Vincent van Leeuwen
Vincent van Leeuwen is the founder of SNTMNT, a social sentiment analysis for financial markets. Vincent van Leeuwen is the founder of SNTMNT, a social sentiment analysis for financial markets.
Around this time of year I get sentimental and think about my life for once. It’s been slightly over two years since I attended Startup Weekend in September 2010, which literally changed my world for the better. At the time, I was an insecure lad who just came out of university. I was working for a large Dutch bank, and was not liking it very much. I was not very happy with my life, but didn’t really know why.
Startup Weekend provided an absolute cultural shock to me. I was amazed at the atmosphere going on all weekend. Amazed at all the beautifully designed products that came out of only 76 hours. Amazed at the fact that, apparently, I wasn’t the only person in the world walking around with weird ideas. And most importantly: I was amazed to be doing something that I was really passionate about, rather than just passing the day to make a buck.
Still, I was scared as well. Scared of that others would think. Scared of throwing away my two precious uni degrees. Scared of not making any money for the better part of the next decade. I guess, in a sense, I felt a lot like Neo, when presented the choice between a blue and red pill by Morpheus. Now, two years later, it is a good time to share some important lessons that I learned after taking the Red Pill that day in September 2010.
1. Pursue your passions: Start with the why
One of the things I found most valuable from participating in the Founder Institute was a lesson about the Golden Circle by Simon Sinek. The golden circle argues that most people and organizations know what they do for a living. A large part of them also knows how they are doing it. But only a select group of people know the exact why behind what they are doing.
Especially in entrepreneurship, I believe this last part is fundamental. The first years of entrepreneurial struggle for me were often a bizarre roller coaster. Sure, I earned a few successes, but against those stood far more failures. Of course these failures are essential for learning in the long run. But in the short run, they give you worry and sleepless nights. Especially during some of these difficult hours, the golden circle has been of tremendous value for me: I always exactly knew why I was going through all this trouble.
2. Learn from the masters
Starting a journey without knowing the path is unwise. Not listening to experts who walked the path before you is foolish. When I started out after attending Startup Weekend, I was a complete idiot. I was the typical university graduate who “knew his shit” about Business Administration, which is not very useful in a startup. I couldn’t write a single line of code, and I didn’t have any clue how to start a business. Luckily for me, I found some books that enlightened my path.
Four books helped me out a lot over the last few years: Four Steps to the Epiphany by Steve Blank, Running Lean by Ash Maurya, The Four Hour Workweek by Timothy Ferris and Rework by Jason Fried & David Heinemeier Hansson. For me, these books were great guides. I still didn’t know how to walk the path, but at least they showed me what it looked like. Up until today, I consider all four a must-read for any entrepreneur or anyone looking into entrepreneurship.
3. Life starts at the end of your comfort zone
Every now and then I run into them. We all know these people, most often working at large corporates or even the government. People who constantly whine about the great ideas they had, years and years before the rest, but “just never pursued them because it was the wrong time”.
These people taught me a great lesson. They are all just making up lame excuses for not trying. People told me it was impossible to have our product launch featured on one of the top tech blogs without spending $3,000 on some fancy PR agency. It wasn’t.
They told me it was impossible to pick up coding. Nowadays I’m not a great coder, but in 12 months I learned how to rock in HTML/CSS, JS & Python. Back in 1994, when Jeff Bezos started Amazon, he had to raise money from 22(!) investors. Any investor who knew anything about books, didn’t invest. They probably thought it was the wrong time too. Screw the haters. Don’t let anyone tell you that something can’t be done.
“Losers always whine about their best. Winners go home and fuck the prom queen.”
– Sean Connery, The Rock
4. Screw exaggerating optimists
You’ve probably heard them far too often bragging about how close they are to signing customer X, who happens to be a publicly listed NASDAQ company. Or a million dollar investment that’s just around the corner from a well-known VC fund.
I have encountered a few of these people and before too soon, I started asking myself what the hell I had been doing with the past few months of my life. Why weren’t we making such progress? Don’t feel bad about yourself because of these kind of people. When I encounter them, I divide their progress by half. Take 50% of their accomplishments and subtract their biggest client from this. This is usually where they really stand.
5. Don’t waste money on legal fuzz you can do yourself
One of the biggest mistakes I made was flushing about $10,000 down the toilet on legal fees for a piece of paper that eventually didn’t suffice when two of our co-founders left the building. This was an important lesson for me. With our first clients, we needed legal documents again to describe terms and conditions. This time, I asked around for some examples, and wound up writing all of our terms and conditions myself. So far, they’ve passed the legal department of our customers without any problems.
