Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Entrepreneurship is an Odyssey : Lessons from the Highs, Lows, and in-between
10 Plays4 days ago
Welcome to the world of entrepreneurship, where the journey is anything but linear. In this episode of the Entrepreneurs Speaks podcast, host Kofi Anyemedu engages Andrew Ackerman, an experienced entrepreneur and author of The Entrepreneur's Odyssey.
Together, they dive deep into the multifaceted experiences that shape entrepreneurs, offering insights and valuable lessons drawn from real-life challenges and triumphs. The journey of entrepreneurship is filled with uncertainty, challenges, and invaluable lessons. Andrew Ackerman's experiences serve as a testament to the resilience required to navigate this path.
For aspiring entrepreneurs, the key takeaways from this discussion include the importance of adaptability, the necessity of testing ideas, and the value of learning from both successes and failures.
Remember, entrepreneurship is not just about the destination; it's about the journey and the lessons learned along the way.
Check out Andrew on his personal site https://www.andrewbackerman.com or buy his book at https://www.amazon.com/Entrepreneurs-...
Don't forget to like and subscribe!!
To get amazing guests on your show , join PodMatch here https://www.joinpodmatch.com/kofiasare
#TheEntrepreneurSpeaks #Entrepreneurship #FounderJourney #StartupLife #Podcast #theentrepreneurspeakspodcast #podmatch
Recommended
Transcript
Introduction to Entrepreneur Speaks Podcast
00:00:07
Speaker
Dreams light up the sky tonight Builders of tomorrow shining bright From every land they find their beat Yeah, it's the entrepreneur speaks
00:00:29
Speaker
entrepreneur speak Hello and welcome to another exciting episode of the Entrepreneur Speaks Podcast. I'm your host, Kofi Animedu.
The Non-linear Journey of Entrepreneurship
00:00:38
Speaker
and Entrepreneurship is often portrayed as a straight climb to success.
00:00:43
Speaker
But anyone who has lived it knows it's nothing but linear. It's filled with uncertainty, bold decisions, missteps, lessons, and moments that test your resolve. Today on the Entrepreneur Speaks Podcast, I'm joined by Andrew Ackerman. He's an entrepreneur, a startup advisor, and author of the Entrepreneur's Odyssey.
00:01:06
Speaker
Andrew has spent years working closely with founders, helping them navigate the real journey of building companies from early ideas and hard setbacks to leadership, growth, and long-term vision. trip In this conversation, we go beyond theory to explore the highs, the lows, and the lessons that truly shape entrepreneurs. If you are building, leading, or simply finding your way through uncertainty, this episode
Andrew Ackerman's Entrepreneurial Path
00:01:36
Speaker
is for you.
00:01:36
Speaker
Welcome to my show, Andrew. Hey, thanks for having me. All right. So Andrew, let's go back. What first drew you into entrepreneurship and working with startups? Great, great question. So i'm I may be a little older than some people in the audience. So like when I was done with with business school, I looked around, there was none of this whole startup hustle.
00:01:56
Speaker
You know, there wasn't this whole culture of startups. I remember in business school, I saw a Netscape Navigator and thought, this could be big if there's ever anything more than like government data you know sources on this this internet thing. So, you know that wasn't really an option when I came out. So I went into consulting. I did that for four years. And then in 1999, I'm on this project and we're actually creating this intranet ah solution so that these two companies can submit what their their financials are and what they will be once they're merged without ever sharing that data directly with the other company, which would be kind of a problem for anyone who saw it if the merger didn't go through.
00:02:34
Speaker
And, you know, this was crazy times. Like you press like compile and then you could go out and have dinner and come back an hour and a half later and wait for the result. But it was the first time I'm like, okay, this has moved beyond kind of just a thing. You know, I go and I find my government data.
00:02:48
Speaker
This is actually something that has a lot of potential. So we wrapped up that project. The project was in London. I came back to the States, quit the consulting job, moved back to New York. And within nine months, I'd kind of found my way into my first startup. So we'll be picking a lot of nuggets from your experience so far, but let's still go back.
00:03:07
Speaker
So looking back, what defining moments shaped your entrepreneurial and adversarial role as you have it today?
Transitioning from Consulting to Startups
00:03:14
Speaker
Also a good question. So remember, I had been four years as a consultant and like I didn't realize how deeply that changed how I thought.
00:03:21
Speaker
So when you're a consultant, you work for like Fortune 100, Fortune 500, like really big companies. And you're coming in there and like you're trying to get them to take your advice or you're trying to get them, you know prove to them that like their gut is correct with data.
00:03:34
Speaker
you're spending a lot of time like nailing every single detail down. Like we had one project, it was last project I worked on where we came to like the number, like this is what we think the company is worth. You guys should buy it.
00:03:45
Speaker
And they had a an investment bank working on it and they had a different number. In both cases, the numbers were below... ah Sorry, we're above what the company was actually trading for. So just go get it.
