The Startup Espresso Podcast

 

🐼 PAUL: (HTTPS://TWITTER.COM/PAUL_TIRBAN)

It’s Paul.

 

🐿 FLORIN: (HTTPS://TWITTER.COM/FLORIN_MURESAN)

It’s Floryn. What are we grinding today?

 

🐼

Hello there. We are back. This week with a small delay.

 

🐿

What delay?

 

🐼

Well, in a startup one day, plus or minus.

 

🐿

Yeah, I know, right? It’s the same quarter that we initially had planned, so it’s still quarter one. I think we’re on track with this episode.

 

🐼

Yeah, it’s the same week and the bug in production on our farm app is fixed.

 

🐿

I mean, it’s the same week, so it means that we are spot on, right?

 

🐼

Yeah.

 

🐿

It’s the same sprint.

 

🐼

Hopefully, we’ll be live in the same week.

 

🐿

Yeah, hopefully.

 

🐼

You need to do the description of the episode.

 

🐿

Yeah.

 

🐼

No.

 

🐿

Pressure. I will describe it perfectly in a couple of seconds while I’m uploading the audio to the platform.

 

🐼

It’s.

 

🐿

Not going to work out for us.

 

🐼

Actually, you made quite a good coffee today. What do you plan to grind today? What do you want us to talk about?

 

🐿

Thank you. We should talk about techniques to validate your startup idea.

 

🐼

Techniques like by the book?

 

🐿

Yeah, but it’s not going to be the most comprehensive ultimate guide in the universe. This is just what techniques, what types of tactics or what would be your general strategy when going to validate a startup idea?

 

🐼

Basically, we plan to brainstorm a little bit how we plan to validate or how we would validate in this moment some ideas. A couple of ideas. Generally. And maybe later in the episode, taking some particular ideas.

 

🐿

Yeah, definitely. In this episode, we’re going to have six startup ideas chosen randomly. We’ve never thought of them before during this episode. And we’re going to start thinking on how we would validate those ideas to actually build a startup around them.

 

🐼

Keep listening because we will talk about AI, smart assistant, personal cars.

 

🐿

Good keywords, yeah. Fintech and blockchain. We’re going to say something about blockchain and food delivery and personal car sharing and sharing apps and the stuff where everybody uses the same things in common and they don’t create a lot of waste.

 

🐼

The first question for you, what are, let’s say, top three ideas that comes now in your head to validate the next billion unicorn idea?

 

🐿

Customer development. Always Steve Blank’s idea of customer development. That’s always my number one thing. Then I don’t use forums. People don’t use forums anymore.

 

🐼

Customer development, forums. Yeah.

 

🐿

Maybe even keyword research to see if there is a particular need that people already know how to express and they’re actively looking for solutions on search engines.

 

🐼

You said about forums, can you give more details, like how would you do it?

 

🐿

Yeah. A lot of internet marketers that I knew back in the day, they had the capability to create products, internet based products. Even though they weren’t very advanced from a technological standpoint, they used forums to identify where people have certain problems. So a lot of people go to forums and they start describing pains that they have, like really big problems with different software or different jobs or different activities that they have to perform. And they go around, they complain that, Hey, this is so stupid. Whenever I do that, this thing occurs and this thing occurs and it’s so frustrating and I have to do this on and on. And it really pains me. And oh, my God, why does it have to be so hard?

 

🐼

Basically, are you saying that, for example, if I’m quite a good developer and I’m looking to build some app and instead of having, I don’t know what idea, to actually look on these forums for an actual problem that the people have?

 

🐿

Definitely. Definitely. Especially if you see a lot of people who express that problem, it means that you already have a lot of people whom you could contact to get on your calls so that you can interview them more about the problems and the ways that they currently try to solve the problem.

 

🐼

So the first step in this situation with the forums would be that I see the problem that the people have identified those people, and you said that you call them, so you contact them.

 

🐿

Yeah. And you either contact them via the private messaging on forums, or you try to spy for their email address, or you stalk them on Facebook or LinkedIn. You do something like that. And a lot of people, they are afraid to talk to other people, but if they complained so much, either on social media, because sometimes people complain on Twitter, if they complain that much on Twitter, on forums, on Facebook groups, on LinkedIn groups about something, they will definitely want to hear that you’ve also experienced the same problem and that you think that you might have a solution and you want to discuss it with them to see if you’re on the right track or if you’re not basically doing anything right. Because if you put a problem like this, people will not immediately get on the defensive because they don’t feel like you try to sell them something. They feel like you want to get them involved in creating this magnificent thing that would actually change their lives. Because remember, they are complaining about it and they need a solution for it.

 

🐼

Basically, the take out from here would be like in the first call, at least try to understand them and their pains and not trying directly to sell them their idea and to make them commit to the idea.

 

🐿

Don’t even show them screenshots or anything. Just try to better understand the idea, how they relate to the idea, how much of their life is involved in that idea. If this is a problem that they present to other people, if they talk to other people about this problem, or if it’s something that’s super personal and only for them, you try to get a feel of how much that problem impacts their lives. And of course, the best thing to validate this would be, does this problem manage to get their attention so much that when they think on an active basis like, what’s my biggest problem in my life right now? This problem would be in their top three problems that they think they have. So of course, if you can do that, then that’s like the best startup that you could build for these people.

 

🐼

Do you think you could apply this in the B2B scene, for example? Because there it might be strange for some people that you go to a business and ask them what’s your biggest struggle right now? Instead of going to selling them something.

 

🐿

No, not really, because you don’t ask them what’s the biggest struggle. You already tell them that you know about that struggle and that you want to learn more about it. So in my case, for example, Mailchimp completely sucks at list management. So I complain a lot about list management and Mailchimp. I do that on a very constant basis. And of course, the other email apps are even worse than Mailchimp. So it’s not like Mailchimp isn’t the leader. It’s the leader, but it’s still doing things wrong. And I’m like, list management is the biggest pain point for me. And I would like to see somebody who studied the problem of list management and come and try to talk to me. And I would definitely talk to them about how I see list management, why I think this is a problem, what solutions there are to this, and how you could do it more efficiently. And then, of course, they could pitch me on a product, but they shouldn’t do that because first we should really discuss about list management. And this is a bit of a product because I don’t need list management in my personal life.

 

🐿

I need it to better communicate stuff with the audience that we have at S quirly, right? I don’t need a list with my grandmother, with my grandparents, with my father, with my child, because I know them.

 

🐼

Hopefully, you don’t want to be in that situation in which to use a list for this.

 

🐿

Even though I’ve got pitched at one moment on an app that reminded you to call your friends and your parents.

 

🐼

Not calling them for you, so just reminding you. So you need to do some effort there.

 

🐿

Yeah. Hey, you haven’t called your parents in a while, you should call them.

 

🐼

Regarding this part with the calls, how do you see, for example, calling businesses or users just to say them, Look, I have this product. I give it to you for 10 bucks and solve you this issue.

 

🐿

Oh, my God. It’s so bad.

 

🐼

Why?

 

🐿

Well, first of all, because if you’re calling a company and you haven’t done your customer development or any pre validation prior to this.

 

🐼

Yeah. So I’m talking about cold calling, so no contact before.

 

🐿

Yeah, that’s horrible because I would call somebody at a company and maybe they’re the person at the reception desk who never had the problem with managing the annual evaluations of the employees. So what could the person at the reception desk tell me about evaluating employees? Then maybe I would actually call the VP of sales at that company who doesn’t give a damn about managing the evaluation of the performance of the employees, or I could speak to the person doing their logos and their graphic design and they still wouldn’t care. I would talk to their developers, I would talk to maybe their logistics experts, and they would not care about the evaluation of the employees because that’s not what they do. That’s not the job that they would perform. So if I call, call, they will obviously tell me that they are not interested, and of course, they wouldn’t be interested. That’s just sound logic.

 

🐼

So find the right person and talk with the right person, like not with your family, friends, and the receptionist on a cold call.

 

🐿

Yeah. And I mean, if you’re doing cold calls, you need to really find the right people. Otherwise, you’re just wasting a lot of time and you’re getting a lot of negative feedback that you shouldn’t be getting. But you’re getting it because you’ve been asking for negative feedback deliberately. You just didn’t know it.

 

🐼

I know at least for the young founders to say like that, it’s a struggle this first contact because I know that, or I assume that this person have a certain problem, but I find them on LinkedIn. I don’t know how to contact them.

 

🐿

Yeah, and that’s mostly because you just assume that they have a problem, you don’t know if they would have that problem.

