The first 30 months of a first time startup founder in a new ecosystem

(Originally written and published in 2015)

The city

For most of the world, Athens (capital of Greece, home to nearly 50% of Greece’s population) in 2012 was synonym to words like crisis, debt, IMF, austerity, corruption and unemployment. The economic and social reality on the ground was/is harsh and it affected everyone one way or another. Everyone talked about the cuts, bankruptcies, new taxes, lack of political leadership, insecurity and so on.

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The Greek business community was very ill prepared for such a hit and had nothing to hold on to. Athens (and Greece for that matter) had and still has no headquarters of multinationals or globally leading tech businesses that would spur growth/innovation around them. It has only a handful tech focused entrepreneurs.

So if you combine the above with the fact that in a country of 11 million inhabitants, 95%+ of the private sector workforce was employed by very small companies with under 20 staff (2013 stats) and 10%+ of the country’s population is unemployed… the tech ecosystem starts with huge disadvantages.

In addition to that, on the consumer side, only 59% of Greeks use the Internet (2014 stats) putting Greece below Albania and Argentina on the global ranking. In other words: not the new “tech eldorado” if you ask me…

The first legacy

By 2012 the first few Athenian startup founders had already moved forward with the creation of the first products. They were the only examples of people starting in this chaotic Greek environment and creating something that had some value.

So we all wanted to learn from their mistakes. (Some leading examples being: DailySecret, BugSense with an early exit to Splunk [NASDAQ: SPLK], TaxiBeat who closed a 4M EUR round and others).

The start

We are in Q4 of 2012 and it’s time for the second generation of Athenian startups to surface. We find our selves in Colab (photo below), the first co-working space of Greece in order to be around other founders. We rent a desk or an office and start meeting the people…we soon realize that only a tiny % was actually creating a (real) startup, the majority of who we met were kind of confused on what a startup really is. (Yes there is a definition…) But that didn’t stop us from feeling like we were on a joyride.

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Some founders had read Ries’ book, many people also bought Blank’s other books, some had also designed their idea on the Business Model Canvas, but anyhow everyone was convinced that their idea (including me) was the next billion dollar idea.

We all kept reading everything on TechCrunch, TheNextWeb and the like, and all teams had this excitement in their eyes, when we would all meet on every pointless event that the Athens startup community was going to.

The ecosystem

We reach 2013, the gates have opened and Athens flooded with “startups” & startup-related professionals. New co-working spaces, incubators, accelerators, private equity funds, VCs, angels, meetups, private meetups, networking events, media, advisors, mentors and basically anyone who could convince he or she was worth having a startup-related title also came along.

That brought unbelievable levels of bullshit in the air, making it difficult for us newbies in the beginning to distinguish those who had value from the rest. It quickly became obvious though.

The assumptions

Yey! we have an alpha (fail) version! It’s not fail because it’s alpha, it’s fail because we have no idea what exactly is the value we want to create and for whom, how to do it etc.

None of the founders had any prior experience in developing a global tech product (no ex-Google or ex-Apple employees here), putting it to market and testing it, so we didn’t even realize what we needed to do for testing or how we could do an MVP, this is why I used the term alpha.

Eric Ries’ lean startup model is great when you read it, but when you try to apply it, all your perceptions and preconceptions mess it up, and you end up asking the answer in the question. Yet, you don’t see it.

The popularity effect

As months passed the ecosystem bullshit has grown. Before having achieved anything, simply for starting up in the chaotic environment of Greece, the Greek and global media portray us as “The ones who went against the crisis and won”, “The hope for reducing unemployment” generating a very confusing image and making us look like if we achieved something when we haven’t.

At that point the ecosystem’s dilution with startup-wannabes (in my humble opinion) has hit an all times high.

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Being presented in the media became something of a hobby. Every week or two, some of us either independently or together with other founders would be on TV, on major radio stations, on national newspapers and news websites/blogs you name it! And we became also frequent speakers at events taking place in Athens (for no particular reason).

Later on in 2014, we were even invited to speak at events of the two major political parties and to meet Angela Merkel (the German Chancellor and most influential European politician) at a private session with our Prime Minister #what_ever!

