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)

Join me in helping startups

One of the things, I find most pleasure in, is helping others succeed with their ideas and ventures. It’s a big part of the reason, why I joined People Ventures in the first place, as a core part of our DNA is helping the founders, we invest in, in very hands on ways moving their companies fast forward.

Because I like to help and see other great people help likeminded great people achieve great things, I have kicked-off a small experiment:

I have launched a Slack community for people with an interest in and passion for helping startups succeed. Here we chat and help each other out, because we care. We are people with ideas, founders, corporate profiles and investors all trying to chip in the best we can.

If you’re into helping others become greater than they already are, join today using this link and introduce yourself.

The only thing we ask is that you make a commitment to being open, accessible and active.

Many thanks for your participation and help. It’s so much appreciated.

(Photo by Stephen Phillips – Hostreviews.co.uk on Unsplash)

The beachhead pitfall

Every time I see a startup pitch for funding, the founders include an assessment of the size of the market, they are going after. The more detailed ones also give an assessment of the size of that market, they believe they can make their own and why.

It is all well and good. Sometimes I might even think that the slide is in the boilerplate department, where it’s there because it’s expected, but it’s not the most sexy or informative slide.

But what I have learned is that it is actually more important than that. That if you get this wrong or don’t think enough of it, you can potentially end up in a place, where you and your startup find yourselves stuck between a rock and a hard place.

Why that is has something to do with the first share of land, you grab in your market – the beachhead.

Normally, when we talk about beachheads, we refer to them as a representation of the segment you go for first in order to prove your value proposition and achieve the illustrious Product-Market Fit. It’s your assessment of where the best match between your customers pain and the relief, you can bring to the customer, is the best at this particular stage of your startups life.

You go after a beachhead, because you want to get traction ASAP to show your investors – and potentially also the first significant revenue to show for it. And it makes total sense.

But – and this is a big but – if you’re not mindful about the bigger market opportunity, your specific plans to get there and the narrative about what you’re doing right now, you run the real risk of getting stuck in the midst of what otherwise might look like a success.

What could potentially happen, if you’re not careful, is that your beachhead becomes your market. That what was once thought of as the first small slice of a big cake becomes the entire cake.

If that happens you may develop a super strong position in a niche market, but you will never be able to scale your business to the bigger market opportunity, you will need in order to find investors, who are willing to put up the ressources required to be there. In other words you risk turning into an ok business on the longer term rather than an amazing business. Which – without saying anything bad about ok businesses in general – just seems like a wasted opportunity.

And this is where we come back to the role of the beachhead.

It is super easy to get excited about your beachhead, when you start seeing traction in it. You naturally want more, and you want to build on the early success. And you can do that, but you need to control the narrative.

You need to keep telling yourself, your investors and everybody else who might listen that what you’re currently doing is NOT the end goal but just a beachhead. That while you’re killing it in your beach head, you understand the fundamental dynamics and value of your product in a larger context for different segments of customers, and you’re well on your way towards branching out.

Thus, your narrative and your operations becomes about the beachhead based on what a beachhead should be; a stepping tone towards making real landgrab in land. If you can balance the two stories about what’s happening now and where you’re taking it, you’ll have a much more compelling story to tell. Not least to the investors, you will need to enable you to get the ressources you need to make real landgrab and fulfill the potential, you set out to fulfill.

If you don’t get this right, the risk is that you end up becoming a de facto niche player doing a stellar job in too small a market that no investor really sees the upside in. And if that happens being able to move the needle and move inland will become infinitely harder. Just don’t go there, when there is an alternative that is so much better by just being more conscious about how you stay the course.

(Photo by frank mckenna on Unsplash)

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)

It takes a full team

One of the great misconceptions in working to build a startup from scratch is that you need only be great at one thing – typically product development – and then you can wing and learn the rest.

Why do I think it’s a wrong approach?

First of all, you’re essentially working on a wrong assumption about what’s needed to become really successful. Because just as innovation, product development and delivery takes skill and experience, so do the ‘boring’ business parts.

In essence it may actually be more difficult to build a business than develop a product; when you’re developing a product you can get very far with your own skills (provided they’re good enough), but when you move out into the market, the whole world goes into flux, the interdependencies are huge and the risk as well. And it just takes a pretty steady set of hands to work that infinite space.

Second, you risk spending your time, energy and ressources on the wrong things. If you’re a stellar developer, you should be focusing on development. Full stop. You should now water down and defocus your unfair advantage by taking on tasks, you don’t feel confident in and – lets face it – basically care very little about.

You should leave all those things to people who have the same qualities as yourself – but within the business/market facing aspects of your startup.

In summary, the key message here is that it ALWAYS takes a full team to succeed. And since you cannot by everywhere and bring your A game to every aspect of getting a successful business up and running, make sure that you get A players in all positions and show them faith and trust that they’re capable people who knows what’s needed to be successful.

