Adi Patel on the future of product experimentation, getting into YC, and venture capital fundraising

Product State Q&A

Adi Patel is the Co-Founder and CEO at Lancey. He was formerly an Enterprise Solutions Consultant at Ada, Management Consultant at Deloitte, and Sr Consultant at Xactly.
Website / LinkedIn

EC: What’s the future of product experimentation?

AP: Teams have beaten the experimentation horse to death. We can bucket this down to two types of groups and how they think about experimentation:

• There are some folks who think the answer to making any decision is A/B testing everything possible

• There are other folks who spend so much time in analysis — that they never end up taking big swings

The truth is most A/B tests leave a large chunk of users worse off than before, even though the test might be declared a winner.

With advancements in AI and ML models, we’re finally at a point where we can actually figure out how a given cohort, or set of users, are likely to react to a change without having to put them through a blind A/B test.

The future of product experimentation is trending towards micro-experiments where you can figure out the right cohort or set of users to target with a high degree of confidence. Each with their own mini personalized experiment.

These micro-experiments can impact onboarding, activation, retention or conversion separately but make a large impact when summed up at an aggregate. The best B2C teams have cracked this, and I’m excited to see this ripple through to teams — that don’t have large in-house data science teams — but can close the gap with rapid advancements in AI.

EC: What advice would you share with a startup looking to get into YC? 

AP: A lot of early stage founders are relying a bit too much on YC. This is evident when I speak to a founder who is working full-time somewhere, and part-time on their venture. And the condition for them to leave their full-time job is if they get into YC.

This is the wrong way to think about entrepreneurship in general. Starting your own venture is supposed to be risky. If you’re relying on YC to tell you that — you’ve missed the mark.

But if you are looking to get into YC for the right reasons, here are a few things I’ve found helpful:

• Strong founders with a mix of technical and non-technical backgrounds

• Co-founders who have previously worked together — or known each other for a long time

• YC doesn’t seem to care too much about your idea (case in point the Reddit story)

• Write your application in simple language (the bar should be if someone in High School can understand what you do — you’ve done your job right)

• Be able to explain what you’re building, why you’re building it, and why you’re the right team to build it

Outside of that, it's a bit of luck. When the chance of getting into YC is ~1%, you have to know the odds are against you. The best founders are the ones who still find a way to succeed despite YC (ironically, these are also the founders YC loves).

EC: What fundraising tips would you share with early stage startups starting to get traction? 

AP: Unlike building or selling, the pre-seed/seed stage is likely the first time many founders will be fundraising.

It’s important to realize VCs are a lot better at running these meetings than you are (and especially so at negotiating).

Here are few tips to keep in mind as you go through the fundraising process:

1. Know that whatever you say during a meeting with VC will likely get shared. 

It might get shared with your competitors — or other VCs — you’re also talking to. This means keep your pitch consistent, don’t overshare, and do your research about any competitors the firm might have invested in.

2. Fundraising momentum > Product momentum

Most VCs want to see social proof. Just like your customers want to see other customers using your product, VCs want to see other VCs in the round. Use this to your advantage.

As soon as you get a single check into your round, send everyone an update (even if you haven’t had the first meeting yet) with the current round size, and amount left to fill.

3. Speed > Quantity

It’s better to have 30 meetings in a single week than 50 spread over 2 weeks. See point above. If you keep all your meetings in a similar window frame, you can use the momentum in your favor.

It reduces the time VCs have to backchannel with other firms and you can hold them accountable to your timelines.

If you do the opposite, you’ll let control slip. This is when panic sets in. It’s natural, but do everything you can to move things around and cluster your meetings.

It’s exhausting, but you’d rather be in intense fundraise mode vs going at a leisurely pace for a longer period.

4. You just need a few folks to say YES — Not everyone.

Even if 90 VCs say no, it doesn’t matter if you get 5 to commit to your round.

So get used to the rejection, but don’t let it get to you. It’s already a stressful time, prepare for it ahead of time.

5. Believe the NO, but not the why.

Hardly will you get a No from VC with a very transparent reason for passing.

Gracefully accept their no but don’t believe the reason. Also, don't send an email telling them why they're wrong. And don’t change your pitch between every meeting based on the no. You’ll go crazy.

“The future of product experimentation is trending towards micro-experiments where you can figure out the right cohort or set of users to target with a high degree of confidence.”
- Adi Patel, Lancey