10th Lecture : Building a great team

Hiring is probably the toughest job in the Start up Founder routine, it is also what he does the most: hiring customers, partners, investors, co-founders, employees… It is complicated because at its early ages the Start up doesn’t have money, it doesn’t have renown but keeps wanting the best what will fit to its values. So how to manage with these confines ?

First, the founder has to really be obsessed by his start up to attract employees. He must be convinced that his company is the best place to work, if he really thinks that, he will be able to transmit his optimism. Start ups have to purpose to change the world, to make a better living for the users, the employees must feel this willingness to make the change happens. They should not be here for bad reasons such as money or glory.

Second, to be attractive a Start up must have strong values and culture. I have already talked about culture in an ancient post. I was saying that to perform well a company needs a strong culture, but it is also very true in the process of hiring. A company such as Google receives résumé from the best computer scientists all around the world because it is considered to be a great company with very strong values. According to Linkedin, it is currently the most attractive company in the world.

Third, to be sure that the employee in the hiring pipe meets the company standard and culture the founder should spend a lot of time evaluating the people who are going to join his team, listen to his instinct and gut, ask for what the people like to do outside of work and be focus on their potential to grow and leadership. For example, Airbnb founder conducted interviews for the first 1000 employees at Airbnb !

Fourthly, when you have finally found the best people to work with, keep them ! A good way to be sure to keep your best employees is to create an environment where people want to congregate with the culture with a good leader. Another way to keep your employees motivated and dedicated to the company is to create a referral system: reward your people that have found other employees  to hire.

Finally, a founder can take a wrong decision and hire someone who finally doesn’t fit the company spirit. To avoid this kind of disappointment there should always be a try period before taking the final decision, this time period should be between one or two weeks depending on the position. However, if even after this period a bad decision has been taken, don’t hesitate to fire him. Don’t keep someone for too long if you have already given him multiple chance without any signs of change.

Francois Freixanet

 

9th Lecture: Building a great company culture

I think that the company culture is more important than its business model. Indeed, all the Unicorns we know, all the most well known companies from the Stock Exchange have a very strong company culture. For example, Amazon has its 14 leadership principles, Google its “10 things they know to be true”.

Today, our guest lecturer was Gunnar Holmsteinn, COO of QuizUp. He pitched his company, then talked about the company culture and Teamwork (which is deeply related).

I really enjoyed the way he pitched his company. It was really structured and factual with figures but still personal. It was for me a great lesson of pitching, I learnt that to keep everyone interested in your pitch you have to divide it into three parts:
1) The features of your product (for your users/customers)
2) The figures (for your investors)
3) The touchy-feely way (for everyone)
To illustrate these words, Gunnar told us that his company was owning and running the biggest trivia game in the world (feature of the product), with more than 75 millions of users playing on about 30 000 topics (the figures) and thanks to the game some users met and got married, showing us thank you letters (the touchy-feely way).

Gunnar was easy to understand, funny and structured. It was only after his talk about QuizUp culture that I understood that he embodies it. When he arrived at QuizUp 2 years ago the company had the strengths and the weaknesses of all average successful start up: high talented people, high growth and a lot of fun but a lack of objectives, information flow and not defined areas of responsibilities. His main job was to solve these issues. For that, he established the company values:
-Help others learn: they are young so they don’t know everything, they shout for help.
-Fun in every action: it is a gaming company, they want to remain playful. For example, to have rates on the App Store, a message appeared when the user opened the app: “hey I just met you and this is crazy, but I am an App so rate me maybe”
-Drive the vision: every action they take is completely in harmony with their vision. They speak their mind; taking risk is their DNA
-Wait for nothing

To improve their teamwork, they have an external consultant who comes once a month during one week, he taught them the 5 points of a dysfunctional team (see below), to avoid them they have a real transparent communication: all the KPIs, results, meetings notes are public, they can also ask anything they want on a poster at the hall and once a week the CEO answers to the questions. They also have created the Quiz Up camp when during 2 days they stay outside of Reykjavik. The first day is focused on the past (accomplishments, failures, mistakes through a timeline with all the projects), the second one is focused on the future (how will be the company in the future, what’s next…)

As I told you as an introduction, I really think that the company culture is more important than the business model because when you have highly motivated talented people you can always find great ideas to merchandise but when you have a great idea without a healthy culture, you will never execute it in a good way.

Francois Freixanet

 

8th Lecture: How to draw attention on your company

Drawing attention is one of the most important thing to do when you get started. First, you need to draw attention and awareness to sell your product : make customers know what you sell and why it is good for them. Also, you need to draw attention to raise money. This is what I am going to talk about, PR and fundraising.