 

🐼

In order to find out, should we just pass over this fear of not getting the answer or something like that? I should say just, Hi, I’m working on this. What’s your opinion?

 

🐿

In my experience, it doesn’t really work that way. So you still have to really target the people that you try to call contact for the first time. So honestly, the safest thing is to do, try to actually network with the people for whom you’re trying to build the solution. You should really network with them beforehand so that you get five people that really get to describe that problem for you. You understand them better. And then when you will talk to other people from the same industry who have the same problem, you will be better prepared to compose a really intelligent message that would grab their attention. So in my case, I’ve identified a couple of, let’s say, buyer personas that would be interested in S quirly SEO, the first iteration that we’ve done. And when I’ve conducted them on LinkedIn, most of the messages that I sent got replies, which is really weird. Actually, I couldn’t even replicate that same effect with other products that we’ve tried because on the other products, I haven’t done the pre validation that I’ve just talked about. So that’s why it didn’t work because I didn’t know how to address them.

 

🐿

The way you address them makes all the difference. The way you place different words in the text might make them want to talk to you or go on the defensive. And if people go on the defensive or label you as a spammer, they will never get to talk to you. So you really need to know how to do this thing. Of course, in the book Talking to Humans, which I definitely recommend that you read Talking to Humans, that’s the name of the book, there is a method for how you could approach almost anybody and they would want to reply to you because you use some like, Look, I am doing this study. It’s for the university. It’s purely theoretical. Nobody’s getting any cut out of this. We’re just trying to better understand, blah, blah, blah, blah. And I saw that you may have relevant experience, so your feedback would definitely be valuable. If you have just like 10 minutes of your time, I promise I won’t take more. This is what we could discuss about and that’s it. And the thing is, relevant, you consider them relevant and their opinion would be valuable. So if you use these words, they have a much higher chance of actually talking to you.

 

🐿

And now if you really want to be a hacker, you could go to crystaln ose. Com and you could place the name or the LinkedIn profile of the person that you want to target. And then Crystal will show you exactly how to address that person to get a reply and believe it. You won’t believe it until you try it, but try it and then you will believe that it actually works. Crystal knows is amazing at these sorts of things.

 

🐼

They say you always learn something, so I’m really happy that we are doing this podcast because I didn’t know about this. I will give it a try.

 

🐿

Nice. I didn’t even know that I would talk about this. I guess it just naturally led to Crystal knows.

 

🐼

It doesn’t count as consultancy because we’re doing the podcast. It doesn’t count as consultancy, right? Because we’re doing the podcast.

 

🐿

So it’s a public advice. We’re not your lawyers.

 

🐼

We’re not your consultants. Don’t forget, so we’re just brainstorming some ideas. On this part, for example, since you said about the phrasing, it came to my mind now that in order to validate some demand, an idea that I think right now would be, for example, to make one or two ads, place them on Google, on Facebook, on Instagram, and see the results there.

 

🐿

Yeah, I agree with that.

 

🐼

Should I use soul on this part with the ads, I think, again, it’s quite important to do the research and who you target, right?

 

🐿

Yes. And you need to be extremely methodical about the way that you make these ads and very methodical about the way that you make the landing page to which you bring people through the ads that you’re building. Because if you don’t pay attention to the exact methods that you’re using, you might end up getting false negatives. No, I guess false negatives. I don’t know the word. But you might be getting the false answers and you think that, yeah, people don’t like it because of this, but they actually don’t like it because of another thing that you couldn’t find out because the whole way that you planned the ads and the landing page was wrong.

 

🐿

Okay. I’m not sure if this is really clear, but if people hate the idea because the image in the ad is bad and they don’t click because they don’t like the image or they don’t like the colors, or you’ve placed A B testing and A is completely different than B and you have too many variables between the two, you will never get a clear result on why people would prefer this variant or this variant. And you need to know what you’re trying to test and what you’re trying to validate. Are you trying to validate, let’s say, the way you present the business or the business itself?

 

🐼

Actually, we had this issue at startup week and we try to validate with the Google form and it was quite shitty because we didn’t have time to make a proper landing page and everything. We tried to marketing it with the Facebook ads.

 

🐿

What.

 

🐼

Happened? To get results. The issue there was the conversion was very low. But one of the facts was because we actually saw people looking at it, but not actually clicking on it. And it was like a question, why? Because in the previous discussion, there was interest, the message was clear. But actually to promote on Facebook via an ad, a Google form like a questionnaire, I think it raised some question marks on this part. Because on another example, from this startup weekend, for example, was the fact that we post the same Google form on some Facebook groups and it felt more natural. We just wrote a message there and the number of answers that we got were way higher. Really? Exactly. Basically, we target the.

 

🐿

Same same people. Exactly.

 

🐼

All right. On that part.

 

🐿

Yeah, well, it takes a while. Even if you try to do a validation, there are a lot of things to consider and a lot of experiments that you should run until you can actually say that the validation itself was a success because sometimes your process of validating the idea might be completely wrong, not the idea itself. And that’s what you have to plan for. That’s what you have to examineate the first time. Is my method that I thought about good enough to validate the idea? Because otherwise, I will think that the idea is bad. The idea is great. Just the validation process was horrible.

 

🐼

I think we can talk about this an entire day.

 

🐿

Yeah, I think so.

 

🐼

What do you think about taking some examples?

 

🐿

Yeah, maybe then we do another episode in the future that’s also about validations because I guess there are many more ideas now that we’ve actually started doing the episode.

 

🐼

Yeah. Actually, I think we just barely scratched the surface. It would be interesting to see what would you like to listen more on this. Just drop us a message on the Facebook or on the Twitter, and we can talk more in the next episode. Would you start with the food or with the AI tool?

 

🐿

Let’s start with the food delivery service, so that’s something easier.

 

🐼

Let’s pitch an idea. A food delivery service at your desk and the MVP will target the developers. Now, if you don’t know who the developers are, just think at the lazy people that are standing at the desk and they have a lot of money.

 

🐿

A lot of money to spend on any food from any city. How would you validate this idea? Would you just walk into an office, maybe the office next to you and just ask, Hey, developer guys, I have this new cool app. Would you want to order food from it?

 

🐼

I would start with the other part here with the restaurant. The first thing that I would do, I would take some contracts, I would go to them telling them that I would deliver your food for a 10 percentage fee and this is the contract we launch in next month. So if you want to be on it, you need to sign this.

 

🐿

So this is how you would validate this idea?

 

🐼

The part in which there are restaurants…

 

🐿

Interested in taking part in this?

 

🐼

Exactly, on this.

 

🐿

Now, actually, I know that some people listening to this might disagree. I actually agree because I’ve had a guy in my web design agency days. We’ve built a site for him, but we didn’t actually build the site because in the process of building the site, he said, You know what? I really need to validate this first. So that’s what he did. So he stopped the web design stuff and he just went restaurants asking them, Hey, I’m creating this very cool portal. There’s going to be a lot of people ordering food from this. Do you want to sign up? And he signed up in his prerelease. So he didn’t even have a release. He didn’t even have a prerelease. But he signed them up for the prerelease on about $200 each when he didn’t have anything. So by doing that, he validated the idea and he had money to pay us for the website, for the web portal. And he did this with a lot of restaurants in different cities. So he had restaurants in Cluj, he had restaurants in Brasov, he had restaurants in Sinaia. And he actually took places from Transylvania and he actually managed to convince them to join his prerelease.

 

🐿

Now that was all the validation he needed that the restaurants would be interested. And a lot of people are afraid to do this, by the way.

 

🐼

On the other part, on the developer side, on the consumer part, I think I would try to validate it with some fake ads for installing the app.

 

🐿

Okay, this is unorthod ox, but go on. But it’s not so unorthod ox that I have never.

 

🐼

Done this myself. So you know that people that are working at the desk, they have some regular breaks in which usually during the lunch, they’re entering Facebook or something like that. So I would just target them with installing this app that brings you food at your desk and you can stay and watch even more Netflix on scrolling on Facebook. I would target them specifically on the segment and see how much of them would click to install the app. That would be the first validation.

 

🐿

But this validation depends on how big is the competition in the town that you’re targeting those developers. Because if they already have three other apps, they won’t be interested in your ad because they already know the other apps. So your idea is very good for a town where there are developers and there are other big competitors that they would know about.

 

🐼

But wait for it, I will put in the ad my secret sauce.

 

🐿

What’s the secret sauce?

