent of the Techstars network, to help them and also learn a lot from them, and become a better entrepreneur myself.”
Today, Techstars alumni SendGrid rang the bell at the New York Stock Exchange. Having served alongside Mark Solon on SendGrid’s board of directors since 2009, we were honored to be invited to help SendGrid open the market today.
Today, we congratulate the entire SendGrid team. It’s truly been an honor to work with them as their earliest investors in 2009, from inspiration to IPO.
— SendGrid (@SendGrid) November 15, 2017
SendGrid (Boulder ‘09) recently closed a $33 million Series D funding round and now boasts more than 350 employees and a brand new, state-of-the-art office in downtown Denver. However, SendGrid’s humble origins stem from three passionate founders, Isaac Saldana, Tim Jenkins, and Jose Lopez, who set out to solve the problem of email deliverability in 2009.
I had the opportunity to sit down with Isaac Saldana, one of SendGrid’s three co-founders, and the first CEO of the company, to discuss how the business was started.
During our in-depth conversation, we discussed Isaac’s past as an entrepreneur, his motivations for starting SendGrid, finding initial product-market fit and the keys to SendGrid’s ultimate success.
The story and glimpse into Saldana’s mindset that follows are sure to be invaluable for aspiring entrepreneurs and seasoned professionals alike.
Before There Was SendGrid…
For such a successful founder, Saldana is extraordinarily humble and attributes much of his success to luck.
“This thing is hard and it’s not going to be given, but consider that a lot of it is luck and just part of the process. So, if you never create a successful startup, it doesn’t mean anything. It just means you didn’t get as lucky as the other person.” Isaac Saldana
While luck was certainly part of the equation, Saldana’s goal was to objectively identify why SendGrid’s founders were able to succeed in spite of the unfavorable odds facing startups.
For Saldana, curiosity and persistence were instrumental in identifying a challenging, widespread problem and forming the right team to build a solution.
Consider that SendGrid was Saldana’s fourth startup. To put that into perspective, Saldana had worked on “failed” startups for six years before even beginning on SendGrid, which doesn’t sound lucky in hindsight. While all of those businesses failed from a financial standpoint, they provided invaluable experience that would lead to SendGrid’s success for a number of reasons.
- Saldana developed meaningful working relationships in running startups with SendGrid co-founder Jose Lopez and SendGrid’s 5th employee, Elmer Thomas.
- Saldana, Lopez and Thomas learned from mistakes they had made in previous businesses.
- Saldana encountered a recurring pain point of email deliverability in all of his previous startups, which would eventually drive him to found SendGrid.
Identifying a Problem and the Sign of a Promising Startup Idea
SendGrid was unique compared with Saldana’s previous startup ideas because, in the case of SendGrid, Saldana was attempting to remedy a problem he was personally experiencing rather than capitalizing on a perceived gap in the market.
Each of Saldana’s previous startups struggled with email deliverability. Saldana had discovered that, in an effort to combat massive spam volume, mailbox providers were inadvertently filtering legitimate email as spam, preventing messages from reaching their intended recipients.
Saldana knew he was onto something because of how challenging the problem was to solve.
After countless attempts to eliminate the issue, email deliverability kept rearing its ugly head. As a passionate engineer, Saldana was determined to find a solution to his nagging problem and eventually built the foundation for SendGrid.
Releasing an MVP and Soliciting Customer Feedback
Upon building a solution to his problem (his MVP or Minimum Viable Product), Saldana visited online forums about cloud hosting to see if others were experiencing the same pain point. As someone who had been passionate about cloud hosting, Saldana regularly participated in these types of forums and figured them to be a promising channel to connect with hosting providers to learn if they could benefit from the solution he had created.
His hypothesis was that if companies are having problems sending from the IP addresses that they would get from hosting companies, the hosting companies should be hearing that from their customers.
Saldana went on to say, “I assumed that hosting companies at least had some idea about email [deliverability], said Saldana. “Maybe I wasn’t clear on the hypothesis, but I had some idea, and I was lucky that I guessed right.”
