The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Five Lessons Scaling Toast to $14BN Market Cap | The Biggest Mistakes Founders Make in Fundraising, Hiring and Selling with Aman Narang, CEO @ Toast

Aug 21, 2024

Aman Narang, Co-Founder and CEO of Toast, shares insights from scaling the vertical SaaS company to a $14BN market cap. He discusses critical mistakes founders make, emphasizing the need for early fundraising and hiring managers sooner. Aman reflects on crucial moments in Toast's growth, revealing the importance of quick decision-making and adaptability. He also addresses the challenges of navigating the restaurant tech industry and the transformative potential of AI and data in improving operational efficiencies.

01:03:33

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Aman Narang

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Quick takeaways

Recognizing market signals and acting swiftly are crucial for startup success, enabling rapid product development and necessary pivots based on customer feedback.

Balancing generalists and specialists within a startup is essential, as incorporating domain experts can improve operational efficiency and facilitate better scaling.

Customer feedback plays a critical role in product-market fit, as exemplified by Toast's pivot from QR codes to point-of-sale systems through direct engagement with restaurant owners.

Deep dives

The Importance of Speed in Business

Recognizing market signals and moving quickly is crucial for startup success. Speed allows businesses to launch products, learn from customer feedback, and make necessary pivots efficiently. Emphasizing the value of swift iteration, founders are encouraged to release products even if they are not perfect, as this can facilitate faster learning and adaptation based on user interactions. The case of Toast illustrates how early fast-paced decisions contributed to their survival and growth.

Build Gradually, Integrate Thoughtfully

02:30

Value First, Talent Drives Success

02:54

Engage by Addressing Pain Points

00:39

Embrace Humility and Trust Your Instincts

01:23

Intro

4min

Formative Experiences: From Childhood Challenges to Resilience

2min

Navigating Startup Challenges in Restaurant Tech

23min

Strategic Growth in Restaurant Tech

25min

The Crucial Role of Culture and the Promise of AI in Business

2min

Transforming the Restaurant Industry Through Data and Efficiency

5min

Navigating Software Challenges and Innovative Solutions

3min

Aman Narang is the Co-Founder and CEO of Toast, one of the best-in-class vertical SaaS companies of our time with a market cap today of $13.5BN. Five astonishing stats that show the quality of the Toast business today:

$1.2bn in ARR with 48.4% from payments.

Toast Capital has reached $1bn in annualised loans originated.

875k restaurants in the US (Toast has 112k: 13% market share)

75% of locations are coming from inbound channels

The first investor in the company invested $500K at a $3M price

In Today's Episode with Aman Narang We Discuss:

1. The Biggest Mistakes Founders Make:

Why does Aman believe that founders should spend more time fundraising and with investors early?
Why does Aman believe founders should hire managers before they think they need them?
Why does Aman believe that founders do not give up control early enough?

2. Lessons Scaling to a $14BN Market Cap:

What did Aman and Toast do so successfully that allowed them to scale to $14BN market cap in 12 years? What worked?
What are the single biggest mistakes Toast made that hindered their growth most?
What are the first things to break in hyperscaling companies?
What opportunity did Aman and Toast not take that with the benefit of hindsight, he wishes they had taken?

3. Crucible Moment Decisions: Expansion:

How did Aman and Toast know when was the right time to release a second product?
What has enabled Toast Capital to scale to $1BN in loans so efficiently?
How did Aman and Toast scale so successfully into both enterprise and SMB? What are the biggest lessons from doing so? What did not work?
How do Aman and Toast approach geographic expansion? How do they choose which countries to expand into?

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