S02E08 – Accelerating Ideas with Jeroen Coelen

[00:00:06] Hello, dreamers, thinkers and doers. Welcome to Ideate with Florian. In this season we discover where good ideas come from, whether it's for a new feature, product or company. I'm your host, Florian Hoornaar. For over 25 years I've worked with small and medium sized companies in engineering, sales and management.

[00:00:24] During that time, I connected with many professionals to grow together. That makes me excited to explore the journeys of our guest with you. So let's dive in! Episode 8 Accelerating Ideas with Jeroen Koehlen In this podcast episode of Ideate with Florian, we welcome Jeroen Koehlen, a seasoned mentor

[00:00:44] and researcher at the Technical University Delft. We explore the dynamics of early stage startups. Jeroen provides valuable insights into distinguishing between wannabe entrepreneurs and founders, emphasizing that everyone is a founder when actively pursuing ideas.

[00:01:01] We delve into the concept of product market fit, demystifying the term and focusing on its significance in creating a sustainable business model. Jeroen shares practical advice on decision making and early stage signals for success. He discusses common pitfalls in identifying problems and provides a checklist for 7 red flags.

[00:01:21] The episode includes a real world example of a dating startup, highlighting the importance of adapting revenue models to customer behavior. Tune in to learn from Jeroen's experience and practical insights in navigating an early stage startup.

[00:01:37] So the idea is that we set the stage a little bit, so tell a little bit about your background because I think that's very relevant now here because everyone can speak about startups, but it's nice to know that you're a little bit of an authority.

[00:01:53] And I also want to talk about like with the product market fit thing. Is this the intro or are you just telling what you're going to talk about? No I'm just going to tell you what we're going to talk about.

[00:02:07] I was like, this guy's delivery is way off. So here we go, there we start the podcast. Ding ding ding ding now. Hey Jeroen, welcome to the podcast. Hey, hello. I hope I pronounced your name correctly. It's always awkward with names that are not English. Yeah, yeah, yeah.

[00:02:29] People always struggle with my name Jeroen. So sometimes to avoid it, I just call myself Jeroen and then people can, they understand it immediately. Okay, so during the podcast if I call you out... No, no, no, don't do that. Don't do that.

[00:02:42] You know how to do Dutch pronunciation. So let's go for Jeroen. Yeah, I've pronounced Jeroen before. So if we're both Dutch, that's so nice. So I live very close to Delft, which is a technical university. And do you work there?

[00:02:57] Yeah, first I taught there design students, many product design and now I'm researching early stage startups as part of my PhD. So I'm learning how to be a researcher. You're learning how to be a researcher and you've practiced that on wannabe founders.

[00:03:13] Yeah, well actually like when are you wannabe and when are you a non-wannabe, right? If you're actually trying to launch your startup, for me you're a founder. Maybe you're a first time founder, but still if you're actually trying to launch your

[00:03:26] product into a market, the moment you have that intention to do so, you are an entrepreneur. Maybe you're not very good at it because it's your first time, but yeah, everyone is a founder that tries to do things I think.

[00:03:37] And that's not before you go to the Chamber of Commerce. Yeah, that's the funny thing. A lot of students always when I do workshops are like, yeah, well how do you set up your business with the Chamber of Commerce and what's important there?

[00:03:48] And it's like, that's not important at all. Forget about that stuff for the first eight weeks. You don't really need anything official to make leaps in developing your product or your startup as a whole.

[00:03:59] So you research but you also are a mentor in a way, so you meddle with the ecosystem as well, right? Yeah, yeah, yeah. So I mentor startups that are in TU Delft and I am a freelance startup mentoring.

[00:04:11] So there's these early stage startups that sometimes are a bit stuck. Most of the time they have a product, but they have an issue with getting it to market. So I help them to figure out a to market strategy. Sometimes we need to downscope the product.

[00:04:23] Sometimes it's about trying different marketing channels. And most of the time it comes down to really deeply understanding your customer. And do you do that only at Delft or also in Amsterdam? The freelance mentoring is all across the world.

[00:04:36] So I have clients in India and in the US and it's mainly in the Netherlands because that's where my network is the largest and my exposure is the biggest. So some of these founders are in Amsterdam, some are in Delft, some are in

[00:04:50] Rotterdam. It's a very location agnostic. OK. And do you see differences between those cities? Well, yes, mainly because Amsterdam doesn't really have like a proper deep tech sector, right? You have this entire campus that has a lot of bright minds actually studying like electrical engineering or applied physics.

[00:05:12] And there are certain types of ideas and patents come from. So you see that if you look, if you take a look at just Delft and compare to the type of startups that are in Rockstar or in Antler, Amsterdam tends to be a bit

[00:05:24] more software focused in my experience, so more SaaS. But that doesn't exclude any types of robotics from Antler. I've seen like one or two startups in Antler that were robotics based. So it's also like Amsterdam is more of a blend where I see that Delft is

[00:05:37] more focused on tangible technologies and something that you can drop on your toes. But they're also making leaps there in terms of cryptographic startups. And you need quite some advanced mathematics, so it's very much science

[00:05:50] inspired. And in Amsterdam, you also see this thing that you don't really often see in Delft is just really consumer oriented brands and startups that are cool. And Amsterdam is a cool city. At least that's what people like to think. And Delft is not as cool.

[00:06:04] So it attracts a different type of breed. And that's OK. But you could really see the difference between the average guy or girl on the Delft campus versus the Amsterdam campus. Yeah, the one thing that I noticed in Amsterdam, you have to wear white sneakers.

[00:06:17] It helps if you work at like the Lloyd over on the South Tos and it's Friday that you are supposed to wear the white sneakers and a light colored shirt. That's the default casual Friday attire here in Amsterdam.

[00:06:30] And what used to be the I think that nerds in Delft become more hip. It used to be that they would wear these jeans like blue jeans and then a light blue shirt and then always tucked in their pants with belts and then the

[00:06:42] brown and the brown almost dress shoes. That's what is very common. Like the properly dressed entrepreneur from Delft would dress like that. But these days, they are more hip. Sometimes they even have their own apparel from their startup. I like the stuff that they're wearing.

[00:06:56] It's so funny how that is creeping into fashion. People always ask me, hey Florian, are you technical or business? That's the big divide. You're either technical or you're a business guy. And I always say it depends on where I am.

[00:07:09] If I'm in Delft, I'm definitely the I'm the salesy guy. And if I come to Amsterdam, I'm the absolute nerd. It's so telling about the city. It's so interesting that this difference exists even in the age of remote working. This is not black and white.

[00:07:24] This is like distribution. So the amount of diehard nerds that you can find in Delft is probably higher. But still, if you go to the science park in Amsterdam, you'll probably find some at computer science. You will find some proper nerds there as well. And that's absolutely.

[00:07:39] So you got a website and the website URL is I want product market fit dot com. I also got I want product market dot fit. I'm very proud of that. There is a dot fit top level. Yeah, and I got that. So what is product market fit?

