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[Music] so welcome to this episode of pre-seed academy where today's topic is about validating your business idea and we have some very cool speakers that i will announce shortly we have a quite tight schedule we'll finish at 10 o'clock so let's just get started so for those of you who haven't attended before this talk is a series of talks called pre-seat academy and the goal of pre-seat academy is basically to educate new entrepreneurs in various topics related to startup that could be funding it can be team it can be go to market and and it's preset academy is run by priest adventures which is a danish venture fund um in collaboration with me my name is nicola nielsen so president vendors decided to run this and then we teamed up to make this happen so i'm not a part i appreciate the ventures but are working very close with them today's talk is talk number 23 which we have done over the last two and a half years and we approximately run one event per month stay tuned and i'll talk about next events later so as i said today's topic is very simple but also very hard and it's the classic question is i have a great business idea uh how do i validate it is it just me who think it's a great idea or is there a real market for this solution slash product that i've come up with um and the idea for that is that i so my name is nila hoya i'll do the introduction so besides being an entrepreneur and investor myself i also teach entrepreneurship at copenhagen business school and what i would do in 5-10 minutes is basically talk about why and how it's different to validate startup idea versus what you normally learn in a business school after me i'm so happy to have trungolo triangle is a very experienced business angel he's currently spending most of his time in my money davis fintech startup but also build successful startups like language wire and order yo-yo and tour will do the very hard task in 15 minutes to explain how he's validating business ideas both his own and when he meet new uh founders who had an idea after talk we have david davi is a dental partner and one of the most recognized accelerators in europe called accelerace he's also a general partner at overkill ventures and david will share his insights from meeting basically hundreds of startups in the application process and they're also the the real person of running an accelerator you know what are they looking for and what do startups actually do both right and wrong after that we have 15 minutes of q a where feel free to ask any questions you might have and i will facilitate the q a so we will end at 10 sharp in case there are many really really good questions we run we might run a few minutes late but we really strive to to end the time for that to happen what you can see soon is you can see the q a button and if you have a question to either uh david tour or me or in general question just fill it in and then people can both put in their own question and you can also upload other questions do that as we go and as i said last 15 minutes will be a q a facilitated by me so now i try to to do the hard thing of making a five minute introduction to this validation in the startup perspective so i think the first question you will have is how hard can it be you know you have an idea you're basically going out and ask a lot of people what they think about it and guess what you will have a good um answer to these questions and of course this is a cartoonish thing where you ask the wrong questions but but it's basically what people think so when i meet first-time entrepreneurs or also business business school students they think that idea validation is about sending out a civic and of course they understand that they should send out the survey to the right people and they should ask the right questions uh but i think what i'll talk about the next five ten minutes why that is not enough um but maybe we should go one step back and say when does such surveys are very simple validation questions work in my view and i think in most research review that worked quite well when you have well-known products in well-known markets where the consumers or the customers can understand the problem you have the the the question you're asking so when i was doing this presentation i thought okay what about breakfast products so whether you use a cereal or you eat other type of breakfast or you don't eat breakfast at all at least you know about the problem so if i ask you would you like an organic version of cornflakes i guess you have a quite good understanding of that i could ask you a question even in a survey about what you prefer why you are eating musically instead why you're not having breakfast why you are eating fruit etc etc so to such well-known products it does make sense and that's why we honestly saying teach that at school because if i have a very well-known product or problem for you i can get reasonable answers the problem is just when we talk about very novel products that is not the case and again i had to dig up one thing that i haven't been able to foresee and i just came up with tick-tock you know okay so all you know tick tock now but imagine if i had pitched tick tock to david or tour five years ago or seven years ago whatever they were popular right and my research was about that i have asked consumers i guess that is teenagers about the need for a new lip dancing app you know was there really a need for that you know what would people have asked i don't know but it's really hard to see stuff like that so when you have latin need and very novel products you know it's really hard to use these simple surveys because you basically get in the out right i could set the same tick uh which step you know i guess most of you have snapchat on your phone now whatever happened if i made a survey about that one year before would you have recognized the need most likely not what to do about it i think the first thing is there's no silver bullet here my first recommendation was always to you qualitative methods because by qualitative methods you can find out what's really going on in the head