$100k Funding From the Sale
I wanted a flexible way to make money and learn business by actually doing it. I would partner with big local tech companies and offer their employees a discount on our service if they would promote it internally.
After partnering with 20-30 of these companies I learned the ins and outs of how they managed their company perks and found that the system was broken - employees rarely knew what kind of perks were available to them because there was no centralized platform that made perks visible or easy to use.
A friend of mine agreed that we could solve a problem by building a software platform that would that would offer hundreds of perks all in one place that employees could easily find and take advantage of. PerkNow was born. We soon found an angel investor, Mark Newman, who was the Founder/CEO of HireVue - an HR tech company.
Our perk platform got us into the market and allowed us to get our first ~30 clients but like any startup, we were constantly trying to find ways to evolve and differentiate. Hundreds of conversations led us towards a deeper problem that companies are trying to solve - how to consistently recognize and reward employees in a meaningful way. It’s not that leaders are bad or aren't TRYING to recognize their people, it's that they don’t have the right tools or resources to do it consistently and effectively at scale. There are some great tools out there that help standardize recognition and capture the positive pulse within a company but small to mid-sized businesses can’t afford them. Nectar arose gradually as hundreds of ideas and conversations began to converge.
The first three clients came from pure scrappiness. We tried all kinds of things at the beginning - cold calls, cold emails, talking to friends/family and straight up walking in to companies and demanding to speak to someone in HR (our target audience). None of these methods came easy or were particularly comfortable but I’m a firm believer that if you get out of your comfort zone and work hard things tend to happen someway or another. Our first client came as one of my family members was talking to a co-worker about what I was doing. The CEO overheard the conversation, loved the idea and flew me out to meet with him about it. Within 10 minutes of pitching him he asked “how soon can we get this launched?”. Our MVP wasn’t quite ready yet so I told him we could launch in a few months and he signed a contract that week. Our next two customers came from walk-ins. We went to the front desk and asked to speak to the right person. They appreciated the hustle, loved the concept and are still customers to this day.
I don’t think you ever stop validating your idea - especially in tech where you are constantly iterating and morphing into what best meets the market’s needs. Initially, it was meeting with prospective customers to pitch them the idea/concept and see how they reacted. From there it was building a simple prototype, showing them again and helping them visualize it a little better and finding out if they would pull out their wallets when the product was finished. After you do enough product demos, you will know whether or not the idea is viable enough to create a sustainable business based on how people respond. If prospects are hesitant to pay for it you might need to drill down to figure out why. Maybe you’re headed in the right direction but a few pivots could greatly impact how valuable your product is.
We started out as PerkNow and were focused on providing a discount platform to companies that they could offer to employees. Over time, our conversations led us into building new products including engagement surveys and a rewards/recognition platform. However, our name was pigeon-holing because prospects could never see past us being a “perk provider”. We knew that we would have to rebrand sooner or later to reflect our broader vision of becoming an employee recognition & feedback platform.
Nectar is sweet, organic and abundant. We believe that the world’s greatest companies create cultures where recognition is organic and abundant.
We help people-first companies create a sweet culture.
Did you have any experience/expertise in the area?
Not at all! Learned it all on the fly by diving in.
We have clients from 10 employees all the way to 5,000 but our sweet spot is SMB between 50-250. Within those businesses, we target the HR/People Ops teams. Our team uses a lot of different channels to attract clients. One thing that we DON’T do is paid ads. I loathe paid ads and refuse to do them. I think it's the best way to burn through cash early on and doesn’t help you create a competitive advantage that other channels have the potential of doing. We’ve found the most success with cold email marketing but find leads through SEO, cold calling, referrals and channel partnerships.
Growing up I always loved hustling and selling things from making duct tape wallets in 6th grade to starting a subscription trash take-out business in 8th grade. That said, my only experience running a company was the car detailing one that eventually led me to the idea for Nectar. We eventually sold that car detailing for $100k to help fund Nectar.
My main motivation for running a business is just the gratification that comes from building and growing something from scratch. Creating something that adds economic value to the world is my drug. I also like the idea of controlling my own destiny and building my own dream versus someone else’s. I couldn’t do any of this without the amazing support of my family and friends. Very few entrepreneurs have the amount of support I do between my wife, parents and siblings. They are my biggest fans and many of them have sacrificed a ton for me to succeed.
I’ve learned so much since starting Nectar, it’s insane. I can speak all business languages and have an in-depth understanding of each area of the business including sales, marketing, support, engineering/product etc. I can have really cool conversations with experts in those fields that I never thought I’d be able to have. I also have learned how to do UX/UI design and went from someone with no design experience/skills to designing our entire product from scratch. When you’re out blazing your own trail, your problem-solving muscle gets so strong because you’re forced to solve the problems - no one else is going to do it for you.
My advice for those just getting started is to be patient. Every startup has a 2-3 year germination period where you are moving incredibly slow compared to your own expectations as you figure out your identity and product/market fit. At first you’ll find that massive amounts of inputs will only produce marginal outputs. Stay scrappy, keep grinding and eventually you’ll build momentum where small inputs will produce incredible outputs. You just need to stay survive until you get to that point.
Would definitely go with GSuite, Intercom and Asana. GSuite is amazing for email, collaboration and documentation. Intercom is vital for customer interaction, activation and retention. Asana is how we stay on task with our product roadmap, bug fixes etc.
We’ve finished up rounding out our product suite with peer recognition/rewards, engagement surveys & employee perks. Our main focus now is to build integrations with other HR systems and with platforms like Slack. I think someday if the price is right we would be willing to sell the company, but that’s a long way away. We are just focused on growing as quickly and sustainably as possible.
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