[00:07:56] Oh, it's this thing that people throw around that they claim that they have. If you are doing a startup, so what people like the best way to to put it is that it's this moment in time in your startup and you have figured out what your product should

[00:08:10] be, that you can sell it in huge quantities. Almost it sells itself and that you can start focus on really scaling your business so that the value proposition that you have combined with the revenue model, a

[00:08:22] business model that's sustainable, that you figure those things out and that from there on, you can deploy scale mechanics. That's that's the tipping point that people are looking for. And very often that thing is not going to work.

[00:08:33] And when you don't have product market fit, very often it stems from not having a product that's good enough for that market. Rarely you see it coming down to business model, but there's a huge focus on online writing about product market fit and startups for B2B SaaS.

[00:08:50] It's very dominant there. So you can imagine that if you have a like a B2B SaaS product, like what's the revenue model? Well, pay per user per month or something like that. That's not a very tricky thing to figure out.

[00:09:01] So that part of the equation rarely is the issue. Besides like, yeah, I have this new kind of Trello thing, but it is slightly different and then figuring out really like which customer segment within that

[00:09:11] market is for you and that you can serve best and then optimize your product for that. That is where most startups struggle to get product market fit. It's so funny because I'm listening to you and I understand what you're

[00:09:22] saying, but the product market fit is also that point in the hockey stick where you go from zero to 100 miles an hour. And I feel that what we've done in the podcast so far this episode is so far

[00:09:33] we've been like, coupling, coupling, coupling, and it's just having a little bit of fun and all of a sudden like, boof, you've got this record boost of terms being thrown at you. Yeah. That is what product market fit feels like, right? That's what people describe it as.

[00:09:47] Like if you are doubting whether you have it, you don't have it. That's one of the things that people sometimes say about it, but I think it's an over-mystified term. So also it's like, it's over glorified because do you have product market

[00:09:58] fit or people say they come to me and they say, oh, I want to improve my product market fit. Like what does it mean? Like I actually, I like to steer away from using that term, but I chose

[00:10:06] that as a title for my newsletter because then people know what my newsletter is about. Right. Because it's a very common term used indeed in the street, like all around the globe. Everyone says, Hey, it's the term I recognize at least. Yeah. Yeah.

[00:10:16] They recognize it, but nobody knows what it means. So that's interesting. It's hard to define. It's hard to define properly. So in this season, I've talked to people who are artists who've come up with product ideas, like product market fit, if you know that you have

[00:10:35] product market fit is basically a test. If your idea is good, is that correct? I would say that you can have earlier signals of that your idea is good and product market fits. I would like sometimes to think about it as startup market fit.

[00:10:49] Like does your entire startup fit in that market? Like, do you have a reason to stay alive as a business? Can your solution generate value is a different question. And that's something you can learn way earlier in that process.

[00:11:01] Like if you have a prototype and you let your potential customer use it, and you can observe or ask questions like, Hey, did this thing help you achieve the thing you wanted to achieve? Then you can also like get some validation, some signals that

[00:11:14] your idea is any good. And I think what I always like to do is to split open the word idea, because when we say idea, most of the time people think of a solution idea, but the solution always tries to fix a certain problem.

[00:11:26] And that is the thing that I tend to focus on first. I think most people know that have done this before is that how important understanding your problem is. So when people ask me, is this a good idea?

[00:11:38] I always want to know like, okay, well, what's what problem is this idea a solution for? And that's just a question that first time founders often struggle with. So if I understand correctly, you don't focus on the solution, just focus on the problem.

[00:11:52] And is the startup in a good position to solve the problem? Based on my experience, I've mentored, I think over 150 early stage startup and it's like very early stage, like first half year that they exist so that they start doing stuff.

[00:12:05] Nine out of 10 times people start with a solution idea. They say, Oh, wouldn't it be great if we have, I don't know, Uber for dog grooming or whatever. The first 10 weeks you should, no, not 10, but the first four weeks,

[00:12:15] you should just park that solution idea and just go out there and see how do people do dog grooming right now. Just ignoring every, like you have this baby and someone, Marco from from Bitta I used to work with always says keep your baby in the bag.

[00:12:30] Like don't talk about your baby. Put it away because you're an innovator and that's as innovators bias that we love our solution idea. And the goal is to ignore it for a bit and understand how are people doing dog grooming these days?

[00:12:43] What are they currently doing in terms of like, what kind of solutions do they employ and do they bring it to a salon? Do they do it themselves? What sucks about doing it themselves? What sucks about bringing it to a salon and really exploring that.

[00:12:55] And if you have a very good picture of what they're trying to do, then it's way easier to assess whether your solution is a good idea. So I know that the solution is a good idea. If people give me money and they come back next week and give

[00:13:10] me more money, right? Yeah. What you're saying is that there are a lot of things you can measure before or that can happen before that you know that you're on the right track. Yes. If you are able to immediately sell your solution, do it right.

[00:13:22] I don't, I'm not holding you back to make a sale, but sometimes being able to make a sale means that I can tell you something that you say yes to. So that means that I can pitch my product already in this concrete form

[00:13:33] that people are able to say, Oh yeah, I want that here. Here, take my money. If you are at a very early stage and you're still figuring out, most of the time people have like two or three variants of their solution and they

[00:13:44] don't know which of these three variances, the best idea among those three ideas. It's all the same direction, but which horse are you going to bet on? How do you make that decision before? Because you can just ask them like, Hey, would you pay that? But then, yeah.

[00:13:58] So you want to make sales? Yes. If you can make sales immediately, just do that. If you run into the roadblock, ah, shit, I can't make any sales. What, why is that? Why can I not make any sales?

[00:14:09] And there's a couple of explanations most of the times there. If I, for instance, have an idea about dog grooming, because that's the, that's the example we're sticking with, right? And I have a hard time to even speak to dog owners. Yeah, that's a red flag.

[00:14:22] So if I can, if I can actually, if I can even speak to dog owners, that's really green flag and then take it to the next level. Right? The fact that you're able to talk to potential customers is it's a necessity to either confer.

[00:14:34] Because if I have this idea for, I don't know, some money management for billionaires, but I don't know any billionaires and I have no access to billionaires, I'm not going to be able to sell that tool at all. So this is a shitty bit.

[00:14:44] This is a shitty business idea for me. Maybe, maybe you, maybe, you know, 50 billionaires, lucky you. And then for you, it might be a good idea. So it's extremely contextual. So there's a, I think the picture that you're painting, at least in my

[00:14:58] head as a continuum of, oh, on the one hand, there's like recurring revenue, which proves that your idea and your product and your problem is really good fit. And on the other end, there's also this smaller thing that being able to

[00:15:09] actually talk to customers, that's already something, and there's something in between as well. Yeah. There's, there's this, this skill that I developed. I called it the attirability skill. I also made a V2 recently. It's like what kind of signal should you look out for in the early

[00:15:23] stage of, of your startup? Some of the simple ones are, can you talk to a person that has this problem? Like, can you talk to potential customers? Like the people that go for dog grooming. Maybe some of those people don't have an issue with their current dog

[00:15:35] grooming situation, so those are probably not your customers. But if you can be, find people that actually have a problem with their current dog grooming situation, oh great, that's already something. Maybe you can propose a pilot that you say, Hey, is it okay if I groom

[00:15:49] your dog next time you need something? And if they say yes to that, that's already, that's not a sale, but it shows that they're interested in you helping them and then maybe you do it once and then they're very happy and they say, okay, do you

[00:16:01] want me to do it again? And then they say, yeah, sure. Okay. But next time it's going to cost you money. And they say, sure, but it's good. Okay. I will charge 50 euros this time. I said, perfect. It was definitely worth that.