They then continued inviting us in closed door meeting with Ambassadors from 50+ countries to Greece, and special missions for Greek exporters…along with orange and olive oil producers #wtf.

The funding

Back to 2013, funding time has come and we are looking to raise funding in order to move forward. Most of us are running on borrowed or personal money which is ending soon and there is quite some anxiety.

Some of us manage to raise early funding from the two Greek tech startup funds of that time (OpenFund and PJTC), together with some angels that were interested to take part in this Athens startup hype, and we move forward.

It was a new weird thing, both for us and for the people at the funds.

Looking back it, I think we all tried to simulate the “Silicon Valley best practices and standards”, while neither of the two had any similarity to the Valley’s equivalent. We are so far from the Valley in so many ways, and it was just weird…

The two funds mentioned above are financed 70% by the European Investment Fund in Luxembourg and 30% by private mainly Greek investors.

So it’s largely public money they were investing in us. That didn’t make any of us happy, but for the first time it was being given as equity through investment and not for free via pointless EU programs as it happened until now.

Greece has had a tragic experience with EU programs and financing, as well as regional and local “Funds for Development”. Wrong political decisions and wrong implementation at EU level, combined with record high Greek corruption and incompetence, led to a chaos. That started from 1981 when Greece joined the EU and probably is still happening until today, although I don’t know the details, I only hear what is being said by people who are involved in such activities.

The networking

By now, around 6–7 startup founders — among the funded ones — have formed the Early Startup Circle where we share in private our product & business problems, and we exchange ideas on how to implement solutions.

The credit for this goes to the founders of Locish (It failed. The founders now started Weengs in London) who started this idea. It was a great initiative as in this chaotic situation, we needed to speak with each other, and share our ideas, as it generated more than just suggestions for solving our business problems.

Although we didn’t care how other saw us, we were an integral part of the startup hype for few months. We were the first wave of multiple (small) investments that happened in Greece in a short period of time and with all the publicity, it made a splash.

The business

We are now in deep beta and we are super happy as we are getting early traction. Some of us with more robust beta products, others with much less, anyway the numbers are not yet that important.

As time passes product & business decisions become harder and harder. Our skill sets start not being enough, and the beta success for those of us who had it, makes us feel like we jumped from a plane and we are trying to create our parachute while falling…as Reid Hoffman has said about the startup journey.

The learning curve

Funded founders (seed and above) generally tend to be fairly clever & skilled people. Some more, others less, but in general they have what it takes to build something and convince someone to give them an important amount of money for it.

This is why funded founders represent a tiny % of the population of developed countries. (Note: This is now growing in developing countries with social entrepreneurship but the numbers I estimate are probably still very low)

In Greece, what most people lack though is what I would call “context”. For building a great tech product you need to understand how products are built, I mean the tools, methods, techniques and approaches everyone uses in the world’s leading tech companies, when trying to build a tech product.

In an ecosystem like Greece where basically no one (apart from… 4 people) has done it, no one has the slightest idea of how it can be done, so being a new startup founder in this ecosystem is like if you are…trying to learn how to drive (for the first time) at the F1 Grand Prix Final Race.

The year 2014 and beyond

With all this push, and massive new programs supporting startups, new startup awards (we also won a 5.000 EUR award — Get In The Ring competition), still the new Greek startups that I hear about are as lost we all were.

If the Greek (or any other) startup ecosystem which lacks 100% “context”, hopes to succeed (=exits & IPOs), it must first of all understand it will take 20 years of failures, and that the stats about startup success rates won’t represent 15% of all companies started, as most people say in tech.

It will be more like 0,1% or 0,5% for the first 10–15 years and this should be seen as normal. It won’t solve the unemployment problem, it will need to attract foreign talent and it may push several companies to relocate some or all of their resources at some point outside Greece.

It can’t be done only from within (i.e. only Greeks in Greece without global tech experience) as we all need external input from people who have done it before.

Having said all that, if you are planning to start in any place apart from the Valley, London or maybe Berlin, may the force be with you 🙂

If you think others should see this, please share it. I really appreciate it 🙏

How startups grow in fragmented niches by Dru Riley from

Dru publishes, a report on trends shaping the tech ecosystem. In one of his latest reports (Feb 2021), he focused on what he calls competitor risk. Here are my key takeaways from that report. At the end of this post I have added the video where he presents this report in greater detail as a podcast.

