My experience as a founder consists of two startups: the first one, Appticles, which we closed in 2018, and the 2nd one – MorphL, which Algolia acquired in January 2021.
The first startup was … let’s say that my co-founder Ciprian Borodescu and I made many mistakes. After raising a small seed round at the beginning of 2014, we failed to generate enough revenue or secure a follow-on investment. After nine months, we had to fire the entire development team. Those were tough times. We managed to bounce back after joining the Prosper Women Entrepreneurs accelerator in 2016. Still, in the end, it didn’t work out – the product started generating a steady revenue stream, but it was not enough to reach that growth curve required to bring an additional investment round.
After deciding to close Appticles, we started looking at other opportunities. As we have always been captivated by technology, we decided to create something in the Artificial Intelligence field – which was at the time beginning to trend. Thus, MorphL was born. The second time around, we were less prone to that “first-time founder” naivety. We still made a lot of mistakes, although if I may say so – they were of lesser importance and didn’t stop us from reaching a successful exit.
In retrospect, I believe it’s worth it to take a look back and summarize the things we did well and the things where we could have done better, in the hope that other fellow entrepreneurs may find these helpful.
What we did well at MorphL
Understanding our strengths
When we started MorphL, we knew we wanted to create a B2B product that was challenging to build from the technical point of view. While other founders feel more confident with sales or marketing, we felt positive that we could ship a deep-tech platform and do the “hard stuff” in product development. In addition, it had to be B2B. We never had the desire to create a B2C product – we understand how B2B works much better, and that’s where we wanted to be.
This also meant building a strong core team, centered around common values. We knew the kind of people we did not want in our team and we quickly parted ways when values didn’t align.
Going back to your why – before you invest your time and energy into a startup, you need to deeply understand what motivates you and what are your core strengths (and weaknesses). Don’t go in a direction just because other people tell you so. You will quickly become uninterested and undermotivated.
We managed to attract funding from three sources: Google Digital News Innovation Fund, European Data Incubator, and Techstars Montréal AI Accelerator. Out of these, the first two were equity-free grants. There is no such thing as “free money”. Grants have their own requirements, and, among other things, they expect you to reach specific milestones both from the business and product development point of view. They do, however, offer an essential advantage – founders are not diluted. You keep your shares with the additional benefit of simplifying discussions with future investors.
To paint the complete picture, accessing these grants was no stroke of luck. Ciprian, who was in charge of fundraising, has actively searched for opportunities. We applied four times (!) to Google DNI before being accepted, to give you an example.
Attracting valuable mentors and advisors
The main reason we applied to Techstars was their network of valuable mentors. It drives me crazy when some founders say, “YC is the only accelerator I’m considering.” This statement completely underestimates how hard it is to get into a top accelerator. Yes, Y Combinator is famous and creates a lot of value, but it is not the only program that does this – we have Techstars, 500 Startups, StartupBootCamp, and others. If you’re interested in a YC – Techstars comparison, I recommend this article.
For us, going through Techstars meant becoming part of an alumni network (you’re a Techstars founder for life, even if your startup fails). We attracted valuable advisors, some of which had already been through an exit themselves. It was highly beneficial to have their support and advice while negotiating MorphL’s acquisition by Algolia.
I believe it’s essential for a founder to understand the value that mentors and advisors can bring. You may think that you have everything under control, and this can be true, for now – until you take that new road where you haven’t been before and start wishing that you had someone on your side that knows the way. After all:
“Everyone has a plan until they get punched in the face.“Mike Tyson