Even great startups sometimes need to pivot (feat. Francisco Cornejo of Theo) | E2214
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode of This Week in Startups showcases the power of experimentation and data-driven pivots in building successful startups. (02:27) Francisco Cornejo from Familify shares how his team discovered that their Bible-based content was outperforming their general storytelling app, leading them to launch Theo, a prayer and meditation app for Christian families. (07:07) Within weeks, Theo surpassed Storybook in daily sales and now represents 90% of their revenue. The episode also features Colin Sebastian from En Vérité, discussing how AI can streamline due diligence processes, and Jake Triton from Pitch Perfect, who's building compliant SMS marketing tools for high-volume sales teams.
- The main theme revolves around the importance of running consistent experiments, analyzing data deeply, and being willing to pivot when you discover untapped market opportunities that show superior metrics.
Speakers
Francisco Cornejo
Francisco is the co-founder of Familify, the company behind both Storybook and Theo apps. He went through Jason Calacanis's Launch Accelerator program (cohort 20) and has successfully scaled two meditation and storytelling apps for children, with Theo achieving remarkable growth by focusing on Christian families' faith-based content needs.
Colin Sebastian
Colin is the founder of En Vérité, a platform that helps startups prepare for due diligence and assists VCs in performing thorough investment analysis. He previously worked at SoftBank, where he gained valuable experience in venture capital and investment processes, giving him unique insights into the challenges faced by both founders and investors during funding rounds.
Jake Triton
Jake is the co-founder of Pitch Perfect, an SMS marketing platform designed for compliance and high-volume sales teams. He has a background in insurance sales, having pushed $6 million in insurance sales, and has built apps for over 5,000 users, giving him firsthand understanding of the sales process challenges his platform addresses.
Key Takeaways
Run Consistent Experiments and Analyze Your Data Deeply
Francisco's team discovered their breakthrough opportunity by consistently running experiments and deeply analyzing user behavior data. (05:20) When they noticed that users consuming Bible-based stories had better conversion rates, cheaper acquisition costs, and superior retention, they didn't just add more religious content to their existing app. Instead, they recognized this represented a completely different use case - parents wanting to pass on their faith rather than simply getting kids to sleep. (07:13) This data-driven approach led to Theo surpassing Storybook's daily sales within weeks. The key lesson is that breakthrough opportunities often hide in your existing data - you just need to be curious enough to investigate anomalies and patterns that seem promising.
Understand When to Build Separate Products vs. Super Apps
Rather than cramming more Christian content into Storybook, Familify made the strategic decision to create Theo as a separate app. (12:30) Francisco explained that the use cases were fundamentally different: Storybook was about helping kids fall asleep, while Theo was about transmitting faith to children. This meant different content formats (Theo includes video since parents weren't worried about screen time), different user behaviors, and different value propositions. The decision to separate products allowed each to serve their specific audiences more effectively, proving that sometimes focus beats consolidation.
Product Velocity and Design Excellence Create Competitive Advantages
Familify's ability to launch Theo in just three weeks demonstrated the power of product velocity combined with world-class design. (07:21) Jason highlighted that Francisco's team possessed three critical founder qualities: product velocity, world-class design, and being true builders. This combination allowed them to quickly capitalize on their data insights and launch a new product that shared the same codebase as Storybook but served an entirely different market need. The speed of execution prevented competitors from beating them to market and allowed them to capture first-mover advantages in the Christian family app space.
Market Hunger Can Accelerate Growth Beyond Traditional Metrics
Theo's explosive growth was fueled by unprecedented market demand, with Francisco noting that everything they posted on social media went viral due to the Christian revival happening in U.S. culture. (13:36) Their return on ad spend (ROAS) reached $2-3 for every dollar invested, significantly above typical benchmarks. This demonstrates that when you identify a market with genuine hunger for your solution, traditional growth constraints can be dramatically reduced. The lesson is to look for cultural and societal trends that create pent-up demand for solutions that don't yet exist in the market.
Due Diligence Preparation Can Make or Break Fundraising Success
Colin Sebastian revealed that 80% of new founders fail due diligence on their first attempt, with VCs walking away before even issuing due diligence questionnaires. (28:03) En Vérité's platform addresses this by helping founders prepare their financial models, cash flow projections, and data rooms while enabling proper reconciliation between P&L statements, balance sheets, and bank statements. The platform can save founders 50 hours of prep time and reduce fundraising cycles by two months. This highlights that fundraising success often depends as much on operational preparation and data integrity as it does on having a compelling business story.
Statistics & Facts
- Theo represents approximately 90% of Familify's revenues and helped them achieve year-over-year growth acceleration, with the company expecting to reach a $15 million run rate by Q2 2025. (08:01)
- 80% of new founders fail due diligence the first time they attempt it, with VCs walking away from deals without even getting to the due diligence questionnaire stage, according to En Vérité's data. (28:03)
- 85% of early-stage investors don't perform confirmatory due diligence before cutting checks, leaving significant room for fraud and misrepresentation in startup investments. (28:31)
