Founders Hack was in Bielefeld and it was great!

Some (or none) of you may have wondered what was I doing on a mid-June weekend. Me being me, I went to the city of Bielefeld and mentored in the first Founders Hack. It was a typical gloomy German weekend, yet the hackathon was probably the best thing I have seen in a while.

The best part of the hackathon were actually the teams. I was impressed with the stunning mix of experienced business professionals and pumped up techies. In fact each team without exception managed to deliver a well thought over and absolutely uptodate solution.

It started during the day.

And went on during the night. Some went on till 4am.

A big differentiator to other hackathons were the real life challenges. They were drawn from actual opportunities (or problems) and provided by industry leaders from the Bielefeld area: Wortmann, Miele, Boge, Alcina, Benteler, Claas.

Some went a step further e.g. Boge impressed by bringing an actual product to make the teams play with their machine.

Challenges focused on IoT and machine learning with 2 prominent IoT ones being: 1) build an IoT based business model for the laundry care in sharing economy, and 2) track spare- & wear parts in a complex machine. Then the machine learning challenges explored using external data sources to track fashion trends and ways to increase efficiency in farming with data from agricultural engines.

The final delivery was in the form of a short pitch in front of the cheering crowd in a fully packed theater. And the prize was a unicorn!

Now add to this the fantastic Lasse Chor who orchestrated the event with a ton of great vibes and the tiresome Founders Foundation team, and you have an unforgettable weekend.

This event has definitely left a mark. I believe it is the first time when I saw corporates connect with startups and take over the initiatives into their agenda. For me the secret sauce to make this work would be well summed up with few words: curated team building, well defined areas of interest and business opportunities for the corporates, unhindered access to corporate executives, energising moderation and mentoring.

Most importantly, there was plenty of food. Just kidding but there was indeed good food :). All the time!

Before
and after

“This is Bielefeld” – these are the true words of Jackson Bond from Relayr, the word is spreading. One thing is clear, entrepreneurship is no longer reserved for Berlin, Hamburg, München and Cologne.

The Netflix culture – a myth or a must for company growth and sustainability

This time my topic is around company culture and in particular the culture of Netflix. Also big apologies to those expecting my next post on blockchain, please have some more patience, it is almost there, and I just could not hold on to share this Netflix jewel.

My personal experience and believe is that culture does not come from senior management or below but is set by the founders and the CEO (if not the same). In that respect, Reed Hastings, CEO of Netflix, gave a stunning example on culture and leadership by putting it altogether in a not so short presentation (you will find it below). He published the actual presentation in August 2009 when most of us were worried about the financial meltdown and existential topics. May be this is why it took so long for people to actively talk about it (or maybe it is just my humble me noticing it just now).

Reed Hastings made it clear that instead of nice sounding values (and often fake ones), he has designed the actual ones for his company. And so that there is not too much interpretation involved, he added plenty of examples :-).

“The actual company values, as opposed to the nice-sounding values, are shown by who gets rewarded, promoted, or let go.”

Takeaway I: The nine Netflix values are as follows:

  • Judgement
  • Communication
  • Impact
  • Curiosity
  • Innovation
  • Courage
  • Passion
  • Honesty
  • Selflessness

Reed has explained pretty well what each one means so please take a look in the deck, below you will find just my own takes coupled with a bit of commentary.

For me values such as Judgement and Communication point towards resolving the plague of each business – employees NOT being empowered to make decisions and communication flowing efficiently. But there is a catch – this of course is only possible if the people in place are AAA professionals. Else said (Takeaway II):

“Great workplace is stunning colleagues”

and

“Unlike many companies, we practice: adequate performance gets generous severance package”

and

“We are a team, not a family – we are like a prosports team, not a kid’s recreational team”

Takeaway III: Reed also references to The Keeper Test manager case. This is something I have vaguely practiced but never managed to summarise it so crisp: if somebody tells you he/she will leave, are you going to fight hard to keep the person?

At Netflix internal attitude such as “cutthroat” or “sink or swim” are not tolerated. Yet, this can apply only for a AAA team that will tolerate fast learners or otherwise

“Sustained B-level performance, despite “A for effort”, generates a generous severance package, with respect”

“Sustained A-level performance, despite minimal effort, is rewarded with more responsibility and great pay.”

The focus on high performance comes on a seemingly scientific measure:

“In procedural work, the best are 2x better than the average.”

“In creative/inventive work, the best are 10x better than the average.”

Takeaway IV: The Rare responsible person – yet another ingenious concept. Reed is referencing to the rare type of attitude towards self improvement, self motivation and that can even be spurred in people that pick someone else’s trash in the office and throw it away.

Takeaway V: When company grows, it often fails to add proportionately top talent to its workforce. Sometimes I even believe managers are afraid to surround themselves with top people and see them as a threat. The solution – grow talent density faster than complexity. In other words outgrow complexity created by growth by hiring top talent at a faster rate than the growth itself (as much as you can).

Takeaway VI: Netflix is not in a safety-critical market such as running nuclear plants so it rather focuses on rapid recovery. This for me translates quite clearly to the Facebook’s Motto

Move Fast and Break Things

But at Netflix, also Fix fast. 🙂

Takeaway VII: Another interesting point is the Netflix approach to working hours and vacation: No 9am to 5pm work policy, no vacation policy. Practically no tracking, yet people are actively encouraged to take generous retreats and come back with fresh ideas. And on top

“Career “Planning” Not for Us”

Netflix has dismissed formalised planning including mentor assignments, rotations, multi year career paths.

