The 10 most important things I learned, while building my first startup – Part 1

Part One: Building a Startup: Co-Founders, Team and Efficiency

///This is part one of a three-part series. Enroll to the newsletter, to not miss the other two parts///

I was finishing up one of those overpriced fruit smoothie at the Cosmo Bar Barcelona and thought: “You can’t really effort this pseudo-healthy hipster drink anymore. It is time to switch to water again”.

Just one more week. If we wouldn’t have our seed capital on our bank account in seven days, we would stop working on this idea and move on. This time for real, stop the idea of building our own startup in Barcelona and move on with our lives.

At the very thought of going back to a stable 9 to 5 job my stomach started hurting again. That’s why I turned around one last time and called out to my two German colleagues: “We gonna make it happen!”.

At this point the three of us where working on an technical MVP for about 3 months, had run test marketing campaigns and actually evaluated the legal situation of our business idea. On-demand house cleaning. We wanted to disrupt the black market in Spain (and later on Southern Europe) and bring house cleaning to the 21th century.

Minimal Viable Product on whiteboard
Building MVPs and planning initial launch can get a bit messy. Try not to lose track.

Even though the negotiations with some well-known former Rocket Internet MDs where going well, they were not going at the speed we were hoping for. Week over week we were sitting together, discussing conditions and drafting term sheets.

We knew each other exactly for this three month, were financing the whole thing by our self and were seriously running low on cash.

Fast forward 1.5 years. The three of us are sitting at a table in a Vermouth bar in Eixample, Barcelona. A place where we used to come quite frequently at the beginning of our journey. We just bought one of our biggest competitors: Rocket Internet funded Helpling Spain. GetYourHero is very much alive and thriving.

We are running our on-demand cleaning business in Spain, Italy and France and have more than 20 great guys sitting in our office in the heart of the Catalan capital. Earlier this year we raised our first bigger investment round of 2M$.

Behind me lie the most intense 18 months of my professional and personal life and I learned more then I could have ever imagined.

Online Startup in Barcelona
Part of the GetYourHero team in Barcelona

While the learning curve is still steep and the ride still wild, I want to pause for a second and share the 10 biggest learnings of this time with you.

1. Team, Team, Team

I can’t emphasize this point enough. Your startup is your team and your team is your startup. Not the assets, not the technology, not the market. At least not at the beginning.

We were lucky enough to have a strong founding team with a diverse background. We had a financial analyst with experience in an operational heavy business, as well as a marketing expert on board. I brought in the necessary technology and sales skills to the table. This setup helped us to both, execute fast and capture the attention of early-stage investors.

Even though, we barely knew each other, we clicked and were able to collaborate efficiently from day one. Some people say: found a company with someone who you really know. Otherwise you might be in for a surprise. To a certain degree this makes sense. After all, you will spend quite some time with your co-founders over the next months and there will be tough times and decisions ahead of you.

I, however, did not started GetYourHero with two friends. I didn’t even started it with people I knew very well. After all we just met a couple of weeks before on a conference.

In retrospect we took a huge gamble on this one and I understand everyone who would not go down this way. The chance to discover sides on your partner that only show when hard decisions have to be taken, is high.

But in business as well as in my private life I tend to trust my gut feeling. And my feeling was good.

Startup Bootstrapping Rules
Bootstrapping: no office, no problem!

In the last 18 months I spend more time with my co-founders than with my girlfriend (I still thank her for being so understanding). We are still joking that we are kind of married. And it is true. I never faced more up’s and down’s before. I won’t lie, there where times where the shit was about to hit the fan and we, for sure, had our fair share of differences.

But up until today, we stuck to one important rule, that we established early on: two-against-one. As soon as two out of us shared one opinion, we went along with the decision. Even though one might does not agree with the decision, we always acted with one voice to the outside world.

A strong and united standing founding team is the foundation of every working organization. I am sure you heard that before. And that’s because it is true.

2. Team. Again? Yes, again!

Initial funding: check. Finally we can add some firepower and hire some guys to help us build our vision. Uhu, right. If you think you have a bunch of talented folks working with you the next day, think again.

Even if it sounds counter-intuitive and seems incredible slow at the time, here is why you actually should take your time before you do your first hires.

You are working with limited resources. Every Euro invested in your people must return more Euros. Hiring and firing is extremely time-consuming and costly. You just don’t have this time and money to be wrong too often. We were working with a lot of people during this journey and the following was almost always true: the more careful we selected during the hiring process the the happier we were with the result.

