Moving aside

The other day I met a startup founder, who had been struggling getting his business of the ground as a business for the past couple of years. Despite claiming the ambition of millions of users worldwide, he had only reached a couple of thousand within the first couple of years.

While there is always reason to celebrate great knowledgable people for taking the plunge to pursue their passion and their dreams and turn both into a startup, there are also times when you need to step back and take a more sombre look;

This particular startup was in reality nowhere. In order to have any prospects of success, they needed to step back, look at their core assets and find ways to build a revenue stream around those. Not out of curiosity. But out of necessity.

And yet the founder resisted. While claiming to be open to change, he was still very much set around the same set of assumptions that had brought him and his colleagues so little over the past couple of years. When I asked him what in their performance so far he thought mandated to continue approaching things the same way, he didn’t really give an answer, and I totally understand why: There was no real good answer.

The founder was faced with a ton of challenges, but what also become apparent to me is that he was at the center of a lot of them. And that maybe the best prospects of success for him and his startup was for him to find someone with a pair of fresh eyes and the right capabilities in terms of building the business, and then step back to another more product related role for himself.

He sort of agreed. Until he didn’t the next second. And we could have continued that way for ages.

While I completely understand that it can feel totally wrong to think in terms of finding someone better to replace you in a key role – and especially in a startup you founded – I think there are times, where it’s truly the best solution for all parties concerned. If you believe that the most important thing is to build a thriving business, personal considerations should matter less.

For myself I have always believed that building winning teams is about looking at the challenges facing you and then go about trying to recruit someone much better than yourself to help you overcome those challenges and move on to the next level with the business.

For that reason I have always tried to recruit the best and brightest and get someone who could not only challenge me and my thinking but also contribute to some vastly improved results within their areas of expertise. I think it’s wise for founders to think in those terms too.

The last thing anybody needs in any company whether it being a corporate and a startup is someone at the top with the ambition of always being the smartest person in the room, no matter what. Yes, that person might be brilliant and truly the smartest person, but in most instances – and my experience – there are quite a few even smarter people out there, we should instead be looking to recruit, onboard, get to work and start generating successes with.

Having this unbiased view of your own role can help you build the team that builds the great business together with you. If your too stuck on your own ego to realize that, you risk ending up becoming a founder who will look back and reflect on what potentially could have been but never materialized because you failed to make the right decision and move over to provide room for other great people.

(Photo by Greg Shield on Unsplash)

Silent opportunities

Preventing something from happening is without any doubt one of the biggest opportunities in healthcare – and perhaps especially digital healthcare. Trying to keep people from developing a medical condition that requires cost medical care is a really good idea for everybody concerned. And given the nature of prevention – and thus lack of physical intervention on the body – it is an area that is really suited for everything digital.

But there is an opportunity that might be even bigger; helping look after those who have developed a condition to enable them to have an improved quality of life. I think there are at least two major arguments for why this is so:

One of the problems with being diagnosed with a condition that may last for life is what happens after the diagnosis has been given. It’s all very good that in Denmark there is a 30 day or so guarantee to get a diagnosis, but to many who are then diagnosed, getting the message might actually be the last time they have a truly meaningful conversation with someone who specializes in their condition.

Yes, it can be that hard to get the attention and follow-up, you would like to have, post-diagnosis. There may be a lot of reasons for why this is so, but I think two of them are a lack of specialists in general combined with a lot of conditions being considered relatively banal by any other than those who are actually suffering from them.

In those terms this is what I would call a silent opportunity.

Here digital tools for follow-up and disease management can be a real benefit, as they can supply the kind of ongoing help and advice that is otherwise inaccessible. Done right digital tools have an opportunity to take the place of a specialist and provide the person with the condition with all the tools needed to ensure a better quality of life.

In this also lies the second major argument for why I believe this is a huge opportunity: The value the tools can potentially bring to the patient.