1/ Competitor risk is better than “new market creation” risk

When you’re going after markets that have established players, you are taking competitor risk. This is much better than taking the risk of creating a new market (unless this isn’t your north star). You may end up realizing that you can’t build a business in that new market after having devoted a lot of resources, and this path will take you back to square one.

2/ Incumbents leave room for new competitors after 10+ years

Products built in a specific market have already validated the demand, the user segments, their willingness to pay, and more. Over time, behaviors and markets change and that shift creates the opportunity for founders to re-think those needs from first principles and improve/upgrade they way they provide value with new SaaS.

3/ Micro-SaaS = fragmented. No-Code might be winner take most.

There are product categories such as CRMs, email marketing tools, calendar tools, automation tools, server uptime tools, and many more where there are at least 20 alternatives easily. Yet many founders that don’t have the luxury of burning millions, grow within niches of those fragmented markets and build healthy small businesses. No Code startups might not allow for fragmented markets to exist, as they might evolve into winner take most markets.

4/ Switching costs are dropping

The switching cost from one tool to the next in a category isn’t what it was. We haven’t seen that happen in places were there are network effects like Amazon and Facebook, but we’ve certainly seen it in small B2B SaaS. Companies like ConvertKit for example offer a “switching service” to help companies switch from the likes of MailChimp.

5/ No more technical moats

Anyone can build things quickly nowadays. With no code, even faster. Technical moats are not a competitive advantage, especially when we see big tech (with vast resources) copying startups almost daily.

6/ Distribution is the name of the game

Given anyone can build anything now, just building a great product isn’t going to take you very far. Mastering distribution and revenue expansion are the key differentiators. Building proprietary distribution channels or moats is key. Finding ways to expand revenue without acquiring more customers is even more important.

7/ Easy APIs + productized services = smaller headcount

There is wide range of APIs and automation tools available, and along with the explosion of productized service providers for things you would normally hire in house, today you can build scalable startups without equally scaling your headcount.

Resonance in sales

Trying to find the right arguments that will resonate with each prospect, is key to the success of any sales and business development process.

If your arguments, your story, your persuasion tactics don’t resonate with the other person, there is no point in trying to persuade them.

You’re wasting both your and their time.

It’s actually purely scientific and if you see it that way, it’s much easier to achieve it.

According to Wikipedia:

“resonance describes the phenomena of amplification that occurs when the frequency of a periodically applied force is in harmonic proportion to a natural frequency of the system on which it acts”

Your prospect is the system.

She is a system of beliefs, perceptions, values, and past experiences. The way she sees the world, and the way she makes decisions depends entirely on this system.

In my experience, only a very narrow share of the global population is able to disconnect (to a certain extent) their decision making process from their default system.

So if you apply force on this system and the force is in disharmony with the prospect, then it fails.

The only way to make sure your sales process (the force) is in harmony with the prospect (the system), is to actually know in advance what the prospect thinks, believes, and values.

And the only way to extract that is by not talking, getting them to talk and listening. A lot.

Obviously at some point you’ll want to tell them why they should pay attention to you and what you have to offer to them, but attempting to do that when you don’t understand the system won’t work.

Get to know the system first.

One prospect once told me at some point in the beginning of our conversation:

“I don’t like sales people”

So I framed the conversation around my role as an adviser and not a person trying to sell her something.

In another conversation, I asked a prospect what was her budget for a specific need they had and she said:

“I know that trick that companies use, where I tell you my budget and you’ll give me a quote exactly for my budget even though the price is lower.”

So I adjusted my pitch, giving her some examples of past quotes for framing a maximum and a minimum so that she would feel comfortable to share with me her budget.

It all comes down to asking the right questions at the right time in a conversation, in order to have the opportunity to understand the prospect’s beliefs, values, and perceptions with regards to the context of the conversation.

The little known sales tactic

We all fall for the same sales “promise land”. You hear how someone followed the NEW sales approach and signed 100 customers using a little known sales tactic and — of course — you want the same.

Don’t get me wrong though, sales tactics work or let me re-phrase: They used to work really well.

