Recently, I have decided to become a founder again. After 2.5 years of being employed/contractor, I just felt it was about time to venture out again.
There were a couple triggers for that decision, which I will tackle in the following few paragraphs.
Firstly, I am grateful for all the people who have put their trust in me in the past 2.5 years and I can honestly say that I gave it my very best every single time. But to be completely transparent, I think a part of me knew that this part of my career was always going to be temporary. I always wanted to be a founder, since I was a kid. It is something deeply embedded in how I think about life. And going forward, I can’t really see myself doing anything else than building companies.
Secondly, around December my personal life started falling apart. I went through a really bad break up. And I had one of those epiphany moments when you ask yourself — what the hell am I going to do with my life now. So again, it felt only natural to me to go back to who I really am.
And finally, I dug up some of my old ‘Evernotes’ and I realised that I have been passionate about this space for the past 4 years. And I feel with every step that I have taken, I have been subconsciously preparing myself to launch Crunchdex.
Before I launched my newest venture, I have decided to write down the biggest lessons from all the startups that I have been ever involved in. And because a couple of my close friends have asked me to share this publicly, you can find the full list below. I sincerely hope it will help at least one of you to avoid making the same mistakes that I have made. If it does, please do let me know. It will make my day.
I will keep it bitesized. So feel free to ask for more details in the comments.
1. ClickandStudy 📚
— marketplace of language schoolsLessons:Not all attention will result in revenue.& Don’t ever accept media for equity.
Screw media for equity, seriously. Don’t ever do that. I know this might sound like a really harsh opinion, but bare with me for a second. First of all, your shiny new media partner will have absolutely zero skin in the game. Second of all, the sheer economics of such a deal never work in the long run. Sure you will see a cool spike in the short term, but at some point there is only as many times as you can recycle a promotional piece of content. And finally, if you are really clever, I am sure you can figure out a way to get in the press anyway.
Secondly, some attention is totally worthless.My first hand experience: We did a viral video together with two Youtube influencers, which now has over 7M views on Youtube. I think only in the first week, it had like 1M views and brought us hundreds of thousands of visitors. Do you know how many conversions we have actually made? De nada. Jackshit. Zero. I mean ok, some people did convert, but none of them became loyal customers. And it had absolutely zero impact on the business.
2. Labelgram 🤳
— influencer marketplaceLessons:**Small Social Media influencers have a bigger influence than celebrities.**If you can’t sell it, don’t even bother building it.
If you want to run a really effective influencer-driven campaign, hire a lot of small influencers rather than really big ones. In early 2014, when I started telling brands that it’s better to hire 100 people with 1.000 followers than one celebrity, to promote their newest coolest product, everyone thought I was insane. How would we manage 100 people? Is this even legal? Don’t they have to tell their friends it is product placement? Shouldn’t we rather work with a pro?
Ok, in hindsight I have to admit, at that point I had no freaking idea about the legal part. And that’s probably like 50% of why this venture failed. But I still firmly stand behind the claim that you should work with small influencers whose followers actually care about what they post. You wouldn’t believe how many big influencers use bots to grow their follower-base.
Don’t build it, if you can’t sell it. I still believe the idea was firm. And if you look at the funded startups in this space, I also think the timing was right. I just didn’t have any experience with enterprise sales at that point of my life. I had a pretty good idea of the influencer/social part. But I should have spent 100% of my time trying to find the first customer before I even started building it.
3. Nestpick 🏠
— Airbnb for long-term rentalsLessons:**If you are a crucial team member, ask for equity as soon as you can.Money can screw up almost any friendship.**
So here is another unpopular opinion, I think you should never ever ask someone to sign a non-compete. Especially, if they are a crucial team member. Instead give them equity or stock options and if they want to leave — fine, let them. But they are leaving their baby behind as well.
Also, as an early employee don’t ever be afraid to ask for equity. Negotiate. Be reasonable. Get it signed. Get it done. Don’t wait. It will always be a difficult discussion. The longer you wait, the more difficult it will become.
Money can screw up any friendship. I hope you will never have to go through this yourself. As experiencing this first hand, especially when you are young can really leave some scars for a long time. There is no real way to avoid this. I think all you can do is try to be honest and sincere. And try to understand other peoples’ motivations.
People will say it’s business. It’s not personal.
The thing is — startups are personal, because you start from nothing with a handful of people and a somewhat crazy idea. So when you start making it, try to keep the same attitude as when you had nothing. It’s tough. Most people can’t manage. But if you ever get into a situation where you have to choose $ over your closest friends, try to take a step back and think. Because you can always make more money, but nothing will bring these real friendships back.
4. Rentomato 🧰
— SaaS tool for Landlords and Property ManagersLessons:**Don’t stay in the same industry just because you think it makes sense. Sometimes timing is more important than execution.**
After nestpick, I felt it’s only natural to do something in Real Estate again. I can now honestly say it was maybe one of the worst decisions that I have ever made.