[00:16:11] So then you are already in this, in this sales, it's a pilot sale, but still you're trying to figure out how eager people to buy this thing of me. And then the question becomes if you have gone through this phase once, like,

[00:16:23] okay, I've done it in a small scale. What if I want to do 50 sales now, because it needs to have 50 sales. Then the question, so first you validate like, do we provide value? And do they want to talk to me about the problem?

[00:16:36] Are they okay with me grooming their dog? Do they want to pay for that? That is still in a one-off situation. Like can I generate enough value with my solution so that I can charge money? Right.

[00:16:47] You can do that with one person only, but then the question becomes, can I get 50 and then you, and then you have different challenges. Yeah. And what I've seen quite a few times is that you can actually do something for

[00:16:57] someone and someone's happy to do something for you, but the moment that you charge money for it, even like nine euros, they're like, Ooh, now I have to pay, nevermind. Yeah. That's what I call the money gap. It's, um, yeah.

[00:17:11] The thing is most people like talking about themselves. I, I, I'm here on this podcast because I like here to hear myself speak. And, and I'm doing this for free. Why? Because I enjoy this. I also enjoy interacting with you. Don't get me wrong.

[00:17:25] So a lot of these signals can be false positives that people just have, maybe you're a nice person and want to engage with you and, uh, Oh, you can do it grew my dog for free. Sure. Go for it. You seem like a nice person.

[00:17:35] And yeah, so, so that is something the, can you charge money for it? Is a big hurdle, but there's also nuance in like what type of money, because I once mentored this startup and they did a something called reverse

[00:17:48] sticky, which meant you can just give someone a gift, but then on distance, they wanted to say, Hey, have a coffee on me that you can pay forward. And then they had these partnered up, uh, coffee shops that you can just be

[00:18:01] this during COVID times, I think are just afterwards. I think it was three year old 50. So that's extremely cheap. So that's, that's an impulse buy. So they got, it got a lot of validation. I think they made over a thousand euros within the program that I run,

[00:18:14] which is all time high. Almost beating Peter Potts, you know, that Peter Pot didn't have that many sales. So they did pretty well there. But then the question is how hard is it for any customer to spend

[00:18:24] three 50 that's not a lot of money, uh, convincing someone to spend 10 K. That's harder. Um, so it is not a binary, like, did we make the sale? Yes. No. It's also about getting some sense of, okay, yeah, how much convincing was required here.

[00:18:40] And that makes it, that makes it super hard for founders to estimate, like, how should I interpret this signal? They said, no, am I too expensive? Did I, did I not provide enough value? And that's tricky.

[00:18:50] So if I understand correctly, you can say, okay, I made a thousand bucks and everyone can applaud you because thousand bucks is a lot of money. Yeah. Uh, but then the question is what did you need to do to get that thousand bucks in sales?

[00:19:03] Did you had to work like 80 hours a week for that for four weeks straight? Yeah. Or was it just go out on the street, throw a few stones and people like, Hey, shut up and take my money.

[00:19:12] That's a qualitative side to, you have to look deeper than just the sales. Yeah. You need to be realistic about the effort in and then the results that you realize, and it's not a bad thing that the first thousand euros are extremely inefficient, right?

[00:19:27] Um, I think that's why Combinator they say do things that don't scale. So the question is, can we do it with all the effort in the world? Can we then do it? And then this, because if you get a hard note there, even with a lot

[00:19:40] of effort, we cannot pull it off and you should just stop. But if you can pull it off with a lot of effort, then the question becomes, how can we do this with less effort? And then you're starting to optimize that.

[00:19:49] So first it's like a proof of principle. Like, can we make this sale just once? I know I spent 40 hours on this customer, but the moment that he started to use our product, he loved it, right? You need to be better at sales, but the product provides value.

[00:20:02] So the question that I most often ask is people approach me for helping with designing experiments is like the question, like, what do you want to learn? What is the most important thing? You need to learn about your ID right now. And that's, that's a hard question.

[00:20:13] I think I'm going to take that background of something being really hard, but still trying to work it into a little bit of a segue to seven problems that have a red flag. Can we talk about that? I love it. I love it. Yeah.

[00:20:28] So I see a lot of shitty startup ideas. So that's where this, this post comes from. This is at the contact. This is a blog post on your website. I want product for market fit.com or I want product markets.fit. Go there, find the blog posts.

[00:20:44] It's very insightful. So I tend not to tell people, I think they have a shitty idea because sometimes they are able to pivot away from it and if they are able to do that, then I was wrong. Right?

[00:20:55] So it's only shitty in its current form, or maybe it lacks proper argumentation why it's a good idea. Most startup ideas, they are little stories like what if we made this for that and then, or we saw that people are doing X and then we think

[00:21:08] they should be doing Y and therefore we do this. And very often in these stories, there is this problem that people paint for you to make it seem that their startup idea is actually a good idea. So I always use the example of shoe condoms.

[00:21:22] Like everyone hates when there's chewing gum under their shoe. Right? So therefore we invented shoe condoms so you can put condoms around your shoes so you never have chewing gum on your shoes again. This is a shitty product.

[00:21:33] Like really everyone immediately sends, but I made an argument for it. Like there's a, chewing gum under your shoe sucks and arguably shoe condoms fix the issue. So what's up with that? And in this way, a lot of people make these seemingly existing problems, which actually don't exist.

[00:21:51] And one of the biggest ones is the reasoned problem. So people, they made up a problem. They assume there is some kind of problem, comes with a scenario. The example I give in the article is like when people are booking tickets

[00:22:04] for a Hyperloop journey, people will be concerned about their carbon offset. And therefore we designed a platform where you can see carbon offset per all these new multimodal transport things. But that last thing probably has been pitched 50 times already.

[00:22:18] The question is like, how, how real is this problem? And then that's something that's yeah, I identified seven of those non-problems, the things that people make up or can steer your way from the right thing. Do you mind if we run through them just quickly? Yeah, sure.

[00:22:32] So that's the reason problem I just made like made up by the founder. And the most important aspect with the reason problem is that it cannot be attributed to an actual living person. It could be that the problem by doing some interviews that you find

[00:22:45] the right person, so this is always like in the current form, this is a shitty problem. Then there's the non-problem and that is when, when, when people assign a problem status to part of the story of a customer, but the customer

[00:22:58] doesn't actually see it as a, as a problem. So you, you did speak to someone. Yeah. Congratulations. You took that step. Uh, but they, and they, they tell you a story, but they never said, well, that's not really a problem for me.

[00:23:11] I once heard this travel app that, that that said all these people, they have all these browsers open and Excel sheets and that's such a hassle. For some people, that's not an issue. Right? Right. Yeah. They don't mind that it's, it's like scrapbooking. It's messy.