But sales tactics are overused and people are becoming allergic to them. Instead of focusing on building relationships that will grow your business, most business owners get super excited when they see stuff like this table below.

Because OBVIOUSLY, the silver bullet for growing your business is to pick the right day of the week for your calls.

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Even if you go down that route, you’ll run our of tactics after some point.

What happens when prospects don’t answer the phone on Wednesdays? No tactic lasts forever.

But why change something that has worked for so many people for so long? Because sooner or later, you (or your system) will start to fail, little by little. It happens to all businesses as the market changes and then you’re left with nothing.

That’s when I realized the insanity and changed my game.

Instead of building businesses and sales processes that are heavily based on “little known sales tactics”.

Instead of trying to find the best day to have calls.

Instead of tweaking emails to find the perfect sentence.

Instead of trying to use the ALPHA MALE sales attitude (people are not stupid!).

I now do something else. It’s something that is heavily based on human psychology.

It’s deeply rooted in never-changing elements like respect, relationship, and trust.

Because if I take the time understand you, and show you how I can deliver pure value to you.

If I show you that I really care, guess what! You will care back. And your customers will do the same.

Once you have understood that, you will put yourself and your business into a league of your own. It’s how you can massively impact your customers..Their lives, their businesses and move minds, hearts & wallets.

Speaking about wallets:

What’s your current success rate? Is it 1 out of 10 calls? Or maybe 2 out of 10 calls…? Or maybe you don’t know the number right now.

That’s what most businesses achieve. Signing with 1 or 2 out of 10 calls means that your prospect conversations are not persuading 8 or 9 out of 10 people that reach out.

80 or 90% of prospects are not interested to get your help. I think that’s bad.

And that is why I’m not OK with numbers like that. I aim for engagement. I aim for super responsive, hyper engaging and highly persuading people.

This post was inspired by Bastian at Wild Audience.

The 12-step brainstorming process of Rahul Vohra ‒ Founder of Superhuman (the email SaaS)

I’ve been listening to the Founder Coffee podcast by Jeroen Corthout (Co-Founder at Salesflare) since the beginning.

In Feb. 2020, Jeroen interviewed Rahul Vohra, the founder of Superhuman and I really liked some of the ideas and practices Rahul uses to grow his startup, so here is a summary!

Setting and reaching a goal through a specific type of brainstorming

Let’s say that you need to get to $5 million ARR. Now you’re at $3M ARR. So how will you add $2M ARR to this year’s plan? Well, now we have a framed question.

1/ Frame the question in multiple ways.

One way is “how do we generate an extra $2M of revenue”. Another way would be “what could we be doing that would make $5M of revenue”. And I think either framing is totally fine.

2/ Have a brainstorm.

This can be done just with leadership or you can do it using everyone in the company.

3/ Leave the office and to go to a new location.

The location where it’s not familiar to anybody. Take the time, get relaxed, get settled in, have a coffee or have a Coke or whatever and then get brainstorming.

4/ The key thing: no idea is a bad idea.

Everyone should have the opportunity to throw in whatever idea they want. You should be having fun, you can play music in the background.

5/ Set hypothetical constraints.

That’s actually a technique that we use in our brainstorming every time. So we had constraints like, well, what if we have to achieve the goal in just one week? What would we do? Or what if we had to achieve the goal without spending any money at all?

6/ And then remove the hypothetical constrains.

We ask: What if we had 10 years to achieve the goal? Or what if we had infinite resources to achieve the goal? Adding constraints and then rapidly taking them away, flexes the creative muscle and just gets lots of new ideas coming out that otherwise would not.

7/ Have a “brainstorm boost” keyword.

If the energy gets stale at some point anyone should be able to shout switch or some other keyword. And then everyone can swap seats just to keep the momentum flowing throughout the room.

8/ Get to hundreds of ideas. There will be a few gems in there.

Ideally, you want to get to hundreds of ideas, most of those ideas will be terrible and that’s fine. Afterwards leadership usually the CEO or the head of strategy should take those ideas and assign them scores.

9/ Score the ideas based on cost and impact. High, medium, low.

This allows you to stack rank the ideas. So you’d be able to say, well, this is a low cost, high impact idea. Well obviously we should do that and maybe we’ll save the high cost, high impact ideas for later when the team is larger. So then you have a list of stack ranked ideas.

