How to Build a Startup Brand from Scratch

On the 9th of October I was giving a talk at itnig, the hacker accelerator of Barcelona. The first talk after a couple of workshops on the same topic, it was exciting and frightening in the same time to see so many people interested. Of course teaching requires a lot of practice and learning, just like everything, but I am happy to have been given positive feedback on this first occasion already.

Already thinking about how to make it better, more relevant for a startup and useful for small organisations, I am very happy to get more feedback. The slides are on SlideShare, so if you happen to give them a look and have any constructive criticism, feel free to comment! Thanks in advance!

Ripples and Real Life Effects of Startup Hype, #1

It’s been on my to do list for some month now to translate an earlier trilogy of articles from Hungarian to English, and magic has finally started to happen. Published on Barcinno, you can find some ideas on how the startup craze effects real life and longer term thinking. Here is the first part:
Most trends and waves run the same course. A few crazy visionaries start it, followed by innovators and early adopters, and then the big ones eventually reach the tipping point, spilling over into mainstream consumerism. They become well known and available to the masses – think last autumn’s high street fast fashion punk inspiration overload – and in the same time somewhat less hip for those picking it up in the first place.
On the other hand, more time, practice and eyeballs also mean that we understand the trend much better, hopefully leading to more development and more successful outcomes. In the particular case of startup culture, we are currently somewhere nearing this tipping point. I mean my mum reads about Prezi and Ustream in the Hungarian Marie Claire, tech can hardly get much more mainstream than that.Read the rest of it here!

Water Drop

stop telling us to never give up

Someone really smart told me about the Stockdale paradox from the business and leadership  book, Good to Great[1] and I keep thinking about the story, especially in my current situation which is not exactly rosy. It’s main point is that we need to find the third mindset for living in between optimism and pessimism. We need realism – combined with a certain, okay, it sucks but I’m going to get over it attitude – to be able to not only deal with a given situation, barely surviving really, head stuck in sand, but make it better.

Pure optimism cuts your ability to assess reality. It stops you from being able to take a step back, change course, to admit defeat if necessary. When you keep humming “everything’s gonna be alright” and advance blindly, with a spring in your steps, you are more likely to run into walls and situations you can’t handle due to lack of preparedness.

Sometimes these walls are actually there and things just crash and burn. I came to believe that in these times it’s more destructive to preach perseverance and encourage our friends and acquaintances to keep on going in the same direction regardless. There are times when it doesn’t matter how many more hours you are prepared to pour into your business, too many important factors – like founding partners, goals, business models – are screwed and no amount of starting over or even money will actually amount to a result. And there are times when your heart will break and no amount of talking will reach your partner anymore, or make things the slightest bit better.

These are exactly the times to give up, let go and practice brutal honesty with ourselves. To sit down in a quiet place and face fears, mistakes, shortcomings. There has to be space to count and label all the monsters. There has to be an opportunity to admit you are imperfect and your strength is not endless. To curl up on the floor and cry to your heart’s content until a tiredness so great arrives that suddenly everything becomes simple.

True desperation can actually clear the air, and give new directions that actually make sense. Like Pandora’s box: you are free to let out all that gnaws at you from the inside and finally look at what is left. I believe you find hope and new dreams underneath all the rubble and this is what perseverance is about really, to be able to look for them. Because when you have nothing more to lose, you are suddenly free to choose the path that in reality suits you best.

freedom [1] I haven’t read it, so can only paraphrase

Food Waste and Its Solutions

During the last few weeks I was working on a study on food waste, and how our attention started to shift to this problem.

In many aspects, the story of food waste is a story of success. Rich countries produce 3-4 times the food they actually need, which means feeding the world is a solvable problem. 
In many other aspects however, the situation is more than tragic: we waste 1.2 to 2 billion ton of food every year, produce most of our grains and many other grocery products for animal consumption and destroy rain forests and biodiversity to cultivate food we don’t even need really. 

