Success & Motivation

Below the ice cap (seen on http://img.wonderhowto.com)

Entrepreneurship – Icediving without a breathing hole

Everybody interprets success in his own way but it always has to do with reaching a goal. You set a goal and you want to achieve it. For me this goal is to grow foodieSquare into a European wide business that delivers the true and authentic taste of all the flavours of Europe to you. Seems to be a huge thing, considering that there are thousands of reasons why this goal could never be reached. But for me setting a goal an aiming for it has all to do with motivation and sacrifice.

For me, starting and growing this business is like standing in front of a ice covered lake, taking one deep breath and diving underneath the ice just because you want to dive to the other side. Everybody says you are crazy, you could run out of air, you could die, it hurts, its cold…but you just set your mind to it and you start…and while you dive under water you perfectly know that you cannot reach the other side with this one breath…but you believe that you can find thin parts of the ice that you can get through to get one more breath and keep on going…and this probing and testing and keeping on going is what makes all the difference. There will be points when you almost run out of air (or are close to bankruptcy with your startup) but you have to keep pushing and testing so that eventually you can and will succeed.

Do you really want to succeed?

99.9% of all people say that they want success…but I can tell you, it all goes along with a lot of sacrifices. Are you willing to sacrifice sleep, holidays, parties, travelling and all the other things that are pleasant but distract you from reaching your goal?

Today I stumbled upon this guy, Eric Thomas, from the US. And it just clicked because he made a remarkable speech which also has to do with breathing 🙂

His biggest asset he says was being homeless for 2 years. Knowing what pain is, knowing what you can endure…because you can endure much more than you think you can…and he made it to become an American Football player. Here’s the speech,  I can only encourage you to watch or read it:

Lyrics (from http://www.lybio.net):

[Eric Thomas ]
There was a young man, you know, who wanted to make a lot of money and so he went to this guru, right. And he told the guru you know I wanna be on the same level you are and the guru said if you wanna be on the same level I’m on, I’ll met you tomorrow at the beach.

So the young man got there 4 A.M. he already to rock n’ roll. Got on a suit should of wore shorts. The old man grabs his hand and said: How bad do you wanna be successful? He said: “Real bad”. He said: Walk on out in the water. So he walks out into the water. Watch this. When he walks out to the water he goes waist deep and goes like this guy crazy.

Hey ( ) I wanna make money and he got me out here swimming. I didn’t ask to be a lifeguard. I wanna make money he got me in – so he said come on a little further – walked out a little further – then he had it right around this area – the shoulder area – so this old man crazy – he making money but he crazy. So he said come on out a little further – came out a little further, it was right at his mouth – my man, I’m not about to go back in this guy is out of his mind. And the old man said: “I thought you said you wanted to be successful?” He said: “I do.” He said: “Then walk a little further.” He came, dropped his head in, held him down, hold him down, my man (kept scratching) hold him down, he had him held down, just before my man was about to pass out, he raised him up. He said: “I got a question for you.” He told the guy, he said: “When you want to succeed as bad as you wanna breathe than you will be successful.”

I don’t know how many of you all got asthma here today? If you ever had a asthma attack before your short of breath S.O.B shortness of breath, you wheezing (breath sound) the only thing you trying to do is get some air. You don’t care about no basketball game, you don’t care about what’s on T.V., you don’t care about nobody calling you, you don’t care about a party. The only thing you care about when you trying to breathe is to get some fresh air. That’s it! And when you get to the point where all you wanna do is be is successful as bad as you wanna breathe then you will be successful. And I’m here to tell you that number one, most of you say you wanna be successful but you don’t want it bad, you just kind of want it. You don’t want it bad than you wanna party. You don’t want it as much as you want to be cool. Most of you don’t want success as much as you want sleep. Some of you lost sleep more than you lost success. And I’m here to tell you today, if your going to be successful you gotta be willing to give up sleep. You gotta be willing to work with 3 hours of sleep – 2 hours of sleep, if you really wanna be successful. Some day your gonna have to stay up 3 days in a row. Because if you go to sleep you might miss the opportunity to be successful. That’s how bad you gotta (inaudible).

