“Part of the entrepreneurial thing is there are lots of ways to die.” Reid Hoffmann

The last topic we covered in our startup course: "How to be a great founder?"

Compared to the lecture from Reid Hoffmann taught in Stanford a year ago, Bala chose a slightly different approach - more philosophical.

We talked about several leaders, for instance Mahatma Gandhi, Rosa Parks, Nelson Mandela etc. and what they have in common with founders. There are a few skills that become apparent if we look at these people. All of these skill sets (listed below) are important to run a successful business or be a great leader. As ReidHoffmann mentioned, 

“…you’re not good at all these things. You can’t do it alone.”

As a founder who leads his company, you have to focus on the short term and the long term, take risks on the one hand and minimize them on the other and be flexible and persistent.

Leaders and great founders have the ability to focus on a pattern that does not include an OR. You are not looking for a fifty-fifty balance between the extremes, it is about having a stable vision that drives you even if you act in an uncertain environment. 

Again, the founding team is one of the most important inputs on “How to be a great founder”. No one will ever be a perfectionist in these skill sets, however, as a team with balanced skills you might get close to perfect.

“If you have wealth, it is your duty to help those who don’t.”

Manoj Bhargava, founder of 5-Hour Energy, was one of Bala’s last examples. An incredible story about this successful entrepreneur, he has pledged 99% of his wealth to charity. His current project “Billions in Change” is a leading example for how wealthy people should act. It is about really making a difference rather than just putting money into some sort of charity organisations. Regarding the growing world population and the distribution of wealth, his organization faces three major initiatives: WATER, ENERGY & HEALTH! How is he going to do that?

That should be an inspiration for every entrepreneur to keep going with his venture. Never give up something you believe would make the world a better place! I hope you enjoyed reading my blog so far. My startup course is coming to end with the final pitch this week! I will keep this blog alive, posts are going to follow maybe every two weeks with some diversified input about startups, my entrepreneurial thoughts and things that change the world ;)

Peace! 

„People don’t buy WHAT you do, they buy WHY you do it!” Simon Sinek

My semester comes to an end and the final pitch of our project will be in a few days. The topic of our latest lecture in “How to Start a Startup” focused on culture again, but especially on how to hire great team members and how to retain them.
A question most young co-founders ask themselves probably is:

“How do I find and convince good skilled people to work for my startup, especially in the early stage?”

Well, basically there is no answer to this question and no place where these people are waiting to be fetched. Open your eyes and mouth and start talking to your family and friends, use the opportunity of your network to find the right people you are looking for. In my opinion, students should be more encouraged to do an exchange semester and to get involved in associations so that they built up their own network during their time in University. There is no better place on earth that gives students the opportunity to meet people with different backgrounds, skills and career prospects . For instance, our startup-team consists of two computer scientists, an engineer and two business students, five different nationalities and sometimes five different viewing points…

However, that is the challenge we have to face: we learn to communicate with each other to improve not only our product/project but also our personal skills. The lesson learned for me is share your ideas and talk to your fellow students. Do not just connect on Facebook, but be professional and use platforms like LinkedIn as well.

“Why?” 

A main word that Bala mentioned a few times in his talk. I got very much inspired by the TED-Talk of Simon Sinek which my girlfriend recommended to me for my Leadership class.

"...very few people or organizations know why they do what they do. And by "why" I don't mean "to make a profit." That's a result. It's always a result. By "why," I mean: What's your purpose? What's your cause? What's your belief? Why does your organization exist? Why do you get out of bed in the morning? And why should anyone care?"

His viewing point is based on the ‘golden circle’ – it shows simply how successful companies like Apple think, act and communicate all the way through. Actually, it is an approach everyone should use or at least spend some thoughts on. If you get the message from Simon, you know how you will convince the people to work for you and how to retain them.

Culture fits in your company like your personal values in your action. Create an environment in your business that motivates your employees to work for you because it is a great place and they love what the company is doing rather than your incentives.

„There’s no magic formula for great company culture. The key is just to treat your staff how you would like to be treated.” Richard Branson

Gunnar Holmsteinn, COO of QuizUp, gave us some inspiring insights about the topic “Culture” in the latest lecture of “How to start a Startup”. Before I share some impressions of the lecture a couple of words about Gunnar:

The Icelandic born entrepreneur was founder and CEO of CLARA previously, which is the first Icelandic startup that existed successfully. After this exciting event, Gunnar spent a couple of months in the Silicon Valley and worked for the acquiring company, Jive Software. In 2014 when he started working for QuizUp, the startup had about 40 employees and was struggling a bit with the growth of the company. He gave us some incredible insights how he handled this situation and how valuable a company culture can be. 