00:03:56
Speaker
But then like, but wait, your number's here and their number's there. Can you guys like figure out what the exact number is? And like, so we spent another three months, like, you know, going back to the numbers. In that time, the stock price of the company they wanted to buy went up.
00:04:07
Speaker
So, you know they lost all this value because they needed to be precise like that. But that's how consultants work. That's how big companies work. So then, know, I'm in my first startup. And we're out there we're hustling. Like the sales guy is like cutting these deals left, right and center. Like every time he has a customer, it's a different deal. Okay, you pay $8.95, you pay $8.99, you pay $9, right? And I'm like, head man, why do we have a zillion different? we We don't have that many customers. Why do we have that many like pricing plans? Like, let's be little rational about it, you know?
00:04:38
Speaker
So it's really starting to get a point of friction. And then the CEO kind of pulled me aside into his office. Like, you don't get it. Like right now, we just need to say yes, right? We need the customers we to learn from them. We need the customers we need the money, right? Being efficient doesn't matter if you don't have enough money to be efficient with.
00:04:55
Speaker
So like, we're just going to say yes. So like, put a pin in it for another year or two. And then when we're big enough that it matters, then we can start cleaning all this stuff up. And that's when I kind of got it, right? As a startup, quick and good enough trump the right answer, single quotes, every time.
Testing Ideas and Learning from Failures
00:05:11
Speaker
um Get it good enough, you know what you need to do, then just do it, right? You don't need to overthink, you don't need overanalyze it. and And you can be a little sloppy the first couple of times around because you need to move fast. So so just as you know it, entrepreneurship is not work in the park. It has its ups and downs. So let's spend some time talking about your journey, talk about some of the wins and also the setbacks. So let's start with some wins. What are some of Yeah, one of the most rewarding moments in your journey so far. I'll give a couple, right? I remember this like really, really vividly.
00:05:48
Speaker
It's a kind of early April. And like one of the guys that I'm working with turns out, I was like I think eCamp just went out of business. That was our our main competitor, the summer camp space. He was like, went out of business? It's like a toy store going out of business like in December 1st, right? That's the worst time when they go to business. They can just like make it through the summer, get some money back. It's like, no, man, I think they're down.
00:06:07
Speaker
And like they were. of a sudden, like, this is awesome. our number one competitor is dead. So the highs are high. Fast forward, May, June, July, August, September, five months, right? So we had a term sheet from a VC fund that was interested in funding us. We'd gotten it before the summer.
00:06:24
Speaker
This is a summer camp related business. So it's very seasonal. So the CEO had made this decision. We're going to wait until the end of the summer We're going to see where our revenue is. And then if our revenue is really good, we're going to go back to the VC. And then we're going to kind of negotiate a different valuation.
00:06:38
Speaker
Makes sense, right? One problem. On September 11th, 2001, we have a couple of planes that hit the ah the World Trade Center and the Pentagon, our VC was headquartered in the World Trade Center.
00:06:50
Speaker
So our term sheet literally blew up on 9-11. I mean, thankfully, the the guy that we were talking to, he's all right. As far as I know, he's still around. He survived, but the company ceased to exist. And that was like VC money that we...
00:07:01
Speaker
kind of counted So then, you know, low. And then we have this discussion about, well, we're not going to get any more money until next summer because seasonal business. How are we going to make it to next summer?
00:07:12
Speaker
And unfortunately, the answer was, well, we're not taking salaries. Highs and then lows. Highs are high and the lows are low.
00:07:20
Speaker
so So you've touched on the highs. You've mentioned also a low moment. Let's pick some lessons you've you've picked up so far. um You've been on this journey for quite some time. You've interacted with a lot of business. Can you share some key lessons you've picked up so far on this journey with us? Absolutely. Absolutely. um There's a couple of them that are like, you know, you must write this down on a piece of paper, take you know tack it to the wall and always look at it. One of them is always find a way to test something cheaply and quickly before you do it, to de-risk it.
00:07:54
Speaker
right So if you think about it, like, you know, you can model your entire business in an Excel spreadsheet. And if you do that right, you've got the assumptions that go into it. It's like, let's say you're an e-commerce business. So, you know, you know what you're going to sell, you want to sell the product for, maybe the customers won't buy it. Maybe it has to be lower, it has to be higher. That's one assumption, right? You know.
00:08:13
Speaker
or you think you know how many people are going to come to you, right? But how does that happen, right? You take a Google ads and you think you know what it's going to cost you there. You think you know what percentage of the people are actually going to click through the ad.
00:08:24
Speaker
You think you know what percentage of the people are going to put items in their cart. You think you know on average how many items and what the average cart size is going to be. All these things are assumptions. So you can just go and build it But really what you want to do is test as much as you can test beforehand. So you could, for instance, before you built anything, just put up kind of ah of a fake site in Squarespace or some website, WordPress, you name it.
