How to Validate an Idea | Moe Abbas, Founder of Acadium

Pablo (Host) 0:00 Your first inkling was, let's go validate this. Why did you think that was your first reaction? Moe (Guest) 0:05 Because I had done it the other way, and it was a terrible way. I built the social media app that wasn't validated, and it was very costly and painful. I thought, "I'm not doing this again, that was a stupid way of doing things." Intro 0:18 Welcome to the Product Market Fit Show brought to you by Mistral, a seed stage firm based in Canada. I'm Pablo, I'm a founder turned VC. My goal is to help early-stage founders like you find product-market fit. Pablo (Host) 0:34 Today we have Moe Abbas, co-founder and CEO of Acadium. It's a pleasure having you here. Moe (Guest) 0:37 Thank you so much, Pablo, good to be here. Pablo (Host) 0:39 Just a little bit of background on Acadium. Acadium is a community of marketers. Their main product is an apprenticeship marketplace with businesses on one side and students on the other. Businesses pay a monthly membership fee and in return, they get to access to marketing students who help them with all aspects of marketing, SEO, content ads, et cetera. The service is totally free for students and has helped hundreds, if not thousands of students launch their marketing careers. Acadium is based in Ottawa, Ontario, and for context, they have about 20 employees and are doing about $2 million in ARR. The topic of today's episode is how to validate an idea. For everybody listening, I've known him for many, many years now. I've shared the early, early days Original Idea Pablo (Host) 1:22 of Acadium. As I recall, you started working on this in late 2015, early 2016. Was the original idea an apprenticeship marketplace, or what were some of the early versions of the idea that turned into what Acadium is today? Moe (Guest) 1:35 The form of this, where there's no technology, would be like an internship, very similar to an internship. So, I had been working with interns for a long time, so I had a good idea of how to work with them. And we wanted to build something in marketplace that allowed businesses to find affordable help, eventually focused on digital marketing from unpaid intern. But what we really wanted to do was focus on the job training aspect of the relationship, which, we thought, was incredibly valuable to the students. And in exchange for the job training, the businesses would get affordable help. So for us, the earliest version was our own company getting interns and working with them off different job boards. Pablo (Host) 2:27 Perfect. So, you had done this internally and kind of had an inkling that there could be a lot of value here. I know today you're fully focused on marketing. Did you start with that? What led you to choose that as the main vertical? Moe (Guest) 2:42 I guess the story started when we were actually hiring an intern for another project we were working on, and we had over a hundred applicants. Nobody had experience, and they needed experience, so they would come and volunteer to work with our company. And my co-founder, Richard, turned to me one day and said, "Hey, Moe, nobody has experience here. They're all willing to work for us, unpaid. Why are we building the social media app when we should be solving this problem? And I ignored him for a bit, but he turned out to be right. So, I independently, I said, "You know what? I don't know if this is the right path. I should try to validate this at the lowest cost possible. So, I started working on this idea independently, trying to validate it. First, Validate. Do not Build. Pablo (Host) 3:34 Let me just ask you just something right there because a lot of founders love to build, and the first inkling is, here's an idea let's just start building product. And your first inkling was, let's go validate this. What do you think... Was it something about you or your team? Just the why of it. Why did you think that was your first reaction? Moe (Guest) 3:54 Because I had done it the other way, and it was a terrible way. I built a social media app that wasn't validated, and it was very costly and painful. I thought, " I'm not doing this again, that was a stupid way of doing things. I'm just going to do this myself." I had the full skill set. I could figure it all out. I had learned a lot in that first process. So, I just built a spreadsheet, in terms of are we ready to work for businesses. And I'd called businesses up, and I said, " Do you want to get these people to help you?" It turned out to be that didn't work, actually. You had to build a product in our case. Pablo (Host) 4:32 Why didn't it work? Moe (Guest) 4:33 It was a tremendous amount of matching effort to actually get them matched with each other for something that is relatively low value and should be low touchpoint. So, it just wasn't worth the effort in a way because of the way we were doing it manually. But businesses were interested, we knew the students were interested, and that was the super early version. That gave me enough confidence to build out a landing page. Actually, around the same time, I built out the landing page where I used, I think it was Squarespace at the time, and I just built up the idea of, "Hey, you want to get work experience? Sign up, and we'll help you get work experience." To validate, you need a small team. Pablo (Host) 5:22 And at this point, just for context, who is on the team and is this really just you doing it all or did you get a few different people involved? Moe (Guest) 5:30 No, it was just me. So, why would I involve design and engineer to build a website when I don't even know if it's going to work, let me just do this myself using a template and if the conversions are not good, but they're decent, that's totally fine because you know you're going to improve conversions by building a better product and a better website and better marketing. If it converts with the shitty landing page, you know that you've done something