What makes an app a killer app? Why do some tech innovations fly … while others do not?… Where can women best excel in a tech field still dominated by men?
I’m Melinda Wittstock and today on Wings of Inspired Business we meet an inspiring entrepreneur who has built and exited three software companies and is getting ready to launch a fourth in FinTech.
Cynthia Del’Aria started coding at age 8, started her first business at age 15, and never looked back. She describes herself as a “startup ninja” and she now runs the startup incubator Raika Technologies. Today we’re going to talk how to dig into any idea and find the gold, the killer feature, the thing users absolutely cannot live without… And turn a startup idea into a business that will make real money.
I can’t wait to introduce you to Cynthia! First…
Cynthia Del’Aria has built and exited three of her own software companies and now helps other entrepreneurs do the same at the startup incubator Raika Technologies.
She describes herself as a “startup ninja” – and Cynthia has a proven talent for digging into any idea to find the gold, the killer feature, the thing users absolutely cannot live without… and help entrepreneurs turn their ideas into a profitable business.
Cynthia’s past experience building her own startups in web design and development gave her a lens through which to understand and apply proven processes and methodologies to advance great tech ideas – and she developed the curriculum for the Raika Technologies and GotAnAppIdea.com Startup Program as well as a process to help stakeholders, Project Managers, Product Managers and IT professionals at all size companies test new ideas without impacting their teams, road maps and corporate priorities.
Today we’re going to talk about how to take an idea to scale and exit, and iterate to nail often elusive product-market fit and enduring customer delight. We talk failure and why it’s a welcome part of the startup process and much more.
And you’ll want to take out your phone and download the Podopolo app too as you listen to this episode, so you can join the conversation with me and Denice. Please share what you see your ultimate purpose and legacy is … and if you’re a business owner, what your exit plan is.
We’re going to talk about how to take an idea to product-market fit, scale and exit, why women are uniquely suited to be more successful as entrepreneurs, how to manage a bro culture tech team as a woman … and what Cynthia has learned along the way about the mistakes most entrepreneurs make … and how to avoid them.
Let’s put on our wings with the inspiring Cynthia Del’Aria.
Melinda Wittstock: Cynthia, welcome to the Wings.
Cynthia Del’Aria: Thank you, Melinda. I’m so happy to be here.
Melinda Wittstock: Me too. What made you start coding at age eight?
Cynthia Del’Aria: Well, I am a book nerd. I love to read, I cannot get enough of books. When I was a kid, sometimes there was a lag between when we would go to the library and when we would go back. You can only get like three or four books at a time. I was about eight years old and sort of in between books. My mom had just started taking some classes at the local community college. One of those classes was a Visual Basic class. So, her book was sitting there on her desk, and I was kind of like, “What’s that?” I got nothing to read. Let me dig in. It took me about three days to get through the whole thing.
By the end, I had like 3D objects kind of like building themselves and flying all around the screen and it was just really cool. I just sort of picked up the habit from there. Every time she bring home a new coding book, I would jump in and learn it. I learned COBOL, which nobody ever uses anymore and all kinds of things, so.
Melinda Wittstock: So, did you always know from an early age that you were an entrepreneur as well, or did that come later?
Cynthia Del’Aria: No. I started my first company at 15. How that happened is I actually was working as a barista in a coffee shop in a mall near my house. I was horrible at it. It wasn’t because I was bad with customers or anything like that. All I could see all the time was things that people were doing wrong or where people were being inefficient. I had this really horrible habit as a 15 year old of telling people in front of clients or in front of customers, “Hey, you shouldn’t do that,” or “That’s the wrong thing,” or “This person has a dairy allergy. You shouldn’t put milk in there.”
My boss got really sick of it because I would do it to her too. So, I had been there like two or three weeks, maybe a whole month, but I don’t think it was a whole month. I went into her and I was like, “You know what? I think I’m going to quit because I don’t think I’m any good at this.” She was like, “Oh, thank God because I thought I was going to have to fire you.”
Melinda Wittstock: That’s funny.
Cynthia Del’Aria: But I like the paycheck, right? It was nice getting regular cash and being able to buy clothes and put gas in my car and whatever. I guess I wasn’t driving then, but food and whatever. So, I had all these skills in writing HTML and stuff like that. So, I went to the business owners in my church, and I was like, “Hey, are you on the internet?” They’re like, “No, we haven’t really done that yet.” It’s like early to mid-90s. I was like, “Well, you really should be because it’s kind of like the phone book of the future. You’re on the phone book, right?”, like early sales. They all kind of were like, “Okay, that sounds good.” I gave them a screaming deal and just kind of started building my first thing from there.
Melinda Wittstock: Wow. So, you building websites for them, their very first kind of e-commerce type things or-
Cynthia Del’Aria: Yeah, this was even pre e-commerce really. This was websites primarily, but I also did a bunch of like forums and message boards. That’s what we used to call that then was messaged boards. I had a company that I worked with out in L.A. That was a nonprofit that had celebrities reading books on tape. I did their entire catalogue of like 8,000 books on tape over a period of time. That was my first really big project. That kind of kicked me into the other companies that I started working with. That then eventually led to me being able to sell that company, because the value of the maintenance contracts was really, really good, so.
Melinda Wittstock: So, how old were you when you had your first exit? Because you’ve exited three times which is amazing. So, how did that all happen?
Cynthia Del’Aria: Yeah. So, it was just before my 19th birthday. I had one a very, very exclusive, very coveted contract doing a bunch of custom basically like now we would call custom web app development. It wasn’t called that then, but for a very well-known company in Southern L.A., in South L.A. I won the contract, because I underbid everybody else. Now remember, I’m 18 years old, right?
So, the VP in charge of this whole project came to me and he said, “Here’s the thing. My boss really likes your price.” He’s like, “I’m really concerned because I’ve met you and you’re really young.” He’s like, “I’m going to give you the contract. But off the five-year contract, I’m only going to give you six months. If in six months, we don’t feel like you’re able to perform, we’re going to kill it.” I was like, “That’s totally fair,” right? So, we shook hands, signed the contract. All of my competitors were just furious about it.