00:08:49
Speaker
And then just put some ads on Google AdWords for $100, $200 and figure out what your click-through rate is going to be. What's it going to cost you to get a click? And if that's like way off, you got to rethink your model.
00:09:01
Speaker
But those are things you can do very cheaply before spending six months your life building a site. And by the way, I learned that the hard way. We did that exactly wrong. So ah the example, and this is true story, happened to me.
Evolving Leadership Styles
00:09:13
Speaker
So the first startup we had was called Bunk One. And like the core services were things like you send a kid to camp, they're not with you, but you want to see photos.
00:09:23
Speaker
And, you know, in 2000, it was Kind of hard to get photos that you took on your digital camera. That's how long ago this was. Up to the web. So we had a whole system for that. It was password protected. We charged for it. It was awesome.
00:09:35
Speaker
And then we thought to ourselves, you know, parents buy a lot of stuff for their kids before they send them to camp. about clothing they buy like a canteen or a water bottle you know they buy a tent maybe all that kind of stuff sneakers hats bug spray let's create a store where they can buy all these things we spent a lot of money building that store and the store is like three different four different vendors it was hard this is early this is like the early 2000s and we opened up the store and we sold virtually nothing so much like why did we sell nothing And then it occurred to us, the parents don't really think about camp, or at least not about the photos from camp until they've dropped their child off, right? They, you know, they're doing all their stuff to get rid of the camp. They drop the kid off. and then when they drop the kid off, they get the sheet of paper reminding them, here's how you do your account to see photos.
00:10:19
Speaker
So then they go and they sign up and they activate, reactivate their account. Well, guess what? That's already weeks and weeks too late to buy anything for camp, right? obvious in retrospect, but it costs us tens of thousands of dollars to learn that. Now, knowing what I know now, what I would recommend a startup do if they're kind of in a similar space, that's a, hey, Kofi, don't build anything yet. For this year, just find a store that sells most of what you want.
00:10:43
Speaker
Associate an affiliate deal with them. So you can get 4%, 8%, whatever it is that they sell, just put that link on your site. Because the number one thing you're going to need right now is what percentage of the people actually click the link and enter the store.
00:10:56
Speaker
So for two minutes worth of coding, you put the link to the other guy's site and see how many clicks you have, what percentage of the people do it. And you'll get the data from them, you know, on average, whether they purchase, that kind of stuff. And then you could decide if you want to build that store or not. And had we done that, we would have saved tens of thousands of dollars. So that's the kind of stuff that I tell all my startups to do. That's the kind of stuff I talk about in the book.
00:11:20
Speaker
But, you know, that's it. What can I do quickly and cheaply to test an assumption before I spend a lot of time and money on it? That's the lesson. Okay. so So how has your leadership started? How has it evolved over the years? You know, that's a good question.
00:11:38
Speaker
It depends on what role I've been in, but I used to be like very, don't know, like take charge-ish, right? I'm in a group, people turn the seats around, let's talk, let's figure this out. And I still am in the right circumstances, but now that I've kind of made the transition from being startup guy to an investor, it's all too easy as an investor to tell people what to do.
00:11:57
Speaker
but I want, you know, my, I want my founders to grow and be better. I'm not going to be there looking over their shoulder all the time. I can't be. So I've actually learned to be a little bit more teacher-like about it.
00:12:09
Speaker
And I would kind of, what do you think? Why do you think that? You kind of leading them in until they can figure it out. I also teach entrepreneurship now. So it kind of The two of them reinforce each other rather than telling, you know I will all kind of question and try to lead them there. Sometimes also I've learned instead of telling them what to do, I'll tell them a story that happened to another startup and they can kind of identify with it And that leads them to it because they like, oh, that's a startup. I'm a startup. Same position. I totally get it.
00:12:41
Speaker
They went through it. I'm going through it right now. They try that. I can try that. So I can tell them, hey, Kofi, you got to go put up that link and see what happens.
Creative App Testing Strategies
00:12:51
Speaker
Or I could tell hey, listen, this is my first startup. Here's what happened to us.
00:12:54
Speaker
And when I'm in the form of a story, you can bet your butt that more people actually do it. You I tell them advice, like, okay, that's interesting. Maybe say, I'll put that on the list of things to do.
00:13:05
Speaker
You tell them a story, they're like, yeah, we can do that. We should test that. Yeah. So what beliefs about entrepreneurship did you have earlier on that has since changed and you've had to unlearn? It's not glamorous. It's not glamorous. It's a lot of hard and boring work in some cases. So like, I thought it was awesome. like going to be like the Facebook movies. This is even before the Facebook movie. thought going to like, you know, awesome that way.
00:13:32
Speaker
I didn't realize that like 95% of what you do, you do because it has to get done and there's no one else to do it. You're using like the top 5% or 10% of your skills, only 5% or 10% of the time. But like, there's no one else to do it. When I had my first startup, We were so cheap, we built our own desks.