But it’s up to us if the story becomes a tragedy or a comedy in the end: with surprisingly straightforward and common sense steps, a bit more of conscientiousness, information and better tech, we can solve this question and reduce hunger all over the world. 

You can read the full article accompanying the slides, and how a Barcelona startup aims to disrupt the current distribution system here on Barcinno.

Fast Fun Facts – What has triggered the highest tweet per second to date?

Browsing through Internet Live Stats and it’s data on Twitter, I bumped into this curious fact. However the usual amount of tweets per second is around 6 000, the highest peak to date has seen 143,199 posts on the microblogging platform. And what did trigger it? Apparently, all the chit-chat on August 3, 2013 was around the TV airing of Hayao Miyazaki’s beautiful (and sometimes quite frankly frightening) Castle in The Sky animated movie in Japan. Quite a testimony of the wonderful animator’s pop culture icon status and the love of his work.

While we are here, a note on localisation: it’s not a coincidence that while the original title is Laputa: The Castle in The Sky, the name of the flying island was excluded for distribution in several countries, including the US, Spain and Mexico. La puta in Spanish slang means “the whore” and considered offensive for many. A good reminder for all of you considering international expansion to double-check what your brand name may mean in other languages.

Lifestyle design from the ground up

I’m sitting on an article I’m not sure any more I want to write. After two posts on startups, the new business structuring ideas and the fervent self education they bring – there will be translations next week – I want to talk about what I think, without being backed by precise data. And this is hard to do without being personal – which currently feels infinitely riskier than anything I published before.

During the last 6 days – or rather 9 months, to be honest – I was on an insane, insomniac research of career options ranging from the totally conventional to relatively outrageous ones. I’m reading until my eyes bleed then meet people and try out different stuff, because you don’t really know until you are actually doing it. A principle that I’ve always assumed to be true for my personal life, but somehow didn’t really realize it applies for work too.

Strangely this is a discovery that links personal and professional development together very well. In life, I tend to make big decisions easily and be willing to try out something just for the fun of it. Both my moving to Milan and Barcelona were somewhat abrupt. I learned incredibly lot – compared to my expat level zero anyways – and was very willing to admit and accept that my approach to building up a life was immature and not very efficient in Italy. (Which of course also led to a better, though nowhere near perfect start in Spain.) It also helped me to understand my priorities better and finally, today, to discover how setting foot in a new city – or a new relationship for that matter – is like setting up a new business. A wonderful opportunity to build yourself up from the ground again.

This is not one of those posts idolizing entrepreneurship. In my experience that is a hilariously interesting ride, but very often also excruciating and heart-crushing. I don’t believe it is a suitable path for everyone the same way I wouldn’t recommend a relationship style or diet to all of you. What I’m looking for is a structure that helps me to make sense of the world around me. My partner recently pointed out that I obviously derive a big chunk of my sense of self-worth from work which is a correct observation and also means that I can’t find integrity without building my professional self and decisions into this structure.

It helps me to look at entrepreneurship from a different semantic angle. In Hungarian, vállalkozni (that is, “entrepreneuring”) also means volunteering for something, taking matters in your own hand. I like this angle because it highlights that you have a choice and are free to experiment. That it’s completely okay to not know all the answers as long as you are ready to ask questions. So this is what I’m doing next.

silver for red, blue for yellow

Branding for Startups – Can trust become competitive advantage against big brands?

When I wrote about the advantages of building your startup with a brand focus from the beginning I got the question: isn’t a brand something that requires years and a long-term approach to build? It does, to stay alive and relevant for a long time. But we shouldn’t give into the belief that a brand, an image is a constant, an unshakable quality that will never evolve. 

It can be downright challenging for big brands to stay relevant and recognize the time to let go of a heritage that is meaningful no longer. Though some luxury and heritage brands will always stay on demand – as Burberry became chic again only after they cut off the franchises, returned to domestic production and focused on the traditional product line and quality – others will thrive to disrupt themselves to stay exciting and fresh for younger customers.

if brands would disappear

And only exciting is not enough. A maturer, more demanding kind of consumer generation is growing up, already requiring to be able to trust the brands they buy from. They look at businesses as responsible members of the society and decisions are increasingly made based on the transparency of said businesses. 