It was three months later, he came to me and said, “We’re ready to sign the full five years because we’ve been thrilled with your work. You have done everything that we’ve asked and overdelivered, and your work is impeccable.” So, once he signed the full five-year contract, two of my competitors came to me and made offers to buy my company in exchange for me transitioning that contract. Not because the price was any good for them, but because they wanted the relationship. So, I did some negotiating and ended up selling to one of those buyers. So, I was 19, super overwhelming. I had no idea what I was doing. If I was doing that today, I would do things very, very differently. I made a lot of really stupid decisions.
Melinda Wittstock: Well, it’s difficult to sell your company, because really, honestly, most founders, even experienced founders, toil on building up the revenue, building up the earnings, but actually, what sells, what the value of your business isn’t necessarily to do with any of those things. When you said they wanted the relationship, they wanted the contract, I believe that companies are sold not bought, right?
So, when you actually know what is the value that you would provide somebody else… It could be anything. It could be that relationship or your brand or maybe your team culture or something like that, right? But as a 19-year-old? I can’t imagine any 19-year old’s like working through that calculus. So, what were some of the mistakes or what were some of the… I’d rather say learnings because all these fails, right, in the startup, actually, really-
Cynthia Del’Aria: Opportunities.
Melinda Wittstock: … lessons. Yes, they’re lessons. They’re opportunities, all of it.
Cynthia Del’Aria: Yeah, that’s exactly right. I would say the biggest thing was before I went into this, I didn’t have an attorney that I knew really well that I had a relationship with that I trusted. I didn’t have an accountant that I had or like a CPA or tax accountant that I had a really good relationship that I trusted. So, I kind of went off recommendations in the throes in the middle of negotiating and everything else. I didn’t always feel like those people were working in my best interest. In fact, about eight months after the sale, I got the final tax bill, which first of all, as an 18-year-old kid, you’re not like waiting for a tax bill right? You forget about that really easily.
I just found out there was a lot of things that I didn’t prepare for. It was about a month after that that I had gone through everything in my savings. I had wasted a lot of money to be quite frank. And then to pay the tax bill, I took the rest of it. All of a sudden, I was literally living in my car and showering at my gym and like scratching my head going, “What the hell just happened?”
Melinda Wittstock: That’s all too common story though. This is so important for anybody with a scalable technology startup, where ultimately, you’re going to sell, is making sure that you have the right advice and you’re actually planning for the exit from the beginning.
Cynthia Del’Aria: That’s right.
Melinda Wittstock: But again, how are you supposed to know that as a 19-year-old. Gosh, even 40-year olds don’t know that, right? So, there you are, you’re in your car. So, what’s the next move from there?
It was actually almost three years after I sold my first company, I moved out here to Colorado and started my second company. I had so much more knowledge, both from a technical standpoint that I was able to build a product, but also from a business standpoint, because of all the things I learned running the previous business. Every time I made a mistake, I was like, “Oh my god, I’ll never do that again.” Right? You get to make all new mistakes when you do it again.
Melinda Wittstock: Every time. I mean I’m on business five now, and yes, every time. They’re just different ones, but it’s iteration, right?
Cynthia Del’Aria: That’s right. It’s exactly right. It’s so funny because all of the ways that I’ve iterated through various companies is the same way that I iterate inside of a company. It’s like I talk a lot about product market fit, because I think it’s one of the most key defining factors of success or not in a startup. But it’s not something that you do once, and then you have it, and then you go. It’s something that you do constantly.
You’re constantly iterating on what is the market asking you for? How do you need to shift and pivot? What are you doing well? What are you not doing well? What are your competitors beating you at? What are you beating them at? You know what I mean? So that process just like all my businesses within a business is iterative, and then within a product is iterative when you talk about product market fit. So, yeah.
Melinda Wittstock: The product market fit-
Cynthia Del’Aria: I don’t know if anybody has all the answers, and it’s like all the right ones, I don’t know that that’s a thing.
Melinda Wittstock: Well, there’s so many things that go into the success of a startup. I mean, first of all, is it actually solving a problem? Number one, because there’s a lot of people who create products that they think are cool and assume that people will come because they created it.
Cynthia Del’Aria: That’s exactly right.
Melinda Wittstock: Often they’re creating features. They’re not necessarily an actual something that someone that solves a real problem. Remember, years ago, I was doing some work for Tony Hsieh, the Zappos founder when he was investing all that money into the downtown project in Las Vegas. I would do this virtual coaching like mentorship for a number of early stage startups and they’d come on the phone. I’d say, “So hey, how can I help you?” They’d say, “Well, my product, it does this. It does that, it does this, it does that, it does this.” I’m like, “Hey, that’s great. So, how can I help you?” “Well, and it does this.” They kept going about, went on and on and on about all the things that their thing did.
So, finally, there’ll be a long pause. It’d be like 10 minutes left of the half hour session, after they’d like talked all that out. I would say, “So well, who are your customers?” There’d be a long, long silence.
Cynthia Del’Aria: Crickets, yeah.
Melinda Wittstock: Long silence. I said, “Well, do you know who your customers are?” Again, long silence. Well, what problem are you actually solving?
Cynthia Del’Aria: That’s exactly right.
Melinda Wittstock: I don’t know if this is true, but it felt to me like 99% of like that, right? But I am. To be fair, probably wasn’t that, but it was a significant proportion.
Cynthia Del’Aria: It’s significant though. So, I was talking about this, Crunchbase did a study in 2018. They reviewed 1,000 startups that failed, 150 to 200 of them actually gave them really deep dive access into their companies like books and interviews with founders and interviews with advisors, etc. What they found, most people think that startups fail because they run out of money.
According to this study, only 29% of them actually ran out of money and that was why they failed. 42%, almost half, failed because nobody wanted what they were building. It was cool. They had great teams. They were really agile and able to execute really well. They were very well funded. Nobody wanted it. They hadn’t asked, “What’s the problem we’re solving? Who are we solving it for? Is our solution compelling enough that people will spend money, change their habits, or ideally both to use it?”