As an introduction, Gunnar showed us three different perspectives to take into account when outlining a company, specifically here QuizUp:

#the feature – they are going to be the Trivial Pursuit of the 21^st century -> their north star

#numbers – making the company transparent and interesting for investors as well as employees

#soft-touch/emotional part – the network effect they are creating with their vision

When he started working as the COO, he interviewed all employees and asked them about what is going well (highlight), not so well (lowlight) and topics that are not talked about (nolight) in the company. He analysed the current situation and started leveraging the “lights”. For instance, the QuizUp Camp was initialized, a two day event once a year outside of Reykjavik where all employees are participating. Basically, it is a huge brainstorm and socializing session to reflect the past and the future of the young company. In this way, the nolights and typical lowlights of the startup are considered and discussed. Especially the fast growth of startups make it more difficult for them to keep their traditions. That is why Gunnar puts emphasis on the personal fit already in the job interview. He talks about the values of the company, asks how the applicants interpret them and makes sure that not only their skills match to the job requirements, but also their character.

One story that inspired me very much concerned the following value:

“Wait for Nothing! Risk something!”

QuizUp has just started a cooperation with an American television show. They are going to make a Quiz, which users will use during the show on a Sunday evening. That means a lot of traffic and requires a robust IT-System, because they are going to have millions of active users at the same time. A situation they never had before – something venture! They decided to grab this opportunity of cooperation because they believe in their vision. In order to achieve goals you have to risk something – sometimes the entire company. 

“Hopefully it’ll work!”

Another value that Gunnar talked about a lot and which is the basis for highly performing teams is trust. One measure they introduced are the so-called “Friday-feeling-meetings”. During the afternoon in the chill area, the team members are talking about things that made them happy, sad or angry and share stories from their personal life or the job. Sharing these basic emotions and opening up like that creates a team spirit and trust. Moreover, employees are welcome to bring their family along for breakfast, lunch or even dinner. Very unique, I would say! 

However, many of these attitudes are strongly connected to longer working hours. Nevertheless, people who decide to apply for a job in a startup know that they are rather working to change something in the world than working just for the money.

Gunnar shared an incredible view on teamwork with us, a philosophy that he is creating at QuizUp which is unique and a way of modern leadership which improved the company day by day.

Thanks for the inspiring lecture and if I could have pushed the “feeling button” after the lecture, I would have gone for a happy smile :-)

„If I was down to my last dollar, I’d spend it on public relations.” Bill Gates

In one of my earlier posts, I referred to a street art in Reykjavik, which basically had the intention:
“It’s about the way you climb a mountain and not the size of the mountain what makes it to a unique experience!”

People don’t want to hear the story about how many summits you reached, they want to hear how you reached them – the story behind! Everyone who takes off to the challenge decides to find his own path up to the summit and that makes every story unique. That’s what the PR wants to hear from you, the stories how you became an entrepreneur, how you came up with the idea, found the right co-founder, managed the first pitches, raised the first money and so on…

“Story is everything! It makes you different!” Paula Gould

If you listen to successful people, you’ll notice that they talk about their story like a storyteller. They came up with their ideas by coincidence – e.g. “There was this international convention that took place in San Fransisco (…) all the hotels were sold out (…) we decided to turn the house into a bed & breakfast for the conference (…) we pulled three air beds out of the closet and called it …” a sort of Brian Chesky tells his story about Airbnb.

Making the people curious and wonder is one thing, you also have to differentiate yourself from the competitors. Do not just tell them that your product or service is ten times better, tell a lifesaving story where people can see themselves.
Once again, PR is about network, so get connected to the people around you who have the power to influence certain blogs, magazines or twitter and develop your network to come to light in public.
If you think you can’t handle this or you are not the networker, try to find a co-founder who fits this position or get a PR firm.

“Build something 100 people love, not something 1 million people kind of like”
Brian Chesky

Here we are again on the frequently –probably- most asked questions when talking about startups: “How do I get started?” & “How to raise money?”

It seems like the lectures start to repeat themselves, but these are the starting points most first-time entrepreneurs are struggling with. However the lessons learned are:
Keep things easy and manual as long as possible, e.g. have a simple landing page for your business where people can see what you offer and how they can reach you. Stay in contact with your first customers and make them happy, build a relationship and listen to them!