of the customer what alternatives are the customer evaluating what is the customer spending money on right now so instead of asking only dear customer do you like this app you're saying you're finding out dear customer what are you doing today what are you doing to if you're interested in dancing or whatever what are you using are you having a youtube channel what are you doing so in general qualitative methods so what's the problem with that um the problem is it's ten still to be superficial you don't really understand what the customer really wants i know again here in five minutes we don't have time to go into the details if i should um recommend one framework i would recommend the jobs to be done uh by clayton christensen and others where it goes beyond simply segmentation and goes into what kind of problem is the consumer or customer trying to find out and this quote you have on this page is actually quoted into you from clayton questions showing the difference between segmentation correlation and jobs to be done right so what are the the filler problems so assume that i've had taken this approach in a let's say b2b setting and i really try to dig into the problems of this ceo this big company why is this still not enough and the problem there is that there's no commitment so you might have these fantastic dialogue with other consumers or businesses but and they you get your value proposition confirmed and basically this customer is saying to you oh my god that sounds fantastic go out and build it and we will for sure buy it in three years right and we see so many startups do this approach where they most likely ask the right questions but still they're getting some feedback with no commitment and you need that kind of commitment both in the b2b sphere but also building something for consumers that is of course easier said than done because the ideal form for commitment is that your potential customer pays a lot of money upfront right that's basically what you see with crowdfunding for instance or in the b2b setting where you have pilot cuts where you said okay dear customer you said you have this problem normal price is one million euro i will build it for you for only one hundred thousand right that's great um typically that's hard to do from day one because so what can you do early on the process typically you see time is some kind of commitment so if i don't have a product yet that are used that customers are willing to pay for b2b customers what if they are willing to spend time with me what if they're willing to do a code development project with me where i can have meetings and workshops with them that's at least one sign and you can see what happened in the b2 business to consumers fare is basically that's how all staff right have you ever paid for a consumer version of software most likely not it typically starts as some kind of free beta version to test whether there's a demand and the third and final type of commitment as i see it is a brand so you might want to interact with people that are not spending so much time on you and don't are giving you cash but they're spending something else and that is their brand so assume that you are doing uh your medical device company or pharmaceutical startup and you're on to something really new if you can get a nobel prize nobel prize winner as your scientific advice so ideally that advice to spend time but just the fact that that person will spend part of his or her brand on you is important you can also see that with agreements with other companies etc etc of course you ideally want them to spend time or money but a brand can be a starting point if you want to dig deeper i can highly recommend digging into the the theory of effectuation done by professor sastati because he actually studied how successful entrepreneurs were so not semi-successful but really someone who made it and she found out what most of them did when evaluating new business ideas and building the startup was stakeholder commitments where they interacted with compa uh with stakeholders and if they could got the commitment from them they learned some they got better resources and thereby they built their company if they couldn't get that stakeholder commitment then they would go on to something else and you can see that here that stakeholders it's not only about customers it's also co-founders investors etc etc so you're trying to commit our people instead of just saying would you buy this in three years you're trying to find other signals that they really want that with these words and again it was a five-minute version of um of how i see it from a business school perspective i will give the word to tor and he can share his insight on how he's really doing in in real life so so the screen is yours thanks is it fine is it on yes yeah cool so 10 15 minutes very quickly about my uh view on this um about your business idea and how to get started um it's actually easy just do it uh i'll get back to that um but first just one slide about me um i have 20 years of startup uh experience um i started my first company uh how do i change oh there you go perfect um i started my first company 20 years ago that was language wire it was a translation company um then i sold that after 12 years and then i invested in a lot of small companies to do exactly this product market fit testing helping founders to test the product making a minimum viable product and get it out there so i was involved in a lot of projects with small investments just to help and that failed i learned a lot from that but a few of my small investments came out interesting and which was one of them was audio so i jumped into that uh seven eight years ago and i ran that for four or five years uh now he's running by itself and then i changed to my money which was an old investment of mine well old uh five years ago and now it's matured it did a lot of pivots um and now we found a really interesting spot in the market doing a pocket money system or allowance systems for kids and we have a deal now with mastercard so we have my money mastercards that we ship out and help families control that in a safe