Melinda Wittstock: Exactly. Because if you’re doing a swing for the fences and people have to change their habits, that’s not easy. That’s not easy. You’re right. It’s not a problem that can be solved with money alone. I mean, obviously, funding helps. But in a way, it’s almost better, I think for a lot of startups, to not have money earlier on?
Cynthia Del’Aria: That’s right. That’s right.
Melinda Wittstock: If it’s really good, you’re going to find a way to bootstrap it and prove at least some sort of MVP or minimum viable product, and then take the money. I mean, that’s actually better for you as a founder anyway to take [crosstalk 00:14:15] scale something proven rather than-
Cynthia Del’Aria: That’s right. That’s right. You give away so much less of your company, because you’ve shown not only that your solution has that compelling factor and it’s a real problem, but you and your team are the ones to execute on it. That’s worth way more to an investor, and you give away so much less of your company when you do that. I encourage people all the time, get to MVP, get to revenue. I don’t care if you’ve got a little bit of revenue, get to revenue, prove that there’s a thing here.
Melinda Wittstock: Yeah, that somebody actually wants to purchase it.
Cynthia Del’Aria: Yeah, exactly.
Melinda Wittstock: Because there’s all kinds of iteration too. It’s not just on the tech and on the product, but it’s also on pricing. There’s so many things that you’re testing all the time. So, there’s like constant daily, little failures, right, along the way, which of course you can’t take personally. So, you got to take it as feedback and move nimbly and swiftly and all of that. Did you always have that kind of gene naturally, or is this something that you had to learn the hard way like a lot of entrepreneurs do?
Cynthia Del’Aria: Well, that’s what’s so interesting. I would never have used language like what we’ve been using to talk about it in the past, but it was something that I just innately kind of knew, which is why out of my first three companies, I sold the first two. The third one is seven figure revenues, 50% margins, still running today.
Melinda Wittstock: Nice.
Cynthia Del’Aria: So, when I started working with clients, when people started coming to me and saying, “Hey, you’re really successful at building startups, would you help me build mine? Would you help me figure all this out?” They had like varying levels of success, and I could not figure it out. Because for me, some of the stuff just comes so naturally that I didn’t even think about is part of the process originally, right? I remember the very first time I was like sitting with a customer and I’m talking, I’m like, “Okay, so have you done market research? Did you talk to customers and do validation?” She was like, “I don’t know what you mean.”
I was like, “Oh, no, people don’t know how to do this. Okay, I got to switch up my process.” The second that I started at the very beginning with everybody and did all that from the beginning, people got way better results. I was like, “Oh, there it is. That’s the magic.” I didn’t even know that.
Melinda Wittstock: It’s funny. As a result of this podcast, I ended up with this little side business line teaching people how to create podcasts. It’s almost similar to tack in a way, because people come to you with an “I’ve got this great idea. I want to do a podcast on X. What mic should I buy?” I was like, “No, no, no, no, no.”
Cynthia Del’Aria: That’s the last thing to worry about,
Melinda Wittstock: Yeah, the absolute last, because the very first is who is going to listen and why will they listen? Why will they keep listening, and why will they tell their friends to listen and etc? Otherwise, you’ll just get frustrated doing a lot of work and not making money and you’ll pop fade.
Cynthia Del’Aria: Totally.
Melinda Wittstock: But so many people are really… It’s almost like they’re sort of confused by that, like “What? I have to think about my audience.” And then you get the typical answer, “It’s for everybody.” No, no, it’s not.
Cynthia Del’Aria: That’s so true. Yeah. I love that when people say, “Oh, all people could find this valuable because this group could do this with it. This group could do this with it.” I’m like, “Yeah, yeah, I got that.” But the second you start trying to sell to everybody, nobody will see themselves in what you’re saying. So, you’ll miss out on the audience that need you the most, like who needs you the most? That’s what we’re looking for and that’s you go after first. I always have entrepreneurs who get freaked out. They’re like, “Oh, but I have two audiences that really need me,” and I’m like, “Great, focus on the first one. When you’re successful with that, then we’ll add in the second one. You’ll have the resources and the capital and the ability to have a whole different set of messaging for those people.”
Because they relate differently, they have different problems, they have different challenges and struggles. So, it’s not a bad thing to narrow your focus and narrow your niche. It’s actually really, really smart. You’re going to be able to capture more of that niche because more people will find what you’re doing relatable to them.
Melinda Wittstock: Yeah, I think a lot of founders struggle at that early stage though, because they don’t actually know-
Cynthia Del’Aria: I know.
Melinda Wittstock: … who needs the most. So, you’ve really got to go out there and test. I remember the earlier startups of mine just calling people. I would just call people cold or I guess it evolved into email or messenger or LinkedIn now.
Cynthia Del’Aria: Yeah, sure.
Melinda Wittstock: But calling them and saying hey, “Is there a reason you don’t have this?” Oh, you haven’t really thought about it. But if you did have this, how much value would that create for you?
Cynthia Del’Aria: That’s exactly right.
Melinda Wittstock: Oh, a lot.
Cynthia Del’Aria: That’s exactly right.
Melinda Wittstock: So, what if I could do that for you for X price? Would you be interested? Yes, you would. Okay, I’m going to go build it.
Cynthia Del’Aria: Yeah. Using those opportunities sometimes to do my favorite type of bootstrapping, which is pre-selling. Sometimes you can get money that way. Sometimes you can take contracts that you’ve pre-sold and turn that into money from investors that’s at a lower price than just sort of a blind angel round. Yeah, I’m such a fan of talking to people. I think one of the things that I hear from almost every single founder that I work with is they get scared of talking to people because they think that somebody’s going to steal their idea. “Oh, somebody’s going to take it and they’re going to do it.” I’m just like, “Oh, man, you guys.”