Or to put in other words: whenever we hired fast and needed a solution rather yesterday than tomorrow, we got disappointed. This is by the way a two-way road. Neither we nor the person we asked to work with us, were happy and the relation didn’t last too long. Earlier this year I wrote an article on how to find the right software developer for your startup. Whenever I followed this framework I was very happy with the outcome.

Think you can’t afford to take your time, because your investor is putting pressure on you? Airbnb actually took 5 month to hire their first employee. Airbnb is evaluated at $24 billion. If they can – you can.

Hiring an employee is expensive. It is estimated that it costs $4,000 to find, train and supervise a new employee.

Another crucial finding, I learned to understand early on was: hire people that are better than you. Yes I know that many managers want to be the sole show master and are intimidated by hiring people that are better in some ways. But then again, I know a lot of bad managers. If you think about it for a minute, it makes an awful lot of sense. You want to be surrounded by great people, that bring you and your company further. After all, what good is it if I have to spend a lot of my time explaining what I expect from my team.

Instead of being afraid, I rather take it as a compliment when I manage to convince someone to join my cause, especially if he knows more in certain areas than I do. In the end I even learn a thing or two on the way.

Even if you put your best efforts into hiring, sooner or later you will end up with one, two people in your team that you thought would be a great fit, but are really not.

At this point its time for an old but golden advise: fire fast. There is nothing wrong with that. In fact, its the only right think to do. If you think you better keep someone around because you already invested so much time and money in hiring him, you should read up on the sunk cost fallacy.

Startup office
First own office. Small opening party with the team – can you feel the excitement? Celebrate the small wins.

Once I acted against my own advice – twice. First, I hired a young software developer, even though I was not a hundred percent convinced of his skill level and cultural fit. At this time we were in dire need, so I gambled and took the risk. It took me less than a week to realize, that he could never catch up and contribute to our fast moving development habits.

Secondly, I waited too long to let him go. I was not happy with his work and he knew that. He didn’t feel respected, supported nor motived to deliver better results. I didn’t want to invest more time to make him better. In the end he gave up and left the company frustrated.

Mediocre or bad people are harming your startup for two reasons: first, because they attract other mediocre people and second they can be toxic for your company culture and bring down your other team members.

My advice: hire carefully (and slow), give (and receive) constant feedback and fire fast if you see the need.

3. Getting things done yourself is different than managing people to get things done

Boom. Today we released a new feature, went live with a new Facebook campaign and on-boarded 3 more cleaners. Today was a good day.

Back at the beginning, when it was just the three of us, we moved so fast I thought we would run out of tasks in a couple of weeks. Obviously we did not. But gosh, we were extremely productive. Everybody knew what he had to do and executed. Getting stuff done is such a great feeling.

I remember that one day, after we interviewed a couple of candidates for the head of marketing position, I thought: “Once we found the right guy, we will take off even faster”

I could not have been any further from the truth.

Team Productivity vs. Team Size
Team Productivity vs. Team Size does not scale in a linear matter

Why aren’t the guys we were hiring doing the things how we planned them to do it? Why does something that took me one hour all of a sudden take a full day? Did we hire the wrong people?

Obviously not. While I knew exactly what the expected output of a certain task was, my new team members still needed to get to understand what I was expecting from them.

The problem was not them – it was me. I assumed people would pick up where I left the work and just continue in the way I was working. On top of that we were at the very beginning – a phase I always refer to as the positive chaos period. Some of the early employees of GetYourHero might have used a slightly different wording.

I as a founder have the vision clear in front of me and are ok with changing course every now and then in order to adapt to new developments. It’s a complete different thing to make your team members share this vision.

The good news is: it got much better with time. Processes got standardized and people learned what level of quality and work effort I was expecting and adapted accordingly (or left). And of course, I got better. While I still enjoy working very much hands-on on a daily level, I developed tools and skills to coordinate my teams and get things done.

Remember: Employees add organizational complexity and communication overhead.

Build a startup
Hands-on building an MVP by myself very much at the beginning

It may sound counter-intuitive at the beginning, but adding more people to your team will, in the short term, slow you down. I had to free time to explain, train and supervise my personal. All things I obviously did not have to do when I only worked with my two co-founders.

Hence, try to hire as late as possible and only consider it, once you literally can’t handle the tasks yourself anymore.

In the second part of this series I talk about how cooking by the book increases your team’s performance and how you decide which actions work and which do not.