That’s the best way for you to maximize your chances of success.

(Photo by Guille Álvarez on Unsplash)

Triangulating opportunity

Some people get great ideas out of nowhere. They just pop up at the most unusual times and places. Other people can spend weeks looking over the ocean hoping to catch onto something and eventually leave the beach empty handed.

And some people just have a basic fear of the blank sheet of paper – of getting started at all. They need help in order to get the mind juices working.

On that note here is a small idea that might get you started:

One of the things I have often found helpful is to look into different kinds of trends and then try to combine those to see what pops into my mind looking at it.

I call that the ‘triangulating opportunity’. And here is how it works:

You draw three overlapping circles on a blank sheet of paper – Lean Startup style but with a sizable overlapping area for notes.

Then in each circle you write down a trend, you have observed and/or read about – something you know to be true and not just the figment of your imagination. Do so with a headline and small comment on what makes you think the trend is interesting and worth diving into.

Once you have done that for all three circles, you start looking at the overlaps and intersection of all, and then you start thinking about what opportunities could arise from combining the different ones.

Now, it needs to be said that there are no firm rules for which trends go with which trends. It’s all up to you and you need to try and do the combination. In fact, you could argue that the more unusual pairings, you make, the bigger the opportunity to come up with some truly novel idea nobody has thought of before.

What could an example of three trends be?

Fx what would happen if you tried to find opportunities in the intersection between ‘Second hand’, ‘Local’, ‘Instant Delivery’? Could something come out of that? Something that draws on the best elements of all three? I don’t know, but the example is simple and should give you an idea of how this works?

No matter what you get out of it, you get one instant win: You get yourself away from thinking and brooding about something with nothing to show for it. You get an assisted start towards something – potentially – and that’s always better than – well – nothing at all.

(Photo by Kristopher Roller on Unsplash)

The ‘know all’ fallacy

Some of the most charismatic and persuasive people I have ever met have also been the ones who have been the most convinced that they had it all figured out and knew everything.

Until they didn’t.

I am not suggesting that they all failed. But a good number of them did. Because they thought they ‘knew’, ventured ahead without taking stock of what was going on around them – and ultimately hit a concrete wall.

Besides the pain of that particular experience, the most painful thing was that it could most likely have been avoided by adopting a very different approach.

A learning approach, if you will.

When you adapt a learning approach you are more humble.

You’re able to take more signals in.

You are more aware that you’re not directing the world, the world is directing your opportunities, and you adapt.

Adaption is key here. The world changes and you need to do that too in order to be forward looking.

‘Knowing it all’ is inherently backward looking. And not very useful when things fundamentally change.

When you learn and adapt, you are able to seize new opportunities and with that the odds of success increases.

Which again makes it pretty stupid to insist on being the one ‘knowing it all’, don’t you think?

(Photo by Joao Tzanno on Unsplash)

An age perspective

“You’re just too old!”

I hear it thrown around every once in a while. Not specifically at me but more as a general shoutout to voice dissatisfaction that someone simply just not ‘get it’.

But does age really have anything to do with it?

Of course not.

In fact I think quite the opposite is at play;

Using the age argument is like arguing “This time is different” about why something that was a bust in the past will be a success now or “We have the best tech” as a reason for why you’re going to win whenever you enter the market:

High risk arguments with little validity in data.

So if the “You’re too old” argument is a flawed one in itself, what can we use the difference in age for in an extended startup team?

Well, for one youth can be put to superb use – if applied with clear thought – towards something that other people might not think is possible doing. Because the big advantage to a lack of experience is that you don’t know what you’re entering into, and thus you’re more open to risk.

Just think at the warm stove the first time you touched it, because you didn’t really believe that it was too hot. You only did that once, right? And got the hard earned experience.

Youth also typically have an abundance of energy of the sort that comes with eagerness to get out in the world and do something and – for most – a basic lack of other substantial obligations (family, kids, mortgages etc).

So what does age bring to the table that could be fruitful to the young ones?

First of all experience. Not of the kind that stops great ideas in their tracks but the kind that helps the young guns avoid the most obvious pitfalls, so they can stear clear and get a cleaner path towards ultimate success. A kind of a mentor that gently guides without taking over control in any sort of way.

Second, a shoulder to cry on. Now, I do not necessarily mean that literally, although if that’s what’s needed, so be it. No, I mean it more in the sense of someone to talk to and seek support at when the going gets rough, nothing works out, the roof is falling in and you’re just generally feeling like an utter failure.

Because that’s exactly what you need at that point; someone you can went to – and be heard, respected and understood by someone who has most likely been there her-/himself.

So think of these things the next time you feel the urge to claim that people who don’t get you are just “Too old”.

(Photo by Paolo Bendandion Unsplash)