There was a time, late ’90s, early 2000s, right around the.com boom and then the bust, where a couple of big companies we won’t name did that. They saw little companies that were starting to get some traction. They went in and sort of like built it out from underneath them and totally killed their businesses. The press was awful. I mean the amount of money they spent on fixing the press issue of looking like Goliath to the startup David and crushing the dreams of these companies and stealing their ideas was awful. What they learned from that was they would actually spend less money and have less risk if they let all of the little guys build up the market, make the mistake, spend their own money developing the product, and developing the market and the traction, and then coming in and buying the best-
Melinda Wittstock: And buying.
Cynthia Del’Aria: Yeah, totally and that’s what we’re going after. Microsoft doesn’t want to come in and compete with you on your whatever widgety thingy. They got their own priorities they’re working on. The other thing I always tell people is… So, they’re like, “Okay, well, somebody that I talked to who is interested in this area might get an idea and go out and build it and go out before me.” I’m like, “Great, it was your idea first, and you’re going to learn from all the stuff they do that’s stupid and wrong and how much clients don’t like it. It’ll be better. So, it’s still not a problem, you still need to be talking to people.”
Melinda Wittstock: Absolutely. This is the other thing too, is that all those companies that ultimately will buy you and you make such a profound point, it’s actually really understanding that from the earliest stages to about your exit.
Cynthia Del’Aria: That’s right.
Melinda Wittstock: Because you’ll have an exit of some kind. The difference is whether you have the exit on your own terms that actually builds wealth for you or not. So, you may as well think about it from the get-go. So, I know with my company now, Podopolo, which is a podcasting network, it’s socially interactive and gamified and all this sort of stuff. As we think about “Okay, well, who would want to buy that and why?” And then go do strategic partnerships with a lot of your potential exits.
Cynthia Del’Aria: Yes, the S word. I love strategic partnerships, especially if you’re getting companies involved who will have real interest in picking up from your market or it expands something they’re already doing in a new way. Those are brilliant partnerships to have because not only are you going to get access to the people, the customers, the audiences they already have access to, but at some point, they’re going to realize, “Oh, my gosh, we should buy this.” There, you’ve just baked your exit right in.
Melinda Wittstock: Absolutely. You’ve developed that relationship and that partnership. What are some of the things though you’ve also learned from the exit process? I know so many women tech entrepreneurs who say things like, “I can’t believe that investor asked me about my exit.” It’s like, “Dude, if you’re raising money from a VC, you just exited part of your company.”
Cynthia Del’Aria: That’s right. They want to get a return on their money. They don’t do that by you staying in business for 20 years. They do that by you humping for 5 to 7 and getting them a 10-extra return.
Melinda Wittstock: Yeah, exactly.
Cynthia Del’Aria: A sale.
Melinda Wittstock: Yeah. Sometimes even less time than that now as well. I mean, there’s a lot to be said if this fits your vision or path, if you can do it. Selling really in that two to three-year window as a founder, you take a lot more money out of the company as long as you’ve gotten your kind of term sheets right. And then meanwhile, keep a stake in the new company, ride that one up. And then you’re free to go on and do your next thing. This is the question, finally coming here. A lot of founders do all the hard work. They work really, really hard and the big exit comes. It’s either acquisition or it’s even an IPO, and they end up with nothing.
Cynthia Del’Aria: Yeah. Yeah, it’s this delicate balance. Most founders that I see that end up with little or nothing at the end of an IPO or the end of an exit, got money too soon. Like I said, it’s really expensive when you get money early. The more traction you have to prove as proof of what you’re doing, the less you have to give away in order to get money, because everybody wants to get on a train that’s going somewhere great. So, the more you’re showing that trajectory and you’re showing execution and you’re showing the proof, the cheaper the money is. This is where I get conflicted, right? Because there are definitely inherent biases in investors towards investing in male-founded companies versus female-founded companies. I’ve done a ton of research on that.
Melinda Wittstock: Yeah, I think we get 2% of the available VC money.
Cynthia Del’Aria: Yeah, it’s about 2%. Yeah. What’s crazy is on the same number of dollars, women produce an average of 18 to 20% higher returns.
Melinda Wittstock: Yes.
Cynthia Del’Aria: We’re good business. You should be investing in us.
Melinda Wittstock: Yeah, I think we use capital more efficiently by far. I don’t know. I’m not sure whether this is just because we have a perfectionism gene or it’s just proving our competence so much that we’re more likely to not ask for money until we’ve actually created something I think of value. There’s a lot of dudes that have the get funding for an idea literally written on the back of a napkin. I’ve never seen a woman do that. I don’t know, ever.
Cynthia Del’Aria: No.
Melinda Wittstock: So maybe it’s the market making us have to prove that or there’s something within us that also feels we need to.
Cynthia Del’Aria: I would say it’s a little bit of both. So, I’m also a founding member and on the board of a group called A11OW, and we are an investment media company. We invest in primarily female-funded, female-owned, female-run companies. We tell the stories of how those women become successful in their ventures. We have a ton of research backing up our hypothesis, which is investing in women is good business. It actually produces a better return than investing in men.
So, coming back to what you’re saying, I think it’s a combination of both, which is there’s a statistic out there that a man will look at a job opportunity. If he thinks he’s even 50% qualified, he’ll submit a resume. He’ll spend the entire interview talking about how amazing he is and pointing out all the reasons why he’s going to be great at this job. He’ll never refer to the 50% of the job that he has no idea how to do yet, not ever, and he’ll get hired. Women tend to wait until they feel they’re at least 80% qualified for the job. A lot of women spend the interview talking about how they’re going to fill the 20% gap. So, what happens is we set ourselves up for the gap versus how amazing we are right from the beginning.
Cynthia Del’Aria: So I think it’s both sides of that, which is we don’t go out and ask for money or ask for help until we think we have the proof. But we’re also told by the market because one of the things that we found and actually this was Dr. Dana and I can’t remember her last name, but I’ll find the link and send it to you. So, you can post as part of the podcast. She did a TED talk where they looked at 10 years of venture capital, pitches and deals made, and found that in almost every case, men founders were asked growth-oriented questions. Women were asked retention-oriented questions.