If a digital tool provides significant value to a person with a condition – perhaps for life – I can’t think of any reason why it wouldn’t be a major business opportunity to strike a working relationship between provider and patient perhaps even for life. If the tool becomes an important port of ensuring the users quality of life, it is worth paying something for. Likely not a whole lot per month, but over time it all adds up. And, best case, with extremely little churn.

For startups looking to cater to this market it is an opportunity to build a really interesting business for the long run with a solid purpose to boot. Of course the requirement beyond being able to build something that truly adds value is that entrepreneurs are in it for the long run, as exit opportunities may be few and far between. But for the right people with the right incentives and motivation to make a difference, the opportunities are definitely there.

(Photo by Towfiqu barbhuiya on Unsplash)

Unleashing impact

A couple of weeks ago I ventured a bit into unknown territory, when I attended the Green Impact Summit in Copenhagen. I wanted to get a firsthand view of what’s going on within the world of impact startups and get a sense of how it’s progressing from being a lot of great and interesting ideas into real companies that actually have a fighting chance both to create impact but also become great businesses.

I don’t know what I expected before getting there. But a couple of things surprised me.

First of all the sparse attendance at the event. There probably was a couple of hundred people in total, and many of them were from the startups themselves or from the supporting ecosystem. For all the hype surrounding the space it still seems like we have some distance to go, before it really draws the big crowds.

Second, I noticed that the creativity and skill in the solutions being showcased are not necessarily matched with business experience yet. It still seems like there is an abundance of idealism – which is fine – and not so much emphasis on actually making it a sustainable – viable – business.

Tommy Ahlers, the super angel (yes, I will call him that) said it well, when he noted that the impact investment community reminds him a lot of where the tech investment community was 20 years ago; a lot of great ideas, visionaries and willingness to share. But not at all the same kind of focus on the business side of things.

I fully realize that there may be some out there who would now suggest that thats all part of the plan. That the great and all important cause of fighting climate change in all its incarnations takes priority ahead of talking about business. But I think that is totally misguided; there is no distinction between impact startups coming up with brilliant solutions to our sustainability challenges and the ability to make a profit. Rather, I think they go very well hand in hand.

There is an obvious opportunity in this space IMHO for experienced business savvy people with an interest in pursuing something more meaningful than a corporate career to look at startups in this space and look for ways to collaborate and even engage directly in one of them, helping them succeed all the way.

In fact, I don’t think you can overestimate the potential of this sector to become a real Danish or Nordic growth industry, if we just show the ambition on wanting to make it about more than the idea and invention itself but actually put a laserlike focus on what it means and takes to succeed. In a big way.

It’s ‘just’ a matter of the missing people engaging directly with everything they have in the good cause.

(Photo by kazuend on Unsplash)

The new reality

Currently it’s not for the fainhearted to follow the developments on the worlds stock exchanges. 15 years of bull market has been replaced by an ugly bear which seems to send anything with an incling of tech down, down, DOWN in the market. Well, it pretty much sends everything down to an extend where it can resemble a stock massacre. 

The development in stock quotes is not interesting in itself – things go up, and they come down again. What’s interesting is the shift to a new reality that the movements are an indicator for; the end of ‘free’ money, rising inflation, rising costs of production and a shortage of both key components and talent. It is truly challenging times. 

In the face of such adversity, you can be forgiven for giving up and just wanting to bury your head in the sand until this whole things blow over. Because how do you cope, let alone adapt to this new reality? Most of us have never tried anything like it, so we’re in uncharted waters trying to learn how to swim before we drown.

But it’s exactly when you have to develop a key ability in an instant that you’re perhaps the most capable of doing so. There is just no workaround. So when the immediate shock gives way, it’s time to assess where you are, and what all this means for you and your startup and start adapting to the new normal. And I think there are a couple of things, you need to address and get used to.