You gotta go days without – LISTEN TO ME! You gotta want to be successful so bad that you forget to eat. My ( ) said say, once she was on the set doing her thang, three days had gone by and she forgot that she didn’t eat. Cause she was engaged. I never forget, I went, 50 Cent was doing his movie, I did a little research on 50 and 50 said: that when he wasn’t do the movie he was doing the soundtrack. And they said: “When do you sleep?” 50, and 50 said: “Sleep, sleep is for those people who are broke. I don’t sleep.” See I got an opportunity to make my dream become a reality. Don’t cry to quits. You already in pain, you already hurt. Get a reward from it. Don’t go to sleep until you succeed. Listen to me, I’m here to tell you today you can come here and and you can jump up – you can do flips and you can be excited when we give away money but listen to me, you will never be successful, I don’t have to give you a dime if you ( ) You won’t be successful until you say I don’t need that money cause I got it in here.

If you want to be successful as bad as you want to be breath, you will be successfull..true that!

Sammy

co-founder foodieSquare (www.tastybox.de)

 http://www.lybio.net

Key learning – “ALWAYS BE PITCHING”

ALWAYS BE PITCHING!!

(picture taken from http://www.thecompletepitcher.com)

IE Class Managing the Tech Startup – learnings from my view as a foodieSquare co-founder

First of all I would like to thank Enrique Dans for putting together that great class. It was really insightful to have speakers with very different experiences coming to class and chat with us.

My key take away is “ALWAYS BE PITCHING” as we from foodieSquare literally pitched our company to every single visitor and got great contacts, insights and even an invitation for presentation in front of investors out of it. You never know how the person in front of you might be able to help you, even if it is “only” a potential customer – a pitch is absolutely worth the effort so –> ALWAYS BE PITCHING!!!

Going chronologically by speakers I will shortly sum up my key take aways and relate them whenever appropriate to foodieSquare:

Jorge Mataserial entrepreneur 

It was interesting to see his view on how to raise money and how much to give away of your company for that. Basically “don’t give away too much” equity and try to make money on your startup. He always goes with a 2-3 million pre-money valuation for the seed round. My take is that this is possible for a serial entrepreneur who already has a track record of successfully launched start-ups, for a fresh entrepreneur the valuation might be a little lower.

His key investment criteria is 1st scalability of the business and 2nd the team. Could not agree more. For foodieSquare scalability means that the back-end processes of delivering the product is working smoothly, as soon as this works, there is no growth limit for foodieSquare.  Management team is of course key, without smart and dedicated people driving your start-up, nothing will happen and especially the pivoting part is not happening when it should. I liked that Jorge pointed out the importance of a balanced team. He likes to see clear division of team roles like ceo – finance – operations etc.

I would however also emphasize the importance of a network of mentors that supports you. As a small start-up you usually have three full-time employees and some interns. Covering all the knowledge you need is almost impossible and having experts guiding you in for example online marketing or in our case food marketing is essential.

One controversial point is, should founders invest their own money. Jorges’ take is, not too much to be scared to fail. If you put in too much of your own money, you e.g. rather sell pizza than admit that your business hypothesis does not work. I believe that some money should be put by entrepreneurs, but they should not put their whole life at risk for this one shot.

Important once you have investors – be upfront and honest especially with bad news. They will honor this honesty and it helps building a long-lasting relationship build on trust.

Now some quotes

  • Selling the company is like opening a water melon – early not tasty – late not good any more
  • Make strong due diligence with your VCs – ask invested companies – how are they?
  • Get CEOs from the countries you want to make business – it is cultural
  • Most of the value of the company is not in the technology – it s how you solve the problem for you consumer – how you execute

Inaki Arrola from www.coche.com 

As a web-company you have to focus on usability. It is crucial to have a CTO in a tech company that controls usability. You also have to be able to transmit your vision and dream to your CTO who should then build the e.g. webpage accordingly. This is really hard to do by only off shoring, so I also encourage every web company to find a good and dedicated CTO asap.