So, men were perceived as being able to handle risk more, and therefore, you’re going to go after growth, which is what we want. Women were perceived as more of a protection mindset and a risk averse mindset. So, they were asking, “Well, how are you going to keep the customers you have?”, rather than “How are you going to get new customers?” So, I think there’s both sides of the equation that play into this.
What’s interesting is I think the one that we have control over is the first one, where we start sort of taking a little bit of a cue from men not to sound weird or anything but saying, “You know what? Why don’t I just experiment with looking at a job or looking at an opportunity or looking at my company and saying, ‘You know what? Here’s all the things that are awesome. I’m going to talk about those. I’m going to talk about growth. Anytime somebody asked me something that sounds like a protectionist or a risk averse thing, I’m going to learn how to flip that around and turn into a growth thing, because that will get me better results.'”
Melinda Wittstock: Oh, gosh, I 100% I’ve learned that one the hard way how to raise money.
Cynthia Del’Aria: Me too, my friend.
Melinda Wittstock: [inaudible 00:29:26]. Also, just asking… I remember actually, I was part of an incubator of sorts called Springboard Enterprises, which started up in around 2000 to help women get funded, right? They do a lot of training for women. Both in kind of media tech side of things, as well as the life sciences are their primary two streams. I remember we went through this boot camp. It was in Boston. It was in 2011, or whatever. Almost all of us were asking for money with a question mark on the end of it, like “$5 million?” There’s a whole bunch of stuff that we were doing that we weren’t even aware of. It was completely unconscious.
We’ve moved on a long way since then. I think women are a lot more confident out fundraising, I mean. Also, just having groups like Springboard, and there’s so many more now, right? That works and whatnot where we can compare notes. So, we’re getting better at it, but it is partly our mindset, and then it’s also that perception. Gosh, really good advice to flip those questions around.
Cynthia Del’Aria: That’s right. It takes practice. I’ve seen female founders who are like… They come out of an investor pitch and Q&A in there, they’re kind of shell shocked. I’m like, “Did you practice? Did you spend hours having all of the critics in your life ask you the hardest questions they could think of and then working either on your own or with the coach or something to figure out how to turn those things around into growth or benefit statements?” No.
Melinda Wittstock: No.
Cynthia Del’Aria: Yeah. Get an expert, get some help.
Melinda Wittstock: Absolutely.
Cynthia Del’Aria: Because it will make leagues of difference.
Melinda Wittstock: It’s huge. I think the fundraising thing is tricky though too, because women don’t have necessarily the relationship already to get that warm introduction to an angel or a VC. That’s really hard, because they tend to want to do business with people that they already know or kind of like know of. And then women are coming up with all these amazing disruptive things. Also, if not pure tech, certainly in applying tech in innovative ways that disrupt whole industries. Yet, they don’t know how to get those connections.
Cynthia Del’Aria: Yeah, I would agree with that. I would say, you hit right on it, which is we like doing business with people we know. I’ll say even we like doing business with people who are like us, right? We love doing business with other women, but there isn’t always the opportunity in the ways that we need to. This is the thing that I always say when anybody asked me, “You’re a very successful woman in tech. You’ve been doing this for 25 years. What advice do you have?” It’s like, “If it seems hard not in terms of the universe trying to tell you, ‘This is not the path to go down, you need to pivot,'” that’s a different kind of hard.
But if you’re noticing that you’re coming up against like roadblocks and things, just consider that you’re paving the path for all of the women and all the young women and the and the girls who are going to come behind you who won’t have to do that. That’s worthy in and of itself. So, you know what? Step out and be willing to do business with a guy who’s kind of bro culture-ish.
Melinda Wittstock: Mm-hmm (affirmative).
Cynthia Del’Aria: I do it all the time. I just have learned how to sort of navigate that in a way where we both get what we want out of it, and I don’t take anything that they say personal. I build those connections and those relationships, so then other women gets come to me for the relationship. They don’t ever have to deal with that thing.
Melinda Wittstock: I think that’s really astute and inspiring. I’ve seen so many women and I will include myself in this who in building a tech team ends up building a culture, because the only people you can find…. It’s really hard to find women coders, right? So even if you set out with that intention, let alone Black women coders or… Do you know what I mean?
Cynthia Del’Aria: … minorities of any kind.
Melinda Wittstock: Yeah, you really want to build this diverse team and all of this. So, I’ve ended up building sort of a team, and they’re all dudes. And then suddenly, I’m the man, you know what I mean?
Cynthia Del’Aria: Yes, yes.
Melinda Wittstock: Wait a minute. Okay, so here’s my biggest tech mistake. This is hilarious. I call this malicious obedience is where the CEO says, “I’d like you to do this,” and gets into the how. Because the minute you do that, and then they take you seriously, I knew exactly what you asked for. I call it malicious obedience.
Cynthia Del’Aria: Yes, totally. I totally get that. Oh my gosh.
Melinda Wittstock: I’ve learned the hard way. I look back on it now. Gratefully, I can laugh. I found my way through that. But really actually, for women to know how to manage a tech team. Now that’s not easy. Do you have any advice?
Cynthia Del’Aria: Oh, totally. So, from my very first company, I started out with like two or three. I’m using the word ‘guys’ on purpose, because I’ve mostly always had men work for me. In the last maybe 10 years, I’ve had a few women who were coders who kind of crossed my path and they were phenomenal. But I had two or three guys on my very first team. On my second team, we were up to almost 40. I’ve managed all size teams everywhere in between both from a purely technical standpoint, like a director of technology or CTO and also from CEO, founder or leader of the company, whatever. The biggest thing, women are far better leaders than men in most cases.
The reason is because we tend to lead with empathy first. Being held accountable with empathy is completely different than being held accountable with a stick. This is what makes us great mothers. It’s what makes us great wives. It’s what makes us great partners. We have this innate ability through our intuition and sort of our ability to sense the surrounding and sense the tone, which is sort of the thing that I always say. Came from a TV show, I can’t remember which one it was. But we have this ability to pick up on what’s needed in the moment. Sometimes people need you to be a little bit of a hard ass, right? They need you to kind of push, they need you to dig, they need you to poke around a little bit, right?