 

🐼

Well, I don’t know. We need to think more of this idea, but the plan would be that I have a secret sauce. Otherwise, I would just make another food delivery service.

 

🐿

Yeah, well, the idea is that you could actually do this. If you don’t have competition, you could just place the ad and even if you don’t have a secret sauce, people could potentially sign up for it. Otherwise, people already use such an app and they wouldn’t use yours because yours doesn’t tell the story of why their bellies would be happier with the food that you provide.

 

🐼

But doesn’t that mean that it invalidated my idea?

 

🐿

It invalidated it for a certain market. It didn’t invalidate it for all the markets.

 

🐼

What would you do it here differently? How would you go for it?

 

🐿

Well, of course, it all depends on what I’ve said. So are there competitors or not? And if there are competitors, I would just try and get a bunch of developers, which is pretty easy to do. You just have to go to an office building and join the smoke breaks and stuff like that. And then you start talking to people and you’re like, Hey, guys. So food delivery, right? Yeah, that’s not really what it should be because how do you pay for all the food? Because those guys come in, you try to pay. And if you want to order, do you group order? How do you split the money? And then you could get into some really interesting problems that they would say they have because it’s like, Yeah, man, I don’t really like it because I only have cash or I only have my credit card with me. And then the other guys can’t pay and we have a lot of problem with getting the money back and we don’t really know how to do this group ordering stuff. And maybe then by doing this pre validation, you figure out that the really interesting thing to validate is if people would like to group order for the food delivery service, which might bring you a whole new market that you didn’t think about before.

 

🐼

It’s quite interesting because you’re looking at it from the customer development part, like for finding more the problem, the struggle there. I just tested on hypothesis that they will install this app if I promise them this. I think these are two different approach that each of them could have interesting results.

 

🐿

I think that you should actually try them both so that you have more data because with more data, you’ll make a much better choice in engaging in the startup or just quitting the idea altogether.

 

🐼

Taking the findings from the discussion that you had with them, placing them in the ad and see how it goes and iterate on that.

 

🐿

Or you could get the people who subscribed to your landing page because they came from the ad. They subscribe to the landing page and then you contact them and talk more with them about the problem, about how painful that is for them and how you would potentially solve it and other stuff like that.

 

🐼

I think these were some interesting and maybe valuable ideas. Since we quite talked a little bit about this Facebook ad, I would propose to go to the next idea and basically try to see how we would validate an AI smart assistant that would create Facebook ads which are tailored on your audience.

 

🐿

Yeah, tailored to your audience. So how would you validate this? Well, the thing is that you could easily identify people who would need to do Facebook ads. You just need a tool that shows you where people spend their money. If they do Facebook ads, you can just see if they do Facebook ads and then see that they would definitely have some problem related Facebook ads and delivering them. And you could think about targeting people. Now, the idea is that here you should really do an ad to see if your message gets understood by that particular audience because your messaging might be wrong and you could miss out on validating the idea behind your startup because you don’t present it in a proper way that’s easily understood by people in that market. So this is definitely one of those moments where you would want to do the ad to see if people could potentially understand the value proposition or the high concept pitch that you’re offering with your startup. Because you can present anything in any possible way. I really don’t have an idea right now. Let’s say, for example, let’s think of a brand that has some really cool…

 

🐿

Did they say… Yeah, I can’t think of an.

 

🐼

Example right now.

 

🐿

On Facebook? Let’s move on.

 

🐼

Let’s move on. Rooster tweet?

 

🐿

Yeah, but I don’t know their value proposition and how they.

 

🐼

Present themselves.

 

🐿

On that? Yeah. Anyway, let’s move on.

 

🐼

I would challenge you here with how I would validate it. I would first validate it that I’m able to do that AI part.

 

🐿

I wouldn’t do that. I would try to find if there are customers for this because AI doesn’t really exist now. We can have a whole episode about why AI doesn’t actually exist. Machine learning, you can find people doing machine learning. You can find people who don’t do machine learning. You can even lie, a lot of companies lie about doing machine learning, even though they don’t really have the structure and back end to process and to do machine learning. They just say that they do it so they sound hotter for their audience. The idea is that since machine learning is so hard to do and you don’t really find a lot of engineers capable of actually pulling it off, you should definitely go ahead and validate because otherwise the technical side is way too hard to do.

 

🐼

I’m really happy that you disagreed here. What I wanted to say, and I hope some young developers will listen us, if I’m really good at AI, at machine learning, the first thing that I shouldn’t do is to not spend a lot of time building that technology, but instead validating that there is the need for it.

 

🐿

Exactly. I’ve talked to people doing machine learning, and they were working with some really big customers from the United States, and they basically started contracting them for machine learning because AI sounded fun and sounded like something that they should do. But when they really got to building processes and stuff based on machine learning, those companies figured out that they don’t really need AI or machine learning for anything. And then the developers obviously lost the contracts and the developers weren’t actually pleased with building something that doesn’t make sense. So both parties just figured out that this thing wasn’t working and there was no need for machine learning nor for the so called AI and neural networks and stuff like that. There was no need to do that. They didn’t have an end result in mind for doing that. They just did it because of the hype and then they’ve quit because it did not make sense.

 

🐼

Regarding this part with the hype and if there is, let’s say, some, I don’t know, need or not, do you think that it’s an indicator if there is someone who already did or tried to do that? Or if there is nobody, I just have the next big idea? What would help me to decide on this part?

 

🐿

I don’t know because there have been industries like Beacon Technology, because there were a few players, it seemed like everything would work out fine for everybody who got into that industry at that particular moment. And it’s really not that easy. And sometimes there are just hypes in the market and everybody wants to get into that. But then most of the companies involved, they just failed. All of them fail at the same time because there was just hype. There wasn’t any real substance.

 

🐼

To it. What I think on this part is that either if there are competitors or not, if somebody did it or not, you still need to do your validation. The only difference is that if you have competitors there, you need to look what they did good, what they.

 

🐿

Did wrong. Exactly. And to know a bit about their approach in case your customers ask about that so that you don’t look like a fool, because most of the times people when they ask you about competitors, they don’t want you to copy the competitors. They just want to make sure that you’re not ignorant enough to think that you’re the only one in.

 

🐼

The market. Validating ideas. I feel like we can discuss more at some point about.

 

🐿

This, but.

 

🐼

What would be great is if you can let us know what idea would you like to hear from us.

 

🐿

Ideas? Yeah, definitely. You can pitch us an idea, write us what startup you would want to build, and me and Paul are going to discuss how we would validate that idea.

 

🐼

Yeah. So if you just need some fresh eyes in a podcast, can we say fresh eyes on an idea? Yeah, you can say eyes. If you want to listen some of our thoughts regarding how good, how bad, how interesting is your idea, just drop us a message on Facebook. We would really like to discuss some real ideas, but not some invented by us.

 

🐿

Yeah, that would be really nice. Especially because when we would say how we would validate the ideas, we could give clear pointers on what to do and what not.

 

🐼

To do. Maybe from this you’ll get some really valuable insights of this. So drop your ideas on the Facebook.

 

🐿

On Twitter. And we’ll try to be serious about it. But remember, we are not your consultants.

 

🐼

Not your lawyers.

 

🐿

And we’re definitely not your startup mentors.

 

🐼

And buy us a coffee.

 

🐿

Definitely do that.

 

🐼

And see you next time.

 

🐿

See.

 

 

🐼 PAUL: (HTTPS://TWITTER.COM/PAUL_TIRBAN)

It’s Paul.

 

🐿 FLORIN: (HTTPS://TWITTER.COM/FLORIN_MURESAN)

It’s Florin. What are we grinding today?

 

🐼

What do you think if today we’re grinding how to find a co founder since we are two of us in this podcast.

 

🐿

Yeah, that sounds great. I guess a lot of people are asking themselves, how am I going to find a co founder?

 

🐼

Well, I can give you, for example, how I did it in the current startup that I’m involved with. So basically in the previous startup that we failed, we had some bills, a lot of bills to pay. T here was the part in which we need to get some money to pay them. A ctually, I started to work for a client and I built two products for them.

 

🐿

You’ve had bills to pay and then you’ve started working alone or with your other co founder, with other people to pay the bills?

 

🐼

With my other co founder, we work on this product, on these two products for this client. Then my previous co founder got hired in a company. After two years of working for this client, they got with a proposal for me to become the partner in their new startup.

 

🐿

Oh, wow. Who knew that was coming, right?