00:13:47
Speaker
And I don't mean we went to, like, Ikea and assembled them. I mean, we got lumber. And we paid we paid the superintendent of the building the cash under the table to hammer them together.
00:13:57
Speaker
and And we actually had, we had, like, splinters in our hands for the first couple of months. We didn't sand them down appropriately. But, like, you know, assembling desks. I quit my consulting job to put into to physically like make desks. But if I don't do it, someone is, you know, it's not going to get done.
00:14:12
Speaker
there's a lot of that. There's a lot of just stuff that's not glamorous, stuff that's not even mission critical, except if it doesn't happen, you're going to die, right? So your startup's going to die. So you just have to do that. And I don't think anyone who hasn't done it doesn't get that. know, they think of like so it's all awesome stuff. You're making deals. Like,
00:14:30
Speaker
You know, the reality of how it feels is very different. So, so, so a follow up on this. So what is sustaining you on this journey so far? Oh, you know, you got to be a little insane to be a startup founder, right? You got to be okay with that. You got to excite. It's got to be like, yeah, I'll do it because this is my baby, right? I don't know if you have kids or up. There's a lot with raising a kid that like objectively kind of sucks, right? You're, you're literally taking another animal, other things, species, right? But you know, you got to change the diaper because that's your kid, yeah right?
00:14:59
Speaker
You know, and and if you're their parent, you kind of love doing that too. Even though objectively it's a crap job. Unintended. Sorry about that. Didn't resist. So there's a lot of that in the start of, so you really have to love what you're doing. You really have to be like passionately involved with that, like like a missionary going out there to convert the tribes. You got to be like, I believe in this and it has to happen.
00:15:23
Speaker
If you don't have that kind of mindset to it, if you're more kind of mercenary about it, this is kind of cool. I think it can make a lot of money. Let's do that. It's going to feel very different too. So Andrew, tell me, so how do you make important decisions when information is unavailable or where it's even available is incomplete? How do you make sad decisions in such um a situation?
00:15:44
Speaker
and You do the best you can. You're never going to have full and complete information. you try to get what you can. right, so try to get answers that are directionally correct. So i'll I'll give you an example. um It's such a really great technique. I put it in the book. I call it the index card website or the index card app.
00:15:59
Speaker
So you want to build an app. No one's built it before. You can't ask people if they like it They can't really visualize it. They don't know. Yeah, it seems like a good idea. Kofi, why don't you do it? That's useless. So for about five bucks, you go buy yourself a pack of index cards, you know, four by six index cards.
00:16:13
Speaker
Then you go to the bank and steal a pen. right, because remember, we're startups. We're scrappy. Don't even buy the pen. Just steal it from the bank. And then sketch on each card what each screen of your app or your website is going to be like. And then when you want to go out there and you want to talk to customers, and you should be talking to 20 or 30 customers, you say, so, hey, Kofi, listen, I'm building this site. Thank you for sitting down with me. I'm building this this site or this app. Before I do that, i want to do a little bit of research. I want to be like smart and mean about this.
00:16:40
Speaker
So I've mocked up images of so the app on these index cards. I want you to pretend this is your phone and those are actual screens. Look at it, touch it, click the button, swipe, whatever you would do with it. Don't ask me questions. I'm not there when you download the app. I want you to pretend you've just downloaded the app.
00:16:57
Speaker
And the only thing I want you to do a little differently is just whatever you're thinking, say it out loud because I can't read your mind. But I want to just be like a fly on the wall. want stand here and watch what happens when you you you see my you download my app.
00:17:10
Speaker
And you give it to them. you Give them the first card. They touch it. They swipe it. Give them whatever second screen corresponds to what they just did. And if you do that, you will learn a lot. Or you do the 20 or 30 people and you find that they all get confused in the same place. Well, the design there is not so good. Or they never use whole sections of the site. Well, guess what? Maybe the design was bad. They didn't understand it.
00:17:32
Speaker
Maybe they just don't really care about those features. So guess what? You don't have to build them. and And you can do this for all different sides. You can once once you're done, you can start saying, okay, let's break character,
Avoiding Burnout with Sprints and Breaks
00:17:43
Speaker
Kofi. I want to ask you, why didn't you do this? And your, your customer might say, yeah, I kind of wanted to do that, but i was really afraid of what you were going to do with my data.
00:17:50
Speaker
Or I didn't know what that button was going to do. I thought it was going to like charge me. You learn so much about it all for the cost of a pack of index cards, 20 or 30 minutes it takes you to sketch out your site and then just go and talk to people.
00:18:05
Speaker
On the other hand, go ahead. You want to spend six months coding that, release it to the world, and find out that half the people don't like half the site and the other half of the people are confused with the design? Which way do you want to do it?
00:18:16
Speaker
want to do the smart way, the quick way, the fast way. um That is, that it's kind of part and parcel of the idea I gave before. Like, how do I test this cheaply and quickly? Part of a mindset. So you work with a lot of founders and teams. And from your experience, what really separates founders who endure from those who burn out?