well. So, I built this landing page. I h ad a great pitch. I sent traffic to it using a growth hack that I knew, and the traffic converted. Pablo (Host) 6:07 Can you dive into that? Because I think the end of the day, especially today, it's a noisy environment, and building landing pages is fine. If you can't put push traffic to it, you're not testing anything. So, where did you get the traffic and how did you think to do that? Moe (Guest) 6:22 I already know how to get interns. There's different ways you could do it off job boards. I just modified my messaging. We eventually got kicked off the job boards because you can't really do that. But earlier on, it was fine. I used job boards to funnel traffic into the early version of Acadium. For that, go to the job boards, do the messaging, get them to come to the Acadium, and check the conversions. The conversions were extremely healthy. In fact, they were better than anything I've seen atthat time. Pablo (Host) 6:59 And this was conversion to what, the creating of a profile? Moe (Guest) 7:02 Signup . Pablo (Host) 7:03 Signup. Moe (Guest) 7:03 We didn't have a profile. We didn't have a product. It was a landing page. There's nothing there. Pablo (Host) 7:06 It was e-mail. It was all smoke and mirrors. E-mail capture really. Moe (Guest) 7:09 Yeah, pretty much. To validate, get people to pay Moe (Guest) 7:11 And then I said, Squarespace a llowed you to connect a bank account. I said, "Well, maybe it's because it's so easy to sign up. That's why we're getting a good a conversion. I wonder if I put a pay wall, if they would still sign up." So, I put a p ay w all and people still signed up. Pablo (Host) 7:29 And this is, just to confirm, this is the student's side of the business. Moe (Guest) 7:33 Correct, yes. Pablo (Host) 7:34 So, at first you were, you were seeing if they would pay on the student side, got it. Moe (Guest) 7:38 I wanted to see how much, how willing they are to gain work experience. And they were very willing, they were willing enough to pay us at the end of the day. At the same time I also - one of the interns I brought on, I even pitched this to her and a payment - I said, "You're going to pay for this experience. Five-hundred bucks a month, it's going to cost you for three months." And she agreed to it. After the first month, I said, "You don't have to pay us, you're working unpaid. It's unfair", And she was super happy about that. So, there were multiple things we were doing at the same time at that point, but all very low cost at that point, we said, "There's obviously a good demand here." Then you started digging into the problem. Well, what is the problem? What could this really be? And we actually laid out a whole bunch of other ideas at the same time, and we didn't quite do this. They didn't really pass the mental experiment. So, you want to just create a mental experiment in your head and be like, "Well, if you built it, how would it work? Who would use it? Is there a demand, something you want to do?" We had a whole matrix, a whole bunch of ideas. None of them really past that. This one did, and it entered the phase where I was starting to build out the landing page. And that went really well. And then at that point I said, "Okay. What does this look like in the future?" When we imagine a future where businesses provide job training, we knew that on the job training was the most effective way to get trained for the job market. So, we said, "Hey, if we could enable businesses to do this on scale, this could be something really meaningful." And then strategically you can then own the talent because you trained them, and they would be there from your talent pool first. If you own the talent, and you can go to the demand side and be like, "Hey, you need the supply, we have the supply here." So, strategically, it made sense. It was also something we were proud to work on. It was a mission-driven organization. And that's what we did. We said, "This is the vision. Laid that out early. It's still pretty much the same vision." We ironed out a lot of the details along the way and really flushed it out and clarified it and simplified it. But that's the high-level vision. It's the same as it was back then. A lot of things have changed since then, including the product and what we offer, but the vision was very much the same. And from there, the landing page is great, but we knew we needed more liquidity on the student side, and we needed them around, and we needed to give them some kind of training and more value. So, we built out a whole bunch of coursework. That was kind of our MVP, it was solving the chicken and egg problem. And we built these courses ourselves. The first version of that was garbage. It was unusable. Pablo (Host) 10:24 Marketplaces are notoriously hard to launch, especially because of that chicken and egg problem that you mentioned. Do I have the right understanding that you did this kind of single-player mode? And you started with students and build this, you first have this landing page to test the value prop, but then you just started building out features. So, that it'd be useful for students without anybody on the other side. Was that kind of the first model? Moe (Guest) 10:44 First you validate, then you build the vision, and then you build the MVP ultimately. And this was even pre-MVP. This is how do you get one side of the marketplace? And we actually probably spent too much time on the courses. The funny thing is we built these courses, and we iterated them, that went through a whole product journey. We started with scripts and videos and moved to micro lessons. And once we landed on micro lessons, and people loved it, it was really easy for us to create this content. We paid someone 5 or 10 K to create all the courses for us. We haven't changed them. We haven't updated that technology at all. And people, thousands of people a month still use it. But we knew we needed to actually fulfill the promise of work