As an investor Inaki takes the team as the more important factor than market numbers and he also appreciates honest and straight forward people.

What I personally liked is his friendly approach towards competition, he said e.g. “Speak good about your competitors also on twitter”. For foodieSquare I can agree, each competitor is welcome as the market has to be developed and there is enough market for the good companies to succeed – there is always place for a second place after  foodieSquare 🙂

Gabriel Aldamiz-Echevarria from www.chicisimo.com 

Gabriel from chicisimo emphasized on the importance to bring out the first version of your company webpage as quickly as possible. The first prototype of chicisimo was online after one week and was supposedly really ugly. But it helps on getting data on how people react! This helps focussing on the customer needs from the start. A process that we at foodieSquare went through was feature cutting. We have many many good ideas but decided to cut the first foodieSquare version to a more basic one in order to quickly be out there.

Very important – When you build a company you are alone, nobody cares about you – you need to find a community that cares about you…belong to a community! I think we found our core community in the Slow Food movement. We share their philosophy and at the Slow Food Fair in Stuttgart (April 2011) we got in touch with many clients and producers.  Our idea was broadly accepted and appreciated as we solve a real problem for the Slow Foodie community – namely getting in touch Slow Foodies with small artisan food producers that produce in a biological and sustainable way.

One thing I heard from different experienced founders – we should not expect too much from the first launch. At chicisimo; “When we first launched  – the first weeks were disappointing. Then we changed things and it started working.”

For PR; Understand what the possible pr contacts are currently writing about. Generate content that is useful for journalists – they do not write about your company…give them content!

Jesus Encinar from  www.idealista.com

About 30 start-ups started before idealista –> not first mover. I think second movers have a strategic advantage of learning from their competitors mistakes and be more agile in implementing in a better way/direction.

I liked his approach on getting his first database – hands-on guerrilla style – he and his team walked 10.000 km around Madrid to get their 5.000 first announcements. Kind of like we at foodieSquare did – we went to the Slow Food fair to get our first 500 e-mail addresses of potential customers and over 50 producers who are willing to join us.

Be persistent – Jesus talked to more than 150 potential investors to get funding…”every guy with one dollar in the pocket I went and asked for it” – that is the will to succeed – in the end you only need one investor who supports you!

Usability is key: Design by addition is bad – forget about website structure – design each page as if it is unique  – focus on usability and interface – be customer centric!

Be no 1. in a mid-sized country is better than no 2. in 10 countries. Your product has to be verified in one place before you take it international!

Alberto Torrón from www.todotaladros.com    

Albertos insights in short – all very relevant for foodieSquare:

  • Right packaging is key – use high quality boxes that wear your logo.
  • Customer service – direct contact with customers, if possible directly by founders, is key and builds trust

Pedro Pedro Jareño from www.minube.com 

Perdo; its all about community interaction – not primarily about monthly visitors. People love experiences – for example TV shows about cooking. Sell an experience that people trust! For foodieSquare it should be possible to get people interact about the very emotional product we sell, food with a story!

How to build a community:

  • Target customer identification. We need foodies, bloggers, active users…it’s a everyday job! –> At least one person at foodieSquare is responsible for community management and building
  • Then talk a lot with bloggers. Try to be a reference in your blogger community. Get the blogger community hooked through the blogger of your target market
  • Write personalized email to each blogger (they did it with 2.000 bloggers) and it worked. 2-3 people did that full-time!!
  • Get users – each new user is a great success – “I need new users each day!”
  • Want user to come again – Important is proactivity – who that you are interested in each one of them – show constant activity – be the most active user on your own website!
  • Then dynamization
    • Its about conversation – tell each user that he is more than a customer – each user is an interesting person – talk about food
    • Contests – important – each month to two month a contest to get people active on a website
    • Create badges!
  • Loalty-fidelity
    • Newsletter – not about selling but about telling a story – personalized Hello “name of user” – Pedro e.g. spends 1 day answering the newsletter
    • Take users for a trip
  • Public recognition
    • People like to be congratulated – tell them they are important. Maybe its just a prize to tell the community – “foodie of the week” – “foto del dia” – “recipe del dia”

Amazing: minube did not spend a single EUR in marketing – it’s all viral!!

