As some may have seen, we recently announced a $20 million funding round to scale up our test coverage as a service product — check out our website to learn more. We are excited to keep improving our customer experience with this new capital!
In fact, the story of how we raised our early funding and found product-market fit continues to inform and inspire our product development and approach to customer service. We hope that you enjoy the early chapters of our story, and that our learnings can help other founders avoid some of the mistakes we made 😅
Building in the dark
In early 2019, Jon and I started working full time on QA Wolf. We had both experienced the pain of broken web apps in our previous jobs, and wanted to help developers ship confidently.
Like many others at the time, we were also enamored with the potential of AI. We spent the next nine months building an AI to automatically create end-to-end tests on a website.
We made lots of mistakes during this time. We built completely in the dark: no one was using our product. Without user feedback to guide us, we kept prioritizing the goal of using cool technology over the goal of solving a real problem.
At some point, the obviousness that things weren't working became too unbearable. We made the painful decision to abandon the AI infatuation in favor of shipping something — anything — to see what developers thought.
We raced to build and open source QA Wolf, a basic CLI that created test code from browser actions.
The first version was terrible. Still, the initial interest gave us confidence that this was a problem worth solving.
At this point, we didn't have a business plan. We took the gamble that we would learn what to build by understanding our users and their pain points.
The next several months were a grind. We continued to iterate on QA Wolf based on feedback from a few known users. We also started building a hosted version to address the most common issues.
Still, when things felt dark we couldn't help but wonder if enough people cared. Was this still worth doing? When these questions arose, we kept ourselves going by refusing to give up on the few users we did have.
By July, we were exhausted. We took a much-needed vacation to the Olympic Peninsula. We were recuperating by the ocean when I heard the familiar "ping" of a notification on Jon's phone. A few seconds later, he said, "somebody tweeted about us."
"Cool," I replied.
Then he showed me - it wasn't just somebody, it was one of our heroes: Vercel CEO Guillermo Rauch.
After months of coding and wondering if anyone would notice, this felt huge. We were honored that Guillermo had somehow found QA Wolf and was impressed enough to share it.
Enter Sahil Lavingia
The excitement continued when two minutes later, Jon received a direct message on Twitter:
We had been following Sahil since reading about his journey with Gumroad. We knew he had recently started a rolling fund, and were hopeful about the possibility of Gumroad using QA Wolf.
It took us almost half an hour to reply, since we were worried that our response would scare him away. Finally, we settled on an attempt at coolly answering the question while throwing in some fan service. Then we held our breath:
Thankfully, he wasn't scared away and offered to meet with us:
We scheduled a meeting about a month from then. We had never pitched an investor before and needed time to prepare a deck. We also hoped to demo the hosted version of QA Wolf, which was barely working at the time.
The next few weeks were a blur of preparing to pitch Sahil and duct taping our product together fixing bugs.
Finally, it was time. We were nervous in general and in particular because our dog had recently started acting up during video calls.
The call started and we introduced ourselves. We went through the deck and outlined the problem we wanted to solve: the fact that most end-to-end testing is still done manually (despite the availability of many automated testing options).
Our pitch seemed to resonate with Sahil, who told us that Gumroad didn't have automated tests. My nerves calmed as I realized that he already was at least somewhat bought in. This was a problem he had experienced himself, so he knew there was room to solve it.
We ended the call by discussing whether or not we should raise money. We had originally planned to get more traction before considering it, but Sahil thought we could probably raise a round now. We all had to make a decision: Sahil on whether he wanted to invest, and us on whether we would raise a pre-seed round.
Up to that point, we had kept QA Wolf afloat by dipping into our savings and by moving from NYC to Montana to decrease our cost of living.
Jon and I evaluated our options. We ultimately decided to try to raise money because:
- We were excited about the advice and accountability people like Sahil would provide
- We wanted the flexibility to support ourselves and to bring on others to help us build QA Wolf
We emailed Sahil that we would raise up to $1 million. Would he like to write the first check?
We hoped he would say yes, but became less optimistic as the hours passed.
The next morning, we had our answer:
"I'm honored and in! You can send the YC SAFE docs."
First check in...then lots of rejection
Because of the rolling nature of Sahil's fund, we had to wait until the beginning of the next quarter until he could invest. We continued to improve QA Wolf in the meantime, since we didn't want to approach other investors until Sahil's check was in the bank.