experience. We then had to build another product, which is the actual marketplace. That was challenging. At first, it was so terrible, we couldn't give it away for free. We just launched it, got businesses, tried to get them to sign up for free, and they would, but the liquidity wasn't that great. There's a lot of things you learn along the way, so you got to launch very quickly. You learn these things like liquidity, didn't really know how important that is until you launch. And that's what you actually need, liquidity. Pablo (Host) 12:03 Now, did you go through a similar... Like, you had validated these students with this no product landing page, get them to come in, test conversions, put a paywall, test conversions on paid. Did you do the same thing with businesses or did you just go ahead, at that point, and launch a full product? Moe (Guest) 12:20 I didn't know, not on the business because I was the business. Pablo (Host) 12:24 Right. Moe (Guest) 12:24 So, I was the client. I knew what they were willing and not willing to do. I talked to so many other businesses. I talked to a lot of businesses as well. Pablo (Host) 12:34 Customer discovery, but not reflect validation . Moe (Guest) 12:37 I was the client, I was the business. I had a good idea of what they were looking for. So, that one was more of a leap of faith at that point. But it also came from my own experience. Pablo (Host) 12:47 It was informed. Moe (Guest) 12:50 It was informed, correct. And I'd already talked to so many businesses who were interested as well, but they didn't have trust, frankly. Lack of trust because of some random guy calling them, asking them if they want somebody to work unpaid for them. That was challenging. Trust is a big deal in marketplaces. Then we started building a brand and build a product, an actual significant product. That's what we did. We had our first product. It was pretty garbage, it didn't really work well, there's no profiles. It was like a crappy job board. How to iterate your business model Moe (Guest) 13:24 And it just wasn't that good. And then we started iterating very quickly. It was just a small team at the time, which I found, if you are looking for product-market fit, you need to have a small team. And for us, this was so important because it was me and my co-founders, one is a designer, one's an engineer. We would literally ship code every single day and just see what happens. I would send traffic to the product. And once it got to the point where we were reasonably confident, we said, "We've got to start making money." Also, the money makes people more serious as well. So, we introduced a small price point. We were also running out of cash. We had maybe a couple of weeks to a month of cash left. Then we were like, "We have this product, but we don't really make any money. We have to put a business model in place. Let's charge a membership fee, and sell the product." But actually, one of your earlier questions is why did you focus on digital marketing? I found that it was very challenging to sell businesses cross-category. When I was talking to them, it was very, very challenging. And it was hard to get liquidity. It's hard to get students who were interested in multiple things. Liquidity was a problem and focus was a problem. So, we said, "We should probably focus on one vertical to start with, one niche. And digital marketing is something that I knew really well. I knew what the students really wanted to do. I knew every business need digital marketing. So, we said, "This is a good place to start and school's doing a really bad job of training this." So, for those reasons, we picked digital marketing, and that was a good decision. Pablo (Host) 15:09 How important is focus, especially in those early days? If I think about it, you first focused just on students. You got just students, you got a value prop delivered there. Then you added businesses, and then you ultimately refocused just on digital marketing where many others would have said, "If I have the business and I have the students, I might as well do it all. How important is focus in the earliest days, especially? Moe (Guest) 15:32 It was super focused because you need to prove one thing at a time. When you are able to get more resources, and you're able to move multiple things at the same time, then sure, you could do that. You should also be able to take more multiple shots. It's a balancing act between taking an accurate shot and then taking a lot of shots. You want to focus on one thing, but you should take as many shots as you can at the same time. Yes, focus is important. It's a bit overrated in a way, but not, there are some things you absolutely need to focus on. One vertical made a lot of sense, but focusing on multiple product iterations, that could also really work for you because it can unlock success quicker for you. I think there's a balance between focus and taking a lot of shots. Pablo (Host) 16:23 It's this kind of strong opinion, loosely held concept, where you're focusing, but you're also willing to move away and try something new. It seems like what you're getting at. Moe (Guest) 16:33 Exactly. So, it's like, "You know what? We're going to do this, and we're going to do it excellently. And we're going to focus our attention on this. But as soon as this works or doesn't work... if it doesn't work, you learn, you iterate, If it works, you double down. I move fast and break things. That's the motto I have right now on growth, and it works. And I want to see people focus on, let's say, Instagram prospecting. And the only thing that matters is Instagram prospecting. But I have one team doing that, one person doing that, but then I have somebody else doing LinkedIn prospecting and somebody else doing email prospecting. So, when you have more resources, you could spend multiple wheels, but those individuals need to focus. And my focus is assisted call bookings, and then I need to maximize call bookings. But then I action