First of all, you need to control your burn and your business fundamentals. The good times where it was growth at all costs, and nobody cared about the cost are over, as far as I see it. Going forward there will be much more scrutiny on your commercial model, and whether its viable or not. If it is and you can prove it to investors, you will still be able to attract funding to grow and seize opportunities (more on that in a bit) that may present itself. Furthermore you avoid getting into a situation where you need to raise new funding with your back against the wall. That’s a bad situation to be in in general – now it’s just plain terrible for you. So don’t go there. 

Second, be aware that a lot of the ‘smart’ growth tactics you have deployed in the past and probably semi-automated probably won’t have anything near the same effect anymore. Your customers don’t have the same spending power or urge to spend, as they had before, and you will most likely see cutbacks towards skipping things that are considered non-essential. And let’s be honest; a lot of what’s available out there are non-essentials that few customers would truly miss, if they had to cut it. 

With that there is also an opportunity. An opportunity to put your automated growth machine on the back burner and instead spend some time and energy on talking to customers face-to-face, listen and really understand where they are at, what they truly need and how your product applies to those things. You wan’t to ensure that you truly understand how your product is truly – and please don’t blow smoke in your own eyes here – essential for them, so you’re still considered valuable and thus they will continue using and paying for your product. 

Willingness to pay is going to be the only metric that matters here. Forget about most other metrics right now. If you can’t get your customers to pony up the cash for what you provide and have them continue doing so, you have a serious challenge. It’s that simple. 

The benefit of this simplicity is that once you get this right, you will know that you have the strongest possible foundation that will pretty much insulate you and your startup from market turmoil. You will know for a fact that what you do and deliver is essential to your customers, and that any future downturn will hurt a lot of others before it hurts you. 

Knowing that is priceless. It allows you to get a bit out of the crisis “all hands on deck”-mode and start thinking about the future and pursue interesting opportunities. What do I mean by that? Could be that one of your competitors don’t have the same stamina that you do and suddenly provides an opportunity to consolidate. Consider it. If it makes sense, and you can get the financing right, consider doing it. Exploit the crisis of others for your own benefit. 

Do whatever it takes. And understand down to your very core that this is a new reality we’re looking and have to operate in.  

(Photo by Tobias Bjerknes on Unsplash)

What excites you?

What intrigues you the most? Going after the same things everybody else is going after? Or going counter and look in places that most other people have abandoned?

I am all for the latter. While I recognize that there are indeed major trends out there and obvious opportunities, I personally find those that run counter more intellectually appealing. When I meet those I always ask myself: Is what they are trying to do just dumb? Or is it really super brilliant? It’s usually one or the other.

For me too much groupthink doesn’t do it for me. The argument for doing something because everybody else is doing is has always been weak and void to me. While there may be something there, the sheer fight over something with a lot of other piranhas eventually leading to a slide down to the lowest common denominator simply just isn’t that appealing. Add to that that the math seldom checks out for me; in a saturated market easy to penetrate, not everybody who claim whey will win will have the ability to win. Simply too many piranhas in the sea. Most will end up with a fairly decent haircut.

Going counter is another matter. Going where everybody else – or most – have already given up, while the problem at hand persists, intrigues me. I does something good to me to know that succeeding where others have decided not to even play takes something extraordinary, and that success rests on the ability to figure out what exactly that extraordinary component is.

Yes, I know the risk is bigger. It’s really do or die. The difference between making a bet on red on the roulette versus placing all your chips on 0. However, I love this approach for three reasons:

First, it’s deeply satisfying to get really challenged in figuring out something that’s super hard and not for everybody to dig into. It provides a sense of real accomplishment, when – if – you succeed in doing it.

Second, you can add the satisfaction of hopefully having been able to solve a real problem to people that others have given up on trying to solve. You get the sense that you’re affecting real change, creating impact and that people are substantially better off, because you decided to put in the work and effort that was beyond reasonable for many others.

And finally, the returns on your success are likely outsized – at least if the problem you have chosen to tackle is valuable enough to enough people. Because you were the one going counter, most of the pie will be yours. At least in the beginning.