Not to mention it is easier to maintain trust then gaining it back again. Do you trust big corporations? Is it easy to believe that they are up to no mischief? In our era privacy finally becomes a real concern for the average customer – and is definitely already super important for your early adopter – so as sustainable solutions, local products and the actions and beliefs of CEOs. 

Thanks to almost unlimited information we are quick to boycott Firefox – otherwise a big favorite for their development principals and privacy policy – because of a comment denouncing gay marriage. In effect similarly, Abercombie&Fitch suffered 17% drop in sales since they declared how they are only for the cool AND slim kids out there.

This perceived access to all information works in favour of startups. First, conscientiously building on transparency to communicate our genuine good intentions is also easier when you are just starting out. Patagonia’s Footprint Chronicles is a good example: I salute their aim to eliminate the use of down plucked from geese still alive or force-fed for foie gras. However, if you are building a clothing company right now, you can choose your supplier with this requirement in mind and look better from the start.

You also don’t need to turn around a whole organisation and convince a board of directors either. Imagine how much work it was for Auchan to make their complete sustainability report available for every customer!

consumer trust

Secondly, many projects would never be able to spring to life without this trust. Running a successful Kickstarter campaign based on a promise wouldn’t be possible without people willing to try out new things and early adopters couldn’t inspire mainstream usage either.

In terms of communication, the biggest challenge for established brands comes exactly from this: clean slate brands, startups often embody contemporary customer values better. The values our users seek are our owns and communicating them honestly trumps any clever strategy. It’s easier to be sustainable, ethical and accessible from the beginning, than changing already existing perceptions and building up a new image. 

Yes, if you want to build a strong brand, you are in for the long haul. But whatever you do, will contribute to how consumers perceive you as a company and as a brand, even if marketing is nowhere on your mind. Better to be mindful about it, and use all the advantage you happen to got. 

The Maffia Myth – part III.

This is the third part of a short essay, read the  first part here, the second one here.

what others think

One of my favourite stories mentors ever told me was from Gil Penchina. Paraphrasing it super shortly, when I told him about how I’m unsure if hunting investors is the best way to go for Drungli, because I really don’t like being told what to do, he told me what happens when your whole board of directors agree about something you really don’t see is necessary. Apparently, nothing. Provided things are lookin’ up and mainly go into a positive direction, you can say no. (Or say yes and just don’t do it, which I’m not sure will work unless you are the vice president and general manager of eBay or have a real genuine who gives a flying fuck attitude, but you know, worth a shot.)

In a more general sense, being too concerned about what others think about you, your business and your decisions is something far too common in the eastern half of Europe and it will hurt you in several ways.

Being afraid of judgement, especially from established industry players and the media will hold you back from experimentation. In the worst case, from doing anything at all. It will stop you from initiating conversations, ask for advice and gain better knowledge for the important battles you will have to fight.
Without trust in your own abilities and values that guide your decisions it is impossible to make real use of mentoring sessions and the huge amount of advice you get. We all have our own angle and priorities and not all great advice will work in your own case.
And, if your worst nightmare is people judging you and laughing into your face when you fail, you’ll be held back from action.

I heard another interesting thing from Gil: you can’t be a good CEO without loving the stage. And you can’t go into the arena being vulnerable by empowering everyone with judgement. You need to make a shortlist, know who’s opinion matters, and stick to that.

handle failure better

Our fear of judgement is probably directly connected to our obsession with perfection and total lack of acceptance for failure. Educational systems that are geared towards punishment instead of development, teaching lexical facts instead of consequences and connections do a lot of damage. So as of course periods of recent history where one stray step can alter your life significantly in a very bad way. Less dramatically, a traditionally respected career path, where one works for the same company for 30+ years until he retires can be easily held back or ruined by one mistake.