[00:23:25] It's part of planning the journey that it is messy. There is a startup now that does that better, by the way, it's called Stipple and they actually, that's their main argument, stop with making that Excel

[00:23:34] sheet, but for some people that is not a problem, so be careful that you don't. What seems like a problem to you might not be a problem to them. So that is another issue. Yeah. Because my mind works in a bit of an organized way.

[00:23:47] So I see if I see someone who is like a mess around themselves, I'm thinking to myself, oh man, these people have a problem. No, they're just artistic, you know, and not all this thing. That's me, but artistic. Yeah.

[00:24:01] And then there's so many examples of this is that there's all these suboptimal situations that we just how to deal with, right? If you sometimes you, I'm not sure, do you sometimes get a snack out of the fable? Like a croquette. Yeah. Yeah.

[00:24:13] Croquette, Frikadelle, like really bad fast food. Yep. Yeah. Yeah. But you still do it, right? And do you feel bad about it? Well, probably kinda. Ish. Ish. Yeah. But I cannot make that into a problem for you because you still are doing it.

[00:24:29] I, if I would label that, that guilt big problem, I would be like overemphasizing that experience for you and that's just not representing reality. So should we do the next one? Go ahead. So this one is one that's easy to fix, but there's a problem without an owner.

[00:24:43] So I was mentoring this startup once and they wanted to do, to, to increase voter turnout among the youth, because the youth are notoriously bad at going to vote, always among the lowest percentages. And arguably, if you believe in democracy as I do, that's good.

[00:24:59] It's a good thing. The more people participating, voting is a good thing. So everyone agrees with that. But whose problem actually is it? Because they tried some solutions with these, these youth and they don't care about politics.

[00:25:10] So it will be a very hard sell to make them pay for them caring about politics because they don't care. They're therefore they don't go voting. This is like a circular reasoning line. So they needed to find like, whose problem is this actually?

[00:25:23] And what they found is what they found someone in gemeente Den Haag, municipality of De Heek was responsible for increasing voter turnout among all different kinds of groups. And he actually had budgets to realize that kind of thing.

[00:25:35] And all of a sudden they found a problem owner and then this is how you fix these things. So yes, arguably a bad situation, but who cares? That's the most important question here. Yeah, exactly. Because in this situation you could argue, well, there's a number of folks

[00:25:46] around that's the young people themselves, but they don't care. They say, okay, the other people who vote, that's not their problem. If young people don't vote, if all the people don't vote, great, more power to me than the other voters could be. Yeah.

[00:25:58] And they say, okay, the political parties, but if it's a political party that does not naturally attract young people, they're not a problem owner either. So that's how you dig through the demographics, right? Yeah. And to be honest, I think political parties are doing everything in there

[00:26:12] in what they can already to attract voters. So it's not that some are better than others at doing that. I'm not really sure if that would be an interesting potential customer. So in the end they killed the idea. That's it. Yeah, another one bites the dust.

[00:26:28] So the umbrella problem, what's that? That is a very broad problem. And like climate change, sometimes you see a starter pitch and say, yeah, we're here trying to fight climate change. And then, okay, sure. That's pretty big. Like, what do you mean with climate change?

[00:26:41] Because there's so many problems. This is like CO2 stuff is pollution of the waters, pollution of the messing up the biodiversity. All those things could be attributed to an umbrella called climate change. And it's like solving a world hunger. Yeah.

[00:26:54] But nobody solves world hunger because that's just some broader container that we apply to a lot of different ideas that are underneath. Right. And it's like UNICEF is also not solving child hunger. They sent aid packages to certain regions where there are very specific

[00:27:09] hungry children and they are being helped. And so maybe in the Horn of Africa these days, that's over there. They have a very concrete manifestation of what hunger is, but world hunger, that's often a sign that they don't understand the problem well enough.

[00:27:24] Or they are virtue signaling or dog whistling like, Oh, look at us. We're doing climate or we're doing something for climate change. And that's just blowing on your own horn in my book. And is that related to the lack of overview problem? Or is that a different thing?

[00:27:38] That is specifically a software focused thing that I often see is that people, they for some reason, quite some of these applications that we use are siloed. So we have a mail app, we have a calendar app, we have a messaging app.

[00:27:51] We have an images app, we have a video app, have YouTube. And sometimes people come up with this idea, why is this all not in the same place? And then they start to merge these concepts together. Sometimes this is in a business and B2B environment.

[00:28:05] So we have an analytics app and we have this app, we have this and we are putting everything together. And because people sometimes make this vague claim that they're lacking overview and by putting everything together in one screen, they think they will be creating more overview.

[00:28:20] I doubt that. I don't think that there are too many solutions out there. I just think there's people that have issues with structuring their life. It's not a bad thing that your Google analytics is not integrated with your Gmail. It's not a bad thing.

[00:28:34] Maybe it's easy for us to comprehend it like that. If you speak to an online marketeer, they use four or five different tools that are sticking together in one way or another. What you get sometimes is some kind of KPI dashboard that nobody uses

[00:28:48] because someone had the idea, because they heard a customer say, yeah, I'm losing overview. But that is always a superficial way of describing that something else. So you need to dig deeper if a customer is saying, I really like the overview here.

[00:29:01] So from my consumer point of view, it would be like, I've got Slack Messages, I've got LinkedIn Messages, I got email, I got WhatsApp. I want to have one tool that rules them all and that's never going to work. Yeah.

[00:29:13] Well, there are these tools that try to aggregate all these messaging apps. I'm not sure what the name is so you can do Slack, Telegram, everything in there. And what surprises me is the lack of adoption there because I think everyone

[00:29:23] is at least on five different messaging platforms. Like we are on email and WhatsApp and then probably on Messenger or Instagram and a couple of email accounts. And for some reason, these tools have not found mass adoption. And that's a telling tale for me.

[00:29:38] Like, okay, so the extra value of having everything in one place is actually not that big and I'm starting to believe that it's actually pretty helpful that WhatsApp just is in WhatsApp so that it's siloed and we understand all the things are there.

[00:29:51] And maybe it's just easier for our limited brains to process it like that. So this is like a whole category of ideas. I think in Y Combinator they call it TarPit IDs. TarPit? Yeah, that's what Y Combinator calls these TarPit IDs.

[00:30:06] Like the names, I think they're named after the TarPits in Los Angeles, where tar is coming from the ground and you think, oh my God, I can just harvest it and you just get stuck in it and nobody's been able to do anything with them. That makes sense.

[00:30:20] Yeah. I'm not sure if this explanation is actually factually correct. That's how I remember that. So the next one, access to information problem. Yeah. So sometimes if you're interviewing customers and let's say you have an idea in the range of sustainability, especially young founders have these

[00:30:39] more impact focused ideas and they wouldn't want to help people maybe consume in a more sustainable way or will buy less polluting stuff when they're buying stuff. Sometimes people make the claim, yeah, so much information I don't know where to start. And I think that's always such BS.

[00:30:57] Like how many of these people that give you this excuse for not researching the things they're buying did actually go on Google? Right. Because if you would go on Google now and say, okay, 10 things I can

[00:31:09] do to reduce my CO2 emissions or how many pages of hits would you like? Thousands. So the good question to ask here is like, did you do a Google search or a YouTube search or whatever? And if they haven't done that, that is such a red flag.