00:18:37
Speaker
Yeah. So there's there's two characteristics that I like, or three characteristics actually, that I like to cite as the the key things they need to do for success. And when it comes to burnout, the one of them that's most important is to think in terms of sprints. all right So we think about that for programming sprints, but I want you to think of it even while you manage as sprints, because it's a long journey.
00:18:57
Speaker
The startup journey is eight, nine years, maybe more. And for large parts of it, it's kind of a lonely journey. You're under-resourced, right? You haven't raised money. You've raised money, but there's never enough money. So if you're constantly trying to like grind it out, grind it out, grind it out, it's going to grind you down.
00:19:14
Speaker
So got to think, okay, I'm going to do this. It's going to be a day. I'll be up till 3 a.m., but then I'm taking the morning off. but So I give an example. like When you out to fundraise, there's a couple of steps to it. So number one, you want to find a list of investors that are likely, or I should say, they have invested in the kinds of things that make you think that they'd be interested in your startup.
00:19:34
Speaker
but So it takes a lot of work. They're going out there looking up in investors, looking at what they invested and finding out who else invested in those startups. It's a couple hours of like mind numbingly, my eyes glaze over boring work.
00:19:45
Speaker
So I tell people, go do it. You want to do it in four hours? You want to move fast? But go do it. And when you're done with it, go out, go for a run, go get a drink, go watch a movie, whatever it is you need to recharge. But take that time and then come back the next day because step two is also tedious and mind-numbingly boring. But, you know, do that. So in the space of two or three days, you can get it done.
00:20:05
Speaker
But again, sprints, sprint, recover, sprint, recover. So that's the one of the two or three characteristics that usually i see in startups. And if I don't see them, there's a chance they'll burn out. yeah Okay. All right. So let's spend some time also talking about your
Introducing 'The Entrepreneur's Odyssey'
00:20:21
Speaker
book.
00:20:21
Speaker
Can you briefly tell us about your book? Sure. Okay. So I happen to have a copy here. Shocking, right? It's called The Entrepreneur's Odyssey. And ah there's a lot of like visual puns, by the way. If you see this, here's the founder and he's in front of the maze, which is great. And he's got a chainsaw because he's hacking his way through the maze. That's the startup.
00:20:41
Speaker
um But let's talk about like what the book is and like why I chose to do it. There are no shortage of books out there that will tell you how should you build a startup. Some of them are good, most of them not so much, but they all share this one crazy characteristic.
00:20:57
Speaker
They're mind-numbingly boring. Like building a startup, being an entrepreneur, like that's fun, right? If you're the right kind of person, that's like super interesting stuff. So why are these books so painfully boring and business books in general, painfully boring?
00:21:11
Speaker
And they're hard to remember. Like most of these books are a couple of ideas and they're like they're in one ear out the other. So what I did is I took the lessons that I learned over the years of giving advice in the form of stories.
00:21:22
Speaker
And I decided to tell the story of a fictional startup from pitching the idea in an evening event all the way through until that startup, that founder, gets its first round of financing for the startup.
00:21:32
Speaker
And along the way, everything that character goes through and that startup goes through is an opportunity for me to tell the st story and give the advice as part of the story, right? The index card app we talked about is part of the story.
00:21:46
Speaker
When he's trying to think about what revenue model he wants for his startup, it's actually a conversation between him and his son on the New York City subway, where his son's like, hey, if I had the subway, I'd be rich. Why? Well, I charge so much money for it.
00:22:00
Speaker
And then he's like, well, son, but you know, the same $3 that it takes to get from like here to five stops to your school, we could go all the way out to like the furthest part of Brooklyn. And it sounds like, oh, that's crazy. You should pay for how far you go. That's pay-per-use versus, you know, buy, you know, all-you-can-eat buffet.
00:22:18
Speaker
And then they start talking about freemium models. And then they start talking about share-of-savings models, right? But it's all embedded within the story of the founder and his son, you know, on their way to school. So unlike the typical how-to guide, which is like anecdote, anecdote, anecdote, name drop, name drop, name drop, five bullets at the end of the paragraph, and then like your eyes start to like droop because it's done, this is a story. It keeps you entertained. And it along the way tells you, teaches you these lessons in ways that you can actually remember. So you describe entrepreneurship as an odyssey rather than a straight path. Why is that mindset so important for
Entrepreneurship as an Odyssey
00:22:54
Speaker
founders? So I have a confession to make. I actually didn't think about it that deeply when I came up with the name of the book.
00:23:00
Speaker
I knew I wanted like, so actually the first version of the book was the art of the start, but it turns out that Guy Kawasaki, a guy on the startup world, who respect the the hell out of, already has named his book that. So I can't take that. Then I was going to name the book Don't Make Me Think, because that's what a lot of investors say. like A lot of startup founders like overcomplicate things. like Don't make me think, right?