 

🐼

Yeah, actually, it was quite interesting because we started from a relationship of client supplier, with contracts and everything in place, with some money paid in advance before starting to work because we were two strangers. We were connected through someone but still, we did not have any connections until then. And the interesting part was when they got with this proposal. So what do you think about this? Like client?

 

🐿

Well, this is definitely something new and I don’t think I’ve heard this a lot. I’m not sure if I’ve even heard it before. I know other cases that might be similar, but I don’t think that I’ve ever heard this case until now. But I guess it makes a lot of sense because they were good with sales, because we discussed about this in the previous episode. And then they also had the knowledge and the clients and they needed the tech support, which is the perfect moment to try and find the technical co found, right? This is actually good.

 

🐼

Yeah, exactly. If you look a little bit, it’s a common scenario in which three people work together for three years and we saw that we can actually work really well and each one is good on his part.

 

🐿

Yeah, and you were always respecting the terms of the agreements. Both sides were respecting the terms. Both sides were respecting deadlines, I guess. How was the collaboration? I mean, did you feel stressed? Did they feel stressed that they weren’t receiving anything from you? How did that all work out?

 

🐼

Actually, it worked quite well. The best answer to this was the funny part in which at some point we saw that they were paying the invoices for one of those products. A ctually, the contract was ended half a year. Actually, it was just…

 

🐿

It was just a relationship that kept going by itself and you didn’t need to pour any more water into it to make.

 

🐼

It work. Yeah, the trust. We forgot about papers because in the beginning, we started with the papers because it’s important to have something written and the terms to be clear for everyone. And we got to the point in which that wasn’t necessary anymore.

 

🐿

That’s very nice. That’s actually so good. super cool. Did they come with this proposal or did you go to them with the proposal? How did it work?

 

🐼

Actually, they got. Basically in this new startup in which they had a previous platform which wasn’t working correctly, they had an option of paying someone, so paying us again to build it and we just… To rebuild it. Exactly, to rebuild it. Or actually to take us on board, involving us more than just paying some hours of development.

 

🐿

Nice. What did you say? Actually, what I want to know, and I guess everybody would like to know is, how much time did it take for you to give them a reply like, Yeah, guys, I’m in.

 

🐼

Actually, since I work with them for the previous two years, it was on the spot.

 

🐿

Nice.

 

🐼

But.

 

🐿

That’s a good sign.

 

🐼

It was on the spot that I’m in. It took a little bit of time to decide what each of us brings to the table in order to decide how much equity each of one will take.

 

🐿

How did you decide on this? So were you like, Okay, so I’m just going to bring the code, or were you like, I’m going to bring the code and the UX and I’m going to bring the product knowledge, and then I need more equity, or did it matter, or was it a time involvement that you a thing, what was the scheme that you’ve used to decide how to split the equity?

 

🐼

I don’t know if it was the best one, the one we choose, but we look at the experience of each one, at how much time and money each one brought in the new startup. And based on that, we decided on that part. So if I look now, I think it was a good deal, even if, and this might sound strange, I had, and I still have a minority part in it, because a lot of founders run when they hear that they got minority in a startup.

 

🐿

But I guess in some cases it makes sense to run away. I mean, if I’m the lead singer in the band and you’re trying to give me 10 % or 20 %, then I’m definitely not going to take it. But if I’m like a support role and this doesn’t take a lot of my personal time, a lot of my brain, a lot of my energy, I don’t have to put a lot of energy to make this work, then it really makes sense for me to get a lot less out of the deal.

 

🐼

Because in the end it’s how much each one deserves based on the evolvement. Because I can be a part time co founder and I still want half of the income if you are the full time co founder.

 

🐿

Exactly. And I mean, if you’re doing that for a living, you’re doing that for a living. I’m doing this for fun and to see how it goes. It doesn’t really make sense for us to get the same amount of shares.

 

🐼

Yeah, because I think you won’t be happy if we are two friends meeting out in a coffee. I’m telling you that I have this awesome idea. You say, Okay, let’s build it. I said, Okay, let’s do it. Each of one takes half of the equity and then you’re committed half than I am.

 

🐿

Yeah, I agree. At the moment, you aren’t really committed, even a quarter of all of the commitment, right?

 

🐼

Yeah. And we did, I think, another mistake here because we said, Yeah, let’s build it. We didn’t stay to discuss what will be the responsibility of each of us.

 

🐿

Oh, I see. Yeah. That’s actually very common. So I keep seeing this in a lot of teams because they’re super excited to start out and try something. They never get to the part where they sit down, they draft a couple of notes and they say, Okay, so this is what seems fair from my side. Let’s see what seems fair from your side. And then let’s have this signed and make agreements. Like, if we’re ever going to change this, we’ll need to have a board meeting. I was doing a sound that you could only see in the video. And I was like, Goddamn it. I was showing quotation marks and I was like, Yeah, this is not going to work on the radio. Anyway, so the idea is that…

 

🐼

I’m probably in a term sheet if you add quotes for the responsibilities of each one. You need to work and I quote work.

 

🐿

Yeah, I quote work. Then you have to agree and find procedures for how you’re going to change those documents and how you’re going to make decisions. Because even if it sounds like purely bureaucratical, it will make a lot of sense and it will ease the pain of working together with other people. And it can help along the line not to lose all of the relationships that you’ve built over so many years. So that would really make sense not to lose those relationships. Because if I’ve worked with you for three years and then all of a sudden I make a certain decision, you’re going to be like, Hey, man, I’ve never agreed to the decision, but you’ve never actually told me before that you wouldn’t agree to such a decision, and we had no way to process decisions, so whatever I do should be correct. Because you’ve never specified that it wouldn’t be. And if you have this thing defined from the beginning, then you will never run into these weird scenarios where nobody can define who was right and who was wrong.

 

🐼

We’ll get to this because it’s interesting here to see how we can decide who is wrong and who is right. But you said something interesting that you might lose the relationship. Should I take it personally if we discuss something in the startup? So if you and me are on co founder and we don’t agree about, I don’t know, an episode or something on the podcast. Should I take it personally if you say something?

 

🐿

Well, I guess you should take it personally once we make millions of dollars from the podcast.

 

🐼

Yeah, we’re still waiting on the buy me a coffee for those millions of coffees.

 

🐿

Yeah, we actually are because we keep buying coffee from square mile and you guys should start paying for that.

 

🐼

Yeah, actually they’re quite expensive but with great value. At least.

 

🐿

They’re.

 

🐼

Delicious. Yeah. So buy us a coffee when you have the time and while it’s recent to us.

 

🐿

Yeah, definitely go and check our links if you want to hear more episodes that are even better than this one. Then you’re going to get us motivated.

 

🐼

Actually, talking about the decisions, you were telling me a few days ago about an interesting method that you found and try to apply it in your startup.

 

🐿

Yeah, the one with the bureaucracy decision making mode.

 

🐼

That one also. But there was another one in which, let’s say, we are the co founders and I have a really good idea, you have a really good idea. You have a really good idea?

 

🐿

Yeah.

 

🐼

What’s the good idea from these two?

 

🐿

Especially if both co founders are super smart and they both usually come with great ideas, each of them will say that, No, you know what? I’m really good at this and my idea will work. Yours won’t work as well as mine will. And it will eventually lead to an argument. And the biggest problem is that if, let’s say, Paul, we are going to go with your decision, your decision will fail somewhere along the line. Then I will come back and over and over again, I will repeat to you, you know what, Paul? We failed miserably only because we went with your idea. And if we stuck with my idea, which you haven’t allowed me to do, then with my idea, we would have won this and now we would have been a unicorn. But we’re not a unicorn because we went with your idea. And even though this may sound like a joke, it’s not. It happens in a lot of startups, in a lot of companies, especially when, as I said, both people have very smart ideas. So the smartest thing to do when everybody has great ideas is to actually A B test, create experiments, make it in such way that you will try, in our case, Paul’s idea and Florence’s idea.

 

🐿

And then we should make a test and let our users go through the user interfaces, the user experience, whatever we’re trying to do, go through the marketing funnels that we’ve built and see if your case was better or if my case was better. And then the user decides as they’re using the platform or the feature or entering the funnels, we will see which one of us brought the best results. And sometimes we can even see that both of the ideas are completely wrong. And then we can go back to the drawing board. And if we do this, we will never get angry at one another, and we will never have to say, My idea was better. You just couldn’t accept it. You will remove a lot of potential arguments from your lives. And then you could build much better relationships in time. And whenever you’re in doubt, just t test it. And you will win a lot more by doing that than by thinking that you’re smarter than everybody else in every possible room.