It is interesting to see how a widening of opportunities contribute to a higher tolerance for mistakes and bad decisions. In a flexible environment, where changes happen in a dizzying pace and having multiple careers is natural, you have no other choice than learn by trial and error.

I don’t buy into the popular there is no failure narrative. Denying real failure and the heart wrenching feelings it causes doesn’t help you to learn or close down a zombie business. It is one step too far to the other direction.
What I’d like to achieve is acceptance failure without the familiar warm wash of shame. To built on it, and not being dragged down by.

What I’m suggesting is not being pessimistic or wielding these issues as excuses. I believe learning through entrepreneurship is a great way to understand how opportunities come up and changes can be your aid. Consequently, it is also possible to pick upon guidelines, understand the basic principles and come up with novel creative and ethical solutions, melded to a shape that is most comfortable for our personal or wider, regional personalities.

Success in this sense  is knowing what do we have in our hands and working that to our advantage.

The Maffia Myth – part II.

This is a three part little essay on cultural patterns that CEE startups have to leave behind to succeed.

I’m a Hungarian entrepreneur/freelancer, who have lived and/or worked in the UK, Italy and Spain. I’m not interested in finding excuses or brood over the past. My goal is to observe, understand and ultimately find solutions that bring us forward. You can read the first part here.

there is nothing in my hand

In order to be able to maintain balanced conversations we also need a more realistic view on our achievements and assets. Probably because of unrealistic expectations and WhatsApp-like stories we seriously undervalue achievements. We are not happy with a quarter million searches per month or 200 000 paying customers who actually turn in profit, because we want global coverage and constant growth, only the sky is the limit. These are not bad goals, obviously. But they can make the strengths and advantages we already have under our belts look little.[1]

And adequate understanding of our achievement is necessary to be able to see our opportunities and make good decisions. Without correct measurement, you might not be able to react to feedback and changes in the environment properly or won’t pursue projects that realistically seen are promising.

Then again, applied to communication, when you are aware of the value of your experience, you have a way to turn meetings with potential mentors and partners into an exchange of knowledge, honouring both their time and your relationship.

rich people are evil

If you grew up in countries under 4 decades of oppression from a political ideology that in theory idealize sharing and equal shares of work as well as income, and in reality enforces sharing for most but keeps the booty for a chosen few, you can’t help but have a higher than average suspicion towards well to do or downright rich folks. Add in massive, visible corruption and typically unfair taxation systems resulting in the national championship of utilizing loopholes and the result is a very awkward attitude.

How many times do you hear a startup joking about how they’d rather play with the money of investors than their own? I have the impression that we rely too much on seed-angel-VC funding jumps when planning businesses, simply because this is how everyone else seems to be doing it and because somehow we feel we deserve it. This makes us pitch in fundamentally wrong ways and obsess about persuasion and selling the idea, instead of backing it up with a solid foundation of data and results.

In reality, your relationship with your investor is a long term one. It ideally helps you along the way with money as well as connections and knowledge. And, as people who have actually raised funds and then bankrupted companies will tell you, the responsibility of losing somebody else’s money and the trust they’ve put in you is nowhere near as easy as it looks at first glance.

As in all matters of business open eyes and attention to details are all super important when closing funds. After all, there is data showing how having unfair advantage in money can make anyone a meaner person, and your future can depend on that term sheet in front of you. Makes it even more important to look for partners and supporters, not opponents to constantly fight. 

Next up: what others think matter and failure is well, failure.

[1] The other, equally harmful side of the coin is when we get just way too cocky. Poor estimation of assets and environment, a fairly typical “I will know it much better” attitude are all springing from the same root. We need to learn how to approach with a realistic – not to dark but also not to bright – attitude.

The Maffia Myth – part I.

