In the last couple of weeks, I enjoyed being part of the 8th Berlin cohort of Entrepreneur First (EF). It’s the world’s leading talent investor, running a renowned (TIER-1!) startup accelerator program.
Twice a year, EF runs a “cohort” at each of its current six locations, introducing 50 or more people to each other, half of which have a business background (MBA, ex-McKinsey, ex-BCG, ex-something) and half of which have a tech background (Ph.D. in machine learning/physics, previous CTO roles). They get about eight weeks to network and evaluate startup projects and eventually form a team or drop out. Here, you can read more about the program, how to apply, and what to expect.
Spoiler upfront: I didn’t find a co-founder this time. However, I learned a ton of new stuff about building scalable startups, established many professional connections and long-lasting friendships, and got an amazing head start to dive into the Berlin startup ecosystem.
Here is what I learned about making the most of the EF program:
Focus On Your ‘Unfair Advantage’
The EF lingo and their framework of ‘edge,’ ‘belief,’ and ‘hunch’ may sound peculiar initially. However, after a while, it will make perfect sense. Don’t worry too much in the beginning if you don’t get the hang of it – over the first few weeks, you’ll learn how to apply the framework inside out – even when you’re asleep.
Ultimately, the EF framework is a tool to help you answer investors’ questions about your startup, most importantly: Why You? Why Now? Why hasn’t it been done before? Of course, you can answer these questions using different approaches, but the EF framework will provide the most systematic and fastest ways to get there. More about EF’s framework here and here.
EF focuses a lot on your ‘edge’ – that personal skill, trait, or previous experience no one else has that makes you special, such as:
- technical edge: deep experiences with a certain technology, e.g., through Ph.D. or postdoc work
- domain edge: deep experience in a certain market, i.e., having a non-obvious insight into a market that cannot be obtained from googling
- catalyst edge: deep experience in operations, sales, communication, etc., or anything that might enhance the tech/domain edge of your co-founder
When reading about this the first time, I was confused: What actually means “non-obvious”? Does a Ph.D. already give me some ‘technical edge’? What if I don’t know my edge at all?
From my experience at EF, it all boils down to “edge = unfair advantage.”
It’s about determining where based on your ‘edge,’ you have an ‘unfair advantage’ that increases your odds of success. It’s about deciding which startup you are best suited for rather than considering all the possible startups you could build. It’s about answering: “Why you?” (and to some degree also “Why now?”).
If you feel like you always have to look up common terms and ‘business slang,’ have a hard time reaching out to people, or if you have to learn entirely new technical skills, you’re probably not leveraging your edge.
There is no time to surf the Dunning-Kruger curve during the EF program – ideally, you have experienced the valley of despair before and know where to go from it.
Start in an industry you (or at least your co-founder) are familiar with, where you
- can easily reach out to people through your network and schedule meetings,
- can use your established tech know-how/inventions/patents,
- are solving a problem for which you have developed unique insights.
Ideally, you have experienced the problem your startup is solving before, e.g., during your previous job, which leads us to the next learning:
Do Something You Always Wanted to Do
Three months to build a startup or eight weeks to decide on a team is very little time.
You won’t have time to dig into an entirely new industry (unless your co-founder has an edge there) or learn completely new skills (then you are surfing the Dunning-Kruger curve). So, ideally, you work on something that either for you or for your co-founder “has been there before”:
Something you have already thought about a lot, where you even started a small side project before or have some personal connection to. If everything goes right, you’ll be paid by EF to explore something you always wanted to do.
The Value of Being in a Team
Once you have explored your edges and got an idea of what you could realistically work on, it’s time to get in a team – and EF will urge you to do so as quickly as possible.
On the one hand, a huge benefit of the EF program is that you can test different co-founder relations quickly before settling on one. This would be significantly more difficult in real life. On the other hand, this isn’t an invitation for swapping co-founders like Tinder dates.
