It has been too long since my last blog post, I admit. But trust me, this has not been due to a lack of ideas or motivation, to the contrary… All of the following were started… The power of growth mindset,an analysis into the Netflix culture, lessons learnt from our culture day - all to be shortly replaced by a new idea… Then after speaking to more and more budding young companies, I started to remember just how vulnerable you are at the beginning, so I knew I had to write this.
The past six years of Tada, have been a hell of journey, full of ups and downs, sleepless nights, extreme anxiety, combined with feelings of pure elation, excitement, overwhelm - all packed together like a tetras block on a roller coster ride. As a result, I believe that it is only right to share our experiences, to write, to speak and to connect with startups, and others on a similar journey. Maybe with those a little further behind us from whom can learn from some of our ideas and terrible f*ck ups, or to those well ahead of us, from which we can connect to and learn from as well.
But before I get started, I need to already ask you to please excuse my complete and utter, unadulterated transparency. Well, actually, I am not asking to excuse me - I am warning you in advance. For some the truth can hurt. You see, as a result of getting more involved in the European, and more and more the global, "investment/tech/startup" scene - where I have spoken at and attended a number of events, from global CEO conferences, to Women in tech, to investment gigs in flashy London hotels, fancy Economic State visits to Paris, and soon to be added: my up and coming TedX talk, I have been both excited, but also absolutely appalled at what I have seen and heard... Great investments? Incredible mentors? Excellent acceleration programs? Sometimes, but also huge amounts of BS.
Second disclaimer - all thoughts are my own and I strongly believe there is no "one size fits all" model when it comes to building companies, but here a few lessons we have learnt that may be of interest...
1. Treating every piece of advice as though it’s a message from the Gods.
There I was, sitting in a Fit4Start jury room, listening to myself speaking. "Yes, but the two sided market place is tough, try to just get one side of the ground first, before you do both and you will scale faster if the market is right." Then boom - it hit me, was I even right? The guy was looking at me, as though every single word coming out of my mouth was spoken directly from a "startup" holy grail... Most people thrive of this level of admiration.. but not me, I was just sitting there thinking "holy crap, what if I am speaking crap and this guys business was at MY mercy?" Since that moment, I haven't stopped giving my opinion and thoughts, but ask the startups to challenge it, to say that if they have a better idea - go for it and to actively prove me wrong.
OK, back to the blog.. I am the first to admit that in the early days everyone had an idea about our perfect market, our revenue model and our business in general. Oh man… we totally listened!! Why? As you may know, I am a psychology junkie and I am guessing that a little bit of this was caused by what we call the “halo effect.” Basically, this is a cognitive bias in which the brain allows specific “positive” traits to positively influence the WHOLE evaluation of a person or situation. Huh?
Let me explain… As young and inexperienced Founders we walked into a VC’s board room… It was so so foreign, so surreal, so f*cken terrifying! In the beginning, a VC was like, well a God - after all, for us their investment determined our fate, our survival as a company... As we sat down in the chic leather chairs, observing thousand euro pieces of artwork littering the walls, drinking our individal mini bottles of San Pellegrino, we were in awe of their success. From that moment, it was like every word they spoke must have been gold for building our startup… Their mere presence was, well regal... Oh dear, oh dear, oh dear. After the “honey moon” phase came to an abrupt end, we were snapped out of this effect like a click of a hypnotists fingers. We soon learnt that in fact many of the VCs, investors and angels we had met have never in fact started a company. Sure, they were extremely knowledgeable, and had a lot of experience (in some cases) but listening to them had been extremely detrimental to both our startup and our business model.
Now, I am not saying don’t listen to anyone, far from it. In fact, I am the biggest preacher of getting on board experienced advisors as early as possible. But to all young startups: please understand, no one knows your product or technology as much as you. Listen, listen to everyone but be discerning, especially when it comes to VCs and investors. A lot are nice, but at the end of the day, most are in it purely for financial return. Be honest, ask the right questions and get a good feel for their vision before it drags on. Oh, and don’t let the halo effect blur your vision, they fart in the bath too.
2. Understand how much is left in the fund.
I promise this blog post is not a "pick on the VC" session. Some of my best friends are amazing investors and my own investors rock, but the thing is - investing and startups go together like peas and carrots - but startup life is like a box of chocolates (see what I did there? ok ok) and getting investment is often critical early on in the startup life time - hence my emphasis. Now, time is arguably the most critical resource for a startup. How much runway is left feels like a chronic illness, constantly haunting your thoughts, and you feel like you need more hours in a day. As a result, misleading negotiations with potential investors can prove fatal for young companies. What do I mean?