Again, I fully realize a great opportunity when I see it, and I am not hellbent on making things as complex as they can be. Sometimes easy truly is the better way forward. But in terms of really what makes me tick, it’s the tougher challenge – the one where you really feel alive and in the zone.

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Helping university research count

It is always a pleasure when you have the opportunity to go out and share some of the experiences and learnings, you have had, to an audience who need the insights in order to improve their odds of turning ideas into successful startups.

I had such an opportunity the other day, when I visited the Panum Institute at the Faculty of Health and Medical Sciences at University of Copenhagen to talk about how to de-risk your business idea to a group of 60 Nordic researchers and ph.d.-students.

I thoroughly enjoy hanging out with researchers. One of the reasons is that I am deeply fascinated by what they do, how they work and how brilliant they are at coming up with novel discoveries. Part of my fascination is probably also that I know that I will never be in their league, and what is beyond reach somehow fascinates me.

But then there are – luckily – other things I think I am quite knowledgable about. One of those crucial areas is how to bridge the gap from the lab to the market, i.e. how to bring great research to life in the form of products and services that meet a real demand and can thus form the basis for a great business.

Getting in front of researchers to share that knowledge is key, I believe, because there is so much potential in ensuring that top class research gets a real life after the lab.

Today a lot of great research ends up in big corporations, and as such that is fine, because it ensures that the technology gets out there and gets used. But you have to ask yourself, what could happen if more of that research became spinouts in their own right creating new opportunities, new jobs and contributing to economic growth in society? That, to me, is the really exciting part.

For this to happen researchers need help. And a lot of it. When I meet young spinouts as part of the Danish Open Entrepreneurship programme, the spinouts fall into a couple of different buckets.

There are those that are really specialized, deeply techie and so niche, you just know it’s never going to be a company in itself but will most likely be acquired by some bigger corporate as a tech/IP acquisition.

And then there are those, where you immediately get a sense of how it could become a company in its own right with a product speaking clearly to a significant future customer base and with that the opportunity to actually create an impact and solving a problem.

Those are the interesting ones to me. And thus this is where I start to look deeper into the team. And what I see here is most often:

Deeply brilliant and experienced researchers with a big wish to see their research reach the market but with very little realistic idea about how to actually make that happen. Simply because they have never done it before, it’s not what they feel, they should be spending their time on, and – basically – it’s not what they should spend their time on.

This actually produces an interesting paradox. Because I would argue that when we talk about de-risking an idea for a startup, the process and structure you apply to that is actually very akin to the process you use, when you do research: You define a hypothesis, you test it using experiments, and you capture your learnings. And then you repeat, repeat and repeat until you have – hopefully – reached the intended outcome.

So you would argue that of all people, researchers are actually very well equipped to do de-risking for their own startups. Yet, a lot of the researchers struggle with this process. The reasons may wary, but I believe it has a lot to do with the fear of getting a ‘No’; the fear that what you have worked so hard on and been so committed to, will not get the anticipated reaction when you go outside the lab.

For the very same reason this is exactly where its great to get help from someone, who is not only more experienced about doing market research and de-risking but who is also not so personally attached to the research and technology in question. By admitting your own limitations and partnering up with someone to drive the external facing side of the emerging spinout, you may actually get very far with very little.

Why is that? Because the researcher already understands the mechanisms in de-risking, and you thus don’t have to spend time talking through the process and explain the mechanics. You can focus on getting the most critical hypothesis defined, design the experiments and capture the learnings. It can actually become quite an efficient process, and you could argue that only a little more than sheer mentoring for the researcher(s) could get you a long way.

However, mentoring is not enough. An equal commercial partner is needed for the researcher to increase the chances of ultimate startup success. And while getting help on the market de-risking in itself is a huge plus, the right people also bring a few other benefits that are equally important to the chances of success:

First of all, researchers need someone outside their research circle to help determine, when research and technology is ‘good enough’ to start testing. I seldom meet researchers who have a pragmatic view on this – the tendency is always to stay a bit longer in the lab, run yet another experiment, optimize the technology even further etc. In a worst case scenario what that essentially means is you can stay in the lab forever and never get the technology out to use.