On October 1st, 2020, we nudged Sahil over email to check if the investment was still happening. We were relieved to find out it still was, and our first check was officially in a few days later.
Now we had to raise the rest of the round. We decided to take Sahil up on his offer to make introductions to other funds and angel investors.
We put together a list of people we wanted introductions to. We were naively optimistic that it would be easy to close the round, since Sahil was already on board.
Sahil sent our blurb and deck to the people on our list, and we eagerly awaited their response. In most cases, it never came.
In hindsight, it was not surprising that our deck's quality left something to be desired. Yes, this was really our cover slide.
Deck quality aside, Sahil still eventually managed to line up two meetings — better than zero! We tried not to get discouraged and focused our energy on preparing.
The meetings came and went, and we were excited about the possibility of working with the investors we met.
Unfortunately, we learned that the feeling wasn't mutual. We also learned that investors are really good at saying no without sounding like they are saying no.
The rejection hurt. We now viscerally understood that not everyone would believe in us or our company.
I was particularly disappointed that we had been rejected without at least having a chance to respond to any concerns. I had been mentally preparing to give the "hard sell," but the investors didn't even want to hear it.
The pain eventually faded a bit with time and reflection. While being turned down still sucked, I realized it probably sucked way less than having someone on board who wasn't fully bought in. I wanted to feel like our investors had willingly chosen to join us, not been pressured into it.
Still, making peace with rejection didn't solve the matter of closing the round. We started to worry that Sahil had been a fluke, and that there wouldn't be other investors who believed in QA Wolf. We debated giving up on fundraising entirely until we could improve our product and show more traction. Perhaps then it would be easier for others to believe in what we were doing.
Finding our lead investor
With nothing to show for Sahil's introductions, it felt like we were running out of options. We only had one possible conversation left. It was with a NYC-based fund called Notation that had invested in a company Jon worked for before QA Wolf.
With the sting of rejection still fresh, we tempered our excitement when they agreed to meet with us. We reasoned that they were unlikely to invest since we were no longer based in NYC. Besides, they had probably just taken the meeting out of courtesy to Jon.
Our first meeting was with Alex Lines, one of Notation's partners. We enjoyed the meeting, and appreciated Alex's perspective on our questions. We tried to learn as much as possible from him about topics like pricing and which customers to target.
We thanked Alex for his time and hoped for the best. The next day, he introduced us to Nick Chirls, another partner at Notation. Maybe we had a chance with Notation after all?
We met with the Notation team a few times, and I started to really like them. I learned from every conversation, and thought their focus on early stage companies aligned well with what QA Wolf needed. I knew I had fallen a bit too hard for them when I couldn’t stop browsing their Operating Manual and imagining how awesome it would be to work together.
After spending so much time worrying about what investors thought of us, forming an opinion about them felt like a luxury. In hindsight, I've come to appreciate the value in making sure you're excited about your investors. They will be on your cap table and influence the company you build forever.
After meeting with Notation a third time, we learned that this time the feeling was mutual.
Notation's investment would bring our round to $850K. We were thrilled to have found a lead investor, especially one we liked so much.
Closing the round
It wasn't $1 million, but we were happy with $850K and even happier to have Notation and Sahil on board.
In a surprising turn of events, several investors reached out to us after Notation invested. However, their minimum check sizes would have put us too far over our $1 million target. We politely turned them down and offered to stay in touch.
We figured we were done raising money, but a few days later we woke up to a text from Sahil:
We said yes, mostly because we trusted Sahil's judgment that he would be great to have on board. It was particularly gratifying to see that belief in QA Wolf could spread without our direct participation.
After some back and forth over email, Naval's check was in and our round was complete! Overall, the process took about six weeks from first to last check.
It was quite a journey to get here, but we are excited to finally write about our first $1.1 million in funding led by Notation Capital with participation from Sahil Lavingia and Naval Ravikant. We’ve since raised over $20 million total (details here), and the QA Wolfpack is now over 60 teammates strong. 🐺
We are beyond grateful for this opportunity, which began when we took a chance and released the first version of QA Wolf. We learned the hard way that we got farther by releasing a very incomplete product than by trying to build something perfect in the dark.
If you want to ship something but are scared it isn't good enough, I hope our story can provide some encouragement. Whatever you ship is unlikely to be worse than the first iteration of QA Wolf 😉
Still, we would not have gotten this far without lots of help. If you're starting something new, I'd love to help however I can. You can find me at firstname.lastname@example.org.