each one of my BDRs, business development reps, to focus on their specific niche. So, focus, you need to focus. What's your top priority?, But it doesn't mean you got to do one thing. Pablo (Host) 17:39 Right. Moe (Guest) 17:39 So, you can do multiple things that all are related to one focus. Pablo (Host) 17:43 Sometimes these validation efforts can be false positives in the sense that there's a reason that not all pre-order campaigns that are successful turn into hugely successful products, for a bunch of different reasons. So, the validation, in a sense, kind of never stops as you move through this, especially in this early phase. Once you have these pieces in place, and you validated, more or less, conversion rates and the payment stuff, what were you looking to validate now? What were some of the key metrics that you were looking at to Retention is harder than conversion Pablo (Host) 18:14 say, "Yes, we're onto something. There's a real full business here, or we need to pivot or, as you say, iterate"? Moe (Guest) 18:20 Yes, conversion efficiencies and retention. How efficient can you convert someone? When I talk to someone, out of a hundred people, how many are willing to buy? Pablo (Host) 18:33 Got it. Moe (Guest) 18:33 That gives you a good idea of the demand. And from there, how many stick around. Is it another one? Which is much more challenging than the former because that takes time. There's a lot of variables. When you're selling something, you're selling the idea of something, and the idea could be what the other person imagines it to be, and then the expectations of something. And the reality could be a little bit different. So, the reality is much more challenging, retention is a much more difficult thing to solve than growth. Because growth is all up front, you get the data right away, you can figure that out and move, pivot, or persevere. With retention, there's a lot of reasons why people may not retain, and it takes time to figure that out. You have to dig a lot deeper because you already have their money. So, it's a lot more of a proactive thing. That became a focus a little bit later on... Pablo (Host) 19:43 Right. Moe (Guest) 19:43 ...as we got a little bit more success on the growth engine. The rollercoaster never ends Pablo (Host) 19:47 My final question is, at what point did you feel you went from this validating, do we have a business here, what does it look like, to yes, there's something real here and there's a full business to be built out? What were some of the things that got you there? Moe (Guest) 20:04 I think that changes. One day I'm like, "Holy shit, this thing is going to explode like a rocket ship" but I'm like, "Oh my God, it's just going to explode, not like a rocket ship". Some days, we had a hundred members sign up and other days you'd go days without a single member sign up, convert to paying member. It really was this big variable and I think there were sometimes early on when our growth engine was running at full steam, the demand is incredible, and we are unstoppable. But then, you make a few hiring mistakes, you start questioning yourself, you look at your retention, you're like, “Retention is not that great”. And then you start doubting yourself, and you think it's because your product is a problem, and it could be the product. But in our case, a lot of the problem was related to the actual structure of the business itself for retention. The expectations of what we can achieve in that model, we were actually doing pretty good. But we thought we weren't doing so good on retention, so we slowed everything down, and that became a problem in itself, which is another thing to dig into. But if you stay focused, and you're tenacious, and you have a good core team, like your co-founders, then you just keep moving, you keep iterating, and you keep moving forward. And then you rediscover, you discover what it is that people truly love about your business. For us, it was, when you talk to our customers, there are certain segments that absolutely loved it. So, we started doubling down on them. We also realized that this is actually a good entryway to a larger market. Apprenticeships and work experience allowed us to build a wedge and a brand in finding marketing talent and launching a marketing career. But, we can now sell businesses on any kind of marketing talent because we have this amazing brand that is the number one in the space for marketing help. And we now are able to attract, not just students, but experienced freelancers and marketers who want to build a career, and match them with businesses. Because we've established ourselves in this space, in this vertical, in this niche. And now we're starting to expand more upstream into bigger clients, more money, more revenue, ultimately more retention. That's going to take a little while, but it's all a stepping stone process. The journey where you start and where you end. There's a lot of small pivots Recap Moe (Guest) 22:54 that happened along the way. Pablo (Host) 22:54 All right, I'm going to cap it off there. Thanks a lot Moe for sharing your story. It's been an absolute pleasure having you here. Maybe, just to recap, you had this idea that you got from personal experience around the value of unpaid interns for businesses, and the desire of interns to learn hands-on real-world experience. You tested it out with this kind of single-player mode, starting with students, you got to businesses, you focused in on marketing, and now you've built this community of marketers. You've changed the lives I assume of many, many students who are now professionals in digital marketing, and of course helped many businesses grow along the way. All starting with this very lean approach to validation, which I think a lot of people can learn from. So, thanks a lot. It's been amazing. Moe (Guest) 23:43 Thank you so much Pablo. Pablo (Host) 23:45 Thanks so much for listening. If you want to see more content, check out pmf.show.