Subscribe
Share
Share
Embed
Bad Startup Advice is a parody of the ego-bloated founder-worshiping world of venture-backed tech startups.
Each episode begins with authoritatively phrased (but ironically bad) advice on difficult & nuanced issues every founder struggles with. After the jokes, we put our serious hats on and discuss the topic more honestly.
Your host is Paul Koullick, founder at Keeper. Guest appearances on every episode of other venture-backed tech founders.
Paul: sometimes I just, I look at
all these other founders, right?
Jeff, mark, Larry Sergey.
Our peers and I just think,
man, those guys got so lucky.
They really did.
Yeah.
It all just comes down to that first idea.
They were just at the right
place at the right time.
It's crazy how nobody thought
to put stores on the internet.
Like of course.
That's gonna be a trillion dollar business
welcome to Bad Startup Advice, a parody
of the ego, bloated, founder worshiping
world of venture backed tech startups.
Each episode begins with authoritatively
phrased, but ironically bad
advice on difficult and nuanced
issues every founder faces.
After the jokes we put our serious hats
and discuss the topic more Honestly.
I'm your host Paul.
I'm the founder at Keeper.
I'm an innovator.
I'm a visionary.
I'm a tech messiah.
I started coding when I was six years old.
Anyway, with me, is David
also founder at Keeper?
Yeah.
David: I'm all of those things as well.
I started my first lemonade
stand when I was five years old.
I haven't really looked back since.
Paul: Yeah.
Did you end up selling that business
David: or yeah, I sold it to my mom.
Yeah.
7, 7,
Paul: 8 figures.
Yeah.
Something like that.
Yeah.
Yeah.
It's not bad.
Not bad.
For a first business.
David: Yeah.
You gotta sort somewhere.
Paul: episode number one.
Your idea is the only thing that
matters so building a startup
is a highly linear process.
This is something people
don't understand, right?
And the first point in that line is
having the perfect startup idea it's
like finding true love . You see it from
across the room, it touches its hair and
you don't have to think about it too hard.
David: Everyone Has their own perfect
startup idea and really only one.
That's the thing.
Yep.
Yeah.
If you missed your chance, it's over.
Yeah.
You might as well just be middle manager.
Generally speaking, there
are, there are three real time
tested methods here, right?
Yeah.
So the first one is the
god mode spreadsheet.
You got your roses with with
all of the solutions, Yeah.
nlp,
Paul: ocr, social network,
cryptocurrency, distributed ledger,
David: those are the
tools that you're toolkit.
Yep.
and.
in the columns you have
every possible industry,
Paul: the bigger the better, right?
Healthcare, shipping, logistics
janitorial services, productivity.
Yeah.
David: Think outside the box, right?
China.
China's.
China's a column.
China's a good one.
Yeah.
Paul: And then you just play bingo, right?
Facebook for dogs
David: Like n o P in China?
Paul: Or marketplace
for toiletries, right?
Yeah.
It just becomes really
simple to mix and match.
You wanna have a hundred rows
and a hundred columns at least.
And then at that, it.
That's where the art comes into play.
, what I like to do is I put it up on
my screen, and then I just take five
steps back and I take off my glasses.
Yeah.
And I just I just see if anyone.
Pops
David: out, and this is where
Zucker brings a genius, right?
Like that spreadsheet's gonna be huge.
So really what you wanna do
is put on your Oculus yeah.
Get that spreadsheet in the metaverse.
So you create a hallway of ideas,
ideal hallway, and so you're just out
there you're, you have your goggles
on your hands and arms are in the air.
Yep.
And you're just feeling out
Paul: literally it's like twister.
Whatever your.
Is on.
That's a good idea.
That could be the next billion dollar.
Yeah.
I think the other.
To keep in mind, David, I really like
to advise the method where you pick
something, you know nothing about.
Yeah, but it has a large market size.
Think like hundreds of
trillions of dollars.
Because you are a tech genius, right?
You're gonna step into that industry
and naturally be an innovator.
Whatever you've learned in the past
about an industry, it's gonna hold you
David: back.
Throw it out.
Yeah.
Right away.
Yeah.
It's why the world
exists the way it is now.
Yeah.
And not the way it should
Paul: be.
Everybody else is an idiot.
That's the thing to remember.
If you're gonna be a visionary founder
,
yeah.
Okay, So you've got your perfect idea.
David.
What do I do
David: now?
Yeah.
So the next thing you do
is you don't tell anyone.
Don't tell.
Yeah.
That is a classic founder mistake, right?
Oh my God.