Saldana next sought market feedback to determine if customers would be willing to pay for the solution.
Without any funding to commercialize his efforts, he thought of a mutually beneficial solution: give away the product to hosting providers for free to sell to their end customers as a white-labeled offering. In return, the hosting companies would provide the computing resources to run the service. Given the nature of their businesses, the hosting providers had extra capacity to do so, which made the arrangement a win-win.
Although Saldana wasn’t making any money at the time, he was learning about the market, pain point and solution for free.
Co-Founders and Team
After gaining initial traction, Saldana recruited his two co-founders. Because of his past experience, it wasn’t difficult identifying the right people to join him.
Saldana had worked with Tim Jenkins while studying at UC Riverside and then in a professional setting when the two worked together at an Aerospace company.
Saldana and Jose Lopez had previously worked together on two startups. The challenge was convincing Jenkins and Lopez that a real problem existed, but Saldana’s initial traction demonstrated the significant demand for this type of service.
Saldana points to the addition of his two co-founders as one of the most instrumental events in SendGrid’s history, explaining that he just couldn’t have done it without them. While at Techstars, Jenkins and Lopez wrote most of the code and built much of the product while Saldana was taking care of his responsibilities as CEO, such as fundraising and communicating with customers.
Saldana went on to say that he gets too much credit for identifying the problem and says that early employees worked just as hard and as much as he did to grow SendGrid.
It seems Saldana has a knack for finding problems, then doing what is necessary to convince incredibly smart people to join him to solve those problems. He has continued doing so as SendGrid has grown and considers each phase of growth to be a new learning experience.
“I figured out on the first business that we needed a great team to make technical things happen. On the second business, we got funding, and the combination of a great team and funding made a big difference, but I didn’t think it was enough. You also need great mentors around to help ask the questions you don’t think to ask.” Isaac Saldana
While the potential of receiving funding was attractive, mentorship was the driving factor in applying to Techstars. At the time, email was still relatively new, and Techstars offered great mentors on the topic as well as on the non-technical parts of the business. The mentorship Techstars provided turned out to be invaluable, specifically as it relates to pricing and pitching.
From a business standpoint, mentors helped the young company avoid major pricing pitfalls early on.
Saldana offers the following advice to startups:
- Start small. Focus on one specific area of your product, one persona, or one specific target market.
- Become the best in the world at that one thing. SendGrid’s goal at the time was to become the “best cloud-based email deliverability service for web applications.”
- Once you’re the best in the world, then expand your product/market/focus.
When I asked Saldana what advice he would give to a younger version of himself, he was hesitant to provide any for fear of impeding SendGrid’s eventual success.
However, he does have one practical piece of advice for aspiring entrepreneurs: rather than worry about the destination, enjoy the ride. If you spend time working on problems that you are passionate about, you are bound to gain valuable knowledge and form lasting relationships that will position you to take advantage of luck should it eventually strike.
This was originally published here.
I love the 20 Minute VC podcast. It’s the perfect amount of time and Harry Stebbings does a great job attracting interesting guests and asking them the right questions. I was honored when asked to be on the show, here’s that episode.
Harry asks me questions like:
- How did I make the transition from Founder to VC with Techstars and Fund I?
- Fund I is one of the most successful funds in history; what was the structure with Fund I? Why did you choose a $5m fund size? How did you decide initial to follow on ratio?
- Why were you so valuation sensitive with Fund I? Why were you so rigid on a consistent check size on Fund I?
- Why did you decide to expand from being a solo GP fund? What are the challenges and complexities of fund scaling and how did you approach this?
- What do you think about uncapped notes?
- Why do you like big boring companies?
- How did you meet Ryan Graves @ Uber and how did the Uber investment come about? (even more about that here)
- Where does David still see inefficiencies in the current venture model?
I hope you enjoy it. I had fun doing the interview.
The Twenty Minute VC takes you inside the world of Venture Capital, Startup Funding and The Pitch. It helps you discover how you can attain funding for your business by listening to what the most prominent investors are directly looking for in startups, providing easily actionable tips and tricks that can be put in place to increase your chances of getting funded.