[00:31:27] Like how much effort does a Google search? It's like zero. Yeah. I will Google like the capital of a country that's like with 2 million inhabitants because it's so easy because I want to know, like if you

[00:31:38] can't even be bothered to do a Google search, then I don't have access to the right information is a weak excuse of your customer. You don't blame the customer for saying that they just don't want to

[00:31:49] admit they're lazy or they don't want to admit in such a conversation that they actually don't care about the climate change or not at least enough to start doing things. So sometimes people start designing, oh, we will put the right information

[00:32:02] inside a platform around sustainable consumption or something, and then there's yet you just create another information source they're not going to check so you're not really solving the issue of people not looking up the information.

[00:32:13] So the lack of information is very often not the reason people are not acting differently. It's a rack of motivation. So that comes back to the problem. Is there actually someone who really, really has this problem? Because if they really have this problem, they would have put effort

[00:32:28] into solving it. That's like a simple validation check. What have you done to solve your problem? And their answer would be like absolutely squat. Yeah. And then it's still interesting. Then you can still dive deep like, oh, that's interesting because

[00:32:40] you just said to me that you find climate change important, but now you say that you haven't really done anything about it. Why is that? And then you're going to have a very interesting conversation about someone's mode of behavior and reasoning.

[00:32:53] And then they will say probably things like, yeah, it's pretty hard to do it. I know the things that I can do, but I don't want to do it. So that means that they actually already made a trade off and they

[00:33:02] say, well, I opt for not doing it. Like I still eat meat, for example. I definitely know the implications. It's not that so yeah, it's a very fun red flag to unpack. Yeah. So there can still be a problem, but the problem is not access to information.

[00:33:17] I don't have the access to the information. That's not the problem. Okay. Let's go on to the seventh one. Making your business goal their problem. So who's there? Yeah. So the customer's problem. So I worked with, I have two examples here to make it clear. Okay.

[00:33:30] So first I was working with an energy supplier and I'm not really sure. I recently switched energy supply, but that's like a no brainer. We don't have an emotional bond with the energy supplier like we have with maybe your phone or a clothing brand or whatever.

[00:33:48] And this energy supplier in a session I was doing with them said, like, how can we have a more tight personal relationship with our customer? And I asked him like, maybe your customer doesn't want a tight personal relationship with a commodity.

[00:34:02] But this is like if your water utilities company is going to start doing some kind of campaign, like what's the benefit of that? I don't, my water should work. So they're making their business goal your issue, right?

[00:34:16] All of a sudden you need to start caring about your energy supplier where you're only frustrated with them if there's an outage or something. Yeah. Banks have the same tendency. Yeah. Because that's because they don't have anything else to diversify on.

[00:34:30] So they should do it on some kind of personal branding brand stuff. There's not a lot of innovation going on in banks. So yeah, that's what they need to do. It's very hard because it's such a commodity. Like, yeah, you put money somewhere, they keep it for you.

[00:34:42] And sometimes you can use it's very hard to compete on that. And then these neo banks came about and they had better UX and then really because the Rabobank app in 2010 sucked big time and ING as well. But now that all caught up as well.

[00:34:54] So that's so that UX mode has disappeared. So how different is bunk now from, from ING? Well, I just still has customer service. So that's maybe interesting that you could speak to a person, but there was this, this, this started by was mentoring called Breeze.

[00:35:08] It's this dating app where you, um, you don't chat. So you, when you match, you immediately get a data picker. So you immediately get a date scheduler and then you go on a date. So you don't know anything about this person except for the profile.

[00:35:21] And they arranged a cafe and then you sit there and you have a, it's not a completely blind date, but you haven't spoken before. I think they have done 100,000 dates by now. That's pretty good. And I think in my, in my program, I think they arranged the

[00:35:32] first 10 dates or something like hand crafting it in a manual way. Wait a bit of Google sheet was the Google sheet was their backbone and WhatsApp was their front end. And they were sending out PDFs manually of matches and profiles. Yeah.

[00:35:46] Super hacky, but then they were starting to get some traction and COVID hits. Well, what's the one thing you cannot do during COVID is face to face dating. Yeah. So they had a big issue. They were losing traction left and right. Obviously they had an idea.

[00:36:03] What if we do video dating like those dates because they wanted to stay top of mind. And they created this like video dating roulette kind of, so that every night or every Tuesday at eight, you would get together and have this video day together. And the solutions sucked.

[00:36:18] I wrote an art, I did a detailed case study on this one and their solutions suck people really, really didn't like it. And I spoke to Marcia who was a designer back then of the product. And she said, yeah, we just prioritize.

[00:36:29] We wanted to stay top of mind. We didn't, we didn't prioritize what do our users want? Now we want to be in their face. And that backfires and they completely killed the idea. And then they added some new functionalities like walk and talk dates.

[00:36:43] So we don't do the cafe, but you can still do a walk and talk. Not everyone liked those types of dates, but it's at least something. And that's got way more traction because that's what the users wanted. Oh wait, my, my vacuum is starting.

[00:36:56] It's out of clean schedule. Okay. So this is where we break for our commercial. The future of work is flexible. If you are being mandated to return to the office, fear not. There are things that you can do to create flexibility for yourself.

[00:37:22] And there are things that you can do to prepare for the inevitable flexibility that is coming your way. Collaboration superpowers helps people and companies work better together from anywhere. And we've got a free remote working success kit to get you started

[00:37:39] from personal user manuals to team agreements, virtual icebreakers and more. Download the remote working success kit at collaboration superpowers.com. We'll see you online. Yeah. And in the case of Breeze, I know the app, not that I'm dating my dear wife,

[00:38:00] but I happily married when I stayed there, but I know the app Breeze. So basically what they do is they schedule a date with two people in the restaurant and that generates revenue for the restaurant owner. So they have deals with the revenue owner, with the restaurant owner,

[00:38:15] where they get a kickback fee as well. Right? No, no, no. That was the initial business model. So this is quite interesting actually how they pivoted their revenue model because their customer group, their target audience was not used to pay

[00:38:27] for dating, like most dating apps have a free of your model. So they assumed we're not going to get a lot of money for dates. Okay. But we can charge the cafe money because we are bringing in customers. And most dates have three drinks.

[00:38:41] So if they give a placement fee and the fork does this as well, at the restaurant reservation stuff. What if we do that? And the restaurants would pay like one or two euros per date. And the problem here is, if I may interject, is that in that model,

[00:38:55] the actual consumer, the people going on the dates, they are not the customers. The restaurants are the customers. In that case, the restaurants are the customers. And that's a problem, right? Well, it was a problem for two reasons.

[00:39:06] Is that one euro per date was not very attractive lucrative. So I don't think that unit economics would make sense in that way. And the other thing is that for a restaurant, this is a very cumbersome process

[00:39:18] because if you are the fork and you pay, I don't know, you pay 150 or five euros for the fork. I'm not sure what the percentage is either from the top of my hand. We have a certain take rate. And then you can then you have a restaurant dinner.

[00:39:30] That's 50 to 100 euros easily. So there you can discount that in the price and then including that in some kind of invoicing system that kind of works. But if you have to have all these dates that just have a small bill, etc.