You go and tell your, I don't
know, your wife, your husband.
Yeah.
Your close friends.
Don't do it.
Next thing you know, you
have a dozen competitors.
Yep.
Paul: cuz the way that
things work, right?
Everybody wants to be a founder.
Right?
Everyone worships us.
So I think if they find out
that you have an idea, right?
They're gonna, they're
gonna quit their jobs
They're gonna go and build your dream.
David: Immediately it becomes a b
line, sprint to the finish line.
Even
Paul: investors, a lot of investors
actually secretly want to be founders.
David: Yeah.
That happens all the time.
They're all the time.
Yeah.
This is classic founder tragedy.
That's why
Paul: I never say what we're doing.
It's always
David: stealth.
Ideally, you don't even tell your users,
your employees, the best companies.
Yeah.
Like they pivoted, they
claim to have pivoted.
Like you have your Slack they
were working on the video game.
Next thing they're messaging app.
No, come on.
They knew what they were doing.
That is genius.
One of the stealthiest moves
Paul: I've seen.
Yeah.
All right, jokes aside, start up.
Ideas are hard, there's no formula.
I do think there are a few principles the
first principle is founder market fits
David: so contrary to our bad advice
from earlier, your individual
expertise does really matter,
Paul: I think this is a common
mistake that I know I made
There's this assumption that just
because I don't know about something,
therefore I maybe were the first ones to
think of it and that's just never true.
. Yeah.
If you're actually the first one to think
of something, it's probably idiotic.
That almost that never happens there
are so many founders just try
Googling . I know it's scary when
you have an idea you wanna pretend
like it's gonna be the only one.
It's actually crazy
how often that happens.
David: Yeah.
I go out there and I'm like, okay, what?
This thing should exist Does and it does
Paul: exist.
It does.
Of course it exists.
Of course it does.
Yeah.
Yeah.
And so that's why there are thousands
of travel apps and food delivery
apps and note taking apps, and.
Marketplaces for task rabbits and,
just there's a lot of founders.
Yeah.
So yeah.
So you sit down and you think,
what is my uniqueness as a founder?
and ideally it's uniqueness
from other founders, right?
Remember the founders are
mostly, privileged straight,
single males in their twenties.
So think about what
makes you different yeah.
It has to be some uniqueness.
So make a list of your.
Past work experiences.
What did you do?
What frustrated you most about that work?
Hobbies.
I think the second one is staying humble.
And the theme here is, there's this
inherent, drive to just ignore,
like not actually research it
David: There is a tendency, I
think, for folks that rush to
build , and it makes sense, right?
It makes sense.
Like you're, as a so founder,
you, you are a builder.
Paul: It's a lot easier to just be
building something than staring into
the abyss of wow this might be hard.
But the thing is, you have to do
both . You have to spend some of
your time staring into the abyss.
And you have to build it.
You can't do one or the other.
Remember that ideas evolve.
Whatever you thought, sitting your ivory
tower would solve a particular problem.
There's a good chance it doesn't.
First of all maybe that problem
isn't actually a problem, or maybe
the solution is way less interesting
David: than you had hoped.
And this kind of leads into
our next point, which is
contrary to the secrecy at all.
At all costs method.
You do actually, what you wanna
do is actually talk to everyone.
Everyone.
The reality is that, no one
wants to steal your shitty idea.
No.
Even the best ideas, like at
some point you're gonna have to
ram it down people's throats.
yeah.
And, , and so what you really want
is as much feedback as you can get.
Paul: Yeah.
I think the key to doing this
successfully, is a skillset that
think is maybe the most underrated
as a founder that I know I have
struggled to build, over the five
years that we've been doing this.
But it, but is the most
important skillset in my opinion.
And it is, separating your
ego from the business, right?
It's knowing that, okay, I'm gonna pitch.
And maybe I'm wrong, but that
doesn't make me an idiot.
That doesn't mean that I'm stupid for
having talked to all my friends about
this, and then two weeks later be like,
psych that I'm not doing that anymore.
It's okay.
Yeah.
It's hard
David: though because obviously
there, there are times where
you've, you feel like you've.
Sunk, yeah.
A decent amount of time and effort.
And so if the feedback comes, back
pretty negative it can hurt, but it's
important to keep that perspective.
You're trying something different.
Yeah.
Difficult And you have to
be open to the possibility
Paul: you're wrong and you are
gonna get criticism, right?
Unless they're trying to be nice to
you, which is a useless conversation,
you're gonna get some version of,
oh, the market size isn't big enough.
How are you gonna make money?
What about the competition?