00:23:20
Speaker
Pretend I'm grandma, right? Talk to me like that. um And I pro proposed that to my publisher. I said, you know, this is a book about startups. It's about founders, about entrepreneurs. You probably should use one of those words in the title.
00:23:32
Speaker
So went, okay, that makes sense. So ultimately i came with the Entrepreneur's Odyssey. I kind of liked the way it sounded, but then people come back to me and they said, you know, it's really a great analogy because like the Odyssey, like Odysseus coming home from like the Trojan War, like it was anything but a linear path.
00:23:48
Speaker
Like he was blown off course. He was kidnapped by Circe. He had to like go through between the, the sirens and the Scylla and Charybdis. Like he went a lot of different directions before he finally made it home. And they're like, that's what the startup journey is like. So then I was like, yeah, that's exactly what I was thinking.
00:24:05
Speaker
But it really wasn't. like But it is true, right? It is actually very true when you think about it. Your startup journey will be anything but a straight line. You're going to like, you'll have your opinion. I think this is going to go. You'll hit a wall.
00:24:17
Speaker
When you hit a wall, you have a couple of choices. Do I go right or left to try to go around it? Do I try to go over it? Do I try to go through it? Do I try to tunnel under it? right? But you will hit a wall and you'll have to change the direction. And you'll have to do that purposefully. You'll have to do that intelligently. And with luck, you'll find your way through the maze. So in the book, he also emphasized deeply understanding customer pain.
Understanding Customer Pain Points
00:24:41
Speaker
Why do so many founders still struggle to get this right? Okay. So this actually gets to my second big characteristic. So let's roll it back and i'll I'll tell you exactly how the characteristic fits in.
00:24:52
Speaker
So there are actually three elements to pain. I call them the three dimensions of pain. One is the intensity. like How painful is it? Like, oh, I got a hangnail that kind of stings a little bit. Or bang, I just hit my thumb on with a hammer. So that's number one. And that's what most people think in terms of pain. There's actually two other dimensions. Number two is how frequent is it?
00:25:11
Speaker
Like every single time I use the hammer, I hit my thumb. And, you know, I do a lot of work around the house. Versus, well you know, Applying to university is very painful, but with luck that you do that once in your life.
00:25:22
Speaker
So frequency is important too. And the third one is ah how widespread is it? How prevalent is it? Right? Man, it's super painful. happens all the time.
00:25:32
Speaker
Yeah, but it only happens to you. There's not a lot of other people in the same position. Like your company does it a weird way or you're an odd duck. Everyone else, we don't care about this. So to have a truly painful problem that's worth solving from like a business perspective, it needs to be intense, it needs to be prevalent, and it needs to be frequent.
00:25:52
Speaker
Now, the reason a lot of entrepreneurs don't get that is sometimes they just assume that, hey, I feel it. It's going to be like that for everybody. And partly sometimes it's because they haven't developed Well, either they haven't spoken to a bunch of people and that doesn't matter because if they haven't spoken to anyone else, they don't have any other data points.
00:26:08
Speaker
so like, get out of the house, talk to customers, make the index card app, right? Get their feedback, ask them, like, how often is this a problem for you? You know, how big a deal is it? Is it like, you know, it's a minor inconvenience or, oh my God, like you just, whatever, I need something, right? If you have a really painful problem and you show someone in your index card site, they're going to lean and say, when is this done? When can I have this?
00:26:32
Speaker
Like, dude, it's just index cards. I haven't started coding yet. It's like, yeah, yeah, but why are you going to be done? Like, that's a signal that you've got something that's really painful for somebody. Some entrepreneurs will miss those signals. They'll talk to people and like, you know, they're not into it but they're so in their head that they don't notice it.
00:26:48
Speaker
And what I call that is a failure of empathy, right? So empathy, you know, we usually think of like something bad happens to a friend or or just anybody. And like sympathy is like, i can only imagine how like horrible that was. But empathy is, oh man, I've been there.
00:27:02
Speaker
I feel exactly what you're feeling right now. I know it. at a gut level, and a great founder has or has cultivated empathy. So what that means in a customer setting is you can get in the mind of your customer and understand how he or she feels.
00:27:18
Speaker
but I am selling this to real estate agents. Well, I'm going to become in my mind a real estate agent for a moment. And I'm going to understand What pisses me off? I'm going to understand what makes me happy. I'm going to understand what keeps me from making a sale. like It's almost like method acting in a way.
00:27:35
Speaker
And the same thing when you're raising money. I'm going to understand what that dude in the you know in the sleeveless vest on the other side of the table that I'm trying to raise money from, I got to understand i'm like and what's what's moving him, right? What's he looking for? What's she looking for?
00:27:49
Speaker
So that ability to empathize with the other party, to put yourself in their shoes as a founder is going to be invaluable. In terms of like creating stuff that really solves painful problems in a way that your customer or the investor will appreciate.
