Things are great. Apple and Google are starting to take fitness seriously, and 8fit is still a one-of-a-kind app with steady growth:
Today we’re announcing our $200k seed round, led by the awesome team at Vitamina K. I want to share our experience and learnings in this post, together with the materials we’ve used for the fundraising.
The initial product
We’re huge fans of validating things with a working product:
- Jan: I ran a survey for 220 people about a hypothetical fitness app.
- Feb: People liked the idea, so I started a small 3 people team and put $30k into it.
- Mar: We work on the product and content.
- Apr: The initial prototype is ready.
- May: 8fit launches on web, Android and iPhone and we quickly hit 1.000 signups.
- Jun: We introduce paid plans and get our first 25 customers.
With 8fit we aren’t building the app we want: we’re building what our customers need. It’s the answer to “how can we help you reach your fitness goal?”, and that answer keeps changing as we learn more from them.
When did we decide to raise funding
Could we have bootstrapped this company? Yes, probably. Then, why did we decide to raise funding?
First, we didn’t want any distractions. While it’s possible to cut down personal expenses and wait until revenues give you enough room to grow, we wanted to focus on just building a great product.
Second, after our first marketing campaigns we found that we had a very low cost of acquisition. Having some money to acquire users would allow us to grow much faster.
Third, we wanted a minority partner to guide and support us as we grow the company. Somebody to make sure we didn’t do anything blatantly stupid, and who wouldn’t micromanage us.
So I put on my startup-kid hat and got to it.
Finding the right investor
An investor is going to be in your company for a while, so you really want to find the right person for it. You want somebody who gets it. A long-term partner.
In our case, we wanted to:
- Pursue a huge opportunity: the international mobile fitness market
- Build an international company from day 1
- Remain a lean product-oriented team (like Whatsapp)
I made a brief pitch deck with our progress and vision:
For a few weeks we had intros and talks with different candidates. We set our terms upfront: legal structure, valuation, roadmap, etc. That made negotiations a lot simpler, since investors could either like them or not.
We talked to different angel investors and VCs. It definitely helped that we had a working product and previous experience in startups.
Since we had recently launched, we shared our full metrics with anyone who’d ask. You can see them here:
And yes, I also added a few basic forecasts. We did not waste our time writing an “executive summary” or “business plan”.
Closing the round
Soon I took a plane to Madrid to meet Vitamina K, had an in-person meeting with them and agreed on the final terms. It took two extra weeks to get all the contracts signed and receive the money, which was great timing.
Now I’m just finishing our accounting and forecasts, and I’ve been able to take a step back and see where we’re going.
Over the next year, we are going to keep focusing on two simple features: workouts and nutrition. We’ll make them simpler and better. We’ll reach more people and grow.
We want to become the world’s biggest gym, run by the world’s leanest team. No pun intended.
- Keep kicking ass with Workouts and Meals.
- Release an all-new design.
- Scale our marketing channels.
And you know how every startup says they’re raising money to grow the team? Well, screw that. We don’t have any plans for new hires just yet. Small is good. Some other day I’ll explain how we’re using freelancers to complement our founding team.