Sometimes what they need is they’re already doing that to themselves. They need you to remind them that gentleness has a place too. We’re really good at feeling that stuff out. There’s been maybe two people in my entire career who have said that they would never want to work for me again, and I had to fire them both. So, there may be a little bit of bias there.
But for the most part, every time I start something new and hire a new team, I go back into the well of people who I’ve loved working with in the past. Every time I’ve asked, they jump, and they come. They work on the new thing with me because they love working for me. I feel like every time I’ve had the option of a female leader versus a male leader, I always go with the female first not because of gender or what am I trying to say like being a… I totally just lost the word.
Melinda Wittstock: Yeah, not like bias.
Cynthia Del’Aria: Not gender loyalty. Yeah, yeah, yeah.
Melinda Wittstock: I know what you mean.
Cynthia Del’Aria: Yeah, yeah, yeah. Not because of that specifically, but because the skills are so much better. Every time I’m talking to them and saying, “Okay, this situation happened, tell me what you would do,” I’m like, “Yep, that’ll get the result,” every time. That is the thing. Guys, they like to strong arm and control. That has a really good use in certain cases, but it’s horrible when you’re managing. What’s funny is, although men think they want to be led by a man, once they have had someone like me or someone with that kind of accountability through empathy mindset lead them, they realize how much they love it and how much more productive and how much more successful they are and how much better they feel doing their job. They don’t ever want to go back.
Melinda Wittstock: Yeah, so that’s interesting, too, because I think it’s changing as more men and particularly young men have had that experience. Also, too, the more that women of an older generation retire this idea that they have to pretend to be a man, right?
Cynthia Del’Aria: That’s right. That’s right.
Melinda Wittstock: Because I’ve seen a lot of women fall into rather than the accountability with empathy into the accountability with a stick because they think that’s what they’re supposed to do, but you see way less of that. That’s the capital B word that ends up emanating from that, right?
Cynthia Del’Aria: Yes.
Melinda Wittstock: But we have to be authentic. I mean, we’re women. Everyone knows we’re women, be women
Cynthia Del’Aria: Yeah, that’s right. There was a time. So, for hundreds of years, the way that “things got done,” and I’m putting quotes around that was the masculine, forcing, shoehorning, driving, that whole feel right, and that was the way things got done. That’s just not the way things get done anymore. It doesn’t have to be the way things get done. What happens is we…. Especially like my generation, I think I was sort of at the tail end of the generation that grew up still in that sort of like “Men are successful in business,” and that sort of overarching, masculine thing. We just need to realize that there are other ways to be successful and to see that success play out.
And then we’ll start to feel more comfortable playing with it, and feeling it out for ourselves, and finding our path, and being our self-expressed selves as women, right? I would say, definitely through my first company and through the sale of all that, I definitely had that masculine kind of like “Do it or else” sort of thing, right? There were things that worked really well and there were things that didn’t. I was very fortunate to be surrounded by coaches and self-awareness training and programs and always looking at “What am I doing and why is it working? What’s not working? How could I be better?” to be able to have some visibility into “Okay, let me try something else.”
I have just evolved over the last 25 years to being somebody who leads from the feminine place because it really works. It feels so good for me, because I just get to be myself. I’m not putting on armor every day when I get up and go out the door, because my vulnerability is just as useful.
Melinda Wittstock: Right, absolutely right. So, you are running a tech incubator, right?
Cynthia Del’Aria: Yeah.
Melinda Wittstock: Tell me a little bit about… It’s called Raika Technologies. Yeah, you got a thing called gotanappidea.com. So, what are the sort of businesses that you’re looking for and who tends to join your accelerator?
Cynthia Del’Aria: Yeah. So, I really like to pluck entrepreneurs right off the trees. So, I typically work a lot with business owners in a non-tech space. A lot of these are like service-based businesses or entrepreneurs who are not technical in background or nature who have an idea for an app, a website, a piece of software, something that will generate revenue, and they’re just not sure where to start. A lot of people find me because they’ve gone to a developer or several developers, and they get these enormous bids, $150,000, $200,000, $300,000. They’re like, “Oh, my God, is that really what it should cost? I don’t even know if I’m justified in spending that kind of money. It’s not that I would be afraid of spending it, but is that right? I don’t even know.”
So literally, I take them back to the beginning, and we start with, “What’s the problem you’re solving? Who are you solving it for?” Because what happens is people get so excited about their idea, right? That spark, that fire, that vision, I want to keep it alive, but I want the undercurrent to be numbers and data and facts. Let’s go the direction that makes the most sense. Because if your MVP is targeted at the real problem and the real people, the cost comes way down, like in every single case, not to mention the timeframe to get to market.
One of my favorite entrepreneurs I’m working with right now, she actually runs a salon and spa. She’s got two locations here in Denver. There’s this problem in the salon and the esthetician industry where you’re getting a facial and you’re relaxed. They’re putting all these gorgeous smells and sounds and how you feel so good and whatever. And then at the end, they’re like, “Oh, I recommend these three products for you.” Maybe they hand you a piece of paper, and maybe you lose the piece of paper between the room and the register; or you don’t remember what they said; or the times when you do buy the things they recommended, by the time you get home. you can’t remember how you’re supposed to use it, or you have a weird effect or whatever, right?
So, closing that sales loop of products that are recommended for someone, and then also having them be able to report back on “Is it working? Is it not working?”, get help when they need it. It doesn’t exist in her industry. She was like, “I think I could increase my product sales if I just fix this thing,” right? So, we started out, and she got a bid like $275,000 or something like that, because it was real big. So, she came to me and we started working together.
Through all the stuff that we learned by doing her customer validation and digging into her market, not only did she realize that she could solve all of her competitors’ problem with this too, but she realized that what she actually needed to build in order to get to market and start earning revenue was a sliver of what we thought in the beginning. So, her cost of development went from $275,000 to about $58,000 and is about six months faster. That was because she did the work, right?