Of course you’ll need someone with proper legal background to look at certain things, but don’t think you can’t do anything yourself. As a kid, I thought that the grown-up world my parents lived in would be a completely rational world. The older I’ve gotten, the more I’ve come to realize: It’s not. Take advantage of this.
6. Keep your funding round short
I know this is, of course, easier said than done. We have the coolest angel investors in the world, but still our seed funding round (which was not even astronomically big) took us about six months to arrange. Most of this time was wasted on going back and forth between our lawyer and investor and discussing all kind of legal matters involving highly unlikely scenarios. I found this a real waste of time and energy. Especially because I could have used this time on marketing, sales and customer development, and actually helped our business move forward.
Don’t be like us and ask other entrepreneurs for advice so you can overcome obvious pitfalls. Go for a convertible notes/equity and save the legal nightmares for when you actually have proven that you’ve got a credible business model.
A perfect story from the Netherlands in my opinion: Favour.it secured their seed round in only 2 months. They could then quickly move on to more important matters. That’s how fundraising should be done.
7. Treat the media as your friend
Before we made our first euros, we’d been featured on The Next Web, Financial Times and on VentureBeat. In addition, we’d been broadcasted on the largest television show here in the Netherlands. Of course the media has their own reasons for doing so, but still, it surprised me how much the media helped us to create social proof for our business. This is especially invaluable when you’re just starting out and don’t have any clients yet. Much more valuable than I would ever have believed.
8. Mind the overlap
One of the darkest moments as an entrepreneur for me was to have co-founders leave the company. The biggest reason for this exodus was the overlap in skillset between some of us. This created overhead in thought, communication and negotiation. This happens especially when there’s no clear division of roles.
This overhead resulted in slow decision-making and endless meetings. Needless to say, this is a killer for your business. It’s startup life. Decisions are never perfect. Making decisions is in itself already making progress, and the overlap is not helping out.
The lesson I learned from this is to really think through your team composition. I was foolish to believe that things like overlap between founders would work itself out along the way.
When you’re starting a company and considering a 3rd or 4th founder, take an extra pass at considering why you’re asking this person to join. Is he or she helping you accelerate value creation in the phase your startup is in? Or is he or she more likely to create overhead and overlap in thought and action instead?
9. Learn to code
This is only relevant for non-technical founders like myself. This has been one of my most important lessons. I didn’t write a single line of code until 12 months ago. I taught myself to code and, although it has been scary at times, it has given me much more than I expected.
Please note that you don’t need to become the CTO of your own company as a non-technical founder. I believe that picking up programming should be to acquaint yourself with the particular challenges of engineering. You will find that it will help considerably to understand the technical people you’re working with.
10. You’re not alone
The most encouraging lesson of all has been the awesome community that exists around startups. Whether it’s at Startup Weekend, Hackers & Founders, Pitchrs or Lean Startup Machine, all these events point to the same lesson: You’re not alone. I have been amazed how much people are willing to share, help and collaborate. I found it unbelievable how many Meetups there are, even in a small country like the Netherlands.
And next to the community that is around you, there’s a whole world out there that seems to know exactly what you go through. These articles by great entrepreneurs are never far away at times when you’re unable to see the forest for the trees. Whether it’s Michael Arrington comparing entrepreneurs to pirates, Ben Horowitz describing the Struggle or Pete Ford applauding frighteningly ambitious startup ideas: Moral support is never far away.
Those are some of the important lessons I’ve learned over the past two years. I’m still the fool I once was, but I believe I’ve become somewhat less foolish every day since. One of the biggest breakthroughs for me came very quickly: to let go of what the outside world thought and expected of me.
Actually, not caring about the expectations of others has probably been the best decision in my life. Why bother worrying about something that you can’t control anyway? Except for what those people really close to you think, I believe it’s probably the least interesting thing in the world.
Of course, not all my fears from 2010 have disappeared. Every now and then, I’m still doubtful of what the future might bring. I still haven’t made any use of my precious uni degrees, which feels like a waste (although I believe it doesn’t hurt to have them). In addition, I have a gap on my resume the size of a black hole, and my personal finances are still a nightmare. I just sent a Facebook message out to some of my best friends (who all work at large corporates) that I will be passing on a skiing trip yet again this year due to lack of funds.
But every now and then I wonder: What if I could go back to 2010? Would I take that red pill again? Would I want to stay in Wonderland, and see how deep the rabbit hole goes?
I’d do it time and time again.
Image Credit: Paul L Dineen/Flickr
Get the TNW newsletter
Get the most important tech news in your inbox each week.