Cultural patterns that CEE startups have to leave behind to succeed

When you have the good luck of living in different countries and frequently interact with people from widely different cultural backgrounds, you are prone to happen on interesting cultural differences – sometimes by embarrassing yourself ridiculously. Learning to navigate these cultural gaps and adapt models that work for other nations effectively is also a key factor for the development of CEE region startup communities.

As with all development, the first step is of course understanding ourselves, which does include assessing unique advantages as well as weaknesses. Being a die-hard realist, I thought about cultural and historical heritage that is hurting startups and entrepreneurs in Central and Eastern Europe, regardless of having global or local ambitions.

I’m Hungarian, born and bread and therefore my observations are based on the culture I know best. However, work and conversations with Polish, Bulgarian, Ukrainian and Slovakian entrepreneurs shows that we are struggling with very similar baggages.

CEE startup patterns

The Y generation is still painfully familiar with the twisted entrepreneurial image of the wardrobe sized mean bald guy, accessorized with thick gold chains and a black stolen Mercedes.[1] This picture  luckily is waning  slowly but surely with the strengthening startup scene and more and more public successes. It may still very well be a retaining power if family and friends – the circle who is supposed to give support to aspiring entrepreneurs – didn’t manage to step over it yet.

But a more interesting effect has been pointed out to me by Eze Vidra, Head of Google for Entrepreneurs Europe. During a talk he gave in Kiev he was encouraging young entrepreneurs to reach out to anyone they know, tap into the social circles of family and friends and use these ties to get customer interviews and market knowledge. The suggestion has been followed by awkward silence and then the remark: but we already have that, it’s called the maffia here.

When you come from cultures where for long decades your opportunity of emergence has been depending so heavily on who you know and how your family’s influence can help you, a natural reaction is trying to break free of these ties and achieve things all by yourself. I can actually recall feeling accomplished for getting my first real jobs without back-stair influence. Whereas in western cultures it is taken for granted that if you are just starting out, you need assistance. It is not a shameful act to ask for intros and borrow connections from family and friends.

For the sake of efficient customer development and advancing in sales, we have to cut ourselves some slack and find a comfortable middle ground. Being realistic about our options and exchanging in open and straightforward communication is key.

CEE startup communication patterns

A few years ago on an early morning I was walking over the urban railway bridge to our office with a colleague. The following few sentences for some reason has stuck to my mind:

me: Good morning, how are you today?

him: Sorry, I don’t do small talk.

me: …

I was flabbergasted back then but it only really got me thinking when I started to learn about the rules of small talk, the new etiquette of approaching people through the internet and actually leading interesting conversations with them. What I realized is that we are interestingly shy about small talk and conversation for the sake of entertainment. We tend to deem it a toy for the superficial socialites and salesmen from an intellectual high horse. It is probably partly a linguistic issue, rooted in how other languages adapted and exaggerated the expression small talk. At least in Hungarian, it definitely acquired a slight pejorative sense.

In reality purposeless conversation has important purposes: it helps to establish mutual goodwill, it acts as a bonding ritual and a conversation starter. Good conversation is based on interest and fair exchange. Consequently what we should be learning is not conserve phrases, even though they are very useful for first experiences or when you really don’t have the energy to be engaging just like that. What we need is an understanding why those expressions are used [2] as small talk base and find ways to construct new elements, more comfortable to use in our contexts and cultures.

Watching someone working the room with a somewhat cold efficiency is a weird experience, and can explain very well why we think so begrudgingly of small talk. But we can use available blueprints for guidelines and remember that the real context here is paying forward someone’s time and goodwill by caring about them. Then we can end up in functional conversations and find ways to advance together.

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Part II: I have nothing in my hands and rich people are evil.

Part III: What others think matter and I have nothing on my hands

[1] For the sake of not Eastern-European readers, this image is mainly due to the fact that socialism and communism wasn’t exactly glorifying entrepreneurial spirit. Entrepreneurship became the synonym to a wide array of negative attitudes, from being greedy, manipulative, maneuvering all the way to the downright criminal and the mob member.

[2] One of my favourite videos on the topic is from Ramit Sethi.