Melinda Wittstock: Right, right. I mean, Cynthia, what you’re saying is so important, because you could go through all this stuff on your own, the hard way and learn all the lessons and keep reinventing the wheel, or you could go and do this. If someone say has a startup idea or they’re on the road to their MV, and they want to come work with you, tell me about the process and how you qualify them and what you’re looking for and that kind of thing.
Cynthia Del’Aria: Yeah. So, basically, what I do is we get on the phone, we kind of chat. Where are you? What’s sort of the gap between you and where you want to be? What are the challenges that you deal with? Because I want to kind of get the lay of the land. Because I do what I do in a group setting, personality matters a lot. I always say, “I love people who will take responsibility for their success, and who will dig in and look at the data, and be willing to ask, “Why is it not succeeding yet?” People will throw up their hands. The first time something doesn’t work, and they go, “Oh, well, that was a dumb idea.” Yeah, that doesn’t work so well in the group setting because everybody’s looking to everybody else to kind of share their experiences and whatever, right?
So, the program itself, it’s eight weeks online. So, we get on Zoom training calls once a week, and then we have Q&A calls once a week where you can like submit questions. We kind of dig into the specifics of how you’re applying the work that we’re doing in your idea. You can be as open or as private as you want to be with that, because I do realize that some people still don’t quite get over the stealth mode conversation. But it all works, it all works really well. And then after the eight weeks, typically, most people have gotten to some level of success with their result and they are very clear about what’s next. A lot of them want to keep going and sort of a mastermind kind of a setting where you have other business owners or other founders who you’re meeting with.
I do Q&A with those groups and group coaching sessions few times a month. You have access to like a Slack channel and all that kind of stuff. You can be in that for as long as you want, sort of a month-to-month kind of thing. Because some people find that they get to the end of the program, they’ve got the result, and they know they want to keep going. But they’ve worked that muscle of asking for help and bouncing ideas off of other people and they really like it. We create this environment where people feel very, very comfortable doing that, because I am of the belief that wherever you are is perfect. The thing that you’re dealing with or the block that you’re up against is exactly where you’re supposed to be.
Usually, we can find a way to use that as like a training ground for what our customers are going through. What are the people that you’re working with or the people who are coming to you for help, where are they stuck? How can you feel some empathy? I have a coach who says, “You’re just having a cup of coffee in their world.” So, I try and create that kind of a world and a lot of times people love to kind of stay in that because it keeps them again accountability with empathy, right?
Melinda Wittstock: Mm-hmm (affirmative) One of the big game changers for me was learning how, first of all, to ask for help, and having coaches and mentors and the right mentor, at the right time, the right coach at the right time and mastermind groups. These can change as well, but I’ve learned so many things. Often it does help especially women just to be able to bounce ideas off of other people that know and can give you perspective and much more besides actual practical skills.
I do find though that women can also fall into a tendency to being overcoached, especially if they’re overcoached by a lot of different sort of potential investors who say, “Oh, if you only did this,” or “Have you thought about doing this?” It gets so kind of overwhelmed with all the different directions they could go in. So, how do you find that balance?
Cynthia Del’Aria: I always tell the women I work with, “Consider the source,” okay? If someone is giving you advice or coaching that you haven’t asked for, consider the source, right? I have two coaches right now. One is like a marketing and business coach, and the other is an intuition and business coach. They’re super complimentary. I love them both and they both know about each other. So, it’s really great and I get to share both things. I’m growing in both those areas, right? When somebody else who’s not one of those people tries to coach me in marketing, I listen politely. And then I go back to doing the thing that I know is right in my heart, in my gut.
Now when I say I listen politely, I’m always open to the universe sending me messages or signs or new directions or things to consider. I’m always curious, okay? Curiosity is a brilliant thing because it takes all the emotion and all the attachment right out of it, right? So, if you get curious with uninvited or unrequested advice or coaching or consulting, maybe there’s a nugget in there. Anything that’s not a nugget are not useful or not worth your time, you’ll just be willing to set it aside. Be grateful for the conversation and the contact and go about your life.
Melinda Wittstock: That’s wonderful, wonderful advice because we do get these kind of divine downloads sometimes from really unlikely people.
Cynthia Del’Aria: Totally.
Melinda Wittstock: So how to be curious and be listening and whatnot. But at the end of the day, yeah, you got to follow your gut.
Cynthia Del’Aria: That’s right.
Melinda Wittstock: You have all the answers within you, everybody does.
Cynthia Del’Aria: That’s right. That’s exactly right. Sometimes it takes somebody outside reminding you or shining a light on it or being a mirror for you to see it, but it’s all there. I mean, a lot of the work that I do with founders is teaching them how to trust themselves.
Melinda Wittstock: Yes, always.
Cynthia Del’Aria: It’s like, “Okay, your intuition told you this, why are you questioning it? What are the myths you’re buying into that are having you question the thing that in your gut you know is right?”
Melinda Wittstock: Always, always, always. So, Cynthia, you have another startup of your own up your sleeve.
Cynthia Del’Aria: I do.
Melinda Wittstock: What can you tell us about that? It’s in the FinTech space. Yes?
Cynthia Del’Aria: It is. It is, yeah. So, we are working on solving complex compliance problems in the financial space related to industries that typically are heavily regulated or that banks don’t like to touch at all. We recently crossed over into an opportunity with a government entity that’s looking to do something similar to this, which is why I’m not going to say a lot more about the ins and outs of it. But this is my first venture myself into a FinTech space. I’ve got a group of five partners who are amazing guys. Two of whom are very, very deep into the security side of things, because that is not something I’m an expert in, and I’m totally okay with that.
Yeah, I’ve got a couple of developers who have worked for me a couple times in the past who are coming on board with this thing. It’s been an interesting sort of timeline because we started all the work middle of last year, putting together the pitch, figuring out what we’re really doing, designing the product, getting all of our ducks in a row. End of Q1 this year was when we were really like, “Okay, we’re ready to start going out and fundraising.” Within about three weeks, we had about $10 million on the hook. We only needed $8, so we were super excited. A lot of people resonated with this, and then COVID. For the first week after the lockdown in Colorado, all of our investors were like, “It’s okay, we’re still going to invest. We just need to like bolster our other companies that we’re already invested in, and let’s come back to it in a week or two.”
