LunarLab interview with startup investor Fran Hauser

Fran Hauser is an investor, startup advisor, and author of the bestselling book The Myth of the Nice Girl: Achieving a Career You Love Without Becoming a Person You Hate.  She is well known for her commitment to empowering women, as well as her guidance that kindness and strength aren’t mutually exclusive.  We were excited to catch up with her recently to ask her thoughts on launching a startup and supporting other women.

LunarLab: What are the primary things you’re looking for in a startup pitch? 

Fran Hauser:  I need to feel good that there is a real market for the product they’re building, that there’s a specific pain point or opportunity. I also pay close attention to the consumer value proposition – can the founder articulate it in one short sentence that is very easy to repeat?  If it takes too long to get it across, that is usually a red flag for me. 

I pay attention to how I feel when I leave the pitch meeting – do I feel energized? Drained? Did I not want the meeting to end? Was I really enjoying it?  When I make an investment in a startup, it isn’t about just writing a check… it’s a real partnership with the founders. I want to make sure these are people I want to spend time with. Pitches should be experiential. 

On the financial side of things, I want to know if the founders have a depth of understanding in terms of the actual business model, as well as the assumptions that they’re using.  Are they able to articulate, support, and back up these assumptions? Assumptions are a big part of driving the forecast and projections, so I want to understand why they’re using a certain assumption.

I’m also looking for any kind of traction – even if they’re pre-launch. Have they done a beta? Do they have customer testimonials?  If it’s an enterprise product, do they have clients lined up? Do they have partnerships with platforms or companies that can accelerate growth? Any kind of traction is really appealing.

LunarLab: What are the biggest mistakes a founder makes in the first year of their startup? 

Fran Hauser: When founders are not thoughtful about how they are using the capital they’ve raised, and blow through it. When they don’t take a step back to really think about what is the most effective way (from an ROI perspective) to use these funds, and in what order.  It’s important to really think through things like who your first hire will be.

Another mistake I’ve seen founders make is getting so caught up in their vision that they don’t take the time to process feedback. I can understand how difficult this can be. They might be thinking, “this is going to cause such a hard pivot” or “I can’t deal with this right now” and sweep the feedback under the rug.  The advice I would give is to listen to customers, investors, and advisors. Feedback is an important part of the process.

LunarLab: We often work with startups who have an idea or product they want to build, and they have a hard time stepping away from that vision to build in feedback cycles.  Sometimes it can be as simple as a small tweak that can make a huge difference. It’s hard to get people to let their guard down and open up to feedback.

Fran Hauser: Totally agree with that. 

LunarLab: Let’s shift course a little bit and talk about women – particularly in areas that are male dominated.  We read a statistic recently where 25 years ago, there were 2 women CEOs of Fortune 500 companies. In 2021, the number was 41, or only 8%. And only 1 black woman. How do we, as women, help make a difference (day to day)? 

Fran Hauser: Over the course of my career – whether I was working in corporate, at a startup, or for myself – I’ve seen that some of the most important things we can do is to amplify the voices of other women, support them, and bring them opportunities.  If I can’t make a speaking engagement, the first thing I do is think about other women in my circle who would be a great fit. And, I especially think about women who are looking to break into speaking or who are underrepresented. 

I can be supportive by writing checks for female-founded companies, or being available for calls when a founder is really struggling with something – whether it’s with a process, with the product, with the business, or with people (HR related). It really comes down to showing up and actually doing the work.  Don’t just “talk the talk”, but do whatever you can do. Make sure that a woman on your team gets the promotion; gets to work on a highly visible project; is fairly compensated. Take action, whatever that means for you – whatever you can do, wherever you are. Right now I can support female entrepreneurs by investing, advising them, and supporting them. In corporate roles, this may look like making sure that you’re there for them when they need a sounding board. So many women in my life right right now are in transition, and for them this could be opening doors or reaching out on their behalf to make introductions. The biggest thing I would say is showing up and doing the work; truly taking action. 

LunarLab: We are a service based business.  Shifting back to startups, have you worked with service-based startups in the past and what challenges do you see for these types of businesses vs a product-based startup? 

Fran Hauser:  The biggest difference I see is that the business development side for a service-based business can be really hard sometimes.  Lead time can be very long from the time you meet with the potential client and understand their needs to the point that they’re ready to pull the trigger and hire you. Keeping the momentum can be difficult sometimes because it’s a different model than direct-to-consumer.  Mentally and emotionally it can be more difficult because it’s so one-on-one, vs. direct-to-consumer where you’re selling a product to many, many customers. 

Try to come up with some scalable, out-of-the-box products. If your business model is dependent on custom one-on-one relationships, ask yourself: is there a product that you could launch like a template, workshop, or course, to teach people the basics? One thing that many of us solopreneurs or entrepreneurs are asked for is advice, but we normally charge for this.  I started to keep track of the types of questions I was frequently asked.  When my first book came out, a lot of people asked for my advice about navigating book publishing, getting a non-fiction book deal, and working with publishers. So I offered a live webinar, recorded it and it’s available for a low cost on my website. Now when people reach out, I can make it easy for them to get the content they are looking for (and I’ve scaled my own time).  Create short videos or courses that answer the most common questions you get and that can also be used for lead generation for premium products.  

LunarLab: Thank you for your time today, Fran!

You can visit Fran’s website at www.franhauser.com