Introductions

Wanted to elaborate a bit on this.

I do more and more introductions. It’s a great way to be helpful, but done the wrong way it can do more harm than good. From my perspective, there are two essentials to keep in mind:

1. Always allow for double opt-in
This is elaborated on here. In brief, you want to make sure both sides are okay with being introduced before connecting them. This way you avoid connecting people where one side does not want to follow up, and it also makes both the connector and one receiver look bad. 

2. Send something forwardable. 
This is elaborated on here. In brief, have one side send something that makes it easier for you to ask the other side for the meeting (double opt-in style). Be short and specific about what you do and why you want the meeting. More often than not the receiver is high in demand, so if your forward mail is too long you often end up not getting a reply at all. 

Building premium products

The reMarkable team is shipping their first product days. So far it’s been a great success, with the most pre-orders for any European company ever, and some great reviews. Still lots of risk left, but the way they’ve maneuvered through obstacles since we first invested tells me they’ll manage whatever challenge they face in the future as well.

Their pre-sales campaign is one of many things they really nailed. The most natural thing for an entrepreneur wanting to do pre-sales would be to do a Kickstarter campaign. The infrastructure is there, “all” you have to do is create the content. But the guys at Remarkable were early determined not to do pre-sales that way – Kickstarter was associated with gadgets, not premium products.

So they set up their campaign on their own website. It’s quite easy to integrate payments to any website these days, so technically it was no big deal. By doing it this way, they controlled the full experience. No minimum sales target, and the design/feel was 100% remarkable (pun intended). From the start their product felt more like a premium product.

Their newest product video (top) is truly great, and really speaks to that (premium) fact.

No synonyms

No synonyms.” Why not? “If you want to communicate effectively, you need to be clear with the words you use.

Quote from Pete Carrol in Grit. Not about hard things, but very relevant when it comes to one of the three things a CEO has to do to succeed; articulating and communicating the overall vision and strategy. The need for clear communication increases with the size of an organization and its surroundings. Better start off right – be clear.

Grit

Finished reading Grit this weekend. It’s one of those books that I’ll definitely read again, so obviously I recommend that you read it at least one. Four-word summary: hard work beats talent. 

There’s a lot of gold throughout the whole book, and reading it reminded me of the PayPal Mafia. I read somewhere (can’t find it now) that when asked why so many from the original PayPal-crew went on to start other successful ventures, they referred to the period after the dot-com burst. PayPal did a huge raise ($90M) just weeks before the bubble burst, when suddenly the environment shifted from being pro-web to anti-web. From having highly supportive surroundings, their market went sour and nobody wanted to engage with them or other web companies.

Fast-forward a few years, PayPal made it through and built a very successful company. It surely wasn’t easy, but they worked hard and did some amazing stuff. They brought this experience with them when they went on to start other companies, many of whom have been highly successful (LinkedIn, Tesla, SpaceX, Yelp, Youtube, Palantir etc). According to themselves, it was through the rough years with PayPal they learned what it takes more than anything to build a great company; the value of working hard and enduring. 

Keith Rabois (also ex-PayPal btw) has quite actively argued for the importance of hard work on Twitter the past few weeks. I completely agree with him; if you want to build a great company (doesn’t necessarily mean a great life), you have to really commit. We’ve worked with around 200 companies at StartupLab so far, and the only thing I can say for certain about what it takes to succeed is hard work. It’s not that every hard-working entrepreneur succeeds, but every succeeding entrepreneur has worked (a lot) harder than average. 

I’ll be thinking about how to assess grit when I meet entrepreneurs going forward. From an investment perspective, it’s definitely information I’d like to have. Most entrepreneurs will _say_ they’re hard-working, but fewer will show it in action long-term. If you have good ideas on how to assess this predictively, let me know

Talking about good music

Today’s tune

Dejlig dansk

The Startup Dichotomy

More and more realizing how a startup can be divided into one of two stages; pre or post product-market-fit. Some sort of dichotomy, as the title says. But this is really important. Some even argue that the number one reason startups fail is they don’t recognize what stage they are in, aka. premature scaling

Theoretically, the two phases are really easy to understand. In practice, it’s a lot harder. Pre product-market-fit, you should only experiment. Figure out what your customers want. And once you have it, scale. That’s the post part. 

The most difficult thing is figuring out when you go from the first to the second phase. It’s the opposite of flipping a switch. It will happen gradually and you will notice it through your hypotheses strengthening. Usage increases day by day, and at some point you will be confident enough that you have product-market-fit, and can start scaling. 

Succeeding is about doing this at the right time. 

Just a great song

Tech allergy

Tech has had a rough year, and I think this will continue going forward. Facebook and Twitter were both blamed for Trump, Brexit etc. And probably rightly so. Uber got it straight: it’s a taxi company and should be regulated accordingly. This picture and this article both try to articulate the same thing; as the technology industry matures it’s image is more and more becoming like every other industry. Full of cynical, selfish, profit-seeking capitalists. No more “making the better place”. Tech is (also) all about making money, whatever it takes. 

This “all about the money whatever it takes”-thing has been around in the tech sector for many years already. It’s just that it hasn’t been talked about publicly. Facebook is not about connecting you with friends just because. They are working towards driving addiction, so that you spend more (than a healthy amount of) time on their platform and see more ads. Very few see King and Supercell as companies making the world a better place. It’s just that we’re not talking about what they do instead, which is to drive addiction and make those less fortunate more so. The tech sector is not unique in any way, it’s businesses trying to do what all businesses are supposed to do: create shareholder value. 

Software will continue to eat the world, and we should quickly start treating software companies the way all other companies are treated: for what they really are about. Not all tech is good tech or the other way around. We should give credit to those who actually do positive stuff. And we should not wait with shaming those who cheat or try to present themselves as something they’re not. If not, I fear that more people will grow allergic to the sector going forward.