 

🐼

Actually, regarding this part that you’re smarter than everyone in the room, I think a lot of founders that are looking for a co founder are trying to search for a co founder that is less smart than they are because they want to be the smartest guy in the room. I think this shouldn’t be done. I don’t know your idea, but me, for example, I would look for someone who’s smarter than me.

 

🐿

Yeah, I agree. Definitely. I would always try to get somebody who’s smarter than me to come and join my company. The ideal case is where I would be the stupidest, and I would just have leadership skills so that I could manage and help people overcome challenges and just basically turn into some coach for my team and to a cheerleader for my team and a supporter for my team and an enabler for my team. And then just let the smart people do the smart things that they can do and drive the company forward because it’s much better than me trying to look smart all the time and actually never getting results. Because most of the times, no matter how smart you are, your ideas will suck. Your ideas will be completely stupid. And it’s not something that you should be ashamed of. It’s not something that you should run away from because you need to reach a certain level. You have to be smart enough to know that you’re not smart enough. You really have to reach that point. And if you always believe that you’re smarter than everybody else, then just start A B testing stuff and you will see that most of the times users will not agree with you, the market will not agree with you.

 

🐿

Then actually focus on becoming smart. Even if you bring smarter people on board, you should also make them A B test their decisions because no matter how smart they are, they could also have stupid ideas from time to time.

 

🐼

Yeah, regarding this, I think in the beginning in the relationship with the co founder, you need to pay a lot of attention how you present these expectations, the things that you don’t like, because in the end, all the decisions, as you said, needs to be taken on data. And actually, it’s quite hard to learn how to say something without hurting the feelings of the other person because it’s like in a marriage. If we don’t agree on something at a certain point, it doesn’t mean that we divorce right now. We need to be open and to make things work.

 

🐿

Yeah. And you really need to focus on making things work because they will not work from the beginning. It’s like a process of getting to know each other. It’s a process of me saying, you know what? I can totally take all of the things that I don’t like about the way you work, the way you do certain things, and just accept that you’re very smart. And there was a reason why we got into this together and then just try and make it work from there.

 

🐼

I’m also interested because, for example, me, in some situation, if I respect the person quite a lot, sometimes I tend to rush into it and to do the things quite fast without thinking a little bit. I know in most situations this is not the best. If you respect the person a lot, would you rush and make it instantly the co founder?

 

🐿

No. I guess in no case would I ever make somebody instantly a co founder. This lean idea that you get instead of building a very complex product with tons of features, you try to figure out an MVP that will work for some people. You should also do that with the people that you think might become your co founders and create a test, an experiment on how you would work with that person that you respect so much so that you can see that even though you respect that person, maybe even that person respects you, there can really be a working relationship happening between the two of you. So you should have a experiment dedicated. Okay, so we’re going to do this for the next two months. None of us are going to get paid. It’s usually best if you’re not going to get paid because then that will super stress you out and you can see how you can deal with the other person in conditions of extreme uncertainty and lack of payment, which is very important. And if in those two months we manage to reach our goals, reach all of our deadlines and see how we cope with each other’s problems, then maybe we can actually think about starting a company together.

 

🐿

And you will have a lot of time in those two months to figure out how you can work together, what your dedication is, and how much you can base your decisions on the other person’s commitment to the startup.

 

🐼

You mentioned these two months and it came in mind that it came in my head, for example, startup weekend. What do you think about these events? How would you use such an event for finding a co founder? Would you go on the stage and say, I need a technical co founder. I don’t know if you saw my ad on Facebook, but I need a technical co founder.

 

🐿

I honestly think that that will never work. So if you just want to go and say, I need a tech person to come and join me now because I have this awesome idea, it will never work because first you don’t know enough about the other person.

 

🐼

Sorry for interrupting you. Even if I have the slide with $1 billion market and will take 3 % of it, so you’ll make a lot of money off it.

 

🐿

Especially then. And there’s another problem here. So especially because I will go and say that I will be in a three gazillion dollars market and I would be the father of unicorns. Everybody in the room will think that my presentation sucked, so I’m not going to get a co founder because nobody will be interested because my presentation is really bad. And basically, when you go to startup weekends, usually your presentation is super bad in the beginning of the weekend because you don’t really have a very clear idea of what you’re trying to accomplish. And if you’re using that to attract somebody is like using a really bad car to attract another person, and that will never work out. So it’s like, Yeah, hello there. Look, this is my really awesome car. And it’s not. You will never get anybody, guy or girl, like that. That will never work out for you.

 

🐼

I agree on this. I’m driving with the coach a bicycle, but I totally agree with you on this. On the other side, would you start up weekend or these events for that experiment, for example? Yeah. Could it work?

 

🐿

Yeah, it could work. It’s actually worked for me… Let’s see, it’s worked for me once or twice. I can’t really remember, but I’m 100 % sure that it worked once because I had a couple of people in mind and I said, You know what we should do? We should totally build a startup together. We’re so cool at this stuff. We get along, we know each other, we have the same visions about what entrepreneurship should do in the world, about creating great stuff, about innovation. We should totally start something together. And then everybody’s super excited. Yeah, let’s do it. Let’s do it.

 

🐼

Let the money come in.

 

🐿

Yeah.

 

🐼

And the cars.

 

🐿

And the cars, of course. A lot of Lamborghinis, Aventador, and all of the Lamborghinis. And the Mazda XA, the least one. Let them come by. And you go to Startup Weekend with these people and you already know that you would want to work with them. So you get the idea, you start doing something at Startup Weekend, there’s going to be a lot of stress. A lot of people coming and saying that, Hey, this idea is really bad. Don’t do it. You should try this. You should try that. And then you can see your other so called co founders, how they react to feedback from mentors, how desperate they are to get something done or to get approvals. You can actually test a lot of the emotions that they go through and a lot of the personality stuff related to them. And then you can figure out if they are a good match for the organization that you have in your mind. And then after Startup Weekend, what I’ve done was to actually get them to commit for, I guess in our case, it was three months, to commit to actually starting the project that we’ve started during Startup Weekend.

 

🐿

And the best part was that we’ve actually managed to do a lot of great stuff by working together. And after the third month, even though we’ve reached our objectives, we’ve realized that it’s not worth it for us to work together. And we’ve reached all of our objectives. Our results were super impressive. We’ve managed to build the crazy stuff that we wanted to build just by using a WordPress with Body Press and creating a couple of gamification elements that we’ve done over another weekend, not during Startup Weekend, but during another weekend. Then we’ve got tens of writers, professional writers who are published authors trying to join our literary platform. Then we have 2,000 people who wanted to get into our literary circle that we were building online. And we’ve had all of this great stuff. But after three months, we realized we would never truly work well together because one of them didn’t have the necessary commitment. The other one was being pressured from the outside to quit trying to be an entrepreneur. And the third person already had another startup. So there was always the thing that are you going to work on this startup or are you going to work on that startup?

 

🐿

We were three people and it really didn’t work for us. We need three months to figure it out. With all the results, we knew that it’s not for us. It’s not worth trying then and there.

 

🐼

Do you think this would work if, for example, in the beginning, you would have discussed about this and put the things on the table like, I can be involved only this amount of time?

 

🐿

No, because we didn’t understand how ample, how big the project would be. We wouldn’t understand how cool it would be. We wouldn’t understand how many authors felt the need for such a platform. We were like… Basically, we were kids back then. We were like 21 or 22, we were still figuring out a lot of stuff.

 

🐼

Suddenly, I don’t feel sold.

 

🐿

Without those three months, we wouldn’t have really known if this is really what we want to do with our lives in that period of time.

 

🐼

Yeah, on this part. On the other side, I think this could work if, for example, we build a very niche product, a technical one in which we bring the skills each of on and we know that it’s for a short period of time with a clear exit in mind, building some good intellectual property there and selling it. It might work in these situations, but you know how it’s usually because it needs to extend. Once probably, at the beginning, we need to decide, okay, if after that deadline that we saw or the deadline that we see, if we want to order project, this continue, what’s happening with the people that want to go out? Because it’s not something that you do on a lifetime.

 

🐿

Well, this is interesting. This is very good. I honestly have no idea because it’s not like a traditional environment where you would choose vesting. So you need to keep people for three years or four years so that they can access their shares. All of their shares you do the first year with… You need to stay one year to get the first 25 %. If you don’t stay for one whole year, you will get nothing. And then after you’ve gotten your 25 %, it’s going to go pro rated until the four years of vesting actually end. So this is usually a really great case. But for what you said, it won’t work because you have a much smaller deadline to finish that product. So you would have to completely rethink how you would handle people leaving midterm.