10/ Next week people vote on those ideas.

There’s various ways you can do voting. One that we’re doing right now is to give everyone a $100 of voting currency and you can split those hundred dollars up between the ideas, depending on how much you care about each of them. And then you’ll get a sense of how the company is feeling about all the ideas.

11/ Do some analytics work.

Previously you have estimated the costs, you’ve estimated the impact. You probably actually want to do some real analytics work to come up with not just an estimate of impact, but a real prediction of how many dollars each idea is likely to add to your end goal.

12/ Ask the team to have a more detailed estimate.

How expensive something will be to build beyond just high, medium, and low. And then once you have your estimates, both of the costs to build and also of the impact to revenue, you would then actually be able to make real trade-offs in terms of how much time you have and what impact those projects will add to the end of year revenue.

Plus a bonus: The path to success for founders

The key for a founder is to understand what they are world-class at and to double down on that and then to hire leadership around them to fill in the gaps. There are many ways to build a company and trying to do all of the above I think is impossible.

Classic product and technology-oriented founder.

Rahul is in this category, same as many of the founders in Silicon Valley.

Sales-oriented founder.

They have an ability to go out and aggressively find and close revenue.

Management and execution-oriented founders.

Folks who can drive high levels of efficiency through the company.

Relationship-oriented founders.

They are beloved by their company, and that’s how they win.

The 7-step remote recruiting process of Maren Kate ‒ founder of Avra Talent (remote recruiting agency)

In this episode of the Startups For The Rest of Us podcast, Rob interviewed Maren Kate.

Maren built Zirtual, a service company in SF that was offering on demand virtual assistants. She hired 400 people in less than 2–3 years, and after leaving the company she launched Avra Talent. On the podcast, she explained her exact recruiting process that’s now being used by many other startups that hire remotely. Here it is:

1/ Figure out the Job(s) To Be Done by the role.

Forget the title. First define the jobs to be done. Don’t collect resumes, we only look at resumes at stage 5. They are not the right “tool” for assessing an applicant. Let your company culture and your company’s version of weird shine through the job post. You only want people who want the role but also have a culture fit with you.

2/ Ask applicants to answer 3 paragraph-style questions.

The key first question has to be: “What are you looking for, and what honestly draws you to this company and this role?”. This first question also acts as a qualifier. If people don’t fill that out in a meaningful way, we immediately disqualify them. If you want people who actually care about your company and your vision, then they should be able to articulate that. The second reason why this is very important is because remote employees communicate a lot through writing with their peers, so they need to be able to write well-enough.

3/ Ask the 20% that pass the previous stage, to answer an additional paragraph-style question.

We test for responsiveness, not just content at this stage. We want people we respond quickly.

4/ A phone screen.

We ask them how they performed in previous roles. Many open-ended questions.

5/ A paid test project.

This should be something that you actually need done, and always pay for their time. Nothing is more powerful that seeing how people work with you and how they engage with you.

6/ If they pass the test stage, then a second-layer of interviews.

These should be with their team, their supervisors and so on.

7/ And after the interviews, check references.

You should check both given references and back channel references. Try to find people they worked for, people they worked with, and people that worked for them. Even if they can trick the process for two of these, if there is a hidden problem, you’ll surface that for sure.

What is the relation between falling growth and rising debt

Earlier this week I came across this article on Pictet’s blog, and given I wasn’t familiar with the relation between debt and growth, I’m sharing some facts and thoughts from the (brief) research I did to understand this better. If you want to recommend additional sources/concepts that should be included, feel free to contact me.

1/ There is a steady rise in public and private debt in relation to GPD

According to the data on Pictet’s article, debt has been growing fast globally:

YearDebt as a % of GDP
2021125% (OECD estimate)

What influenced this in recent years

1999 – 2000 dot com boom → Loss of faith in overvalued tech companies that couldn’t justify their valuations.

2007 – 2008 household debt boom → People were taking far more loans that they could pay back and it all collapsed in a deep global recession.

2010 – 2012 government debt boom → Investors lost faith in governments ability to repay their debt, starting from Greece.

