Scrappiness

If you’ve made the mistake of following VCs on social media, or, even worse, you listen to VC podcasts, there’s a high chance that you’ve heard them describe founders as ‘scrappy’. Despite sounding like a dirty word, if a VC calls you scrappy that’s actually a good thing.

I love the team at HireCo, the founder is just soooo scrappy – GenericVC Pod (Episode #3754)

VCs adore scrappy founders. Just like the traits we discussed in the previous two lessons – domain expertise and the ability to recruit strong talent – if investors believe you’re scrappy, it can take your team from an 8/10 to a 10/10. If you’re fundraising, you want this.

Unfortunately, convincing VCs that your team has this trait is easier said than done. So I created this lesson to give you a blueprint for doing just that. We’ll start by explaining what the hell scrappy even means.

What the hell does it mean to be scrappy?

Scrappiness is pretty hard to define, so I'm going to explain it by telling you two stories about founders whose actions show it. The first story is from a company I worked with when I was a VC, the second is from the early days of the billion dollar dating app, Bumble.

The ClothesBox Story (names have been changed to protect the team’s privacy)

ClothesBox, is a startup that helps people sell used clothes on resale platforms like Depop and Vinted. Here’s how it works:

1. Users send ClothesBox photos of the items they want to sell
2. ClothesBox then uses an algorithm to figure out the optimal price for each item
3. The items are then listed on multiple resale platforms
4. Once they’re sold, ClothesBox handles logistics and delivery
5. In return, ClothesBox gets a cut of the revenue made in each sale

Our story is from ClothesBox’s early days. When the company launched in 2023, they got a ton of traction. In just a few months, they had onboarded thousands of users and were processing hundreds of items each week. It was the fairy tale launch story.

There was just one catch. The pricing algorithm that was powering the entire businesses didn’t exist. In reality, pricing was being done by Jemima, the founder. Every evening she would literally look at hundreds of uploaded pictures, research them and price them by hand.

Why? They lacked resources. They couldn’t afford to hire someone to build the algorithm, but they didn’t want to have to wait until they raised money to figure out whether customers actually wanted their product. So Jemima became the algorithm. It was extremely painful, but she had to do it to succeed.

The Bumble Story

Bumble, is a pretty famous dating app. In their early days, one of the biggest challenges they faced was launching new locations. What made this so hard was that it wasn't just about getting a lot of new users. For a launch to work, Bumble needed to get

A lot users

In the same area

At the same time

With a healthy balance between both genders

If they failed at any of these things – the network wouldn’t take off. To make matters worse, they needed to do this over and over again across thousands of towns and cities.

The obvious way to solve this was to use ads, however, at the time they didn’t have millions to spend on marketing. They needed something repeatable, effective and cheap.

The way they solved this problem was genius. Instead of relying on ads, whenever Bumble launched in a new location, Whitney Wolfe Herd, the founder, would go to that location in person. Whilst there she would literally visit all the local sororities and encourage their members to download Bumble. Once that had worked, she’d go to nearby fraternities and tell their members that hundreds of women had just joined the app. This became the main strategy that powered Bumble’s early growth.

Think about the implications of this for a second. Wolfe Herd not only came up with this really clever strategy, she literally spent months driving to hundreds of university campuses to make it happen – all while developing the product. While the strategy itself was creative, what she was willing to physically do to make it work was extraordinary.

What do these stories tell us about scrappiness?

On the surface, the stories I just told you are very different – one is about technical limitations, while the other is about launching a marketplace. However, despite these differences, both stories create the same impression about the founders within them. They both manage to make their founders sound scrappy.

How do they do this? Despite their surface level differences, the stories have the same two elements at their core. Examining these similarities closely, can tell us what makes something scrappy. The shared elements are as follows:

Element #1 – In both stories, we’re presented with a company that needs to achieve something but can’t due to a large obstacle
This obstacle is often, but not always, a lack of resources

• ClothesBox needs to make an algorithm but can’t afford ML engineers
• Bumble needs to get huge number of users simultaneously but cant afford ads

Element #2 – In both stories, we’re shown the founder overcoming the obstacle by doing something unconventional
The obstacle is normally overcome by the founder doing something creative or high effort

• ClothesBox solves its problem by the founder literally becoming the algorithm (high effort)
• Bumble solves user acquisition by the founder targeting sororities and spending months physically travelling around the country to meet them (creative thinking + high effort)

These two elements make it so that, by the end of the stories, we’re convinced that the founders in them would do anything to make their startups succeed. Plus we get a sense that they are smart or creative enough to find ways of solving problems that others would miss. This vibe is what VCs mean when they say a founder is scrappy.

Why do VCs love scrappy teams so much?

Now we’ve defined scrappy, it becomes extremely obvious why VCs love teams that have this trait. VCs recognise that someone who is creative and willing to do anything to win is more likely to succeed than a ‘normal’ person. If they had to pick between a founder and their scrappy clone, investors would always pick the clone.

Which brings us to the million dollar question… How do you convince VCs that your team is scrappy?