 

🐼

You mentioned vesting. How would you do it? So would you force only the co founder that comes in to vest his or her equity, or should both co founders do it?

 

🐿

Every co founder should do it.

 

🐼

Even if I’m the smart guy in the room, I with the idea I’m with everything and I brought you to the team.

 

🐿

Yeah.

 

🐼

Definitely.

 

🐿

Why? Because otherwise, I wouldn’t believe you. You would be a very horrible leader because you don’t do what you preach and you’d lose all credibility with the members of your team. And if you also do the best thing, then I know that I can trust you. I know that there’s going to be a clear plan and a clear layout if you are the one who is going to leave the organization, which can happen.

 

🐼

Yeah, totally agree on this. I think both co founders should invest their equity.

 

🐿

And by the time we started having some really good employees, we wanted to offer them shares, but we’ve also made them invest their shares. So that was a super smart decision and it worked really well for us.

 

🐼

Regarding this part with investing and since we’re still talking about equity, would you see the case of an employee actually becoming a co founder in a business?

 

🐿

Yeah, I actually don’t see why not. It depends on how much that employee wants to become a leader in the organization. It depends on a couple of capital conditions, like if you already have a very clear revenue share, you’ve been doing this for years. You also have investors, you plan on raising further investments. There will be a limit to how many shares you could give the new co founder. So that’s like the only drawback that I can see here. But otherwise, it would be a really good idea. It would be a really good idea, especially if the other person gets super involved, then it’s a very good thing to start thinking about the other person as a co founder.

 

🐼

Do you think it might feel odd at some point because a few months ago you were giving orders to that employee?

 

🐿

It depends on the type of organization you have. If you have a very relaxed organization like the S quirly company has, then there’s no one actually giving orders or bossing other people around. Sometimes I do lose my cool and start doing stuff, but in our system it doesn’t really matter who is the one who yells the hardest. It’s mostly who is the one that convinces the others that their contribution is more important. So it’s all like value based and not legacy based.

 

🐼

I hope that if people will buy us enough coffee, you will share this way of working with us because I see it brings quite some results.

 

🐿

I’m not sure it’s the best way to work with people. It’s like the thing that I was inspired to do due to Tony Shai from Zappos and his whole Delivering Happiness movement. I’ve seen that a lot of people have been loyal. They continue to be loyal to Squirly as a company. And some of them even want to come back to us because it’s a really great environment to be in where you can grow and learn. Even though at some point you will not feel compensated enough for your efforts because we’re not a unicorn, we’re.

 

🐼

Not there yet. Yeah, we’re e in the startup community, so we should help ourselves. Since we’re talking about this part with the community environment and everything like that, and we are talking about finding a co founder, how do you see the investor in this part? Could the investor have a role in it?

 

🐿

Yeah, I think that a very smart investor who really knows people and who cares about your wellbeing as a co founder, because believe it or not, there are those types of investors in the market. And I guess it should really take their advice when they say, especially if you have good relationship with that investor and you know that they’re not doing stuff for stuff’s sake and they really care about what they’re doing. They’re passionate about helping people. And if they say like, you know what? I have a really good co founder for you, Paul. It’s this person. She’s very good at business development. She’s very good in marketing. I know she has a lot of great stuff that she can bring to the table. You guys should totally meet and you should start a company together. And you’re going to be like, it’s the perfect deal for you because the other person was already interviewed, already verified. The credentials were checked by somebody that you already trust. So basically they cut out a lot of work that you would have to do and then you just have to work with the other person for a while and get to know the other person to decide if it will make sense to.

 

🐼

Enter partnership. Since I’m thinking more about this, it totally makes sense because an investor can see how much a person working in a startup, even if it failed, and it might see the skills that someone’s need and somebody else have it on this part.

 

🐿

They could easily see, especially if they are good investors, they could easily see how easily they motivate themselves to work. What’s their energy? Because you don’t want to work with people with bad energy. And I’m not trying to sound like all voodoo and stuff, but you wouldn’t want to work with somebody that comes to the room and initially sucks the light out of everybody staying there or just brings bad stuff and always discusses very negative and very horrible things in the office all day long. Then you can see how much they dedicate themselves to actually working and not talking about work. You can see the investor can even see who are the people who are busy trying to do stuff because a lot of people when they hear an idea, they will be like, No, this is not going to work. And you don’t want problem seekers, I mean, problem analyzers. You want people who are problem solvers. You want people to solve problems. That’s the most important thing to get in people.

 

🐼

We promise we won’t make Consultant Parentheses this episode. Talking about this part with you don’t want to take a person who has a lot of energy, so would you take a co founder who’s 24 hours out of 24 hours writing you, sending you emails, sending you messages. There is this problem, there is these things to be done in the morning, in the afternoon, in the midday, in the night. How do you see this?

 

🐿

I guess it depends. My first instinct was to say I would kill that person.

 

🐼

Why? Because I.

 

🐿

Would shoot that person down. I would buy a shotgun. He or she’s very involved. I would shoot.

 

🐼

That person down. I would buy a shotgun. Working every day on the Sundays, working nonstop.

 

🐿

Yeah, but it depends on the ground rules that you establish. So if you have somebody that you’re very comfortable talking all day long, then you should totally go for it. Hey, you can message me whenever you want. I don’t care. This is my life now. I’m super available. And this is all going to work out amazingly well because you might get a level in your relationship when you know that the other person, if they bother you, they bother you with the great stuff and they’re not bothering you with… You having to think the stuff that they have to do. So they basically come and pick your mind 24 hours a day because then you end up working 24 hours a day, not for your company, but for your co founder. And that’s really stupid. So do you get the picture of this? Because if I come and bother you like, you know what, Paul? I was thinking about this. What do you think about this? Dude, you’re.

 

🐼

My co founder.

 

🐿

Think before, then ask me. Yeah, exactly.

 

🐼

And actually even better, do it, not only think about it.

 

🐿

Exactly, do it. Let’s see how this works. Because that’s the most important thing. I mean, a startup should be made with doers, not with talkers, not with speakers, not with stuff like that. You need people to actually do stuff. And you have team meetings and stuff which are weekly for discussing such matters. And that’s it. Other than that, people should just do whatever they’re supposed to do.

 

🐼

And don’t forget, this is not T inder. We’re not looking for co founders or partners.

 

🐿

Yeah, and this is not relationship advice.

 

🐼

So we’re not your consultants.

 

🐿

We’re not your lawyers.

 

🐼

But we don’t mind if you buy us a coffee. Buy us a coffee and see you next time.

 

🐿

We definitely don’t mind that. Buy us a coffee. Go.

 

 

🐼 PAUL: (HTTPS://TWITTER.COM/PAUL_TIRBAN)

It’s Paul.

 

🐿 FLORIN: (HTTPS://TWITTER.COM/FLORIN_MURESAN)

It’s Florin. What are we grinding today? I know. Let’s grind some health tech startups.

 

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While enjoying a V 60 with Burundi from Square Mile from London.

 

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Oh, Square Mile. This is going to be an awesome episode.

 

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Yeah, actually, it would be as awesome as the coffee. So a really, really nice coffee with really Creole notes.

 

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Yeah. And the plus side, Square Mile is from London.

 

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Anyway, are you planning to go in the health tech?

 

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I would definitely like to do that. But as I was grinding all of these ideas about health tech in my head, I was like, I actually want to talk to Paul about this because you’ve got some experience in this area, right?

 

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Yeah, but while getting there, does a health tech startup need to sell?

 

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No, I don’t care about it. It’s just like, Hey, what company would you start? I’m browsing the web like everybody does. And I’m like, Hmm, health tech seems to be something these days. Let’s try a health tech startup because that’s what all the cool kids on the block are doing and they seem to get more and more popular. What’s your take on the startups?

 

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Yeah, actually, what Florian, I think, is trying to say is that all the cool kids are trying to make money in this area, which actually, until you get money, you suffer a lot if you’re doing the proper way.

 

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Yeah, that’s exactly my point. Everybody’s trying to do health tech startups, but doing a health tech startup can’t be as easy as doing something in software as a service, right?

 

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Yeah, look at us. We were three programmers thinking that we will do great startups in health tech, and three years later, two of us are employees in product companies, in software companies, and the health tech startup is a zombie, almost dead.