For example, we entered into discussions that were drawn out a few weeks by about four different funds… Why?…. A few reasons, but the most pressing was because they had almost no money left in their fund. What?! I hear your exclaim. Yep… some weren’t being deceitful, they were literally on the cusp of raising a next fund, others were flat out dishonest to get market or competitive information. But in any case, one of the first questions when sitting down with potential investors is… “when did the fund start?" "How many portfolio companies have you invested in?" "Do you allocate future capital for following through the next rounds?" and of course, "have you still got sufficient capital to potentially invest in my company?” Some will disagree with me, but an early stage startup is a very delicate beast, and honesty is critical. I am not saying this needs to be a first question, and you have to pose such a question, delicately and strategically - but understanding where a fund is in their fund cycle is key.
3. Be very wary of people or entities that promise to "raise your capital"
“Guaranteed seed round” “We are experts at raising Series A investments…” I get it. I get it very well. As Founders, we spent the first three years raising money. It was shit, pure shit. It was stressful, and the idea of someone coming in, raising capital and freeing us up to focus on the core business was, well a dream come true. Now again, it works for some - I am sure. But in our experience, a critical part of our fund raising was illustrating that us, the Founders, were capable of ANYTHING - from raising capital, to creating a kick ass company culture, to building a technology that was arguably on of the most disruptive in the world. Sure, networking is critical and introductions are an absolute necessity but I strongly believe that founders need to raise their own capital. NOTE: This point is focused primarily at early stage startups raising seed and series A investments. There will be a time when someone, potentially someone on the Board, or within the company is responsible purely for raising investment, and I am not saying that Founders need to be responsible for this for the whole journey - thank God.
4. Some women will empower, others will try to kill you.
This point is a tad specific and maybe unjustified. To be honest, this point should be approached in the same manner I approach really angry emails. Write them. Save them. Re-read in 20 minutes, and usually delete them... But the fact it is, I am currently at a very large business event, somewhere in Europe, organised by a random company. (Good work, Genna - at least you are remaining anonymous). I am the youngest, almost most female in the whole event. I have made an effort to approach and talk to a number of high ranking, older, influential women - all to be disregard by a number of them - I am a little pissed, no, I am super pissed - not just for me, but for the next generation.
From my experience, it is true that there are women in business that will support you like no other, I have a few I am so fortunate to be surrounded by (Hedda, Larissa, Aude, Linda - thank you). But there are others, often older, super powerful women that want nothing more but to see you burn, Why? I have questioned this point numerous times. Maybe they are angry they are getting old? Maybe they are jealous? Maybe they like being unique? Maybe they just don't care? It could be any one of them. Each time I am "burned" by another women, I can’t help but return back to a conference I attended in the Netherlands, where Nelly Kroes mentioned the famous quote by Madeleine Albright - “there is a special place reserved in hell for women that don't support other women. ” So this point is an outcry for the older generation, both men and women for that matter, to please don't be scared of us "annoying millennials" - we are building upon your foundations, we are the future (can you hear Michael Jackson? I can). And to those "annoying millennials" be wary, choose your allies wisely and have a thick skin when it comes to those who are scared of you. Use your senses, gut feelings and intuition when you walk into a business deal, setting or new environment and above all EMBRACE YOUR UNIQUENESS - it rocks.
5. Those who do. Do. Those who can't. Teach.
Business advisors... business advisors... business advisors. Choose them well, understand what's in it for them and be sure they have your best interests at heart. A favourite talk of mine is how much we screwed up in the beginning with regard to our, well, lack of product market fit... After getting what we thought were kick ass business advisors to help us build out our market research and revenue model, we built a solution that we now refer to as "the swiss army knife." A platform that targeted B2C, B2B, B2B2C... Oh man... For a startup with few resources, lack of marketing budget, little to zero design resources, and hardly any knowledge of the market - it was one very very big f*ck up - what I like to refer to as - the time we decided to shoot a machine gun into a bunch of pigeons. Now sure, inevitably, it was us, the Founders who made the decision of who to target, but it was driven hugely by the advice we had received. So, similar to my earlier comment: ensure you don't jump on ideas blindly, talk to multiple actors involved in the formula, test, test, test, and test the market before you build too much and above all be discerning and smart about who you take advice from! If they want a bunch of cash at the end of the month, don't buy into your vision or make you feel uneasy - maybe it's not the best match!
So there you have it, my take (thanks to all our wonderful f*ck ups) on what young budding startups need to watch out for. The message is the same across many of the points, do your research, ask the right questions, don't be blinded by the halo effect and above all - don't let grumpy old people burst your bubble. We are the future!