Rachel Law, co-founder and CEO of Kip, has some encouraging words for entrepreneurs, as well as some tales of caution.
Rachel and fellow founder and current CTO Alyx Baldwin graduated from StartFast Venture Accelerator in 2014, back when they were known as Interface Foundry. The company was initially devoted to creating data bubbles based on the location of users, allowing information for shopping and other activities to be readily available at the touch of a button.
Today, rebranded as Kip, the company uses an AI chatbot that helps collect and coordinate group orders for team shopping. Just recently, Kip joined forces with Slack to enable fast and easy purchases for teams.
Through their evolution as a company, Rachel and her team have overcome challenges and learned how to be resourceful. Below, Rachel shares her advice for startups:
Trust your instincts, but back them up with data.
Rachel and Alyx had a feeling that their platform needed to evolve. The team wanted to change direction with Kip’s core functionality, transforming it from a search tool to a chatbot — but their instincts were met with resistance from developers and mentors.
“People were unsure about the chatbot concept and wondered why we’d do it. They thought it was too old of an idea, like something from 1999,” Rachel said. “But you have to trust that you’re the one working on the product, and you have to be the person who knows your customers best – not your advisors, not your investors, not your friends.”
Forging ahead in a new direction, Rachel felt they were heading where “the future was hidden.” They gained a great deal of traction with their new chatbot, which justified the new model to them and proved their instincts to be correct.
While the co-founders’ devotion to following their new direction was met with success, Rachel was adamant that intuition needs be backed up by data.
“You have to do the research and make sure your instincts aren’t lying to you, otherwise it’s a very costly mistake,” she added.
Be as cheap as possible, but not so cheap you hurt the company.
Rachel joked about Kip’s promise of “lots of coffee and chocolate” to teammates on their website, and discussed the importance of providing employment perks while still being reasonable. As a young startup, there’s increased pressure to make the most out of limited resources – and employees.
“Hiring people is the most expensive thing you can do and will greatly affect your burn rate. Be slow to hire, but not too slow,” Rachel cautioned. “And hire well, as these people will affect the entire morale of the company.”
Rachel added that the CEO of a startup needs to remain the sales and business development lead, rather than hiring an employee to fill that role. She said that the“CEO’s main job is to bring in sales, and work together with CTO” to build the company.
To lower operating costs, Rachel said she believes in the power of bargaining. “When someone gives you a price, negotiate,” she encouraged.
However, there are a few critical areas where Rachel doesn’t believe in cutting corners.
“You never save money by being cheap to people. You can negotiate and bargain for things like office supplies and finding a cheaper work space and cutting down on perks like free pizza and beer, but you should pay employees fairly,” she said. “Negotiate for a good deal, but pay for things that matter. Your employees really matter. So don’t be cheap with them.”
After recounting a story about an issue Kip ran into early in the game, Rachel recommended that having a good lawyer is also worth the price, and signals that your company is credible.
“Get a good lawyer that is consistent,” she said. “One that you can truly trust, who can handle your needs, and is on your side. It’s worth it.”
With the successful launch on Slack behind them, the Kip team is looking forward to expanding their service to office schedulers, managers, and operations personnel to embrace the easy bulk transactions the platform allows.
Looking back on their StartFast days, Rachel admits that she didn’t realize how much work it would be. “The startup world was really all new to us,” she said. “What we learned from StartFast was how to communicate, have a vision, and understand our metrics.”
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