 

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I guess that makes sense. I guess it’s not really as easy to do as anything else, right? Starting off the bat, what problems did you guys get yourselves into?

 

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Starting with the beginning, what we tried to do was to create a WhatsApp for medical advice. If you look at it… That sounds good. Yeah. And our perspective was like, we only need to build a chat app. Exactly, right. With some privacy.

 

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Some privacy.

 

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And then everything will come, the doctors, the clients, the money.

 

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And then you can just go ahead and milk the cow.

 

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And the reality is nothing like that.

 

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All right. Well, tell us a bit more about that. So everybody would think like, when listening to this podcast, Hey, this sounds reasonable. It’s quite easy to do. You just have to build another WhatsApp. You just build a chat app and you place Maddox on that chat app. It sounds easy, but is it?

 

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Actually, it’s not because as funny as it sounds, in health tech, you don’t need to start with the product, you need to start with the research.

 

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What research?

 

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Now, definitely the research in the medical field, to see that there is something that you can do, and maybe we’ll get a little bit later to this. But also in other fields that some think that is something weird, you need to start with the research in a legal area, like what can you do, what can you not, how do you protect yourself, how do you protect the doctors? Because, hey, a doctor did 10 years of studies and you might ruin his career or her career because you made something that is not allowed to.

 

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I guess the first questions to ask is, if we get an actual medic to start using this app, can this backfire on that particular medic?

 

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Yeah, because in the end it’s a matter of is it more practice? Is it not? Is it allowed to do that medical service in that app or using that device? Because if we go in the hardware devices in health care, it’s even more interesting.

 

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And actually, is it like a medical service? Are you allowed to say it’s a medical service?

 

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Well, the interesting part is some lawyers, and I quote here lawyers, will tell you that you should not put it as this. Why? Because if you kill somebody because, hey, in the health tech, doing a wrong iteration, let’s hope not getting you to jail, and some of them will tell you, Just write in the terms and condition that you’re not providing the medical services. But how are you looking at this from a marketing perspective, for example?

 

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From a marketing perspective, what you should do is say that this is the best medical service in the world.

 

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Without using the words medical service.

 

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Oh, come on. Then it’s not fun for people. Why would they use it?

 

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Well, look, for example, in our case, when we did our research, with a proper lawyer, one specialized in the medical field. It was an interesting part. Only using the term patient attracts a lot of legal implications.

 

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Oh, yeah? Yeah. Really? Yeah.

 

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Because according to Romanian law, if you call someone a patient, he has some legal rights.

 

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What are you doing as an app?

 

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You just call.

 

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Them users. Regarding those.

 

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Rights, right? Yeah. That’s the solution. You call them users.

 

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You don’t call them patients, you call them users.

 

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Exactly. The question is, are you okay with the fact that you don’t provide that legal rights that they have? Because that are there to protect them. Now you want to innovate and to skip these regulations because all of us look at the regulations like something that…

 

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Yeah, that you can just skew.

 

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Your way. Exactly. In this field, basically, it protects you, it protects the doctors, it protects the users or the clients, because it’s even more interesting if you call them clients.

 

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They are supposed to be clients, basically. But then.

 

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The question is, they pay for the same medical advice without getting the same benefits?

 

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Because they can’t actually pay for medical advice, can they?

 

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In our fear, they couldn’t.

 

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All right. B asically, what you’ve given to our audience right now is quite a bit of a research that cost quite a lot of money, didn’t it?

 

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Yeah, but it applies only if you’re in Romania because another interesting.

 

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Part that’s even more interesting, actually.

 

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Yeah, because even if you’re in the European Union and it’s supposed the law to be the same in all the countries, what is happening in this field from what we saw is that you have certain regulation in a certain market.

 

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Yeah, and basically they are different from country to country. Exactly.

 

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It’s interesting to see the challenging and that the startups that try to go internationally has. It’s even more interesting to look at this. That idea work in US are just implementing it here.

 

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Yeah, but it won’t work that way, will it? Because you have different laws, you have different ways in which mathematics view these sorts of things. You have different ways in which hospitals work. You have different consultancy fees. So even your pricing model could be smashed to pieces very easily because the market conditions themselves are quite different from what you’d have in the United States. So then you can’t just copy one from this area to the United States or one from the United States to Romania. You couldn’t really do that.

 

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Yeah. That’s also the mentality of the people, also the connected services like pharmacies and stuff like that.

 

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I.

 

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Probably gave advice that cost me a lot of money, but probably if you’re not from Romania and really into it and to sacrifice all the time to make it work properly, because in health tech, the probability is to stay a little bit and work on that startup. It’s not like just I build an app in one month and then I go with it.

 

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Yeah, you can really do that. You can do that even in software as a service. You clearly can do that in the medical field.

 

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Yeah. So probably the most wise would be to have, I don’t know, at least an year in which to research from a medical perspective and from a legal perspective. Do very well your research, medically and legally, before actually building the product.

 

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I guess that actually in all of the cases, you first need to do your legal research. And then according to the specifics of the app, you also have to do the medical research. Because in your case, there isn’t as much medical research as there is legal research, right?

 

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Yeah, exactly. So in our case, it was doing to how the product was. A lot of research needed to see what the doctors are allowed to do or not and how we phrase the product when I think. And the interesting part is that all these had implication in the product. So actually we needed to rebuild the product. It was quite funny because actually, we are programmers. The first thing that we do, we were three of us and we start building a native app for Android, one for iOS. We’re like 90 % done with the Android app. Then one of the co founder wasn’t working a lot. I decided to go just two of us. We were like, Okay, we are two of us, none of us know iOS. What do we do? Well, we are programmers. We build the product. We use cross platform technology, basically building again the product like the second mistake.

 

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That sounds like a lot of work. At this point in time, you hadn’t done your legal research, right?

 

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No, we were just building product because we were hoping that once we have the product, we just put the doctors in.

 

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Then the medics will come and clients will come and everybody will start chatting in the app and buying subscriptions. Exactly.

 

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Then we started to test it with a few doctors and they were asking us, Okay, what will happen if I do this? It happened this to the user. Actually, one of them asked until the end, what’s happen if I give some prescription and that person…

 

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Well, that’s something that people should consider. And actually, even if the medic wouldn’t think about giving that to your user, the user would request such advice from the medic.

 

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Exactly. Even more if they pay. And we’re like, Okay, I think you’re supposed to do that due to the fact that I Google it. And then I was like… I was actually staying and thinking, I just told to a person that I did my research on Google and I said, Okay, this is not okay. I should do it properly. And I actually looked in the team that I had and actually we were two people, programmers, and I realized the fact that, okay, the legal, but there is more knowledge that I don’t have in the team.

 

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What knowledge?

 

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For example, as I said, we had only the technical knowledge. I didn’t have… Yeah, that’s right.

 

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You didn’t even have the Android part, right?

 

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Yeah, we had only the Android. Basically, not even all the technical. But let’s say we could have changed this, going cross platform and things like that on this part. We didn’t have the legal knowledge.

 

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We.

 

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Didn’t have a proper medical knowledge, like a doctor with experience. Now, with experience, so very important here. You can just go and take a lawyer from any field because we tried this with one was generally specialized and actually it didn’t help us at all. No?

 

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No. Why not?

 

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Because all that they did was trying and looking just scratching the surface, building the terms and condition that I was telling you, like replying patient with the user. I see. That’s okay from a legal perspective. Now, is it from a moral perspective?

 

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All right.

 

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Do you want to be that founder?

 

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Do you want to found an Uber?

 

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Well, I think with that I can go to jail.

 

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Yeah, that’s a happy thought right there.

 

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Yeah. So on this side. T he technical, the legal, the medical. And now an interesting one, the sales guy.

 

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Why? Why the sales guy?

 

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Because most probably in a health tech, at some point you will go like business to business. Even if you’re business to consumer, you might at some point need to go on a business to business level. So there you need someone to sell.

 

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Yeah, and you can’t really sell yourself because you’ve most probably got zero connections. I mean, you’re a developer, it’s not like you can have a lot of connections with a lot of clinics which are as big as nationwide clinics.

 

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In order to do that, you would say you could know a really well known doctor and go and talk with that one. But to get and to talk with that one, you need that sales guy to open the doors and do this connection. Now, don’t get me wrong, we know that in Romania there is some opening the doors. I’m not talking about that part, but actually proper sales in a legal way.