Why? Simple. Even though, at nestpick my job was to rent out as many places as possible, I never actually cared about the real estate part of it. I was happy to market a service that is much needed and that creates a real value for the customer.
However, when we launched Rentomato I quickly realised that this is one of those businesses that you just need to plow through. It was extremely difficult for me to get passionate about building a SaaS tool which is a nice-to-have but not an actual painkiller. Secondly, we wanted to charge a % commission (on rent) instead of a regular SaaS fee. Now, this looks fantastic in a pitch deck. But in reality every commission business which has some real life component (except a very few cases) will have a pretty unscalable operational part. And this part will cost you a fortune to scale.
In addition, I truly believe timing really matters for startups. In some cases, I think it really defines your fate. So if I now look at successful European prop-tech startups, I feel we were a bit too early to the party. And given our lack of passion, we just didn’t have the stamina nor the resources to make this business a real success.
5. Spaceship 🚀
— Data Mining Company for B2B and B2CLessons: A bit too many :)
Spaceship was probably the one startup that defined my career so far. If there weren’t for Spaceship, I would have never found my passion for data. I would have never been able to join a VC fund. And I would have never made it anywhere.
Yes, we really did have Donald Trump with never@president.com on our homepage :D
The story of how we founded Spaceship is something that I wanted to share for a long time, because I really find it quite funny… so here it comes..
At some point Rentomato was running out of money pretty fast. One day, I woke up, checked our bank account and found out we have have $7 in the bank.
I don’t know why, but my natural reaction was to create a spreadsheet with ideas that could make money immediately. We then ranked every idea on 3 variables — how much it can make, how fast we can build it, and how easily can we market it. The list contained anything from 3D printed weed grinders to webinars. Somehow, we landed on the Spaceship idea. Which for us basically meant to repackage and sell our own lead generation tools.
This business then evolved to a data mining ‘agency’ which serviced hundreds of businesses. However, on this journey we had to hike up the price 1500x. We totally oversold the product offering. We unfortunately totally pissed off some valued customers. And we realised that some businesses are good cash-cows, but a bit of a nightmare to grow.
If I should however share the biggest learning from this whole Spaceship flight — I would say it’s the following: Sometimes the best business ideas come from a desperate need to make money. Now you might be asking; what about passion? Sure, passion is important. But people who are in dire need to make money typically subconsciously evaluate their best skills and go for something that they know how to do fairly well. At least well enough for others to pay for it. I know it doesn’t sound romantic. And sure, most of these businesses will probably not scale. However, and this I firmly believe, it will teach you the most about business. Go and ask every real entrepreneur who had to start from zero at some point of his/her life.
6. DataDaily 🛒 & Nanuk 🍨
— Data Marketplace & — marketplace for co-living (for digital nomads)Lessons**:Do things with passion or not at all.Not everyone is meant to be an entrepreneur.**
During my free time when I was still in VC, I have helped one of my friends and also my ex-girlfriend to launch an online business. Neither of them was a total failure and both of them made some $.
However, it taught me that not everyone is cut out to be an entrepreneur. And there is absolutely nothing wrong with that. Really. Nobody can tell you how to live your life. And if you don’t want to build a company, it doesn’t mean that your career has less meaning or value. It can actually have a lot more meaning and impact than building a startup.
Secondly, don’t ever engage in a halfhearted startup. If you start obsessing about the startup more than the founder, get the hell out. Just say — sorry, and leave. Immediately. And if you can, on the way out of the door try to politely explain to them that in order to start something real, they need to be really committed. Otherwise, they are wasting the most valuable currency — TIME. Not only theirs. But also the time of everyone involved, which is a crime.
7. Other Startups 😶
— Lessons: Not that many
I have been involved in a few other startups over the past few years. Unfortunately, I cannot say that any of them has taught me anything valuable. And that’s fine as well. Not every experience you go through in your life has to necessarily teach you something.
However, once Nathan asked me in his podcast — what is the one learning I would tell to my younger self. My answer was: If you ever look back and you don’t feel what you were doing 9, 12, 18 months ago was stupid, then you are seriously wasting your time. Simply because you are not learning anything real.
If I look back at some of the marketing f*** ups I have made. If I look back at some of the brutally naive sales tactics that I have used. If I look back at some of the terrible business decisions I have made. I FEEL STUPID. Sometimes even a little ashamed. And for me that’s totally fine. This feeling comes from the sheer fact that I am convinced that I have grown and I can do it much better now.
That’s awesome. It doesn’t guarantee that next time around it will be a success. But at least I have learned something.
So these are some of my lessons so far. I do hope you laughed a little. And I do hope it helps at least one of you at some point of your life.
If you enjoyed the read, please ❤ it or even better send me a message.