They are worth more than millions of page likes, because they know your business and how you might improve things. As I mentioned in the blog post last week, these are tasks, which don’t scale in the first place. The value of a relationship is not scalable.


Concerning the topic raising money for your venture, I’d like to keep it as short as possible.
Bootstrap as long as possible and avoid unnecessary capital from people you don’t know.
With every Dollar you get you share or sell equity. That simply means pressure on your shoulders. The more people get involved the more effort for you, because they are interested in the process, reports, status and how their money is doing – basically the whole business! In addition, remember you are running a marathon not a sprint…

In the end, I just want to share one statement with you which I found inspiring. Many successful entrepreneurs and business people talk about it and everybody got this feeling already in his life. Some more, some less. Maybe this talk helps you to find yourself closer to the ‘more’ part:
Getting lucky is a skill!

„Do you know what is so special about this place? Almost the entire country is on Facebook!” Bala Kamallakharan

“How to build products users love – when you don’t have any money!”

&

“Doing things that don’t scale  – while thinking internationally!”

These were the two main statements of our latest lecture. Guest Lecture by Haukur Gudjonsson,

Founder of Bungalo.com and self-proclaimed “Viking Entrepreneur”. 

The startup Bungalo.com is probably one of the best examples when talking about building something from scratch. Haukur launched his company around the same time as Airbnb and both focus on “a house renting platform”. The substantial difference is the valuation which is probably related to the location of the company’s launch. Airbnb was founded in the Valley, full of entrepreneurial knowledge, incubators, high potential growth rates for startups and of course a lot of venture capital. The other one was launched in faraway Iceland, not very famous for its startup scene , barely experienced people in the venture business and not to mention no capital for these crazy ideas.

However, Haukur was smart and travelled to the US and Canada to explore the startup culture and learn about tools he could use. He got support from other experienced entrepreneurs so that he was even more motivated and focused on his project when he returned to Iceland.

“Wherever you see big problems, you’ll find opportunities for companies to improve it!”

Airbnb is a huge competitor, so he set his focus on places Airbnb would not go for. Remote places, bungalows in the middle of nowhere for people who like silence, natural landscape, being away from city life and mainstream places. Locations where you could meet the real locals and enjoy your vacation with family and friends. It took him a couple of years but he was persistent, believed in his startup. He learned programming within 3 months because he could not raise the money for an IT employee or web-designer. He took matters into his hands, started calling owners of a bungalows and asked them to join his project. He used Facebook as a marketing and feedback channel for customers.

He mentioned several times that you actually do not need money to launch your idea.

 “Just do it!”

was the lesson learned again! Grab the chance of the internet to connect with other experienced people, go to meetups  to ask for advice, work in co-working areas to meet other entrepreneurs or go to the Valley if you have the opportunity!

An inspiring lecture by Haukur with just one thing that was thought-provoking. When I asked him whether he would accept a takeover bid of let’s say $3 m he simply said “Yes!”. You probably ask yourself: Why not? Evan Spiegel, CEO of Snapshat, rejected a $3 BILLION offer from Facebook. Think about it and have a look at the interview with Bloomberg ;)

In the second half of the lecture, Bala talked about his vision of Iceland - a unique place on earth where you can test things in a way you could do nowhere else on this planet!

His post and the whole blog gave a new perspective on things by the end of 2011 for many entrepreneurs and interested people. He opened a door for visionaries who saw the future and believed in something. He couldn’t really quantify the outcome of his posts. Of course, he measured click rates and views on his blog. However, he did not get any revenues out of the post but he keeps doing it. His aim is to build sustainable entrepreneurial ecosystems in Iceland, providing a platform where people get support in form of mentoring and Venture Capital - simply something people were looking for!

He created a yearly event next to his blog which he describes as “A Woodstock For Startups”! Or in Paul Graham’s words:

“The recipe for great work is: very exactingtaste, plus the ability to gratify it."

“Almost every failed startup has a product. What failed startups don’t have are enough customers.” Gabriel Weinberg

When talking about early stage ventures the most important thing that matters is growth and growth requires customer traction. That was the major statement we talked about last lecture accompanied by Xiaochen, one of the co-founder of Guide to Iceland.

Guide to Iceland, a startup launched a year ago in August ’14, operates as the largest collaboration in the Icelandic travel industry. Based in Reykjavik, this startup is probably one of the best examples regarding the topic growth. It turned their business into profit after only four months, remember we are talking about Iceland, a population about 330.000 people and around 1.1 million visitors annually.