“High performance people are generally self-improving through experience, observation, introspection, reading, and discussion.”

Takeaway VIII: Managing through context

High performance people will do better work if they understand the context. Highly Aligned, loosely coupled … approach for corporate team work.

and

Investing in context means – frequent department meetings, being open about strategies and results.

Takeaway IX: (Last one 🙂 Always pay top of the market and do not connect payment with the well being of the company as times change but you can be successful only with top talent.

payment is aligned with what the market pays and what would cost to replace such a person.

and

… side effect is that rarely there will be a higher offer if somebody wants to leave.

and

it is tolerable to talk to other companies and then talk to your supervisor about your actual market value

This is all from me for today. Hope enjoyed the read and I will follow up soon with my next article.

P.S. All citations above are courtesy of Reed Hastings.

Quick update: Taking on a new challenge in the fintech industry

It has been exciting 2 years at the helm of my startup incubator Stark Founders. Without doubt this has been the most rewarding but also dynamic part of my life. Must admit my previous 3 year tenure at Rocket Internet has prepared me well for this rollercoaster as some of you might know. 🙂

Looking back, I have extended my understanding of technology and business ecosystems, venture capital, business modeling and marketing with focus on B2B/B2C cloud based products, IoT and nearshoring outsourcing. I can say for sure that what I loved the most were the entrepreneurial minded tireless people I met on the way.

Several companies later (including one exit), it was time for a change. Me being me – why not experience a whole new industry? Since few months I am part of the amazing CrossLend team sitting in the futuristic Sony Center at the heart of entrepreneurial Berlin.

So what do we do?

Undoubtedly money is the rocket fuel for business growth. Lending in the form of SME, mortgage or consumer loans is an essential vehicle to maintain consumption of goods and services. CrossLend provides a solution to redefine the lending economy as we know it for both consumers and business. With its unique securitization service it allows to convert loans into bonds and thus gives investors access to asset classes unavailable before while enabling financial institutions to grant more loans.

Unequivocally identified as a truly innovative company, I am really happy to be leading the digital effort at CrossLend. And for those who want to join our amazing technology team feel free to apply through our careers site. We are looking to grow our team of product managers and engineers with financial services background.

What not to do in your pitch deck

I get about 1-2 pitch decks a day and it is a matter of great discipline to walk over all the slides and keep your attention span. So before I move on – please keep in mind that investors do not spend hours re-reading your deck. It is more like a one time fast-paced read to understand what you want to do, if it is going to fly, does it fulfill their investment hypothesis and if someone will buy this for $$$. And may be a re-check of a certain slide plus validating some numbers.

Now let’s define what is a pitch deck. You have an idea and have done research. You have a team of friends and/or colleagues who you trust and believe will lead this to success. I hope you also did market validation before quitting your job. Then you put this in 10 slides and include your business model, financial projections, roadmap, competitor landscape. The latter will be repeatedly revised afterwards and highly likely will steer your product in a new direction. So – this is the uncertainty part and investors know it.

Bottom line: make it clear what you want to do and why it should matter for a particular investor.

Now here comes the promised short list of things you should not do in your pitch deck:

  • DO NOT clutter your slides with tons of text and information. Sorry, I just get overwhelmed with different fonts and pics and all the things YOU consider important. You will spot if your slides are too informative if people start asking questions to which you have stated the answers earlier.
  • DO NOT identify huge market and reserve a cut of it while not establishing a link to why this market might belong to you one day.
  • DO NOT miss out what you will do with investors money and how much you need.
  • DO NOT forget your roadmap. This will usually make it clear for an investor if you are realistic about what you do.
  • DO NOT render your competitors impotent. Respect them.
  • DO NOT throw in the face of your investor answers like “You have not read this and that in my deck” when asked about things you apparently have mentioned somewhere. First, it is not polite, second, we do sometimes validate what you say, sometimes we just did not see. We are humans after all.

Looking forward to some more suggestions to add. Just drop me a line in the comments.

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See you soon!

First Techstars Demo Day in Berlin

The first Techstars demo day in Berlin was something! I know it is Sunday, I will be quick I promise. 🙂

Techstars Demo Day 2015

Hosted in Hebbel-Theater in Berlin’s Kreuzberg district Jens Lapinski and his team presented their first batch of startups. The gorgeous Art Nouveau styled building was built in 1907/1908 and was the early and unique work of the famous architect Oskar Kaufmann. It was the breakthrough that shot him to fame. Let’s wish the same to the first Techstars batch!

The startups pitched in 2 batches of 5 and the presentations all looked super well done – for me this means crisp, elaborated and well timed. Founders walked to the stage accompanied by the thundering tunes of charging music pieces and presented with a sleek looking deck of slides outlining market opportunities, user growth, expansion plans. The best part though is that at least 2 of the companies have secured funding during the programme – 1x Seed and 1x Series A. You could feel that some founders are still fundraising and pretty nervous. Yet, I am confident that more news is coming soon.  I have seen the products of these companies 3 months ago and am amazed by the progress they have achieved.

Jens has closed the demo session with some kind words to all involved but I would like to share one of his slides summarising the Techstars values.

Techstars principles

 

Powerful message – nothing to add!

That was not all though. The event moved on in the Factory Berlin and continued with networking first and last but not least – an afterparty .

It was a well spent day 🙂

Good luck to all teams, and keep sending me updates. Looking forward to hear from you!

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Have a great rest of the weekend.