How eliminating friction can help your startup scale
Maxwell Health, an operating system for employee benefits, serves a huge market, said co-founder and CEO Veer Gidwaney. Virtually any U.S. employer with fewer than 5,000 employees could be the startup's client. Because of this, Gidwaney said, the company needs to have scale. "In order to have a lot of scale," he said, "we need to work through channels."
Partners make up the first channel, Gidwaney said, as Maxwell Health needs to team up with other organizations to get its product in customers' hands. But the buyer and the customer aren't the same, he said. "We deliberately price our product extremely cost effectively," Gidwaney said. That means the product will be given away to the customer, he said, rather than resold.
Because of the company's reliance on channels to have scale, Gidwaney said, the team at Maxwell Health works to eliminate friction in the sales process as much as possible.
Here are other entrepreneurial insights from Gidwaney:
Know your partners -- Many early-stage entrepreneurs don't get much choice when it comes to investors, Gidwaney said. Often just one investor says "yes," he said, so there's not a lot of choice. Even so, Gidwaney said, it's important for entrepreneurs to understand the value of a potential investor before bringing them on board. "You should have eyes wide open with any partner you bring into your business," he said. Don't be afraid to ask questions up front, such as, "What happens if we run out of money?" and "What if you don't like a new investor I bring on board?"
Find the believers -- When you put all your cards on the table, Gidwaney said, you'll quickly discover whether people are excited about your idea. Those are the people you want to work with, he said. Someone who has bought into your company's vision, Gidwaney said, is more likely to stick with you through challenging times.
Seek alignment of values -- It wasn't tough for Gidwaney to know if his values aligned with his co-founder's. The co-founders are brothers, Gidwaney said, and have worked together for nearly two decades. "We're super well aligned on everything," he said. "You need to have shared values." But even co-founders who aren't relatives can make sure their values line up, Gidwaney said. Before teaming up, he suggested entrepreneurs ask potential co-founders open-ended, values-related questions, such as "How do you think about generating value?" and "Whom do you design for?"