Xiaochen mentioned many things we have learned from Bala the last weeks already: “…look for a niche market…think about creating value, not about money…do not wait until everything is perfect…ask for the motivation when you hire people etc.”. Nevertheless, what have I took from her speech? It was interesting to see how she talked about the development and I felt already like an ‘advanced entrepreneur’ who knows some principles which matter for startups.
By far the most important and exciting part was the way Guide to Iceland is growing. They do it organically! They listen to their customers and they take their advices to improve their product. Good questions from the audience, which underline that statement like: “Are you planning to implement a booking platform for restaurants like you have for several tours?” Simple answer: “Yes, if the customer inquire that…”  This is what customer traction in conjunction with growth means.

During the second half of the lecture, we talked about the book “Traction: How Any Startup Can Achieve Rapid Customer Growth”. The authors identify 19 different traction channels a startup can access to achieve customer traction. Have a look here for the review; it is already in my reading list.

So what is this curve about? According to the quote, many startups end up at the “Uh-Oh!” point, even if they have a product and customers . Why does that happen? Better, how can I avoid this?

I would like to bring up the Guide to Iceland as an example. I don’t know if they got stuck at that point “Uh-Oh!” but a good solution they found to avoid that was translating their page into several languages – that’s smart! Think about it. Your business operates in the travel industry; your customers are coming from all over the world; what would happen if your website would be only Icelandic? You would not have the product market fit. So make your business accessible for more customers by giving them the choice of choosing from different languages. Conclusion: chance of more growth.
Another statement Bala mentioned:

“Are you growing 5% to 7% a week?”

Simple question and it’s all about the mathematics. Example:

“A company making $1000 a month (a typical number early in YC) and growing at 1% a week will 4 years later be making $7900 a month, which is less than a good programmer makes in salary in Silicon Valley. A startup that grows at 5% a week will in 4 years be making $25 million a month.”

Paul Graham

That means the more your weekly growth rate is the merrier you grow yearly! When tracking the rate week-by-week, you will recognize immediately if you are stuck at the “Uh-Oh!” – Point or if you hit the rate, you know you are climbing the right path towards the summit.

The time is running and our startup-project is in process, the pitch is going to be in a little bit more than a month. Next week I’ll give you further updates about the status and come up with some more details. 

“Competition is for losers” Peter Thiel

If you want to create and capture lasting value, look to build a monopoly, writes Peter Thiel.

Based on the lecture from Peter which he taught in Stanford a year ago we talked about the value your company creates and how to capture this value in the first part of our course “How to Start a Startup”. That simply means, are you in a perfect competition or are you a monopoly? On which site do you see your company? What do you focus on? Do you compare your business with competitors and try to find better solutions than they do? Or do you keep focusing on the niche market you identified because you know your product is going to create a demand? 

I totally agree with the fact that competition is good for our markets, because it forces businesses to get better in what they are doing to stay ahead of competition. Even in my personal life I’m competing because I compare myself with people around me and strive to beat the ones who are doing better than me. That makes you grow!

When we talked about monopoly, we do not mean the resource-based industries which control prices by regulating the amount of vital resources. We are interested in creative companies that give customers more choices by adding entirely new categories of abundance of the world, was one of Bala’s points. Let us take Google as an example. How do they see their business? Would you say that this is a monopoly?

Probably most of the people would say “sort of, yes…” and that is obvious, because they own 89,6 %  of the internet search engines market in July 2015, followed by Yahoo with 3,4 %. 

What if Google is not just a search engine? Suppose we say it is an advertising company – that would change things immediately!  The size of this global market is not just a few billion, it is half a trillion – around 8 times Warren Buffets’ net worth.

In addition, no one would say that Google is doing something illegal or it reached this position because the governments pushed it. In 1998 when Google was founded, it was going for a small market, but by now it has taken the whole market over year-by-year and has found ways to expand country-by-country. Again, it never focused on competitors and when Google started there were already 20 search engines, but Google focused on developing its concept of search in the www.

In the second part of the lecture, we visited the QuizUp HQ in Reykjavik and attended a talk about the android technique behind the game and social network apps which they are creating. It was interesting to explore a startup office and to see how colourful and homely everything was furnished. The talks were very theoretical and focused on the programming part, not really my topic, but socialising and networking during the event was very interesting.