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A 3-Step Process To Solve Parallel Dependencies In Early-Stage Startups

Mehrsa Raeiszadeh, Co-Founder, MintList

SAAS NORTH NOW #79

Hello to Canada’s SaaS Community,

PYou need traction to fundraise… but you need resources to invest in getting traction. This is a classic parallel dependency problem. It’s also a challenge Mehrsa Raeiszadeh, co-founder of online car marketplace MintList, found a way to overcome, fundraising over $1 million for her startup before writing a single line of code. Speaking with SAAS NORTH, Mehrsa explained her three-step process for overcoming parallel dependencies.

Key takeaways:

  • Parallel dependencies happen when two outcomes are both seemingly required in order to empower the other.
  • Break through this problem by getting to root causes—what does someone really need to see that makes them ask for the parallel dependent outcome?
  • Once you know the real issue, you can create an additional parameter you have more control over.

Dave Tyldesley

Co-Founder/Producer, SAAS NORTH Conference Editor, SAAS NORTH NOW

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So-called “chicken and egg” problems abound when creating a new startup.

But to solve them, you need to see the real issue: parallel dependencies acting on one another.

Once you acknowledge what’s really going on, you can identify and solve for underlying root causes.

This is something Mehrsa Raeiszadeh, co-founder of online car marketplace MintList, knows well; she navigated around these issues and raised over $1 million in committed ARR from key industry players before building the platform.

Speaking with SAAS NORTH, Mehrsa explained her three-step process for overcoming parallel dependencies.

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Step 1: Name your dependencies

Start by naming what you want and what’s blocking it.

A few examples:

  • You want to fundraise to grow, but investors want to see traction first.
  • You want to add customers, but prospects demand new features first.
  • You want to apply for grants, but providers demand you have revenue first.

You may also have multiple of these problems—run a process for each, rather than combining them.

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Step 2: Identify root causes

So that investor wants to see traction. That customer wants to see features. That grant provider wants to see revenue.

Why?

Or, more to the point: what does the demanded outcome provide so the other party feels comfortable giving you what you want?

The key is to focus on the root issue. For example, investors don’t ask for early-stage traction for its own sake; usually, it’s a proxy or signal to help them derisk the investment.

When you can identify the real issue, you can begin to think about alternatives.

In most cases, particularly in the early days, Mehrsa said it’s about trust and confidence. She shared MintList as an example—why would a grant provider support a new online car marketplace when there are two very well-capitalized competitors in the space? They asked for revenue not because they cared about the money per se; it signalled customers valued the differentiation of their solution, so the grant provider could trust the company can survive in a competitive market.

“Okay, I want to build trust—what type of achievement or objectives do you need to meet for this non-dilutive grant provider or investor to build trust and credibility?”

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Step 3: Define a new parameter

When you know the real question, you can look to define a new parameter.

In MintList’s example, the surface level problem was traction, but the real problem—and thus the additional parameter—was building credibility in a space with big competitors.

“I’m going head to head with these $250 million-funded companies,” said Mehrsa. “How are we going to build credibility? How are we going to build trust with these people?”

Here’s how Mehrsa went about that:

  • Signed up customers, resulting in $1M in committed ARR
  • Pitched and got accepted to Google For Startups to demonstrate innovative thinkers saw potential in the company.
  • Went through Creative Destruction Lab, another elite startup accelerator, where the founder of major competitor AutoTrader Canada was a mentor.
  • Won the “Car Buying App of the Year” award at the AutoTech Breakthrough Awards amongst companies like BMW and Lyft.

These were all very difficult tasks, but ones that Mehrsa had far more control over than the parallel dependency of traction and fundraising.

“Instead of having this parallel dependency with one straight line back and forth, we create a triangle,” said Mehrsa.

By getting to the root cause and adding a different parameter to the equation, Mehrsa said she demonstrated enough credibility to raise over $10 million total in two years.

“Creatively define that additional parameter that can break that dependency and create a cycle—and then work on making that a self-sustainable, effective, efficient cycle,” said Mehrsa.

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Always ask for help

Through Mehrsa’s experience, one truth has stuck out: ask for help.

Mehrsa credits her willingness to ask for help as the key to unlocking success. It’s not that people did the work for her, but they helped her through major problems. In fact, she learned how to overcome her parallel dependency of traction vs. money because a mentor taught her to sign up customers as a third parameter in the equation. Now, she even consults with other startups to help them overcome their parallel dependencies.