[00:39:45] So there was this complaint for the restaurants like this is a lot of extra administrative stuff that they need to do in order to have these six extra drinks in a night, the six extra drinks in one night. Right. That's not the greatest promise compared to that hustle.

[00:39:59] So they flipped it around. They did an open ticky to a bunch of users and said, hey, did you have a nice date? Open ticky. And people started to give like three euros, sometimes five euros.

[00:40:09] And they just said, what if we just stop charging the restaurant or the cafes and just immediately charge per date five euros each because they were willing to pay for it. And the only thing they did with the cafe is that, hey, could you do

[00:40:22] first drink on the house? So it's simple wine or beer or soda. And the restaurant said, yeah, sure. Because that's no administrative stuff for them. You know how cheap a beer is if you'd have it at the cost price, because that's 20 cents or something.

[00:40:35] So that's a win-win situation. There's no need for administrative stuff between Brees and the restaurant and they can do everything in house and they can just charge extremely close to the value. They charge the moment someone goes on an actual date.

[00:40:49] And I think if possible charging close to the value nine out of ten times is the best business model. So that's an interesting pivot that they did. I also loved the validation because we talked earlier about the continuum, you know, from people giving you money.

[00:41:02] That's really good validation. But here they say, okay, just use the product and just pay us whatever amount you think was the value. Yeah. And people started to give them money. Yeah. And sometimes people are against this to do an open ticket or something.

[00:41:16] But this is also a continuum of I can interview afterwards, like how much was this worth to you? You can give me a number. Right. Is that an actual number that you would pay me if I would propose you upfront? No, we don't know.

[00:41:28] But I have a ballpark. I can still have a ballpark. So if I did a session and it would ask someone like, I did this once, I had mentored someone for free. And then afterwards I asked this person like, hey, how much was this worth for you?

[00:41:41] Because, and then this person said like 50 to 80 euros. It's like, okay, cool. I was pretty impressed because I was just starting my freelance business here. And then I asked him like, how often do you pay for mentoring? He says, oh never, I always get it for free.

[00:41:55] I say, okay. So that 80 euros is worthless. It doesn't tell me anything. Right, right, right. So then I started to offer my mentoring service at 125 euros. Some people said yes, but for most people I'm way too expensive. Why?

[00:42:08] Yeah, early stage startups, they don't have a lot of money. And then I did an experiment recently where I sent everyone in my newsletter because I advertise my mentoring service in my newsletter sometimes. I set a September discount now 50 euros per hour and all of a

[00:42:20] sudden I had five meetings scheduled. So my hunch that I was too expensive was confirmed. So that's this range of how concrete people are acting, how authentic is their behavior? And if you would help someone to reflect, you get an estimate.

[00:42:33] If you say open ticky, like pay what you want, then they need to act on what they think. And it might be that they're low balling or something, but the fact that they're giving you something that's already more information than just having that recent number.

[00:42:48] And the question is, what can you do? I remember discussing this experiment or maybe it was what the different startup, like should we do an open ticky as or no, or should we just charge them upfront? And that's no right answer.

[00:42:59] Sometimes founders are not comfortable yet because they think they have a shitty solution with charging right away. And they say, oh, this is a two, three, four step process. If your first experiment is open ticky with the intention later to

[00:43:10] charge upfront, sure, this will just amplify your learning. Like what do people and if this gives you the confidence to do the open ticky and because if you would otherwise postpone actually trying to charge money for your service, then that's the red flag for your process.

[00:43:25] Because then you are not trying to learn are people willing to pay. So whatever helps you to make a step towards paying customers is good. That makes a lot of sense. So let's move on to another topic.

[00:43:35] Another blog post that you wrote that I loved my ass off. It was so funny. It's about how you can turn a really good idea into a really bad idea. Yeah, it's my latest thing that I wrote. I think I compromise never is groundbreaking.

[00:43:52] Cause I got the feeling I watched your standup and I watched your standup for 14 years ago, I think you were just out of high school. I think it was 17 there. Yeah. Yeah. You were on the stage, just pushing boundaries, going to the extremes.

[00:44:04] That was such a bad set. No, it was good. You're very expressive guy. I'm very creative and I love that because you come with extreme ideas and extreme ideas are typically either really bad or they're really good.

[00:44:18] But what I've seen is if you bring an extreme idea into a group, what happens then? People are going to find a middle ground between what they feel. Like if it's a spectrum, so someone is standing at one and someone is pushing a crazy idea and that's a 10.

[00:44:32] Nine out of 10 times this will turn into a four or five. And that four or five is something that is losing everything. What made that crazy idea crazy and something that might have given you the edge is just going to be something. It's going to be mediocre.

[00:44:48] And quite sometimes if you, I've seen it in group dynamics and it's especially done by people that have, they want to maintain synergy in the group that everyone can chip in. So someone has an idea for a crazy feature might work, might completely

[00:45:03] backfire than someone else has an idea for a feature and then they're making adding that to it. So it becomes this Swiss army knife Frankenstein thing because they cannot like scope it down to just, oh, we're going to do this crazy thing.

[00:45:16] And it might backfire, but we're all going to try it. And you can see that very soon in the process, it can start to become this, there's nothing because something that's not explicit in each, in any of these directions, because it tries to be everything.

[00:45:29] And I think if something is everything, it's nothing. Cause you could say, let's make a knife and someone is like, well, let's make a rock, you know? And then like, let's make a knife rock. It doesn't make sense anymore. And it also goes for selecting your customer segments.

[00:45:45] So some people, they say, oh, we should cater to this. Yes, yes, yes. Oh, I was thinking we could cater to that. Oh yes, we should, we should do that too. Okay. So now we were going to do youth and, and, and Cedars is that okay.

[00:45:56] Because those two might require two different products. Now we're going to make it work. And that's rarely the case. Like the fact that the iPhones and WhatsApp and those kind of tools exist and that almost everyone can use them, those are very unique products.

[00:46:09] There, there's not that many products like that, that are for everyone. That's something people often forget is that if you think about books, like how many books are for everyone? Like if you write a book, you write a book, not for everyone.

[00:46:21] You write a book for a specific audience. Right. And I see what you're saying. If you write a book with two people and I want to book, buy the book about for specifically for young men. And you want to write a book about for all women. Yeah.

[00:46:35] It's not going to work. Right. It's too demographics. No, then you get this compromise. And I think often you get a mediocre outcome with that. That's the risk. And you shouldn't confuse big with groundbreaking because that's something

[00:46:50] that I see with founders is they want to be unique by being very big and successful and that's not the characteristic of whatever you're offering to your customer. So either going to be this platform with everyone, everyone will be on there, et cetera.

[00:47:07] And because everyone is on there, it will have a lot of value. That's inherently true about platforms. The more people had to see network effects and the more people on the platform, but still you need to offer something to some group that makes them

[00:47:21] want to come to that platform if you cannot articulate that. So it might, you might start with a very small platform for 50 people that are extremely enthusiastic and build from there. So you can still be groundbreaking for those 50 people, but you start out very small. Yeah.

[00:47:34] That's why that's interesting because I've done a lot of number of these exercises and typically within one hour, someone has already said, oh, but the audience is not big enough for that. There's not enough people who kind of will be able to pay for that.

