10 lessons learned the hard way.
I know what you're thinking: How the hell does someone build 20+ startups in 5 years?
Let me get that out of the way.
I work as an independent corporate venture builder, with bundl.com. Building startups from nothing to PM-fit is sort of my job, except instead of VC money, we use corporate money. To get an idea, have a look at some of our hero cases, like this Free-roam VR Playground.
Next to that, I've had my own startup adventures. They are worth diving in to for their own reasons, but that's for another time. For now, you just need to know that I failed 2 startups, and am actively running 3 right now: Avatek, Studio Stift, and Venturism.
Lastly, I closely coached and co-piloted an additional handful of startups at various stages of maturity, bringing the tally up to somewhere over 20.
In this article...
...I share my lessons learned over the past 5 years of building ventures, on varying levels of abstraction. Some are very high-level, some straight from the trenches.
Let’s dive in!
1. You 'just' need two skills.
Learn to Build. Learn to Sell. If you can do both you'll be unstoppable. – @naval
I love this quote by Naval. It cuts right through to the core. It is a bit over simplified, but who cares?
In reality building and selling are much more intertwined. Build something people want, and you'll have an easier time selling it. This is not rocket science.
That being said, if you can create something people will benefit from, and present it to them in the right way, you are at an extreme advantage.
The only way to attain these skills is by doing. Build something. Pieter Levels famously googled ‘how to build a website’ and that project became NomadList.
I personally recommend you learn to build before you learn to sell. I started from a product design background, and layered business and marketing skills on top as I went along. By trying. By launching. By failing and then trying again.
I wish I could make it prettier than that but it simply isn’t.
Why do it anyway? Because nothing compares to the feeling of holding something in your hands that was only an idea shortly before. There is something magical about creating something out of nothing, and if that something excites other people too it is even better.
2. The best way to create an entrepreneur's mindset is by launching businesses.
You can read every business book out there, watch all of the Y combinator startup school lectures, know all the frameworks, key metrics, and growth hacks, and still be a shit entrepreneur.
Like with swimming, you have to jump in to learn. There simply is no other way.
This is as true for the individual, as for larger corporates looking to build an innovation culture. I've seen millions spent on change programs that would transform organizations built for optimization into innovation breeding grounds. It never works.
The only way I've seen work is to just do it. Put a small team together, get some outside experience, and give them the autonomy to explore and build a venture. Get your first success like that and everyone in the company will hear about it and want the same.
Similarly, as an individual, learn what it’s like to launch. Start something, and tweet / blog / podcast about it as you are building. Learn from the feedback of followers. Discover the challenges that come with building a business, and get better at conquering them.
3. Create a portfolio of smaller bets.
At its worst, you have a 98% chance of failure. That’s close to a guarantee. Skill and experience can improve your odds to 50/50 – maybe.
Either way, entrepreneurship is a numbers game.
This leaves you with two options. Go through ~20+ failures before you land your venture-backed big hit, or, my preference: Build up an accumulation of smaller, bootstrapped hits.
It’s easier than ever to launch a business, which also means it’s harder than ever to create a big hit. If you are a builder like me, and materializing new ideas excites you, aim for a portfolio of smaller products or companies, each bringing in a decent amount of money.
To do so follow these steps:
- Pick an audience / market that resonates with you.
- Identify multiple critical problems they are facing and aspirations they have.
- Brainstorm and select multiple ideas. Test them with your audience. See what resonates.
- Build multiple MVPs. With NoCode you can build an MVP in a day. This is not hard to manage. Alternatively do a 12 in 12 challenge, focusing on one idea each month.
- Achieve Product Market Fit on with or more of your products.
Ironically you are more likely to land your big hit this way.
4. Three levels of customer insight.
Most people will tell you to focus on a customer’s pains. Even better: their critical ones. This is a good place to start, especially for inexperienced entrepreneurs, because it forces you to build something that solves a problem, versus just building.
