The last couple of weeks, I had the pleasure of 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.
This idea is that: 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 lots of professional connections and long-lasting friendships, and generally had an amazing head start in 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.
In the end, 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 framework will provide the most systematic and fastest ways to do so. 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 ‘tech 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 got 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 tech skills, you’re probably not working on your edge.
There is no time to surf the Dunning Kruger curve during the EF program – you have ideally 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,
- you could use your established tech know-how/inventions/patents,
- you 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 for building a startup or eight weeks for deciding on a team is very little time.
You won’t have time to dig into a completely 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’d work on something that either for you or for your co-founder “has been there before”:
Something you have thought about already a lot, where you even started a small side project before or got at least some personal connection to. I everything goes right, you’d 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 ain’t no invitation for swapping co-founders like tinder dates.
Through EF, you are going to meet exceptional people that were selected by hand and that 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 uni or at startup events. This is to say: Don’t switch co-founders offhandedly, 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 in week one and stuck together could present deep insights halfway through or even had a first prototype/first users by the end of the startup formation phase. The later you start as a team, the later you’ll get to that point.
So, during the first few weeks, your highest priority should be to determine the most productive team you could possibly be in – and then stick to it!
Being a Sole Founders 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 for forming 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, in the end, 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 came up with the concept of ‘linear ideation’: attack the same project/industry/domain from different angles and gain more insights. That way, the story you’re telling others will 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 crazy about 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 that 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 to get interviews, and thereby decent insights, as quickly as possible.
Also, it will get you into the mental space of “we are really doing this project.” After some time, you will feel a certain familiarity with the domain you are working in and inertia to change it again.
If you feel like you aren’t learning anything significantly new from customer interviews, i.e. a large number of 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 the product you imagine yourself. 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 what pain points customers have, whether they’re just complaining or genuinely caring about that pain points, and thus whether they are willing to pay for a solution.
No matter whether you made it into EF, any other accelerator program, or are starting on your own – the learnings above will help you de-risk any sort of 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.