Through EF, you will meet exceptional people who were selected by hand and have time to found a startup right now. In real life, you may not have access to this kind of people, or they may not have time to get going immediately. Teams formed at EF will likely be 90% more productive than teams formed by randomly meeting people through university or startup events. This is to say: Don’t switch co-founders carelessly, but as soon as you feel you are not productive as a team.
Speaking of productivity, keep in mind that traction builds up over time. Exponential scaling needs time to really show off; at the beginning, every exponential curve will look almost flat. Working together on a startup for several weeks has the advantage of accumulating insights and being able to act on them more quickly.
Teams that formed and stuck together since the first week were able to present profound findings halfway through or even had a prototype/first users by the end of the startup formation phase. The later you start as a team, the later you’ll reach that point.
So, during the first few weeks, your highest priority should be to determine the most productive team you could be in – and then stick to it!
Being a Sole Founder Sucks
Nevertheless, there may be days or even weeks when you are not in a team. Either because all of your preferred co-founders are in a team already, or you simply haven’t caught fire to form a new team with someone else.
This time may suck.
Especially since talking to different potential co-founders and exploring possible startup projects won’t feel as tangible as writing a piece of code, finishing a report, or doing something else knowledge workers are used to. It may feel utterly unproductive.
However, you are doing what the EF program is designed for: meeting potential co-founders – full-time! Also, it will urge you to get into a team.
Another issue with forming new teams may be that you will keep telling your network about different startup ideas all the time. It can be confusing why you worked on startup A in one week but are already off to startup B the following week.
That’s why EF developed the concept of ‘linear ideation’: attack the same domain from different angles and gain more insights. That way, your story will also be more coherent.
For linear ideation, focus on a particular market or tech: Most successful teams are either crazy about a certain market/problem (and care less about the tech and the ‘how to solve it’). Or they are really into a certain technology and care less about which problem they will solve with it.
If you decide on forming a team in a new domain (and start linear ideation anew!), you may consider:
Warming Up Your Network Takes Time
If you are reaching out to people today, chances are you get a couple of interviews a week, in the worst case, a month later.
That means your insights from interviewing people will always lag behind your current progress. Interviews you scheduled for testing hypothesis A might be irrelevant a week later when you already disqualified hypothesis A and started working on hypothesis B.
If you switch teams and start working on something completely new, you may get interviews from the previous project even the weeks after, which may not be relevant anymore but still insightful.
The longer you work on something, the better insights you will generate.
Following this logic, it’s reasonable to dive into ‘customer development’ as quickly as possible, send a hundred cold e-mails, and get all the warm intros you can right on the first day you start working on something new. Reading The Mom Test will significantly help you with outreach.
Pushing customer development right from the start will help you get interviews and decent insights as quickly as possible.
Also, it will get you into the mental space of “we are really doing this startup.” After some time, you will feel familiar with the domain you are working in and the inertia to change it again.
If you feel like you aren’t learning anything significantly new from customer interviews, i.e., many people within the same (!) customer group are telling you similar things, you may start to build a prototype.
It’s not strictly necessary for the EF investment committee, as they will care mainly about the insights you have generated about your target customer group and the problem you are solving. However, it will help you to show traction, and customer feedback on your prototype may provide even deeper insights.
The Bottom Line
Building a startup is like a research project, especially at the beginning.
Some deep tech startups might involve actual research to demonstrate technical feasibility. But, first and foremost, it’s market research. The primary job of a startup founder is to figure out new business opportunities.
It is not building a full-fledged version of a product you’ve dreamed up. It’s more like sending hundreds of cold e-mails, interviewing dozens of potential customers and industry experts, and, after a while, running quick experiments with simplistic prototypes involving actual users.
It’s about evaluating customers’ pain points, whether they’re just complaining or genuinely caring about those pain points, and, thus, whether they are willing to pay for a solution.
No matter whether you made it into EF or any other accelerator program or are starting on your own, the learnings above will help you de-risk any scalable startup you intend to build.
If you have further questions regarding EF or building scalable startups – feel free to reach out on LinkedIn or via e-mail to mail@benjaminwolba.com.