Where to launch your website: minube launched at a blogger community conference – wonder where foodieSquare is gonna launch 🙂

Great marketing idea; Pedro from minube organized a trip around the world to find people like them, bloggers, entrepreneurs, each city 14 days, writing the story in his travel blog – he asked for sponsors – edreams, hotel.es and orange for expenses. He had a website for the blog and asked for people to contact him. Got great feedback from the blogger community.

–> We have a similar idea for foodieSquare, inspired by Pedo; we want to start with a culinary tour through Germany in order to get in touch with our and potentially new producers and blog about our experience! Like minube we will try to get some minutes airtime per week in a tv show

Ronald J. Friedlanderwww.ReviewPro.com

Ronald has an absolute obsession about product process and costumers. He spent no money on marketing but focused on product- now he has the best technology of the world in his sector. I wonder how much you can achieve without marketing costs in a B2C framework, but I think it is possible to reduce the amount by increasing customer satisfaction and encouraging returning visits.

He for example started in the huge hotel market – that allows for mistakes and even with a mediocre sales forces or product you can succeed. True for every start-up; Look for a big and growing market!!

What I loved is that his company started with no industry expert and still does not have one – Ronalds take; It is great to not know a lot about the industry because you do more than you over think.

In B2B he went to the big chain, offered them a very aggressive price and got the first client.

No matter what happens – you have to be willing to be rejected 80 times – be persistent but adapt to win. True for every small start-up, many people tell you that you cannot succeed and you have to pull through!

Some insights in short:

  • User generated content; People have an inner urge to contribute with reviews if they benefitted from reviews
  • Negative reviews need rapid response as these have direct impact on your sales
  • Being only in one vertical gives us the advantage to focus – so focus on one thing, do it really good and penetrate that market well before diversifying!
  • Having VCs enter is seen like the holy grail for some entrepreneurs – but remember that you give away your company for that money!
  • Focus on product and clients – be obsessed!! –> If you want to grow big, focus on your customers!
  • We really take care of the customer – we give them training –> for foodieSquare that means giving our sellers really good training so that they can use the backend of our marketplace
  • Telesales/-marketing does work! Get the fuck out there and don’t come back until you have a contract! This is the kind of attitude you especially need in at least one of the founders of a start up. You have to have someone pushing and pitching all the time! My favourite saying: “always be pitching!!”
  • On pricing and discounts; We gave a discount for x hours of working with our product – contribute non-monetary things – be careful with the prices – no exception for prices!!
  • Have a vision on today and down the road – choose the right partners for that
  • We are absolutely obsessed with measuring things! If you don’t measure it you can’t manage it!
  • Parable of the Taoist farmer – it is an absolute rollercoaster – don’t overexcited on the highs and don’t get too beaten down in the downs

Comments and questions are always welcome!

Have a delicious day!

Sammy

Rocky Balboa – the perfect entrepreneur?!?

Rocky Balboa - big ego, big fighterRocky Balboa – the perfect entrepreneur?!?

Why in my view Rocky is a perfect entrepreneur

Ok, I love Rocky and I have a poster of this guy hanging here in my room in Madrid but I think we can learn a lot from this guy! 🙂

Because of the following reasons I think that Rocky has the  attitude that makes a good entrepreneur:

  • Passion: He loves his sport and he kicks ass running and training the hell out of himself to achieve his goal
  • Team: He has dedicated friends that support and train him
  • Will to fight: “It ain’t over till it’s over” is an attitude that each entrepreneur should have. For sure there will come times when you get “knocked down”. That are the critical moments which show if you have the guts to go through with it or just give up. Rocky gets up and so should you! 🙂
  • Vision: A unknown boxer from Philly that wants to become champion. Sounds just like every start-up starting to compete in an unknown market sometimes against big competitors that seem to be impossible to fight against. Have a vision and just go for it!