environment and our goal is to educate kids to become financially responsible so they don't end up as slaves in some kind of a payment scheme and so on and so on so they don't spend more than they have so um yeah so that's what i do or what i've done so uh just 10 15 minutes on on my view on this and what i want to help you with and make notes of so that's just you know just one slide from here five things that i want you to uh note on on on doing a a startup and getting out there and many of the some of it is it's just like when nicolas said um but my first thing is that don't quit your day-to-day job don't go all-in i know that people say the opposite that hey go all in and go down the basement and sit there and drink cola and eat pizza for a long time and i actually believe the other way around because things takes much more time than you think so if you have an idea in the beginning there's not so much to do then go out and validate it and have meetings with potential clients and and go out and sell it and then you can slowly build it up and so to me and that's what i've done in my 20 years especially when i started i had a day job or actually night job i was a bartender while i built my first company and so i worked in the bar in the night and i worked on my business idea in the day and that meant that i didn't have you know a a clock ticking that you know at some point i would have not had much money more money so i believe a lot in this that you should fix your private economy economy so that you don't run out of money and you're not stressed about it because it will take time and even your if your programmer says we can build this in two months it will take six months so make sure that you in private have enough time and runway to uh to build up your idea into a company so that's my first thing is that make sure that you don't bet your whole house and everything on something and you only have six months and then you have to land an investor or whatever get yourself free of that by having uh keep your job or have a simple job which i had i remember putting my business ideas on the napkins in the bar while i had time between three and five when people were too drunk to buy more drinks so that's how i built my first company next thing is to test your pitch and sell it all the time i actually remember myself being a little bit dangerous about selling it to people because maybe they will steal it or maybe i was too afraid to get a cold answer back like no i don't see that that's a shitty idea so and but you just have to do it you just have to sell it and then i then it's very important that you take the feedback that you actually listen to what people um come back to you and say um so that you uh so that you you you change your idea if it's not good enough i have some startup people i've met and tried to help and they simply don't listen so they uh they they just don't change and they just keep on going and and then you you will not succeed so test your pitch all the time sell it to people listen to what they say and and so on um one thing i i know about pitching is that it's important when you pitch that you acknowledge who you're pitching to is it a typical client or not if you're selling something for golfing and this guy don't play golf you need to you know put him into the situation that you need the product but if you meet a guy who plays golf and you're selling something within golfing it's you know you should really hit it and you should really be you know buy it so just pitch a lot listen try to sell it um i hear a lot of startups being a bit confused on what they actually do so you know when people pitch to me and maybe my face is too cold like i don't get it and then they start saying well then we can also do this and this and this you know so be careful that you that you want to do too much and actually when i started the language buying my first company 20 years ago we wanted to be everything within translation so we wanted to be a terminology bank and a portal and a lot of things and actually it was an investor at one point that said to us i hear seven different ideas if you should just choose one which one would it be and that made us go well then we might want to start with actually helping companies do translations and be the the in-between guy between the translators and the businesses and that's how we started and we never came back to the other ideas that we had around and we just stick to that and we became very good at that so be careful when you have an idea that you don't say i want to do everything i can do to help people who own a house or whatever just think about what is the number one thing that you want to do and stick to that and then coming back to the pitching you should really get five clients and you should get it right now so sell it before you have it otherwise don't build it i see too many people go down in the basement and build something for six or twelve months and then they come out and say here it is and then there's no one to buy it so sell what you have uh right now get five clients and you can do it in many different ways so if you you know want to do a new cornflakes and maybe you think that it needs to be vacant or whatever you simply just buy some kellogg's cornflakes put a sticker on saying new bacon something and then you make an agreement with your local grocery and just put them up there and then you just watch if people want to buy it and if you want to do a b2b sale then you just go out and have you know meeting with nova nordisk or whatever and try to sell it and just get some kind of commitment so just get five clients and do it before you spend too much time in the basement and then there's this product market fit phase that i always talk a lot about and this is the phase where you go out and your product your idea meets the client and you will learn that you have to do pivots maybe it's a different target group maybe it's a different product maybe you need a green button whatever but you will learn a lot when you go out and pitch and as i mentioned in my last one there are five clients it has to be you because what happens when