 

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Yeah. I guess if you are going to speak to medics that have access to a lot of clients and clinics, you actually need to be in the field. And you could even be a medic or something like that and still not have the proper connections to get you through the door to the business side of a clinic, even though you could have a couple of medics that you know, also know a lot of other medics from a certain clinic, they don’t really have the decision, they don’t have the power of decision. They can’t say anything in the name of the clinic, they cannot get you through the door to start your first demo or to implement your first MVP with the clinic so that they can give it in some of their units to all of the patients inside those units.

 

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Yeah, on this part. And even if you go deeper a little bit and you have a very innovative medical device or medical breakthrough, you still need that sales guy to sell that IP. Because if you do, let’s say, I don’t know, let’s take that startup with the sleep analysis from Clue. Basically what they are doing there, so they starting doing initially a clinical research, like the medical research. Now, most probably they will get to some point in which they will have very good intellectual property there, from medical perspective.

 

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Yeah, and that’s very good, right?

 

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Yeah. An opportunity there, for example, would be to sell it, to license it, to use it in your own product in some clinics, or I don’t know, business consumer. But still you need that sales skills to do that.

 

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Yeah, I agree.

 

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You can do them all. So if you’re very good on a medical side, probably you’re not so good on sales. So you need someone on sales. If you’re on technical, you will need someone on medical sales and all of that. So I think you need some at least this roles in the team. But I don’t know, how are you seeing this from outside of the industry?

 

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Well, not that I actually think about it. Even if you would have a medic, somebody who has done medical studies at university and maybe he’s already practicing medicine in a hospital. I mean, if I were that person, for example, so let’s say that I would be that person, it would still be like, if I had to do a startup in health tech, I would still not have enough experience to decide what’s good from a medical standpoint for my users or patients. So I would still need to get somebody that actually has a lot more experience to look at what we’re doing and what we’re trying to achieve. And I guess as a founder, it would help me to really understand what’s going on, but I would still need extra skills. It’s not as easy as it is in any other startup where basically if you have some development skills, some business development skills, whatever, you can just go ahead and do it because you don’t really need people with more experience than you because you can easily build the experience that you are lacking. In the medical field, I’m not sure that’s quite as true as it is in other fields.

 

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So actually you would hire a consultant?

 

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Yeah, or I know give shares to another medical guy who actually has experience and who really understands everything that’s going on with the patient, with ensuring that all of our experiments will go properly, stuff like that.

 

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You didn’t understood my irony with a consultant because you could have just went to a very well known person that do a lot of medical events with a lot of startups and promoting them.

 

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Oh, I see. That would be interesting. Yeah, I would like to be that guy. Isn’t that guy popular?

 

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I.

 

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Guess all those guys.

 

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Are popular, right? I don’t know. So I didn’t make the… At least I save money without paying a consultant.

 

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Yeah. do people actually fall for that? I mean, do people actually pay those kinds of consultants?

 

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Well, it’s interesting because unfortunately, a lot of young founders pay them with the equity.

 

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Oh, and you pay people who don’t really have all the experience, all the necessary experience, and you give them equity because they sound good, they look good, and they’ve got really great presentation skills, right?

 

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Yeah, because if I see a person everywhere, like at any event, on any panel, on any…

 

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On every banner, everywhere on the web, in every Facebook event.

 

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Exactly. So that person probably work 22 hours, so 10 hours per day is at events, and 10 hours per day is working in the real field.

 

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So basically, would these people fall into the category of the serial PowerPoint presenter? I guess they would, right? Because they just make PowerPoint presentations that they show to everybody. And then everybody’s like, Yeah, let’s trust that guy. That guy’s an expert.

 

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Yeah. And the first two slides are with badges.

 

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With badges? Oh, that’s nice.

 

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Speaker at that event, panelist at that event, speaker at that event.

 

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Wow. Those are some really good street grads.

 

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We’re obviously.

 

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Being sarcastic right now. If you were doubting it, we are sarcastic. We’re just saying it loud.

 

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And okay. Yeah. So basically, if you need specialty in a certain field, like in health, go to a proper specialist. In our case, for example, we were a little lucky to be able to work with that really good lawyers that were specialized on the medical stuff.

 

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Otherwise, anybody can give advice and you really need to check their credentials. So let’s see. So basically, what’s brewing right now in the startup industry is health tech. Everybody wants to get into health tech. But from what I understood from today’s episode, I myself could not really get into health tech because I would just have experience in product management, marketing, SEO, obviously SEO, social media and other stuff like that. And even as a product manager, if I do say so myself, we’ve built a couple of products that are remotely successful. Some of them are successful, but we still couldn’t get into health tech because we lack all of the skills that are actually important, like medical skills, legal skills, sales skills.

 

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Really good technical skills because a bug here?

 

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Oh, yeah. We didn’t even get into that, right? You know what we should do, Paul? We should do a whole episode.

 

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About lean in the health tech, lean fast, iterating.

 

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And how you can’t really do lean startups in health tech, how you shouldn’t do lean startups in health tech because you’re just going to wind up killing people. In my case, if I do something like that, some people will not be able to use the product for a while until we fix the bugs. But in case of health.

 

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Tech, some people won’t be able to use their brain for a while.

 

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Or their hearts, or their livers.

 

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Let’s hope only for a while.

 

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In an assisted environment.

 

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Whoa. So basically…

 

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Not killing them at all, doing like this.

 

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This is a bit depressing. So you’ve just ruined my dream of going to health tech because I’ve got none of the skills necessary to do that.

 

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You can make a PowerPoint and go to an investor. That’s it. Or to fund and take some money.

 

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Oh, boy, I should really do that. I’m really good at PowerPoint stuff, so I should just go ahead, build a couple of slides. I’m not doing anything for real in the health tech, and I’m just going to do a couple of slides, and then I’m going to become a serial PowerPoint presenter for the health tech industry.

 

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Again, I hope you feel the irony. So if Florin is pitching a health tech startup, he’s serious. So please don’t think that he will pitch for some money only. So we’re just sarcastic here with PowerPoint startups that only want to raise some money to buy some devices and pay some consultants.

 

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And then you never hear from those guys ever again, and they never really launch on the market.

 

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But hey, after that, you can sell consultancy because actually you had an awesome startup.

 

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Oh, boy, that’s wrong in so many ways. And that’s why we said you should really choose your consultants wisely. Now, I think that.

 

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We’ve actually… You’re a specialist, so thank you for interrupting.

 

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We’ve managed to really grind the topic here. We’ve also done a recap and I guess that for now, the most important part would be to choose what would be the fantasy team draft, what would be the best team that you could build if you were to create a health tech startup today. What would it be, Paul?

 

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Definitely the medical specialist, a really good one in that field.

 

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And who has some degree in medicine, right?

 

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Exactly. A proper doctor, so not somebody who’s talking about the problem from I don’t know what internet sources, or a person who had that medical issue or heat around that medical…

 

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I know what you mean, but even if and if ell you, let’s say that I would have diabetes, even if I would start a startup that takes care of diabetes, I would still need a.

 

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Medic, right? Yeah. So basically, if you’re not having the degree in medicine, make sure you take someone in the team who has it.

 

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Then take someone who’s a really good legal expert in that medical field, in that medical specialty.

 

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Take.

 

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Someone who’s really good on the technical side.

 

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Yeah, exactly. That was the last point of the recap.

 

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Sales, if you go business to business, and someone who’s really good at product. Most probably we’ll talk about this in that episode with going lean and iterating in the health tech.

 

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That’s going to be hard to find because most product guys just want to do lean startups. We’ll have to see about that.

 

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A doctor, a tech guy, a lawyer, a sales guy, a product guy.

 

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This is already very different from most of the startup ideas that you could ever see in startup weekend competitions or usually all of the startups that get funded on tech range where you don’t necessarily need to have a lot of people who know what’s up in a certain field. They could have some remote experience in that field. Maybe it’s like a web designer creating a startup around web design and boom, he can totally make that happen. But in the medical field, you need this dream team that we’ve talked about in this episode, if you really want to make it happen and you don’t want to end up as a serial PowerPoint presenter.

 

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Yeah, exactly. And on a short note, we’re not consultants, so not giving advice here.

 

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We are not.

 

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Your lawyers. Like selling advice. So probably if you think they are valuable, you should.

 

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And nothing that you have heard in this here episode constitutes any type of legal advice, medical advice, health care advice, therapy advice, or anything for that matter.

 

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But if you want, you can buy us a coffee.

 

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Buymeacoffee. Com, and we are going to have a link there so you can actually do that.

 

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See you next time.

 

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See you next time. And maybe we’ll prepare a PowerPoint presentation.