00:28:04
Speaker
And ultimately, in the case of the customer will buy, in the case of the investor will fund. Also in the book, you talked about pitching. And in pitching, you stress the power of narrative.
Effective Pitching and Fundraising Strategies
00:28:14
Speaker
What makes that start a startup story truly resonate with investors? Sure. So there's there's a couple of different pitches along the way you should think about. um And the analogy I sometimes use is is the sales funnel, right? So we all know in ah in a sales funnel, when you're pitching someone, you have a bunch of leads at the top and you lose a little each way down the funnel. Like some people aren't really in your market. Other people kind of do feel that pain. They're in your market, but they don't have money for it.
00:28:39
Speaker
Other people like do have the money and they feel the market, but they're not the decision maker. Right. And so, you know, narrow and narrow down. So when you're raising money, it's kind of a similar idea, right? You have a whole bunch of prospective investors. You start with ideally over a hundred investors who could conceivably be interested in your startup. And your first meeting usually is like an elevator pitch, 20 to 30 seconds. You know, so not everything about your startup. You can't do that in 20 or 30 seconds, but a super tight, like,
00:29:08
Speaker
Here's what I'm doing. Here's the problem I'm solving you know for this market. And it's huge. And here's the traction I have. right I'm doing this much money in revenue. We've got these private customers. right And if you don't tell me you have traction, i'm going to assume you have none. And then you ask.
00:29:22
Speaker
So I'm raising a million dollars to get to $2 million dollars in revenue. within the next 18 months. So that elevator pitch at the top of the funnel is to take that 100 plus startups and qualify them.
00:29:36
Speaker
So Kofi, are you interested in that? Is that right? Well, I don't do, I don't do real estate technology, so it's not for me. Okay. They're out, right? But really what you're trying to get to is them to say, well, that's really interesting. I got a couple of questions, right? So you get them, they start to think about it.
00:29:49
Speaker
So that gets you to like the three minute conversation where they're like, that's interesting enough. but I want to make sure that it's worth calling this person into my office or onto a Zoom for a 30-minute meeting. Once you get past that, then you go into the office and you'll present your pitch deck.
00:30:05
Speaker
It's like 20 plus or minus slides and it covers all the stuff that an investor, remember, empathize with the investor, that the investor needs to know before he's not going to write a check that comes later, but he's going to commit many hours of his time to dig deeper. So that deck becomes your next pitch. And I'd give like an hour and a half seminar on what should go in it.
00:30:25
Speaker
And then beyond that, there's the entire conversation and managing the process and hopefully playing different investors off each other when you finally get to the point where you term sheets until finally, finally, finally at the bottom of the funnel, the money you're raising comes out and hits your bank account. So Andrew, what's one hard truth about fundraising? What's one hard truth about fundraising that founders aren't told early enough? Okay.
00:30:48
Speaker
So number one, there's no fun in fundraising. but You can get good at it and you can get kind of a sort of satisfaction with doing something hard well, but it is brutal. lot of people telling you no, like 20, 30, 40 people tell you no in a given day, maybe.
00:31:03
Speaker
Right. So it's not it's not a happy process. So just thick skin doesn't matter. Just it's not a fit. That's OK. It's not that your startup sucks. Maybe it does, but not necessarily. It could just be not what this is found, what the investor is looking for. but So just going to get a lot of rejection. Sometimes that rejection has nothing to do with you. It's just not a fit. It's like she's attractive, he's attractive, but they just don't get along. And like they'll make two other people very happy.
00:31:27
Speaker
Sometimes there's something wrong with how you're presenting your startup or what your startup is doing, and you need to get that feedback and get better at it. But, um you know, it's a process. It takes a lot of time and there are no shortcuts, which leads me to the other piece of advice. The most common mistake founders make when raising money.
00:31:46
Speaker
Hold email to investors. Don't do it. So I'll give you an analogy. Let's say you have a a software business and you're you're selling a software package to large companies.
00:31:58
Speaker
And you're asking them for $10,000, $50,000 year, for that piece of software so what do you do right you research the heck out of that company I want to know everything that company needs. If I can, I want to know what software they're already using.
00:32:14
Speaker
Then I want to go out there and figure out who at that company is the decider for this. And then I want to know everything about that person. Like, where did they come from before? What are they passionate about?
00:32:25
Speaker
What makes them get promoted or get a bonus? And then when I reach out to them, ideally I get a warm intro because that's the best way to get in front of them. And if I can, if i have to email them, and even if I got a warm intro and like I'm asking someone else to forward it, I will work. I'll spend 30 or minutes, 30 or 40 minutes just crafting the perfect email where in the very first sentence it jumps out at that person that, yes, I get them.
00:32:48
Speaker
It's like, Kofi, you open up the email and I'm like, man, this guy gets me. That's exactly what I'm struggling with. So that's what you do for enterprise sales for $50,000. How come when you're asking me for 500,000 or 5 million, hundred times as much, I get a bullshit dear investor generic email.