You're gonna get some version of that
and so if that dissuades you, that's
probably a sign that you shouldn't do it.
you should get to a point, you
should talk to everyone about it.
Where you've heard all the, yeah,
you've heard all the responses.
You can answer any of
those questions yeah.
You've got rebuttals and you're
comfortable with the fact
that no one actually knows.
Neither do you this is
the risk you want to take.
Yeah.
The,
David: Realistically the best.
Spot you can end up in is there
are a couple of underlying
assumptions to your idea Yeah.
That are somewhat unknown and you
have a hypothesis or thesis on
the market or a particular angle
and you're willing to defend that.
And some folks are gonna disagree.
Oh yeah, they should.
Paul: Yeah.
The other thing you'll wrap your head
around as a early stage founder is
just the dynamics of venture capital.
Unlike a lot of activities in
your life leading up to this
point that had a high chance of
success, and some predictability.
This is an activity that is designed
to have a 5% chance of succeeding
and turning into something valuable.
Yeah, if you're lucky, I think
if you're lucky, 5% chance what?
Have you ever done anything in life
that has a 5% chance of success
but committed wholeheartedly thrown
away your life for this thing.
You don't do that.
And so it's just a very weird thing to
get used to, and 5% is great by the way.
Because, that's why Inve venture
capital exists is because that
5% has an outsized, a hundred x
return, which makes the EV worth it.
Yeah.
David: And that's another important
point, which is you don't need
to prove with certainty that
you're gonna make it right.
Yeah.
The flip side of this is VCs know
that the best a startup could do
is have a 5% chance of success.
Yep.
And so it's okay if there
are serious unknowns.
For a vc.
It's fine they have their risks
spread across a portfolio companies.
Yeah.
And so you shouldn't feel.
you need,
Paul: Certainty.
Yeah.
I actually, I think it's much more
impressive to just dig up the bodies
and put 'em right in front of the person
you're talking to and identify them.
Be like, look, here are the
three reasons not to invest.
I used to pitch like
this during seed, yeah.
You shouldn't invest if you don't think
that, the market size is big enough
just pull those things forward and
have a mature conversation about it.
Because I think what happens to a lot
of founders is that they try to hide
the things they're uncertain about
and it causes their pitch to be weak.
It makes the person listening to 'em
not trust them because they can tell
that you're trying to hide something.
David: A lot of times the investor
can tease out those concerns and
so the fact that you're trying to
sweep them under the rug, in the
best case, makes them not trust you.
But in the worst case it means, they think
you don't understand your own business.
Paul: Yeah, I feel like
early stage investing is 90%
psychology and 10% actual logic.
No one actually knows what's gonna
work and what's not gonna work, but
they are reading you as a founder, are
you trying to run away from the truth?
Are you lying to yourself?
Are you, able to stay
confident in the face of unc?
that matters in many ways.
A lot more than the idea.
Yeah.
So we can talk about a
few more specific things.
When we went through YC in 2019, there
was definitely a theme in what investors
wanted to invest in always gonna be true.
And so in our case, the theme that
I, that shocked me as a founder
was that basically 80% of the
companies in our YC batch, were b2b.
And I remember thinking like, like, why?
But you would think that more people
would just build for the consumer.
Like it makes sense.
There's a lot of huge consumer businesses.
Like why build b2?
And I think this comes back to this
fallacy that we alluded to in the bad
advice section, which is that, a good
startup idea isn't just like some gap
in the world that you want to fill.
There has to be a reason
why it's venture backable.
And it just so happens that B2B is
a lot more venture backable because
of the network effects and bottoms
up approach that a lot of enterprise
software could take, which just
didn't exist in B2C in the same way.
Yeah.
Keeping in mind that just because
there's a problem, and just because
you have a better solution doesn't
mean it's a good venture back.
But
David: what are your thoughts?
So what are your thoughts
on catering to that?
So there's a world in which
you say, look, here's what VCs
right now are investing in.
Do I want to proactively pursue
a business idea in that space, or
is that kind of an independent.
Ax axis.
So my, my example here is in 2021 there
was definitely a flurry of startups
that kind of did Neil Bank credit card?
FinTech and these companies
raise a ton of money.
Yeah.
But now they're all in a dock fight.
They're, the competition is super stiff.
None of them have any moat.
And it's yeah, they raise money.
But are they actually better off for
Paul: it?
Yeah, hindsight is 2020, but I'm
trying to think of the counterpoint.
I'm trying to steel man this are
there cases where everyone was
doing something and you should
too, delivery apps, , probably not.
