Pitch deck interest is unseasonably high (despite a 1.5% drop last week) which means the fundraising market is open for business. But what kind of growth and monetization are investors really expecting? We caught up with Farhaj Mayan of Kanna to talk about achieving hockey stick growth during a pandemic, and where you should be deploying your marketing dollars right now.
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Q&A with Farhaj Mayan: Co-Founder and CEO of Kanna
Farhaj Mayan worked as an early employee at 3 startups before deciding to transition into building his own. Here’s what he had to say about adjusting their business model and doubling down on their best performing marketing channel.
This interview has been shortened for length and the full version will be on our blog.
Have you gotten any feedback on your business model from your current investors and have you made any changes due to the current market conditions?
Absolutely! Due to the volatile nature of the marketplace, it’s reasonably difficult to make bullish assumptions on consistent MoM growth. At Kanna, we quickly realized we were providing a service of great value to our customers so we decided to pivot from a monthly to an annual subscription (gave customers a 10-15% premium on what they would’ve paid monthly). For SaaS companies that have five to eight-figure average ARPU it’s generally a good strategy because it drums up cashflow and instead of fighting to battle monthly attrition you can now focus your efforts on providing incremental value and upskilling your customers by teaching them how to be superusers of your platform.
How are you approaching product expectations in your deck compared to the reality of building a product with shelter-in-place and other restrictions limiting business functions?
For software companies that aren’t outliers seeing hockey stick growth and have 6-12 months of runway, right now is a great time to be reallocating your marketing dollars to double down on product, ship new features and/or optimize existing workflows, so you’re ready to be on the offense when the puck lines up the other side of the rink. On our deck I tend to not dive too deep into the product’s feature set (does not apply if you’re building something truly novel/patented). Just a single slide with a one-liner explaining what it does along with 2-3 bullet points highlighting important features/functionality. That gets the job done.
What marketing channel has been the most successful for Kanna and how has your strategy for that channel evolved over this quarter?
Since we’re a cannabis ancillary startup and are pretty bold with our branding, Facebook and Instagram are a total no-go when it comes to ads. For worker acquisition, ironically, Craigslist has been our best top of funnel acquisition channel. On good days we get down to a couple of cents per worker acquired!
I think there are a lot of creative ways to engage your customer. Our most successful campaigns have generally converted because of the copy. When we hear something we like from a worker or customer interview we use it as a testimonial or a one-liner on the ads and it’s been pretty effective in moving the needle of intent forward.
Now is the time to rethink and update your business model in your pitch deck
If you’re fundraising right now, it’s essential that you take another look at your business model and convey it clearly in your pitch deck.
Growth in Turbulent Times
Most founders and CEOs are in the process of completely revamping their growth models from the bottom up amid new and unpredictable consumer behavior. Here’s how to think about it.
Read more on the Andreessen Horowitz blog now.