Today, our guest lecturer was Paula Gould, she has been working in PR for more than 15 years. For me, PR is a smart way to have free advertising. I have recently read a book from Ryan Holiday, the former marketing director of American Apparel. The book name is Trust me I am lying, he explains some of the best media stunts: finally media are just looking for the buzz and don’t really check their sources. Entrepreneur should really consider this free advertising! Even if she is working as a PR manager, Paula is realistic and believe that when you start your company you cannot afford a PR manager. So you should try to work yourself as a PR manager, she gave some tips :

-Get eyeballs on your idea, you should perfectly know your story, it’s everything. Know your market and your competitors, you should be able to tell to anyone how different and how better you are. It is all about story telling and enthral.

-Create your own database on a spreadsheet, it is very easy now with social media such as LinkedIn, Twitter…

-Your team and your friend are your best PR managers, ask them to talk about your company, to share your posts.

-Follow journalists covering your competitors and the industry, don’t hesitate to interact with them.

-Develop a network, attend events, set aside time in calendar for pitching.

Finally, we asked her some questions. The most interesting was about the start up names. Why so many unicorns have names that have no meaning (ie. uber, google)? The answer is double. First the domain is cheaper, also it is easier to have a better ranking when you’re the only one to have the name. Btw, she talked about this webiste : namechk that allows you to see if your desired domain is free and evaluate the branding of your website.

The second part of the class dealt with how (and when) to raise money. Bala began with this quote from Brand Feld :

“Delay raising money as much as you can”

Indeed, it is the worst thing to do. It distracts you from your core job, fit the market and find your customers. However the second stage of your start up creation is scaling. And to scale you need money. So, once you have fitted the market and you have your customers, it is time to raise money. To Bala, investors look at

1)The founding team

2)Value to market and the value captured

3)Size of the market

3)The Idea or the Product.

I ranked into a list because actually the founder is  what investors look at first. They expect him to be as Oprah Winfrey :

Leader, mature, a prolific networker, fearless with a sense of urgency. And lucky. Because yes, being lucky is not about random, it is a skill.

Francois Freixanet

6th Lecture: Start up growth with Guide to Iceland example

At the middle of this class, let’s make a briefly sum up, we have for the moment :

• Learnt what a start-up was and understood the entrepreneurship spirit
• How to create his team, find his investor and the role of the CEO
• What a start-up was not and all the counter-intuitive ideas about it.
• How to get great ideas to build great products
• What were the best conditions to start a start up.

So, now that we hardly have all the prerequisite to start a successful start-up, let’s see how we can deal with growth. To illustrate these words, there is no better example as Guide to Iceland, that’s a piece of luck because we actually had a talk with Xiao Chen, co-founder and CMO of Guide to Iceland.

Guide to Iceland is an Icelandic travel marketplace that wants to gather a community of travellers (and not tourist!) and locals. Their go to business was pretty usual with a strong preparation (value proposition, testing, research…), a launch (even if everything was not perfect) and now, growth ! It is a good example of growth because after one year, it is already the largest business network in the Icelandic travel industry, the most popular travel website about Iceland and above all, profitable after only 4 months ! To Xiao Chen, they managed to do that thanks to strong values: think big, customer centric and hire the best.

I really liked this session because I was very interested by the subject. Indeed, Bala keeps repeating that the purpose of a start-up is to make money. But how to make money ? By growing and growing ! So here we were : finally discovering how to rule a start-up once it has been launched and above all, how to continually increase our market share and/or gain more customers. According to this session, and also to an article Bala wrote, growth was about traction. Traction trumps everything, I have read some chapters in a book that I would recommend you, Traction : A Startup Guide to Getting Customers. It, for example, explains that there are at least 19 channels to build your customers base. I won’t tell you all of them here, you can find them on the book and the post I mentioned previously.

I think that there is also a benefit that we didn’t mention in the growth. Of course, the more you have customers, the more you earn money. But there is also the fact that the more you grow, the less you spend. Indeed, on the first hand, you can make economy of scale : when you spend 1000USD for a new computer, if you have 100 customers it is as if your computer costs 10$/ per customer but if you have 1000 customers your computer is now only 1$/per customer ! On the other hand, the more you have customer and the less you have to spend on paid channels (such as offline ads, affiliate programs), you can now rely on free channels (such as email marketing, viral marketing, word of mouth…).

Grow, now!

4th lecture : the product and the design thinking

Stefan Baxter is an Icelandic entrepreneur, at his credit at least 4 start-up creations. We talked with him during about 45 minutes : his learnings, failures, tips…

“A start-up is like a baby” is one of the quote I’ll remember from his speech. He justified it saying that “it hearts at the beginning, then during two years it takes all our time”. After having thought about it, I think he is deeply right, and I can pursue the parallel baby = venture; birth = launch; wife or husband / parent = co-founder; next feeding = next round of financing; one year old = post-revenue; friends and family = team and investors.