[00:47:46] So we need to also do this and also do that. That's what you're getting at. Right? So if people make those claims, I always try to impact them like, okay, like how many do you think there are? You know Fermi calculations. Fermi was this astrologer.

[00:48:01] I'm not sure if you want a Nobel prize probably. And he was researching space, which is huge. And he liked to do these calculations in the sense of like how many, how many piano tuners are there in New York? Make a good guesstimate. Okay.

[00:48:14] So there's about 10 million people living in New York. That's let's say eight million households. Okay. Eight million houses. So it's how many own a piano? Let's say one in 50, not too many. Okay. That's 8 million times 150. How often does a piano needs to be tuned?

[00:48:28] I don't know every two years. And if you do this more than, if you do this exercise, I've done this a lot in class, it also helps with market sizing a lot. You get to ranges of outcomes between, it's always somewhere between 10 and 300 always.

[00:48:42] And the idea is, is that the fact that you say there's nine or 10 million inhabitants in New York, that difference doesn't make, that that doesn't make a lot of difference if you're adding up 10 different numbers together in a calculation.

[00:48:54] You're in the right magnitude because you know there's not 10,000 people living in New York and you know there's not 1 billion people living in New York, so it's about being in the right order of magnitude. So if people say there's not a lot of people out there within two

[00:49:09] minutes, you can calculate roughly the amount of potential customers in your country. And then you can say, if you would reach 5% of a market, that's a lot. Right? Not a lot of companies have 5% of a market.

[00:49:21] So if the number that you need to reach to make your business interesting is 5% and not earlier, that's a red flag for me. Sometimes I don't remember the example, but there was a startup that did this calculation and for three people, for this business model to be lucrative,

[00:49:38] they needed to capture 50% of the market. The market was not very big, very rare, weird product. That's not something that you could double down on. You want to break even earlier than 50% of the market because that's huge to have such a market share.

[00:49:52] So this is a simple trick that you can do. And I think you can always practice this. I also did like how many dog groomers in Amsterdam once to figure it out. And same for some reason, piano tuners and dog grooming gets to same ranges.

[00:50:09] So you need to groom your dog as equally often as you need to tune your piano, that's what you say. Now I understand. I'm saying that all piano tuners could also have a side hustle as a dog groomer. That's also a good conclusion.

[00:50:26] Anyway, we got here because of the discussion about student ID. We meshed in with another one to make it appeal to a bigger market. And the aspect that I also read from your blog post and you said is the social.

[00:50:40] You want to get along with people and that's where you start to compromise. That's where compromise starts to become a thing. Yeah. And it's very hard to notice this if you are in that process, because if

[00:50:51] you are engaged with such a subject, you don't know that you're doing that. Like if you're a person that tends to do that, it's very hard to break those types of patterns. So it's easy for me to call it out.

[00:51:01] It's much harder if you notice this pattern within your team to do something about it. It's almost a cheap shot, but I wanted to put it out there because I think that most people don't realize that this happens.

[00:51:12] So maybe the article can help them to maybe if two people reflect like, Hey, am I doing this? That's already a game. You did some research for incubators and accelerators. And my question is like, we found a good idea. What can incubators and accelerators do here? That's interesting.

[00:51:28] So I got the opportunity or I might have had the opportunity to design an incubator, an accelerator program for venture capital fund. And before doing any of that, I wanted to talk to people that have done

[00:51:41] that and like run an accelerator program and run been in those programs. So I interviewed 10 founders for about an hour on this topic. And I spoke to some program directors to see like, what does it take to run such a thing?

[00:51:55] So this all my knowledge on this topic comes from these conversations. And I could, I could find this hierarchy that I find very interesting in because founders, they tell me the reasons founder give in terms of priority for joining such a program.

[00:52:07] And some of these programs, they promise funding. You either get funding when you get in or you get a chance of raising funding at the end. That is reason number one for people to join these programs. Then there's the network of these programs, especially a startup

[00:52:22] I met got into Y Combinator orderly. They said that network is impressively huge and it really helps to get in there. And another startup that I met got into Techstars Seattle, and they even, they orchestrate that network matching in such a way that you get

[00:52:38] intros to so many people with rich expertise. So there's two ways that you can benefit from the network. It's intro to experts or intros to potential sales, because there's also, if you're B2B SaaS, then maybe you can sell to a lot of these X Y

[00:52:52] Combinator companies to begin with. So that's also just good for your sales pipeline. In the third place, people said that they liked, if you are in this batch of a program, you get this, this community feeling and you're

[00:53:04] pushing each other to go faster than you normally would if you weren't. And that is a huge factor, especially in those very high rewarded programs, like YC and Techstars. They would go to these offices. Rockstar also has that structure.

[00:53:17] People are working there, motivating each other to work hard. And that is something I noticed. And then on place four only, they said something about the workshops that they got there and the contents of the program. So this is what I learned about how founders value these programs.

[00:53:32] And these programs are tied to venture capital? Not always. So some of them are, some are done by municipalities to accelerate entrepreneurship. Some are tied to schools or universities as my program. Some are linked to an incubator.

[00:53:50] So you get to get a desk in our incubator if you also join a program. I think yes, Delft has a structure like that. And so there's all these flavors of programs and if there's funding, nine out of 10 times, that's VC funding. Yes.

[00:54:03] Would you advise founders to go for VC funding? Funding is not my expertise. Like so grain of salt here. I always learned like you should raise money when you need it. It's super simple. So, and, and, and not earlier because fundraising is another, that's

[00:54:19] something that many founders told me. Fundraising is an extra job next to your startup. It's so tiresome because you need to do so many things. And this is something that most people underestimate. So I, I, I found her that I know recently burned out during the due

[00:54:34] diligence because it was such a hassle. So you shouldn't underestimate that. So be careful what you wish for. You can do friends, family and fools rounds. That's like angel related stuff. That doesn't take too, too, still takes a lot of effort, but not

[00:54:47] too much effort compared to doing a series A or a seed round. And you should ask yourself, how do I want to build my business? So there's, there's ways about doing this. And Mailchimp I think famously didn't raise any rounds. So that founder is super rich now.

[00:55:04] Um, but I also heard this. If you are pretty sure you're going to need capital injections and you, then you should have a plan, not just raise around and then say, Oh shit, end of runway.

[00:55:14] Um, I wasn't slushed, and today, and there was this, I forgot her name. She had a good talk on, you should have a, an idea of what types of rounds you want to do in the future.

[00:55:22] So the next, so I have a roadmap of rounds that you're going to raise. And first we will need a round like this with smart money for these types of problems, because we know currently we have these types of problem.

[00:55:32] Next, we expect to have these types of problems and we're going to need a round that will help us fix this in this way. And then you have a roadmap for your startup and maybe you will dilute a big portion of your shares.

[00:55:42] Like I'm not going to throw around numbers because that's not where I have my knowledge, but it's idea of being very diligent about what do I need the money for, when do I need it and how much do I need?

[00:55:52] That is, I think a safe approach to do it. But in a lot of cases people start bootstrapping and they get some revenue and at some point they can go all in and then they work on their

[00:56:02] savings and at some point then the startup is not taking up as they expected. So they have revenue, but not enough to pay the full bills and then a minimum wage salary to and then living costs. And then they started to see the end of their own runway.