00:33:04
Speaker
It doesn't work. Won't work. The best thing I can say about it is if you've done it, don't worry. The investor didn't even read it. He won't know you did it. So don't bother wasting your time with that.
00:33:14
Speaker
Go learn how to get warm introductions. Go learn how to reach to network to the startup. That's the way to do it. So we're just about wrapping up.
Final Advice for Entrepreneurs
00:33:23
Speaker
But before we sign off, and what pieces of advice would you leave for my listeners? You know the number one piece of advice, right?
00:33:30
Speaker
If you're thinking about starting a startup or you have a startup already and you want to make it successful, hop and buy the book. Everything that we've done. and I'm joking, but I'm not joking, right? Because this is 20 years of investing boiled down into, what's it, 230 30, 20...
00:33:46
Speaker
No, 220 pages. 220 pages. It's fun. It's funny. And every every page is actionable. You'll go through it. I guarantee you. And you'd be like okay, I was doing that wrong. Oh, man, that's a great idea. I want to do that.
00:33:58
Speaker
ah More than anything, I mean, short of like getting me to come down and sit with you and doing it personally, I can't think of anything that in, you know, the couple of hours it'll take you to read it.
00:34:09
Speaker
can make it that much better, can make your startup that much more likely to succeed. Or if you don't have a startup yet, help you think about, is this right for me? Because the beauty of it, it's a story. You actually understand what it feels like to do a startup.
00:34:22
Speaker
And maybe it's not for you. And you know what? Stay in your day job. That's the best answer. No shame in that. But you can learn that in the book over a couple hours of reading instead of quitting your day job, spending months and a lot of money, and then realizing it's not for you.
00:34:39
Speaker
So it's a little self-serving, but that's my one piece of advice. Okay. um Before I sign off, Andy, what last words would you like to leave to my audience? Well, way back, I said there are three types of characteristics that founders have that you should learn or cultivate. We talked about two of them, right? We talked about empathy. We talked about what can I test for free or for a dollar quickly.
00:35:03
Speaker
The last one is you should strive to have well-reasoned but loosely held opinions. So what I mean by that is this, Kofi, you're going to get a lot of advice for your startup, whether you want it or not. The moment you go out there, people say, you should do this, you should do that, right?
00:35:18
Speaker
There's two different types of mistakes you can make if you're not careful. Number one is like, oh my God, that's a great idea. I'm going to do it. And then you spin around like a weather vane. Whichever way the wind was blowing, you spin and you face that way.
00:35:29
Speaker
Whoever talked to you last. And like, you can't get anything done if you're zigzagging like that all the time. The other mistake you can make is, no, I know how it's done best. I'm going to do it this way. Right. And you never alter course. So what you're looking for, when I say you have well-reasoned opinions,
00:35:43
Speaker
If someone says, oh, you should try this, you should be able to say to them, okay, Andrew, that's really interesting. Like I was going to do this other thing and here's why. Explain to me, please, what your thinking is behind it. Like, why is that not the right way to go? Why should I do this instead?
00:35:56
Speaker
And then if the person comes back with you and says, well, okay, it's really interesting. You should suggest that. But, you know here's some data you didn't know about. Or, you know, I've worked with 40 companies, 50 companies, 70 companies, 700 companies. And when they do this, it fails. When they do that, it's more likely to succeed.
00:36:14
Speaker
But you get their reasoning behind it. And if they don't show you their work, if they don't give you compelling reasons, you stay the course because you had a good reason for doing what you're doing. But if they do give you a good reason, seriously easily consider it.
00:36:27
Speaker
You may still not change your course or you may decide, hey, I now have two courses. Let's find a quick way to experiment and see which one's the way to go. But like be prepared to move when it's appropriate to move.
00:36:37
Speaker
So that's what I say, loosely held, but well-reasoned opinions. All right. So Andrew, thank you very much for sharing not just frameworks and insights with us today, but also the lived realities of entrepreneurs.
00:36:49
Speaker
Their wins, their setbacks, and their wisdom end along the way.
Closing Thoughts on Entrepreneurship
00:36:54
Speaker
For our listeners, entrepreneurship is not just a straight path. It's a journey that demands clarity, resilience, and the courage to keep going, even when the road isn't clear.
00:37:05
Speaker
If you enjoyed this conversation, be sure to subscribe, share this episode with others, and join us again for some real stories and practical lessons on the Entrepreneur Speaks podcast, where entrepreneurs share their journeys unfiltered. Until I come your way next time, let's continue to keep hope alive.
00:37:24
Speaker
Cheers. Please be sure to subscribe to the Entrepreneur Speaks podcast on all your favorite podcast channels. And if you have any questions or feedback, feel free to reach out to us on social media or in the comments section below.
00:37:44
Speaker
Dreams light up the sky tonight. Builders of tomorrow shining bright. From every land they find their beat. Yeah, it's the entrepreneur speaks.