By the time it was like early April and we kind of came back around that week or two later, everybody was scared. Everybody was like, “Oh, my goodness. I mean, we’re going to lose these things. I just don’t have time to put my focus anywhere else.” So, we went from $10 million to $0 over the course of about four weeks.
Melinda Wittstock: Oh, my god, I’m so sorry. I mean, I know that’s happened to a lot of people because a lot of funds had to shore up their existing portfolio company. I mean, it’s so funny because Podopolo launched its seed rounds two days before the NBA, you know that day?
Cynthia Del’Aria: Wow.
Melinda Wittstock: When the NBA said, “Yeah, no, that’s it. No, we’re not going to play.” I was like, “Oh, okay. This is bad.”
Cynthia Del’Aria: Oh man.
Melinda Wittstock: Like all things, it’s probably a blessing in a way, apropos to the earlier part of our conversation because we keep progressing. We keep hitting our milestones. We have a million or so in, right?
Cynthia Del’Aria: Yeah.
Melinda Wittstock: In kind of our friends and family. We’re hitting and we have revenue.
Cynthia Del’Aria: That’s right.
Melinda Wittstock: People are liking it. It’s all going well, so. Meantime, all those investors who are really interested are still interested, but what happens in times of uncertainty is people freeze.
Cynthia Del’Aria: That’s right.
Melinda Wittstock: They just freeze, right? I mean, but what I do know is I’ve built a nice pandemic proof business. It’s totally a business of our time. Everything is virtual, it’s all socially interacted. It’s making podcasting interactive, all cool. Streaming, it’s all the stuff.
Cynthia Del’Aria: That’s right.
Melinda Wittstock: So, it’s okay, but yes, I’ve been there before. I mean, I remember I was raising money just before the 2008 as well. Oh my god. So, it’s not the first time, right? Not the first recession, not the first whatever. I think times like this actually speaking of Coronavirus and all the mass is that there’s always an opportunity in it.
Cynthia Del’Aria: This is the time when I get super excited because I work with entrepreneurs and founders and ideators, because the businesses that are designed and created during a time like this and there will be a lot of them, they’re exactly what you said. They’re recession proof or at least recession resistant, because you’re solving problems that come up for people during that time. Think about Stripe, they’re a company that was created in 2007, 2008.
Melinda Wittstock: Mm-hmm (affirmative).
Cynthia Del’Aria: Booming right now.
Melinda Wittstock: Exactly. Now this is exactly right. In this case, in my own, this is the first company that where podcasters can actually make money from podcasting when 85% of them don’t.
Cynthia Del’Aria: Yeah, that’s right.
Melinda Wittstock: There’s a lot of people right now with podcasts and not necessarily with jobs.
Cynthia Del’Aria: They’re trying to figure out, “Is there a way for me to monetize this thing?”
Melinda Wittstock: Absolutely.
Cynthia Del’Aria: Yeah, no, you’re right in there. For us not securing that money, if we had secured that money, we already would have diluted in order to bring in those investors and that capital. Whereas now with the contract we’re talking about with the government entity, that’s money. It’s real money.
Melinda Wittstock: It’s non-dilutive money.
Cynthia Del’Aria: It’s non-dilutive. They’re actually paying us to build a thing. They want us to license it to them for a period of time and to take it out and do something commercially with it as well.
Melinda Wittstock: Okay, see, this is wonderful. See the universe works in mysterious ways. But it’s hard when you’re walking on that thing to not take a setback like that as “Oh my god, it’s the end of the world.” It’s like there’s a reason.
Cynthia Del’Aria: That’s right.
Melinda Wittstock: Right. Sometimes, even with things for people who have service businesses and they have an awkward client. Firing a client is sometimes the best thing you can do because the right client shows up after that, right? Sorry, I think I lost my internet. Did I lose my internet connection?
Cynthia Del’Aria: Yeah, I think you did for a second.
Melinda Wittstock: Okay, okay. I’m just going to pick up… Yeah, I got a little morning on my computer. But yes, these messages we get from the universe when things aren’t in alignment or not working, there’s just a lesson in it.
Cynthia Del’Aria: That’s right.
Melinda Wittstock: It means that’s something else. Keep going. Keep going.
Cynthia Del’Aria: Again, that’s where I say, “If you can put yourself in the mindset of getting curious when it happens, again, that removes the emotion, that removes the taking a personal piece, because that’s the piece that gets us all spun out.” Right?
Melinda Wittstock: Exactly.
Cynthia Del’Aria: We got curious. We were like, “Huh, that’s really interesting.” There were so much resonance in the market with this thing that we had $10 million in a very short period of time. What’s the universe trying to tell us? Let’s get curious and find out. It was about two months later, when we were like, “Oh, my gosh, we would never have been able to leverage this opportunity in this way and come out the other side in the market that so wants us out there owning all of our company. Yay for us.”
Melinda Wittstock: Yeah, yeah, no, that’s great. Congratulations on that.
Cynthia Del’Aria: Yeah, thanks.
Melinda Wittstock: I mean, it’s a wonderful story. So, Cynthia, how can people best find you? What’s the best way so if they’re interested in the accelerator or any of the other things that you’re up to? What’s the best way they can find you?
Cynthia Del’Aria: Yeah, the best way is to go to raikatech.com, R-A-I-K-A-T-E-C-H.com. All of our social media profiles are linked from there, so you can get us on LinkedIn or Facebook or Twitter. I do semi-monthly like podcasts and things like this on our own channel called Incubate This, which is all about like business in tech. And then I also have my startup therapy couch where you can just call, and we can get like quick, fast type coaching into your business or whatever. But everything starts from raikatech.com, it’s all right there.
Melinda Wittstock: Fantastic. Well, thank you so much for putting on your wings and flying with us today.
Cynthia Del’Aria: I love it. I’m a unicorn, so I love putting on wings.