Pains are useful, because they are tangible. Pains are the low-hanging fruit for product opportunity.
However, I find there are more interesting levels of abstraction to people’s needs than just their problems. And if you can address those you can create something people love, not just use.
Like Steve Jobs said:
“Most of the time, People don’t know what they want until you show it to them.“
Jobs to be Done
If we move a layer up (or deeper if you want) from customer pains, you’ll find their jobs to be done. The difference is subtle, but JTBD focuses on people’s goals, aspirations and challenges to get there.
Clayton Christiansen, the Godfather of Innovation, famously gave the example of the Milkshake. He found people didn’t buy Milkshakes to quench their thirst. They bought it to kill time in traffic on their morning commute.
An observation like this has many implications for who you are competing with, what to optimize your product for, and also how to position it commercially in order to best sell it.
“Everything people will do is to either affirm, or aspire to a certain Identity.” – Edmund Amoye
JTBD are context sensitive. They have meaning in specific situations, but don’t deal with people’s higher level ambitions and attitude.
This is where Zeitgeist (loosely: Spirit of the Time) comes in.
People are products of their contexts. Background, economics, socio-cultural climate, etc. all play into who they become. The way they interact with that context is how they establish Identity and give Meaning to their lives.
Following that same logic: The way people interact with products gives meaning to those products within that specific context.
All of the above translate into behaviors, which reveal something about their attitude, and the larger Zeitgeist at play. Most commonly, we see these behaviors in the form of Trends.
Needless to say, Zeitgeist is hard to define. It’s more of an art than a science, brought on by experience, or an innate 6th sense like Steve Jobs had.
5. Validate Everything.
A startup is nothing but a series of validations.
Does this sound familiar?
- You are struck by genius. You have a great idea for a new product.
- Your idea is so good, you have to be really protective of it. You cannot tell anyone. And those you do, need to sign NDAs. Even though you haven’t actually built anything yet.
- Over the next months, you spend all your evening hours building this great product.
- After a lot of hard work, you finally put your product out there. The big launch. And then...
At this point a lot of people will assume they have a distribution problem. They try different means of marketing and sales. They update the landing page. None of it works.
Their distribution problem actually is a validation problem. They never talked to customers. Never exposed their idea to feedback or scrutiny, and therefore didn’t build anything of value.
To get around this problem, and increase your chances of success, validate everything.
I even created this database of 52+ validation experiments.
If you take multiple bets like I mentioned before, some of them will be invalidated. Some of them will be your favorites. Which is fine, it’s why you took multiple bets in the first place.
6. Create Value Exchanges.
Often times, business is reduced to 'build A, sell to B'. It's the model we are most familiar with, and the one we encounter most often. That doesn't mean every problem needs a 'build A, sell to B' solution.
The best companies create unique and entirely new value exchanges within an ecosystem of stakeholders. What is a value exchange? It is simply two or more parties exchanging something – anything – of value in a way that leaves them both happier than before. Typical forms of value that are exchanged are: products, services, money, exposure, status, data, rights / IP, access and tokens / points.
Magic happens when you connect multiple stakeholders (your customers) in a way where they each answer the other's needs. This results in entirely new business models, like AirBnB and Uber.
Creating effective value exchanges starts with customer insights: understanding the Zeitgeist, JTBD and Pains of multiple personas that are part of the same ecosystem, f.i. 'public transport.'
The understanding the that Zeitgeist towards Mobility is one of 'On Demand', 'Mobile-first', 'Usership' and 'Convenience' might lead you to explore alternatives to the archaic taxi system.
You find that people actually don't use their car 96% of the time. You find that you can offer rides at a competitive price.
You find that a pain is 'trust' in the driver, and another is waiting time, so you add a layer of transparency to solve both of those.
You create a Mobile-first experience for ordering rides that allows people to make extra money by using their own car to drive people around. You just built Uber.
