Shutting down Lasso - Part 2: The problem we tried to solve
Recorded user workshops, product demos and solution pitching artifacts
In my last post (here), I shared why we shut down our bootstrapped, revenue-generating startup, Lasso. The first post was focused on the team; how we formed, stormed, normed, and ultimately parted ways.
The following post looks deeper into our mission, the challenges we sought to address, and the hypothesis. There’s no sugarcoating, just an honest account of what happened.
The mission: Increase the net worth of Creators.
The problem: The problem we aimed to solve was helping SaaS companies scale and automate the process of finding and booking creators for partnership deals.
Our hypothesis: If we could decrease the time brands take to find and book the right creators, we could increase both the creator's and the brand's revenue.
How we discovered the problem to solve
Like many startups, this journey was far from a straight line. It started with a simple ambition: we wanted to build solutions for creators looking to expand their reach. However, given that the creators are similar to bootstrapped founders in their unwillingness to pay for solutions, it made sense to us that we should focus on driving more revenue directly to them.
The brand deal problem for creators
When we dove into their issues, we discovered that the real pain point was the struggle with outreach for acquiring brand deals. Creators were performing a spray-and-pray cold outreach approach and were often unsure of what information to present to brands. However, the solutions to solve this, at least initially, wouldn’t increase their flow of revenue. This realization sparked a pivot in our thinking.
Creators → Marketers at SaaS companies
We shifted our target from Creators to SaaS marketers who wanted to work with them. These were the people holding the budget reins. This shift coincided with a rise in ad costs and the demonstrated higher returns you can get when working with creators, so it felt like the right move.
As we started exploring this new territory, we leaned on our network. We found SaaS marketers who were excited about leveraging creator marketing, but they were still figuring out their strategies. Their main challenge was refining their Ideal Customer Profile (ICP) to understand what content they needed to develop. This forced us to find another audience closer to the stage of needing to implement a solution for operational problems vs. strategic ones.
Finding our first real prospects
This path led us to contact creators engaged in SaaS-related partnerships. This decision opened doors for us, bringing us face-to-face with clients with pressing 'hair-on-fi’e' problems.
We zeroed in on our ICP: SaaS companies reaping the rewards from Creator Marketing but struggling to scale it quickly enough. The signs of purchase intent were clear - they had internal revenue metrics to hit, were already spending significant sums on solutions that weren’t satisfying their needs, and were building in-house solutions.
Encouraged by these signals, we proposed design partnerships with brands grappling with these problems. We felt we were onto something when they agreed to become formal design partners. This belief strengthened as our design partners started sharing their time and company data with us.
This led us to understand the details and nuances of how our customers think about this problem.
How we decided what to build
Below is a 9-minute recorded walkthrough of the process we took to define our initial roadmap and MVP. (Figma file is available here to view.)
At a high level, it was based on the following;
Generative-based interviews to capture the workflow and pain points.
Bespoke reviews to align the priorities of value creators and capture any nuances.
Solution workshops to identify tangible and realistic solutions that could be adopted if built.
Note - Push the WTP conversation as far as you can
Our most significant insight about the process is that when scoping out solutions for the future, the primary objective should be finding a method to capture a genuine willingness to pay (WTP). We received it in LOI and verbals but later learned that this means nothing. I understand entirely how early adopters are already taking a chance by offering you their time. Still, suppose they aren’t willing to provide their payment details in any form. That is probably a sign that they either don’t believe you can solve the problem or that it isn’t that painful.
Learnings from Design partnerships
Our design partnerships offered some hard truths and valuable lessons. Despite the signals, most design partners did not convert to become paying clients. The most complex tasks were understanding real purchase intent, staying close to the money in workflows, and dealing with less than straightforward scenarios.
This taught us;
If it is not a tangible step to giving you $, then it’s not a signal.
These partnerships can help you become experts in the problem space, improving your chances of closing prospects.
Not everybody is honest. Some design partners we discovered later were already working closely with other startups in the space and had no intention of using our product.
Ideally, you pick just a cupcake to build, but from our initial conversations, no clear cupcake looked to be of high enough importance. In hindsight, the email-capturing feature we eventually produced was a cupcake. Still, we only uncovered its importance by accident with a client already paying for the other parts of the product. Design partnerships can be great, but I would encourage you to find a way to capture a willingness to pay past just verbals during the process.