Short intro – who am I – what this blog is about

Hi there, I am Sammy Gebele and this is my first personal blog. Besides being co-founder of the start-up foodieSquare I am currently MBA student at Instituto de Empresa Business School in Madrid. During my fifth and last term at IE I attend the class “MANAGING THE TECH STARTUPS” of Enrique Dans. Enrique has a great way of teaching, he simply invites great speakers for the relevant topics and moderates the discussion…and there is a great deal to learn from these guys!!

One of our first speakers was Jorge Mata, a very successful serial entrepreneur. With his first start-up myalert Jorge raised over $40 million  in the early 2000’s. With his second start-up he was able to raise seed money quickly as he already had the contacts and the reputation of being a successful entrepreneur. He has been appointed twice technology pioneer by the World Economic Forum in 2001 and 2002.  So this first post is related to the session we had with Jorge.

“As an entrepreneur you have to have a lot of ego” Jorge Mata – true or not true?

Jorge is an energetic, outgoing person with a definitely big ego. When he states “the most important thing as an entrepreneur is yourself, get something for your personal investment” you see that he truly believes in this attitude. Especially when it comes to negotiating with investors he states, “you want to make money, don’t give away too much – your seed round should be made at a pre money valuation of 2-3 million…and you should not give away more than 30%-40% of the company”.

One might say that Jorge is biased due to his personal experience of subsequently raising cash and growing companies successfully. Having a great first time experience as an entrepreneur gives you a lot of credit with future investors, and the time when he raised money was also the time when you could (oversimplified statetment coming:) raise money with a good powerpoint presentation.

So nowadays, does it help you to be a testosteron driven entrepreneur?

I would say it is not necessary but it helps a lot because

  • You show passion: Even if you as a first time entrepreneur might not be able to go for a valuation of €2-3 million because the market is just not like it was in early 2000’s, you must believe in your company and your abilities and you must defend that in front of every investor. You might not get the valuation you want, but you are definitely more likely to get investment if investors see someone who is passionate about his start-up.
  • You have to be a fighter and believe in yourself: You will for sure go through ups and downs as an entrepreneur.  Especially in the down times you have to believe in yourself, your idea and your core team to survive and come out stronger.
  • You have to stick to your core hypothesis: Even in my short life as an entrepreneur, every second expert in that I ask for advice in a special topic gives me suggestions to change core pillars of our business. If you don’t stick to your hypothesis you will never execute well as your vision is blurry and you change directions too often

Valuations in seed and further stages

Jorge’s claim of not giving away more than 30-40% company after the first seed round seems a good approach for both, the investor and the entrepreneur. The entrepreneur is the one driving the company and as an investor you want to have a motivated driver. If you take more, you might discourage the driver and your money is immediately worth less even though you just invested. VCs love to control 15% to 30% of your company, Jorge claims that this is the point of time when an entrepreneur makes money as the initial valuation goes up. Downside is that you have someone invested that needs more “attention” and wants more influence on your business than an angel investor

How investors choose their startups!

Jorge is also an angel investor who usually puts €100k into a startup. He worked for a seed stage fund in silicon valley called applaud and thus knows both sides of the business.

His key decision criteria for investing into a startup are

  • Market: He wants to see a process solving a real problem
  • Scalability: this is key to every business
  • Management team: Clear division of team roles (ceo, finance, technology, operations ) so you create a team that complements each other with all necessary skills. He researches about each person of the core team – good credentials are a must
  • He wants to see a real company, something real happening! So prototypes are a big advantage. This reduces the risk of the investment. Revenue however is not necessary at seed investments.

These criteria are in line with what every professional investor wants to see. Market, team, scalability and ability to execute.