The most successful startups I've seen up close, were able to create a new value exchange that disrupted the old model.
7. The most overlooked part of building a startup.
People like to believe that good products sell themselves.
Granted, a good product helps. But builders rarely think about how they will put their product out there. They imagine people will magically and organically flock to their solution. It rarely works like that.
The most overlooked part of building a startup is Distribution
Distribution is the second part of that Naval quote earlier: Learn to Sell. Selling is about finding the right people at the right places, and offering them something that will help them, presenting it in the right way and at the right time.
This requires you to be very specific about:
- Who your audience is exactly (and your early adopters)
- Where they hang out
- When they experience the problem you solve
- How to get their attention and attract them without being intrusive
- Your offer and promise
Everybody can set up a great ad campaign using Facebook and Google Ads. The question is how you will differentiate yourself from that group. Can you find any underused channels? Can you piggyback off existing ones? Can you use scraping tools to collect and hypertarget leads? What referral incentives can you put in place? etc.
This starts before launch. Distribution kicks off on day one. Start experimenting with what works immediately. Establish a reputation with your audience. Provide value upfront. Build a lead list. Launch a pre-hype campaign. Build in Public.
There are many, many ways to start attracting customers before you have anything to sell, but you better do it.
8. Super Branding is a Superpower.
I never fully appreciated branding until I got to work on a DTC product startup.
It is more than a logo and a housestyle. It is more than a mission statement.
Branding is an ecosystem. It is a feeling.
One core message that is lived and breathed through everything your customer touches.
- Your Website
- Your (Online) Store(s)
- Your Socials
- Your Ads
- Your Content
- Your Packaging & Unboxing Experience
- Your App & Onboarding
- Your Customer Service
- Your Product
This is why understanding Zeitgeist is so important. You cannot build a brand like that around an understanding of pain and jobs to be done. You have to truly understand the identity of your audience and what makes them tick.
Not all startups have to have excellent branding. Branding is particularly relevant for DTC brands. SaaS can sometimes be sold purely on functional value – a T-shirt not so much.
Just remember that people rarely fall in love with products, but often fall in love with brands.
9. Culture is more important than Team.
VCs often proclaim they don't invest in ideas, they invest in founders and teams. I believe them, but for a different reason than you might expect.
I think the value of a founding team is not necessarily in their background and hard skills. Sure, hard skills help. But in my experience the value of a founding team is in the culture. The chemistry between the people. The drive.
Sounds vague. I know.
There is a lot of talk in the Twitterverse about hiring '10x-people'. The idea being you can hire one person who delivers the value of ten people.
Though I think you could technically pull this off, the price of hiring 10 individualistic A-players is rarely within a startup's financial realm of possibility.
Also, I have never seen this in real life.
What I have seen is mediocre team members rising to the occasion under the right conditions. You can 10x your team by hiring 10x roles, but you can also do it by creating a 10x culture.
10. The only trait I would recruit for.
"It's not the lack of resources that causes failure. It's the lack of resourcefulness." – Tony Robbins
Corporates have a tendency to hire managers. It's what they do and what they are good at. Startups don't need managers. They need one guy in the startup team to double function as its CEO. That's it.
Startups have a tendency to hire for skills. Their pains are often the result of skill-gaps so they look to fill them. Startups need skilled people, yes. But for people that were hired to fulfill short-term needs the role will soon outgrow them (not the other way around).
Hence, the primary trait I would recruit for in the first 10 hires of any startup is Resourcefulness. Startups are a super-dynamic working environment. Things change by the day, and so do the demands on its people.
To weather the storm you need people that can adapt to a new situation in the blink of an eye. The internet contains all the knowledge in the world, resourceful people will leverage that to adapt on the fly and turn adverse situations into opportunities.
Regarding startup team size, I love the two pizza heuristic by Jeff Bezos:
"If you can't feed a team with two large pizzas, it's too big."
One more Thing...
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👋 That's all, peeps!
See you next time.