Are there any cases
David: If you can actually win
in the space, the thing is there
is gonna be a winner probably.
Yeah.
And so you're gonna get this survivorship
bias where the winner is gonna go out
there and say, look, I was, that's true
here at the time, the trend materialized,
Paul: so it's, yeah, I guess that's true.
Amazon wasn't the only, there were a
bunch of e-commerce startups at the time.
I think.
You better be confident in
your abilities as an operator.
In those industries, oftentimes the
competitive advantage is raising
more money and hiring better people.
And so if you have a competitive advantage
in those things, then yeah, go for it.
And,
David: and being a great operator
that could go to the market.
It's a dog fight you
have, it's a dog fight.
Yeah.
It's about getting market share.
Paul: I think that's a fallacy that
a lot of people make because they
think oh, an idea is as simple as just
picking a trend and then pitching it.
Technicians will always frame a fundraise
as this is a a chat, G p T based concept
marketing, vertical SaaS platform.
And you, and it'll be framed
as they must have just started
with , what can we apply chat TBT to?
The hammer looking for a nail.
But I think the much more realistic thing
that actually happened with Jasper was.
They were experts in selling to
content marketers and building
software for content marketers.
And then they just happened
to apply this tech to it.
so I think it's much, it's a
much better idea to start with
a problem than the solution
David: based.
It actually happened for us too.
So we started with like finding
write offs for freelancers.
And we do use GPD three now and so it
was a nice case where this was a tool
that could augment our product, but
definitely not the other way around.
Paul: I think it makes fundraising a
little bit harder because investors
don't have, they can't look at
someone else that raised on these
terms and make a comparable deal.
They have to evaluate
it from quote unquote
David: first principles.
Paul: So let's talk about,
so you have your idea
let's talk about what that moment
feels like the sort of true love
moment of, of being a founder.
what does that look like?
What do you do next?
How do you know David?
I don't think you
David: do know.
Yeah.
I think I think there was a lot
of uncertainty the whole time.
Yeah.
, I don't know,
Paul: years, three years,
.
David: Yeah.
I think it's actually a fallacy
to to say, oh, at this point in
time, yeah, I had it written on
my napkin and that's when I knew.
Yeah, I think you have the idea.
You've talked to people.
It seems like there's something
to it, but there are some obvious.
Big concerns.
Yeah.
You go and look at those concerns you
alleviate some of them new ones come up.
It's just a constant iterative
Paul: process.
Yeah.
And I think that the challenging
thing, we had this moment where
we had raised money, right?
And we had this idea and it was
like, all right, it feels like you're
sitting on a secret and the secret.
This is a stupid idea.
. Yeah, exactly.
And think it's important to just, it
took us a while, but we eventually had
a narrative, an internal narrative,
where we picked a direction.
Our job is to run in that
direction and find out if there's
anything at the end of that road.
David: Exactly.
I think this goes back to the
5% probability of success.
Yeah.
I think it's okay if you yourself
believe that it's only, hopefully you
believe it's higher than five, you can
have ex extreme doubt yourself about.
Yeah.
Yeah.
Paul: And that's not, the other
tricky part is obviously as a
founder you have to be persuasive.
And if you're gonna get anyone
to, join your shitty company, you
have to be passionate about it.
And the trick there is don't try to
pitch your solution . Pitch the problem.
Yeah, pitch the problem.
Cause that's the part
that's actually true.
You don't really know if your
solution is gonna work or not.
You can talk about like the traction
you have and the vision you have
but spend most of the pitch getting
'em excited about the problem.
Yeah.
That's the way to stay authentic while.
I think what a lot of founders do is
they make the mistake of thinking that
their job is to be heman for everything.
Like they're infallible.
Their solution is perfect, and no
one will join them unless they also
understand that the solution is
perfect, which is just not true.
You're just, you're setting
yourself up for failure.
Yeah.
Yeah, I think you're right David.
You really won't know.
We have this moment where we,
our retention just wasn't good.
Yeah.
Like really bad.
Like people, people were
just leaving in drove.
And we have this, leap of faith
moment where we're like, okay.
I guess if we just keep
improving the product.
Yeah.
Is this fixable or is this
existential Yeah, at some point.
Yeah.
I guess they'll stick around and Yeah.
And, look, we're not some shining, example
of the perfect unicorn, but it was true.
Retention did improve and
you don't know until you.
Yeah.
And then of course, this is the classic,
strong opinions, loosely held thing, but
some amazing companies were built who did
give up on their initial idea, who stopped
running in a direction and pivoted.
So keep that in mind too, good luck.