The Founder of Funderful – Raimonds Kulbergs: Success stories are born through failures
Q: Late last year Funderful received the fast-track ticket to 500 Startups accelerator in San Francisco. It came as a prize for winning in startup idea competition at Digital Freedom Festival (DFF). What were the next steps after that?
A: DFF was only the very start of it – the opportunity. The determining factor was actually the final interview with 500 Startups. We prepared really hard for the interview thanks to the inputs from Artis Kehris and Janis Berdigans from Printify as well as Uldis Leiterts from Fragmentic (both of these companies have taken part in previous 500 Startups batches). It was very crucial to devote time for the prepping as it was not only the right answers that mattered for this interview, but also the way you would present them/how compelling your arguments would be. This approach actually paid back as well in later stages for discussions with investors.
Q: What were your main considerations for moving to San Francisco?
A: Our goal from the very beginning was to try and achieve the maximum out of this opportunity. I clearly realized that I could aim for less and settle for example only for the UK market by servicing Oxford and Cambridge colleges. It would be a sufficient sustainable business as well. However, knowing my company and the potential we hold I did not want to settle for less. This was the risk that I consciously took. I could have as well went down a much smoother road with less ambitions, but I chose the more ambitious one on the way to the stars. And it is exactly what we are doing every step of the way. This choice has paid off very well for us.
Q: What were the main challenges of moving so far away for a lengthy period of time?
A: Physically the hardest was an absolute change of biological clock – jetlag. And before you can actually switch to the new timing the demanding 500 Startups accelerator starts in full speed. In analogy speaking – 500 startups is not a restaurant, it is a buffet. It is only upon us to choose how we choose and use our scarce resources. We only have the time that there is. It is very easy to burn down all the invested money over here. In order for that not to happen one has to sacrifice every-day comfort for the greater good of company. The boot-strapping lifestyle here is in every decision one makes – you can either rent out a flat or hire a new employee. There is a chance of failure in every decision and the money goes down the drain.
In these decisions my previous professional 10-year experience in big-four companies (Deloitte and Ernst&Young) proves very useful. I am absolutely comfortable in understanding detailed cash flow projections and managing them. It all sounds very boring, but in fact it is an absolute must for startup companies. Startups are not hobbies where you can choose to do only the tasks that you are fond of. It also requires a great deal of persistence.
We did a really thorough preparation job before we came to California in order to identify what exactly we want from this accelerator and how to gain maximum return from it. We did our homework and interviewed our clients until we were able to build a precise profile we wanted. We could have of course just joined and then start thinking of what it is that happens here and how to use it, but it was clear for me that in such a way we shall not be able to squeeze the most out of it.
To be the founder of a startup is like being a long-distance runner. You have to be very persistent, capable and take care of yourself and your team all the time. It is a marathon not a sprint distance.
Q: Do you currently work with no days off?
A: Yes, we work for at least six days out of seven. However, the classical working hours concept does not exist for us anymore – we have clients both in Europe and in the US. We have to be able to work with our current clients, take active part at 500 Startups accelerator as well as grow the company.
US has not changed anything much in the sense of working hours for me – I have been working around the clock with no days off since I established my own company. However, here in San Francisco it is definitely more socially acceptable and understandable to work in such a regiment – I have investor/partner meetings during every weekend here as this is usually the most convenient time for such scale people to devote for meeting new startups. Nobody here is surprised that I had set up a meeting on Easter Sunday morning, for example.
Q: 500 Startups accelerator organizes a couple of famous weekly trainings such as Marketing Hell and Sales Hell week. Why are they named as hells?
A: If you take a look into the 500 Startups homepage you can see the caliber of speakers that are invited for these hell weeks. Those are the absolute leaders in their respective areas – practicioners, entrepreneurs, not only lecturers. There is such a vast array of topics discussed that we skim though during a couple of days in parallel to running our businesses. You have to understand what are the useful things you can take in immediately and what will be the ones stored up for future execution. Prioritizing is quite hard as you want to try out everything, do everything. That is in general one of the toughest challenges – to understand the capacities of myself and my team and to set the right priorities.
The biggest and most typical startup problem is to accept that you cannot do it all. Or do everything simultaneously. You have to make a choice – if you excel in one area then it probably means that you will not have as much time for another and it will be left in the shadow for a little bit. If you decide to focus on sales then during that moment product development, for example, has to be the second priority.
The best lesson I have learned out here so far has been that I have to look at my startups as a mix of various processes. My startup will be successful if I focus on process development and allow for experimentation. You have to experiment to figure out what works and what doesn’t with your clients. In such experiments it is easy to fall into the trap and think that a failure means a personal error that I have made. But in reality 8 out of 10 ideas/experiments will fail. The essence in this process is to be able to measure the outcomes and to analyze them rationally. If something does not work – continue with another idea – and in the same pace as before. Only then you get to the idea that works then dive into detailed analysis and improvements. From the aspect of startup survival that has been the greatest wisdom I have caught.
Q: Even though you were very well prepared for this accelerator was there anything that surprised you?
A: What really sticks out for me is the possibility to meet and talk to million-worth people. They would come to our 500 Startups place on Mission Street and openly share their business stories and struggles. Often in the press you would read articles about startups whose founders became rich overnight, they are bought out by Google, Facebook or other giant company. Consequently you aspire for something of that kind of story as well.
However, you should always address such articles with discretion since often time a large part of information is not revealed. For example, Slack’s punch line is that they are a three year old company, but in reality they have been working on this idea for 9 years from the time the idea was born to its execution in reality. It is a myth that someone has achieved something with no effort and extremely fast. You have to sacrifice a lot both on personal and team level to arrive at the results. It boils down to your persistence to tackle the upcoming problems and keep moving ahead. That is what defines the success. Not a genius idea. That in fact was the biggest surprise – there were no fast-track success stories – each and every one of that have faced a variety of problems and challenges – and the main thing is to overcome them. The success stories are born out of overcoming the failures. Of course I had heard and read about that before, but is was genuinely inspirational to hear that from actual global leaders with million worth companies in their portfolios.
Q: Can startups from Latvia growth without going to the Silicon Valley? Ragnar Sass, who is currently in one batch with you with his latest startup, has in a recent post said that startups from the Baltics should pack their bags and move to Silicon Valley. Can you become a global giant by skipping the move to the Valley?
A: I would say, no. It is very hard to become a global giant without feeling the life over here in the Silicon Valley, growing you muscles over here and increasing your network that is available only here. For example, we can get a contact in LinkedIn and go see them in a matter of minutes, their office is just around the corner. In order to grown into a global player it is a must to feel the rhythm over here and the drive that Silicon Valley community has to offer.
Building you network over here is essential. Only from here you can plan your agenda tightly – often times you can set up a meeting very shortly before the meeting if there was a sudden opening in their super-booked agenda. You have to be very focused and agile all of the time to grab each such an opportunity. Overall the concept of personal referrals works very good over here – you present your company to a partner who then refers you to other possible investors/partners, etc. If you are only based in Latvia then the possibility of personally reaching out to these people is much more limited.
Nevertheless, startups from Latvia have a very clear advantage. We are based in a country that still has in comparison to the US a much lower cost level. We also have qualified people available in Latvia who can compete with their skills on a global level. Consequently it is the task of startup founders to identify early on which functions should be carried from which location and how to manage that on everyday level. As I said earlier – it is very easy to burn all the money over here in short time and a smart plan is needed to use all the advantages possible. And in this once again my previous professional experience and education comes in handy as I can easily navigate issues of financing and organizational management. Latvia will definitely stay as the base center of operations for my company in the coming near term future.