2/ Government spending doesn’t generate a growth return

According to Pictet, in the US for example, the percentage of real growth that comes from every additional percentage of debt is dropping since the 1960s:

PeriodReal growth
1960 – 19882.6%
1982 – 20011.7%
2000 – 20200.7%

3/ A group of researchers suggested that the debt-to-GDP threshold that shouldn’t be crossed is 90%

In 2010, Carmen Reinhart and Kenneth Rogoff wrote the paper Growth in a Time of Debt where they proposed an idea that heavily influenced government policies but was later challenged and even completely rejected by many analysts and economists.

As shown in their graph below, their analysis concluded that once debt goes above 90% of GDP, countries suffer basically.

Source: Growth in times of debt

4/ Not everyone agrees that specific levels of debt impact growth negatively

In 2014, 6 years after the financial crisis, the International Monetary Fund researchers published the paper Debt and Growth: Is There a Magic Threshold where they looked at debt and growth data of various countries.

They came to the conclusion that even though in the short term high levels of debt can have a negative impact on growth, there isn’t a clear threshold that triggers a decline in growth.

Source: Debt and Growth: Is There a Magic Threshold?

Feel free to suggest additional resources I should include in this article.

Thanks for reading 🙏

The 7 major fintech shifts by Dan Kimerlin from Deciens Capital

When I find a podcast interesting, I try to summarize it as it helps me understand the concepts and ideas explored in that podcast. Happy reading 🙂

More on Dan: his Linkedin, his twitter, his fund Deciens.

1/ Fintech will scale even more due to 4 factors

The internet: Broad low-cost distribution through the internet makes it possible to scale fintech to billions of users globally.

Tech: Today we have the required powerful technology that can enable advanced financial applications. A few years ago we didn’t.

Mobile: Around 6 billion people today have a phone. The fastest growth in mobile usage comes from mobile-first countries that lack western infrastructure.

Design/UX: The mobile experience has gotten dramatically better over the last few years. It enables users to do a lot more in an easier way on their phones.

2/ Fintech has unbundling and re-bundling cycles

2013–2015 Unbundling: Many small new startups focusing on a tiny piece of the banking and financial ecosystem.

2018–2020 Re-bundling: Companies that started from a given niche adding multiple financial services under their brand but in a different way than big banks used to do it.

Another way of unbundling will come again in a few years.

3/ Aging populations will have a big impact

In the next 30 years, aging populations in the US, Europe, and Japan will put a lot of pressure on financial service providers as consumer needs will change a lot.

4/ Open banking is just starting

We’re starting to see how open banking will impact the global economy. One of the first changes we see is embedded finance (covered in point 7 below).

5/ Mobile wallets replacing bank accounts globally

The mobile revolution wasn’t an obvious development, but it happened. Today, once a company finds the right business model, it can hit the distribution scale through mobile at an insane speed. Two good examples of that are Instagram and WhatsApp. Both hit tremendous scale through mobile very fast. Good examples in fintech: GoJek (leading mobile wallet in Indonesia), bKash (33% of the GDP of Bangladesh flows through this wallet). Africa’s mobile wallet adoption is very high right now, and we start seeing the first multi-jurisdictional wallets that enable network effects on a global scale.

6/ Vertical banks designed for a specific niche

Until now traditional banks weren’t focusing on any given niche. The new wave of banking and financial companies offer financial products for specific types of consumers and businesses. Those typically are customized to the culture, behavior, and workflows of the targeted niche. Lendeavor is an example of that: A bank for dentists and other medical professions.

7/ Embedded finance globally

Until now banks created financial products and distributed them through owned branch networks and early uses of mail, email, and the internet.

What we’re seeing now is that there are going to be two different types of companies: Those who create financial products and will probably have specific financial licenses, and non-financial institutions that will distribute those products by embedding them into their workflows.

Foreign exchange example: Airbnb embedded the foreign exchange into the user experience in a seamless way through a currency conversion partner.

eCommerce example: Millions of eCommerce companies use Affirm to offer Buy Now Pay Later (BNPL) options to the customers on the checkout process.

Solutions like Shopify Pay, Shopify Capital, Square Cash, and many others are great examples of embedded finance.

“From an investor’s perspective, being right at the wrong time and being wrong are indistinguishable.”

Cool quote by Dan