[00:56:15] And then they start to raise money because they need to work on their job. And that is a common, especially because I work with early stage founders, this is something I see a lot and then they have half a year to close that round.

[00:56:26] And in the Netherlands that's risky because the average round takes, I think close to 12 months, if not longer. So closing the round takes longer than your personal runway is and you run out of money. Yeah. And what happens then, and this can be very hurtful for your startup

[00:56:42] because then you need to consider, okay, I actually, I either need to move in with my parents. I'm 35, I don't want to do that. So the options become to take an extra job because you need to have

[00:56:55] income, which will compromise the amount of hours you can spend on your startup leading not to slower developments, but maybe even non-development. So I've seen a lot of these startup programs, especially in the educational context that do something with entrepreneurship.

[00:57:10] And I've, the program that I run is three days a week in the last 10 weeks and the first eight week is two days a week. But I've also seen a lot of these startup programs with four or eight hours per week, not a lot of startups exist there.

[00:57:24] I'm not saying two or three is ideal, but if you're building something, doing it for one day per week is extremely hard because you cannot get into the flow. Day one, you're picking up your tools and then the moment you're in your materials

[00:57:36] again, you need to already put down your tools and then go to your day job. And this is what's hard about bootstrapping if you're doing it on the side is that you need to have quite a capacity to easily, that the switching

[00:57:47] costs are quite high if you need to put it up every six days and then putting it down again, and this is what makes doing a startup on the side hard because if you want to work sales, for example, you do a B2B

[00:57:58] sales trajectories that take four months. You cannot say I will do all my sales calls Monday morning because those other companies have very busy agenda. So then you need to have a flexible. So combining those two things is extremely hard and there's a risk of

[00:58:11] getting into that hard combination again, if you have lived on your savings and then sometimes people just kill the startup because they cannot get it off the ground and they might've been able to do so if they would have been

[00:58:22] able to give it the full attention if they raised enough funds. Yeah. So that is something that it's hard to avoid, but it is avoidable. I would definitely, if you're running into these issues, talk to founders that have been through this just only for emotional support is

[00:58:37] already very important. It's so amazing how you can paint these pictures, just the bootstrapped and the VC way side to side because they do both exist and a lot of these incubator accelerated programs, they automatically point towards venture capital, but the venture capital is addictive.

[00:58:53] Once you've done one round, you're basically on that trajectory. You're like a junkie, like give me another fix. Yeah, you have to, right? Cause you take in the thousand and you have to turn it into 10 million. It's like this dealer that says, you want another seat right here?

[00:59:12] No, but yeah, no, but so there's this, I've done this talk on bullshit in the startup scene and there's this vicious cycle here is that the moment you raise funds, VCs are professional gamblers. So they know that only a couple of their startups are going to make

[00:59:27] the returns and there are some statistics out there that show that most VCs are not making a lot of money because of their investment gets worth money. They're making money purely on the management fees, not because

[00:59:39] they get the unicorn every one in 20 times, but they get into a business and they're going to raise the bar because they want to have a high yields. So the revenue targets are going to be set, let's say next year you

[00:59:51] need to hit 1 million if they don't reach it, they might say, okay, but you still need to read that target. So they're going to amplify like the, like, um, the, the time school found, right? Increase the pressure.

[01:00:01] If you're going to do another round, this has the potential of increasing more and more pressure because the next round people also want a good ROI on their investment, so those targets are going to be even higher.

[01:00:11] There is something in, in the books called premature scaling so that you start to scale a startup before it actually was ready. And that's the dominant reason for startup failure, but I think there's an also another reason for startup failure is that if you keep not

[01:00:26] hitting your revenue goals or certain goals that your investors are setting and you're keep on raising money, that is a potential debt loop. And I think that sometimes VC money can be that influence in a startup that's still figuring out what they're doing in that sense.

[01:00:42] So it's good to have some amplifier there, but if you can give me a founder that is extremely happy with the VC that they got on board and how supportive they are, I don't know many stories like that.

[01:00:53] And so they always promise that they bring a lot of value to the table beyond the money, but nine out of 10 times I've been told. That's not the case. So they are only going to be saying, why didn't you hit this target?

[01:01:05] And then maybe increase the target next time. So that's a difficult game to play. Yeah. And I'm just going to ask the question in a very subjective way, but what if you do raise around and the race off the round after that, and

[01:01:15] you don't hit your targets, you're diluting as a founder. You're being pushed out of the company, being left with what? That happens. Yeah. But it's good to know that there's two routes. There's the VC route, but there's also the bootstrap route.

[01:01:29] You just need to have your own ag agate to fund yourself. Yeah. That's also something that a lot of people think they need to raise money. If you are a startup, I encountered that quite often. Like what about raising funds? Like you don't need to.

[01:01:43] Sometimes that's a light bulb moment that you don't need to raise funds. And it has to do with the media. Right. So if you not like mainstream media, but if you see this, this is not

[01:01:52] like an attack on mainstream media, but if you see startups in the, in the media, it's either a scandal or that they raised money and there's nothing in between. Right. So that's the image.

[01:02:03] And so if you are a first time founder and you haven't read a lot of books about entrepreneurship, like what do you know? You know that the career scandals you have made, you might've seen the social network or the documentary film about McDonald's and you have seen

[01:02:17] a lot of articles in newspapers that mentioned this startup raised this money, this startup raised that money. And in that way people are trained to think, to associate startups with funding, but I think the majority of startups doesn't get VC funding,

[01:02:29] which is not a bad or a good thing in itself, but that's an association that I think can be harmful. I think that even Elizabeth Holmes said it in an interview in New York Times. Obviously she was fraudulent. That's not the discussion here, but she was making these

[01:02:44] fast claims of what she can do. Like over promising these golden mountains, I'm not sure if that's an English expression too, but to everyone in the media and she later reflected on like, this is what I thought I needed to do.

[01:02:55] If I wanted to be taken serious as a founder because everybody's doing that on top of that, she thought she needed to do that to be taken seriously as a girl because there's also a quite male-dominated industry there.

[01:03:08] So these are these effects that people are imitating others that they have seen. So if you see a lot of people raising money, you automatically assume you need to do that and not realizing that you are not required by that to raise money in any way. Right.

[01:03:22] It's the cargo quilt of accelerators, incubators, fancy capitalism programs, right? Yeah, definitely. Definitely. I love that we've been able to come full circle from all the way, like how do you

[01:03:33] get to ideas all the way to, okay, now you got an idea and what do you do next? If any listener has any questions about their startup, you can reach out to me on Twitter or on email and subscribe to my newsletter. Absolutely.

[01:03:49] I will let everyone know where they can reach you. I have some links in the show notes. To me it was absolutely great. I learned a lot and I want to thank you for that. Pleasure to be here. Thanks for having me. And there you have it.

[01:04:02] Another inspiring episode of the IDA with Florian podcast. As always, I encourage you to visit our website at IDAwithFlorian.com. That is IDAwithFlorian.com. Here you'll find links related to this episode as well as other episodes. My name is Florian Hoornhaar and I hope the story inspired you.

[01:04:23] Thank you for joining me and until next time.