Before she came over to Hustle Fund back in 2018, my Hustle Fund co-founder and longtime friend Shiyan Koh was employee #10 at financial services startup Nerdwallet.

A seasoned entrepreneur in the fintech space, Shiyan served as VP of Business Operations & Corporate Development. She helped grow the business from less than $1M in revenue to over $150M.

Over five years from seed stage up to nearly Series A, she had a front-row seat at Nerdwallet’s phenomenal growth, and learned many lessons along the way. These lessons have served her well in the years after, especially evaluating startups that we come across here at Hustle Fund.

We sat down recently to chat about some of those experiences, and these were Shiyan's 6 big takeaways.

#1: Have an experimental mindset

In the ever-evolving landscape of startups and entrepreneurship, success often hinges on your ability to embrace an experimental mindset.

Shiyan says, "This means constantly iterating, testing, and refining every aspect of your business until you achieve product-market fit—that sweet spot where the offering resonates deeply with a specific customer segment."

Shiyan has certainly navigated those treacherous waters of early-stage startups. Through her journey, she has gleaned invaluable insights into the art of understanding customers, developing effective go-to-market strategies, building the right team, and measuring progress—all while relentlessly pursuing product-market fit.

#2: Understand your customer segments

The foundation of any successful business lies in truly comprehending its target customers. As Shiyan puts it, "The better you know your customer, the better your messaging should get. The better your command of the channel should be."

One effective approach is segmenting customers by credit score bands, as our guest did in the fintech space. "If you are a Prime customer, your Google search term is probably 'what is the best credit card for me.' Because you're not worried about qualifying.”

But if you have poor credit or thin credit,” Shiyan continues, “your Google search term is probably just ‘credit card’ because you just want to know who will give you credit.”

By tailoring products and messaging to different segments, companies can better address their unique needs and pain points, increasing the chances of resonating with their target audience.

However, understanding your customer is an ongoing process. Shiyan advises, "Over time, you should have a better and better understanding of who is a good customer, who is not a good customer, who would like our product, who would not like our product.”

Analyzing search intent and behavior, as well as adapting your product roadmap based on segment needs, are crucial steps in continuously refining your customer understanding.

#3: Tailor a go-to-market strategy

Once you've identified and understood your target customer, the next challenge is finding the most effective way to reach them. And it goes back to that experimental mindset. As Shiyan emphasizes, "A lot of marketing is actually experimentation.

Testing different marketing channels is essential. "They tried a bunch of things. And they know who the buyer is because it's SaaS and you know who is making that decision in a company."

The goal is to find the highest-performing channels for your specific segment. One of our portfolio companies at Hustle Fund found success with targeted LinkedIn job ads for their buyer's job title.

When it comes to tactics for reaching customers, don't be afraid to think outside the box. Shiyan highlights a SaaS company that hosted a dinner series for their target decision-makers, tapping into their desire to connect with peers and learn about emerging fields.

"They weren’t not selling product. They were saying: Hey, we're gonna bring you together, and we're gonna bring interesting speakers. And then that's how you familiarize yourself with our brand."

By getting creative and truly understanding your customers' mindsets and pain points, you can develop unconventional yet effective tactics for reaching them.

#4: Build a balanced team with diverse strengths

As you navigate the early stages of your startup, assembling the right team is crucial. But should you prioritize generalists or specialists?

Shiyan that in the beginning, founders should collaborate with smart generalists. “Because you're still trying to figure out what you need to specialize in. Generalists can help test and learn across various channels and functions, providing the flexibility needed in the early stages.”

As these needs become clearer, however, bringing in specialists can be beneficial. "Once you have something that you can write down and rinse and repeat, here's really no reason why you shouldn't use a cheaper contractor."

Ideally, your founding team should also possess a diverse mix of complementary skills, personalities, and networks. Shiyan says, "Ideally, you have a really good strong sense of the types of people you want to build a business with because you have a good mix of skill sets and your personalities balance out, your networks are complementary, things like that."

Compensating early team members with equity can be a strategic move when cash is limited, allowing you to attract talent that believes in your vision and is willing to invest their time and effort in exchange for a stake in the company's future success.

#5: Measure progress & make data-driven decisions

In the pursuit of product-market fit, it's essential to have a data-driven approach to measure progress and make informed decisions.

Metrics like customer acquisition cost (CAC) and market share within your target segment can provide invaluable insights. "So you should see all those things moving if you really know your customer," Shiyan notes.

On the staffing front, as difficult as it may be, sometimes tough decisions need to be made. "Early on, it was really hard for us to [part ways with underperforming team members]. And I'm not saying that it became not painful, but it became clearer and easier to know that it wasn’t working out.”

Developing a data-driven decision-making process and effectively communicating changes are crucial for maintaining a high-performing team aligned with your goals.

#6: Achieve milestones for the next funding round

As you approach the next funding round, demonstrating product-market fit and building conviction for future growth are paramount.

Start by proving product-market fit. Shiyan reminds us that you don’t need to have the perfect product or the perfect marketing strategy. "You just need to know that you’re addressing a need in the market that gives you a reason to exist and a right to win."

Demonstrating a clear value proposition and identifying a defensible market opportunity are key to proving product-market fit and securing the next round of funding.

Shiyan warns against only harping on past accomplishments, though. Investors will want to see a roadmap for future growth. You need to be able to break down what you’d do with additional funding, on the product side, on the go-to-market side, and how you’ll continue building your moat.

Continuously climbing the "ladder of belief" in your business is crucial for instilling confidence in potential investors and securing the resources needed to scale.

Finally, in summary, as you embark on your entrepreneurial journey, Shiyan reminds founders to ask themselves: "What do you want to see? Because it's your time that you're investing in this enterprise, and it’s the most precious thing that you have. It’s your whole life."

Other than that, embrace an experimental mindset, iterate relentlessly, and never lose sight of the ultimate goal—finding that elusive product-market fit that will propel your startup to greatness.

Enjoy the ride!

Elizabeth

This article was written by Elizabeth Yin, our Co-Founder, General Partner, and lead hippo enthusiast at Hustle Fund.