“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! 

“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. 

“The way to learn how to do it is just to do it” Paul Graham

I worked my way through the first three weeks at the University of Reykjavik and I probably understand much better what studying really means for me now compared to the last 3 semester back at my university in Berlin. 

That doesn’t mean that I wasted any minute in my life or regret (almost) any decision. I will turn 25 next month, I’m in the second year of my Bachelor’s, I took around 1,5 years off before I got to the point to decide to start studying. And that’s what life is about, doing things you’ve never done before, making these unique experiences, building up your own vision of life and setting up all the adjustments to CHANGE the world to a better place.

So far so good, but how does that fit to a startup?

Let’s reflect the last couple of weeks to see what I’ve learned about startups so far and why I chose this obvious quote this time… 

“No school can teach you to be a good CEO.” 

Bala Kamallakharan

Of course a uni can teach you stuff like Management, Leadership or even Marketing and techniques how to become  what you want, but just listening to that doesn’t turn you into a good entrepreneur. What really matters is your enthusiasm, your faith in your idea, because that is what keeps you motivated and convinces investors and founders to join your startup. The 6 counter-intuitive beliefs about startups Bala mentioned, based on Paul Grahams’ talk a year ago in Stanford University, emphasize what I mean:  

#1 Startups are weird , don’t follow your instinct

#2 You don’t need expertise in startups to succeed

#3 Gaming the system in startups doesn’t work

#4 Startups are all-consuming

#5 You can’t tell if you succeed doing a startup

#6 Don’t consciously think of startup ideas to do a startup

Well, my conclusion out of the first part of the lecture and the last couple of weeks is that this fast growing business model is something special. Everybody can do it, but not everybody will do it the right way because there is no right way. There is a little guidance available and there might be a few people who are willing to support and join you. Nevertheless, to draw attention to your idea and your team you have to bring the idea to life and start talking to the people and networking.

“SomethingVentured” - the documentary film about the evolvement of the venture capitalism in the mid-20^th Century was a matching second part of the third lecture. It showed us how everything started. In this highly risky business, the focus is not on the money, it’s rather on whether the entrepreneur is able to lead a startup and reach his vision by using Venture Capitalists as mentors and experts as well as their business networks. For instance, many VCs didn’t see the capability of Apple (or Airbnb and Uber) as a unicorn and neglected to support Apple as a startup in their early ages. Now they are surprised at Apple’s success and regret not having invested in the first place.

Quote of the movie from Nolan Bushnell (founder of Atari) about an investment in Apple:

“He asked me if I would put $50,000 in and he would give me a third of the company. I was so smart, I said no. Big mistake! “ 

So it’s up to you if you wanna call it a mistake or learning for the future.

Like Professor Dave Valliere mentioned in the book "Startup Opportunities":

"... that most VC have a one to ten chance that investments become successful.  But most VC investors are unable to learn from it because they are caught in their own over-confidence."

Again, life is about making these experiences, going a rocky path includes detours towards the summit. This Reykjavik street art I discovered the other day visualizes the long and tough way to the summit very well.

„If you wanna run a startup, run a marathon!“ Bala Kamallakharan

Well, before I will review the last lecture of ‘How to Start a Startup’, I would like to give you the opportunity to gain insight into the presentation and skype interview with Sean Wise from the first lecture.

We started the lecture with the question ‘Why to start a startup?’. To be clear from the outset, this isn’t the best choice for work life balance. A startup means a lot of work, especially for the CEO.

Making money and being your own boss with flexible leisure time sounds good to you? Then forget about the idea of a startup! You have not just a night dream about how to change the future, it also keeps you awake during the night. So start your startup now and make something people love!

The idea of running a marathon is actually absurd . I mean you start with hundreds or even thousands of people at point A and run 42.195 kilometers to point B, what for?

Of course, for some people it’s about the competition: Who’s the first? Who runs the most marathons? And who gets the fame and the honour? For others it’s more about the experience and reaching their personal goal, but many of them run the marathon for the first time and they might get addicted as well.  Furthermore it’s time-consuming and you are a ‘slave’ of your own mind. Nevertheless, that’s also what keeps you motivated, because you wanna get through this challenge.

There we got the commonality with an entrepreneur! On my last post, I already wrote about 2 out of the 4 most important areas to maximize the success of a startup. The third one is EXECUTION! For the marathon runner I would say start running, same for the entrepreneur. But it’s not just about starting, it’s more important how to do it. You’ll never reach point B, the 42 kilometers if you just keep running straight forward. There are two key question you should always ask yourself to follow your strategy: 

“One, can you figure out what to do and two, can you get it done”

 Sam Altman

Regarding "what to do", you should know the execution. But even more interesting is the part "can you get it done". During the lecture we talked quite a while about this topic and Bala figured out two main points: Focus & Intensity!

Focus on your goals: For your job it is the same like when you do sports. You will have to repeat them over and over again, so that they get settled in your and your running buddy's or employee's mind. In addition, a startup is running on an extremely high intensity level during a certain time. If you can’t run on this level, you are not ready for the marathon yet. 

To put it in a nutshell, if your business is not growing it is going to die!

To complete the four areas, the last point is the ‘TEAM’– including investors, founders and employees. Actually the most important question for all 3 categories is:

“Are they smart enough to get things done, so that I would like spend time with these people?”

Sounds pretty easy - I mean would you choose someone being your friend if you even don’t know him/her? Of course not. You would start talking and communicating until you know the person. Same in business - Make sure that you know the people who are willing to join your startup.

“That’s probably why school or uni is one of the best places on earth to find a co-founder!”

Bala Kamallakharan

To sum it up, what I’ve learned so far in 'How to Start a Startup': You’ve got an idea on your mind which keeps you awake during the night? You figured out a product which people will love? You sold your story and your vision to at least two investors who are willing to support your startup and you convinced 2 to 3 co-founders who are able to keep focusing under extreme pressure to reach the goal of your startup? 

“So guess what? Launch your unicorn, because Life isn't a lottery ticket!”

"WhyNotYet"

...is going to be a project which I started for my exchange semester at the Reykjavik University.


"If you are not doing what you love, you are wasting your time." Billy Joel

This quote is part of my Philosophy of life and I'll keep doing what I do as life taught me so far. It doesn't matter what you are doing, if you are an employee, freelancer, CEO or even an entrepreneur you should enjoy human being on this planet and try to make the world a better place.
I'll get back once again in detail to the quote and the headline 'WhyNotYet' in one of my posts.