Second – and a bit connected to the point above – researchers need someone to help them establish and secure a sense of urgency. While this is not the same thing as wanting to rush things through, it is about helping researchers figuring out how to get to market as quick as possible in order to both gather feedback and learnings from the market but also show investors that the case is on track to be viable.

Of course there are limitations as to what you can launch early, if you fx operate within a regulated industry, but the point is that there are always things you can do to start putting the spinout on the map, and researchers generally need help doing that.

Finally, a partner can help researchers deal with the very real issue that the envisioned outcome is by no means the same as the journey to get there. Too many researchers have the notion that the complex part of turning their research into a product that can be marketed is the actual research.

In fact, it often turns out that getting the product to market and commercializing it is every bit as complex, rocky and bumpy a journey as the research. Partners with experience in taking things to market know this because they have the battle scars themselves to prove it. Researchers don’t – by and large – have this and would thus be well advised to add this experience and expertise to their team early on. If for nothing else then at least for sparring them the pain of experiencing these hardships themselves. And potentially see their startup become an unnecessary casualty in the process.

So in summary, there is a lot of things, ‘business people’ can do to help researchers realize the full potential of their research. The right commercial people are just as important and valuable as materials needed in the lab to perform the actual research. They are each others yin and yang, and together they can achieve the outcome great researchers with a passion for affecting change have:

Making the research count where it’s needed.

(Photo by Diana Polekhina on Unsplash)

Affecting change hurts

Working at startup takes it toll. Ambitions are running high, ressources are always stretched, a lot of processes are not in place, and getting the right talent to join the mission is super hard. There is absolutely every reason for why days and weeks can feel like an almost eternal struggle. But that’s just the nature of how it is to be building something from nothing.

When you feel the struggle, it’s super important to remember that there is the good kind of struggle and the not so good kind of struggle.

The latter is the internal one, where you struggle because you don’t have 100 % alignment in the team about where you are going with the business, or you have some friction between various functions in the team, because your processes for how to do things are not completely done yet. Yes, it can be super painful, but it is something you work your way through, as you gain experience, figure out what works and what doesn’t and get into a modus operandi of only doing the things you have found out works best and provides the most progress for you.

The former – the external struggle – is the really interesting one. Because while you would think that struggling is inherently a bad thing, you could also argue that in some cases it might actually be an indication that you’re starting to make a dent.

The reason I make this counterintuitive claim is that struggle is an indicator of friction. And friction is an indicator of change taking place. Thus the more you feel the pain, the more you get feedback from the market about your product or service being a different take on the status quo and upsetting people a bit, the more you’re scratching where you need to scratch in order to have an opportunity to affect change and create impact.

Just for clarity, I am not talking about struggling making the product work or getting to product-market fit in the first place as a good thing. Those are still the kinds of struggle, you want to get away from by fixing the underlying causes as soon as possible. But struggle in terms of people noticing what you’re doing, asking critical questions and maybe even giving pushback and fighting you a bit? Absolutely.

Understanding this dynamic is super importent. Because when you do you also understand that there is some friction and pain you need to deal with in a positive way, since it’s something you want in your life as an indicator that you’re moving the needle and creating an impact where it matters.

So with that comes the obvious question: How to you deal with this pain of the struggle in a way that doesn’t end up killing you?

People have been in this position before, and there are plenty of things to learn from them. Some of them have even been in the position, where the pain and risk was much more lethal and where it was truly a matter of life or death in the most concrete terms. Learning from them and how they coped might give some insights into how you can think about this.