“There might be someone else who knows exactly how to solve your problem, and is such an amazing mentor that can teach you so well that you become the next teacher,” said Mehrsa. “That’s how the community is built.”

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Hello to Canada’s SaaS Community,

PYou need traction to fundraise… but you need resources to invest in getting traction. This is a classic parallel dependency problem. It’s also a challenge Mehrsa Raeiszadeh, co-founder of online car marketplace MintList, found a way to overcome, fundraising over $1 million for her startup before writing a single line of code. Speaking with SAAS NORTH, Mehrsa explained her three-step process for overcoming parallel dependencies.

Key takeaways:

  • Parallel dependencies happen when two outcomes are both seemingly required in order to empower the other.
  • Break through this problem by getting to root causes—what does someone really need to see that makes them ask for the parallel dependent outcome?
  • Once you know the real issue, you can create an additional parameter you have more control over.

So-called “chicken and egg” problems abound when creating a new startup.

But to solve them, you need to see the real issue: parallel dependencies acting on one another.

Once you acknowledge what’s really going on, you can identify and solve for underlying root causes.

This is something Mehrsa Raeiszadeh, co-founder of online car marketplace MintList, knows well; she navigated around these issues and raised over $1 million in committed ARR from key industry players before building the platform.

Speaking with SAAS NORTH, Mehrsa explained her three-step process for overcoming parallel dependencies.

Step 1: Name your dependencies

Start by naming what you want and what’s blocking it.

A few examples:

  • You want to fundraise to grow, but investors want to see traction first.
  • You want to add customers, but prospects demand new features first.
  • You want to apply for grants, but providers demand you have revenue first.

You may also have multiple of these problems—run a process for each, rather than combining them.

Step 2: Identify root causes

So that investor wants to see traction. That customer wants to see features. That grant provider wants to see revenue.

Why?

Or, more to the point: what does the demanded outcome provide so the other party feels comfortable giving you what you want?

The key is to focus on the root issue. For example, investors don’t ask for early-stage traction for its own sake; usually, it’s a proxy or signal to help them derisk the investment.

When you can identify the real issue, you can begin to think about alternatives.

In most cases, particularly in the early days, Mehrsa said it’s about trust and confidence. She shared MintList as an example—why would a grant provider support a new online car marketplace when there are two very well-capitalized competitors in the space? They asked for revenue not because they cared about the money per se; it signalled customers valued the differentiation of their solution, so the grant provider could trust the company can survive in a competitive market.

“Okay, I want to build trust—what type of achievement or objectives do you need to meet for this non-dilutive grant provider or investor to build trust and credibility?”

Step 3: Define a new parameter

When you know the real question, you can look to define a new parameter.

In MintList’s example, the surface level problem was traction, but the real problem—and thus the additional parameter—was building credibility in a space with big competitors.

“I'm going head to head with these $250 million-funded companies,” said Mehrsa. “How are we going to build credibility? How are we going to build trust with these people?”

Here’s how Mehrsa went about that:

  • Signed up customers, resulting in $1M in committed ARR
  • Pitched and got accepted to Google For Startups to demonstrate innovative thinkers saw potential in the company.
  • Went through Creative Destruction Lab, another elite startup accelerator, where the founder of major competitor AutoTrader Canada was a mentor.
  • Won the “Car Buying App of the Year” award at the AutoTech Breakthrough Awards amongst companies like BMW and Lyft.

These were all very difficult tasks, but ones that Mehrsa had far more control over than the parallel dependency of traction and fundraising.

“Instead of having this parallel dependency with one straight line back and forth, we create a triangle,” said Mehrsa.

By getting to the root cause and adding a different parameter to the equation, Mehrsa said she demonstrated enough credibility to raise over $10 million total in two years.

“Creatively define that additional parameter that can break that dependency and create a cycle—and then work on making that a self-sustainable, effective, efficient cycle,” said Mehrsa.

Always ask for help

Through Mehrsa’s experience, one truth has stuck out: ask for help.

Mehrsa credits her willingness to ask for help as the key to unlocking success. It’s not that people did the work for her, but they helped her through major problems. In fact, she learned how to overcome her parallel dependency of traction vs. money because a mentor taught her to sign up customers as a third parameter in the equation. Now, she even consults with other startups to help them overcome their parallel dependencies.

“There might be someone else who knows exactly how to solve your problem, and is such an amazing mentor that can teach you so well that you become the next teacher,” said Mehrsa. “That's how the community is built.”