Angel Investors and VCs –  how to choose and get them

First of all, Jorge has a special relationship with angel investors. A good personal relationship is a must and angels especially need it as they mainly invest in the people not in an existing revenue generating business. VCs on the other hand are a little bit more difficult as they want to have more influence on the business and on strategic decisions.

Jorge says that it is generally not a good signal that you have to put your own money into the business – vc and angel investors should take risk, be a risk taker. Especially VC’s  shouldn’t force founders to invest – founders would then rather sell pizza (diversify) to survive instead of focussing. I partly disagree, especially for angel investors. They put usually €100k+ in your company and want to see you being committed and not quitting when times get rough. So a certain investment that at least signals that you will fight to survive should be made by every entrepreneur. However, it is not easy to determine the right amount in order to not force the entrepreneur to “sell pizza’s”:)

Make strong due diligence with your vcs – ask invested companies – how are they treating their entrepreneurs? Especially as a first time entrepreneur it might seem hard to get your first round of funding going. Like mentioned in the great book of Techstars “do more faster”, you have to focus on the first 1/3, the rest will usually follow.

Explain value proposition properly –  trigger something, people want to feel an emotional connection to your product!! This is not an easy task and it is good to ask for honest feedback about your marketing and pitching strategy. I strongly believe in abp – always be pitching! The more you pitch your product, the better your idea on how people perceive your pitch and the better the chances you can improve and adjust your pitch to trigger this emotional orgasm of your potential customers!

How to treat your investor

Finally, once you got your money, Jorge says; treat your investors like family, especially the angels. They invest in you as a person, love your angels and always try to give them back their money. I agree in the sense that you should work hard to make your investors happy. However start-up usually fail and an investor invests in a market hypothesis. Sometimes it is not the fault of an entrepreneur that a business fails. The art is to know when to close down in order to give back the remaining  money to your investors.If you treat your investor badly nobody invests in you again, treat them right!

Treating an investor right means

  • Be truthful, especially in bad times and with bad news. Boards have to have all info 7 days in advance
  • Board is there to protect investors from yourself – to control you. This is a two sided blade, I agree in the sense that an investor you trust will give you good advice on e.g. when to quit. I disagree in a sense that not every hunge of an investor is right and you have to be up to a certain degree stubborn and test your hypothesis before moving to a new one

A board of advisors is different to a board of investors. They put some money but are there to give you practical advice because of their sector knowledge.

Know your strength

Jorge says; “I am good for 4 years – some other entrepreneurs are more industrial and have more fun doing that – I likes to do new things, grow them big and give it to someone else – the craziness creating new ideas is different”.

Personally I can identify myself with this statement. I am a restless person and keen on doing instead of talking…basically my credo is “walk the talk”. This becomes increasingly difficult in a bigger insitutiono because these companies move slower. There are more steps needed in order to make decisions and implement new ideas. I just love to see things happen, its like an addiction. That’s why I can say that I really like the craziness of our start-up foodieSquare, there is so much to do and so much happens every day that I feel like being on an adventure every day. This is the kick I need!

So then it is good to know when to quit and give the leading positions in your company to people who love growing bigger institutions…sounds easier than it probably is.

When to sell – good Angels/VCs help

Selling the company is like opening a water melon – early not tasty – late not good any more.

How Jorge chooses his business ideas

Jorge says he “is not a guy of brilliant ideas” but rather builds ideas on things he has done in the past. I would rather say go for something you love to do. Get the right team to complement the missing skills and get a good board of advisors and then just go for it! If you truly love something you will learn very fast and you will put all your passion into it…both keys to a successful business!

Tipps for startups

Here some tipps from Jorge for startups:

  • Understand the things that the client does, gives you a good idea on how the process cycle of your product should look like
  • Most of the value of the company is not in the technology – it’s how you solve the problem for you consumer – how you execute
  • Get ceos from the countries you want to make business – it is all about culture!
  • Technology; do inhouse for a couple of years until the technology is clear and set – then outsource. Inhouse in the beginning helps a lot as  communicating to your developers is key – sourcing is not gonna work for transmitting the value proposion