One of the most prominent thinkers and examples of how to deal with pain and struggle and not succumb to it comes from the Austrian neurologist, psychiatrist, philosopher and Jew Viktor Frankl. Frankl spent 3 years in Nazi concentration camps, and while there he had an epiphany that afterwards formed the basis for his groundbreaking work:

People may do whatever they want to you. But even in the most gloomy of times, when all seems lost, you still at your core fundamentally control how you let circumstances impact you. You always have the freedom to decide for yourself that you won’t let even the biggest struggles break you.

That’s a super powerful realization coming from someone who would have had all possible reasons for giving up. And it’s a great opportunity to get inspired on how to be resilient and never give up. Stay strong, stay in the fight and prevail in the end.

So, in dealing with pain for the achievement of a later greater good, there is a lot of things you can do yourself by working with how you think, act and react to externalities. But you’re not alone, and you need that kind of enduring mentality to be present in the wider team as well.

This is where the role of the right recruitment comes in. The advice is pretty basic: Focus on recruiting people who share the vision, you have for your startup. People who have the same visualization of what it’s like when you’re there, and you have reached your ambitious goal. People who can feel how that would be like, and desperately want to get to that place. People who are willing and able to fight and see through the struggle(s) to get there, and understand there will be many roadblocks, challenges and issues before achieving success.

Of course it is also crucial that the people you recruit for the team have the right skillsets, but given a choice I would argue that sharing the same set of beliefs and ambition is the most crucial. Because if you get on the track, you’re hoping to get on, you will be challenged again and again by circumstances, and you need team members around you who will stand, fight and win the fight with you. Period.

You can help them along the way by ensuring that you carve up your success metrics into smaller bites, you can achieve within a limited time frame and celebrate, when its time to do so. Those little starts and stops in terms of putting in the hard work, celebrate success and start over again will do you a world of good in ensuring that you keep energy and stamina high, even as the challenges come at you left, right and center.

Just make it a habit to do the work that’s needed to affect meaningful change. Because the results are worth fighting for. Even when the process hurts, and you just want to quit. No success comes without making a real hard effort.

(Photo by GR Stocks on Unsplash)

Avoid hellish bureaucracy

No matter what framework you uphold to justify your decisions, stakeholders will typically acknowledge the logic of it, but in practice ignore it.

The Great Silence, Brad Dunn on Product Coalition

It is so easy to be lean and mean when you’re small and go heavy and lazy when you get bigger. In one of lifes great mysteries otherwise capable people transform from being efficient and getting things done to being caught up in infights and bureaucracy with limited progress to show for it.

I have often wondered why this is so? Why is it that even agile entrepreneurial organizations have a tendency to become stuck, as they grow bigger? Is there some kind of inflection point for startups in which, when they reach a certain size, the fundamentals of the culture just change, and you go from focusing on customers and solving their pains to being stuck in a world of your own organizational pain? I am tempted to say yes.

Maybe this has something to do with the stakes getting bigger or the stakeholder map expanding. When people invest their time and money in helping you out, complexity grows. Relationships need to be forged, managed and balanced. Especially the balancing part takes time and skill, and getting those things right take away time, ressources and focus from what you were doing before that essentially brought you into the position, where you could take more people and money on.

It’s probably impossible to think of a threshold for when this transformation happens, and it’s equally impossible to come up with a ‘one size fits all’ fix to it. But I do think there is one general piece of advice for to startups worrying about becoming too complacent and bogged down in bureaucracy:

Keep hold of the people in your team, who are die-hard executers. Provide them with the freedom to operate and do what they do best. Grant them the flexibility to devise their own ways of scaling their efficiency, and resist the temptation to step into their way.

You need to have someone on board to provide direction and guidance for where your startup should go on it’s growth journey. In essence that’s a job for you in the founder team. Don’t fall into the trap of starting to overthink processes and stay clear of the idea that frameworks are the silverbullet to solve anything. They’re often not.

Bad ass execution have a tendency to move things forward. So keep traveling down that road.

(Photo by the blowup on Unsplash)