Now let's talk let's our solution. It results from countless lessons learned, pivots made, and a relentless focus on solving real problems for our customers. The best way to show this is to share what we sent to our prospects. Below is a Loom walkthrough we shared with a prospect interested in leveraging our APIs.
Key learnings from all of the above
Adopting the mindset of learners first and founders second, we’ve derived several significant lessons from the problem we attempted to solve.
1. Aim for a revolutionary change, not just an evolutionary one, i.e., build a 10x product, not 10%:
We were confident that our solution would eventually outperform competitors tenfold; however, our initial product looked too similar to existing offerings to create a significant market stir. The decisions of what to build first are tricky because you are also trying to balance shipping something with a low time to value, which often depends on working with existing workflows.
We felt at the time that each feature we built was ten times superior to what our customers previously had because we had taken a radically different approach to how it was built. Below is an outline of the architecture we implemented to tackle this problem. We believed this would result in a clear differentiation from competitors.
It wasn’t that we could not produce results. Below are some examples of the results we achieved from this;
90% of profiles on our platform were considered a match and had never surfaced in the customer’s manual search.
Previously brands relied on creators to provide them with point-in-time stats vs. our solution automatically tracking and continuously reporting on post-performance using just the post URL.
We had a 75% hit rate for pulling the email addresses of creators from a profile URL vs. users manually crawling through profiles trying to find an email manually 5% of the time.
The problem was that we believed each feature would compound to provide 10x in value. Still, when we ran our product market fit survey, 95% of users said they would be ‘somewhat disappointed’ if they could not use the product anymore rather than ‘very disappointed.’ With an average NPS score of 8/10, things felt optimistic, but we were not creating meaningful disruption in the market.
If we were to start over, our focus would be creating a service that encourages creators to share all their data from every platform, similar to what Phyllo offers via their customer relationship. We posited developing a LinkedIn for the Creative economy could lead to a more impactful outcome for the industry if successfully executed (Reid Hoffman’s pitch we referenced). We had begun validating the latter, as seen from Hiroe’s case study of her work on the project. Ultimately we didn’t pursue this as the road to revenue was too far in the future.
2. Value customer behavior over their words:
Throughout our journey, we discovered that the real issues often differed from what we were initially told. Instead of relying on methods like "The five whys," pay attention to the customer's behavior while in their workflow. Doing this remotely is hard, especially if the process occurs over time, but if you can find a way to shadow or become your users, this will likely reveal more insights than through conversation alone.
3. It is critical to understand the platform dynamics of your industry:
Platforms like FB, Instagram, and TikTok need creators to drive engagement, but creators need brand partnerships to exist. The conflict exists wherein every dollar a creator earns from a partnership is a dollar taken from the platform’s ad business. The platforms' primary customers become the brands buying ads, not the creators driving traffic to those ads. This creates a conflict in genuinely supporting the needs of the creator. It also meant that these platforms built up robust systems to block third-party tools like Lasso from getting data that could help creators increase brand deal acquisition.
4. Purchasing decisions for creator marketing solutions have a high degree of emotional bias:
The lack of measurable attribution often resulted in an environment of emotional rather than data-driven rate decisions. This meant that decisions of what tools to purchase were made based on what platforms customers felt could make the process slightly easier for a low cost.
We tried to shift the mindset to one that focused on value based on results. For example, within a month of onboarding to Lasso, a client would see that we could
Reduce the average CPM by 75%
Increase the median likes and engagement rates by 55%
Establish a CPM that is more competitive than Google and YouTube ads.
But none of this mattered as clients still felt this was more art than science and no tool could replace the craft of their manual work.
These key insights underscore the importance of a disruptive approach, a deeper understanding of customer behavior, and being mindful of the complex dynamics in existing platforms. We had many positive metrics and signals, but when we took a step back, we were not building a breakthrough solution.
In retrospect, our venture with Lasso has been a significant learning journey. Despite the closure, we understood the essence of a 10x improvement in an ad-dependent landscape, the importance of studying actual customer behavior, and the need for tangible financial commitments from early adopters to validate their purchase intent. Being close to the money flow in workflows is crucial, and dealing with less straightforward scenarios is part of the journey. Although our final solution didn’t achieve long-term success, it represented a testament to our adaptability, commitment, and insights gained. As we turn a new page, these invaluable lessons will be the guiding light for our future ventures, and we hope will be of value to others.
Bonus material - LinkedIn for the Creator Economy ideation
Here is our full breakdown of the problem and potential solutions for helping creators present a professional profile of themselves.