After this good introduction, he reminded us that in the process of the start-up creation the idea is not the most important thing. I was already sure about it, but it is good to hear that from a serial entrepreneur.

“Ideas are cheap and abundant. Execution is everything”

Everybody can have a great idea, only some people can execute perfectly.

I also really liked his comparison between a product company and a service company. basically, it is harder and more expensive to start a product company but it takes more time to build a scalable service company than a product company. Indeed, you cannot just export it, you have to adapt before.

After having thanked Stefan, we kept on the class lesson on start up by Bala. today we were focus on the product creation and the design thinking. People often mix product and business model up. The product is what you sell meanwhile the business model is how you earn money. By the way, I have learnt that there at least three ways to challenge your business model. I used to only know the Business Model Canvass. I liked this methodology, the customer development model :

But for me, the main discover was this website : http://www.ideo.com/. Which is an award-winning global design firm that takes a human-centered, design-based approach to helping organizations in the public and private sectors innovate and grow. You can learn how to go from an idea to an action or also how to innovate within. Regarding the innovation, I didn’t know that real processes existed, for example according to them :

1- Observing : discover what people really care about

2- Learning from extremes : stretch your thinking beyond asumptions and get to bolder ideas

3- Conducting a great interview : get deeper, more honest

4- Immersing in empathy

5- Sharing insights.

Innovation must be part of each step in the start up creation model, from the idea to the go to market, going through the way of working and the branding. By the way I found this video on branding yesterday, I really liked it, did you ?

2nd Lecture: The team and the execution of a start up

Today, we went a little bit deeper in the start up creation, with a very practical approach. Bala gave us some good tips regarding the early start of the start up and especially on how to build his team and with, to me, the most important part of the start up : the execution.

But first, we started by enumerating the bad reason to create a start-up and some of the counter-intuitive idea about a start-up. To illustrate it I found this funny cartoon by Anna Vital :

The real reason why you should start your own start up is simple : change the future.

To build your team, just find co-fonder. You’ll hire people when your business will run. Your co-founders (3 is the best figure) must be smarter than you are and relentlessly resourceful. An other critical point is your investors pick. You must choose them as if they were your team members. They have money but can destroy your company very easily. The best is to  have at least 2 investors competing for your company.

If you want to learn more about the ideal start-up team composition, take a look on this post from Bala Blog.

For me, the most interesting topic dealt with the start up execution. Indeed, I am not one of those who think that the idea or the product is the most important key of success. Looking back to one of the last start-up success story : Snapchat. The idea is not revolutionary, the product is not outstanding. They managed to create a simple use app, and communicated well. They were not pioneer, they won’t change the future and didn’t respond a specific demand. They just executed perfectly.

So, for a good execution 3 criteria of success :

• The focus, “it determines your reality”
• The prioritization
• The intensity

The CEO is the guarantor of these criteria, by defining the vision, creating the team, ensuring that everyone has the necessary resources, over communicating and making sure that all is going swimmingly.
Bala has not talked about it, but to me, the CEO has a 6th role which is to be a role model, he has to be a leader by showing the example.

1st Lecture: First steps into the start-up world

This week I had my first “How to start a start-up” lesson by Bala Kamallakharan.

The teacher is what we can call an inexhaustible guy. After studying in India, he moved to the US where he studied Economics, International Trade and Finance at LSU. He worked for some MNC (Capgemini and Glitnir, an Icelandic bank) before being very attracted by the start up world. Now, he is fully working in the start up sphere : business angel, founder of Start up Iceland and, sometimes teacher. If you want to know a bit more about him and Start Up Iceland, you should read his blog and especially this article where he shares his vision of entrepreneurship : http://startupiceland.com/2015/04/01/you-are-not-a-lottery-ticket

The first learnings that I will remember after this lesson are very easy to understand, but maybe a bit more complicated to turn into.
What : “A start-up is the largest group of people you can convince of a plan to build a different future” Peter Thiel in Zero to one
Why : To become a unicorn (a start-up evaluated at more than $1 billion dollars.)
How : Mixing the 4 things to succeed : the idea, the product, the team and the execution.

When : “Now because yesterday has already passed and tomorrow it is too late”

After that, we had a call with Dr. Sean Wise, a Canadian entrepreneur, quite famous across the Atlantic and especially for having write a couple of books related to the entrepreneurship and having taken part into the TV Show Dragon’s Den (the Canadian version of Shark tank, I guess). He answered some questions about entrepreneurship:

“What is the best way to create an idea ?”
There is no miracle solution, but there are at least 3 different known ways. The “bottom-up” is when you have a problem and you try to solve it, the “top-down” is when you have a technology, a passion and you want to use it to start a start up.