you go out and meet your first client is that you get a lot of feedback and a lot of changing when i did audio before it became audio we thought that we're going to do a generic app and so on so i went to a cafe in copenhagen trying to sell my idea about having one app where you can find all the cafes in copenhagen and then they said nah we don't want to be there because we are brand like starbucks it was emery's and they say we don't want to be in a generic brand and then i said on the meeting i just said well what if i make your app what if i make an app called emery's and then i said yeah sure and then i went back to my developers and said i got a good you know news and bad news good news is i got our first client bad news is that we it seems that we have to build an app for every client that we built and that's you know on that meeting our whole uh startup idea changed from being one app to a thousand right now all of you i think we close to four thousand clients so we have made four thousand different apps but that's you know how it is and you pivot and you you know you you learn what the clients really want and then my last thing is do it there's no time like the present and i think that some of us might think that damn it you know facebook that was my idea or amazon i could have done that and it's over and tick tock i saw that coming but i didn't react on it but now it's it's too late but it's not and the crazy thing is that it's never been a better time to start and and so don't think that everything is done and now it's over the funny thing is that you we thought like that for a hundred years if you go a hundred years back when they just invented i don't know not fire maybe but like the electricity of the steam engine they thought back then it's over you know damn it the steam engine i saw it coming i didn't do it uh electricity i also was playing around with that in the basement but now someone else bell or whatever his name was did it so i couldn't do it um and it's over and they really thought that a hundred years ago i look at you know look at the world now so it's it's just started with robotics and whatever is coming you know so just do it i think i don't know i don't have time sorry but i think i'm i'm done cool talk very straight to the point yeah for fun yeah so to all thank you if you could unshare your screen um and then we have david coming in and share his experience david you're muted just as you know it yeah i think that's can you hear me yes we can okay i'm just gonna start my presentation here as well we can get started i'm just gonna make sure my time is running okay you actually have four minutes more because towards so fast so yeah okay so just to think put things in perspective for all of you founders sitting out there so where is my experience originating from it is mainly originating from my own startups of course but for the past 10 years really has been from the accelerator and investors side where mainly i've been with accelerates but now also overkill ventures but just to give you a perspective that accelerace works with the startups that are typically in the in the pre-product pre-product market fit phase and also really pre-traction but they have a product they typically have something that is used by pilot customers it's typically two founders and they're already gone more or less full-time so these are typically the companies we work with so much of the experience i'm bringing forth today will come from companies at this stage and if you have like questions on how that relates to if you are further along like you are earlier than that included in qaa okay so uh we helped startups succeed uh so when we look at the numbers uh we remarkably increase the chance of success for companies so actually companies go through our program especially on the funding ratio it's remarkably higher so more than 60 percent of companies that go for our program actually raises funding from people like negolai and tor and and other skilled investors whereas companies that do not actually go for our program they they they do not really raise a lot of money and i think that is because we're doing something right with these companies and what we are doing essentially is that we are taking all our experience from having worked with so many startups for the past 10 years we really work with close to 700 startups and we've seen that going for for for inception to to end game um and we we try to learn from all of that and instill that information into all of the startups that go through our program and so it's really accelerates it really plays a collective and institutionalized learning understanding of what makes a successful startup in the early phases so one of the things i really want to highlight in this talk here is that there is a difference between what we see is called intracriteria and excellence criteria and the reason why i love this picture is because basketball is really one of the places where that is most apparent so if you were to identify success [Music] oh so david i think that's a problem with your internet uh it's just like we almost we couldn't hear you for the last 20 seconds i don't know what happened maybe you could just take your camera off just in i will try to switch off your camera maybe just check mine okay do you want me to take my camera off yeah i think maybe that could be a good idea just in case okay yes yeah right so in the in basketball it's it's really apparent what is an entry criteria because an intro criteria is something that allows you to have a chance to success you're short there's still a chance that you'll become a good basketball player but you if you're tall there is a chance but doesn't mean that you will become a good basketball player and above a certain side there's no correlation between height and success so in any field has what you call intricate here and excellence criteria and one of the key things is to really understand what is that in entrepreneurship what is that with startup what is just needs to be there and what are the things that are really important that actually correlates with success and we're talking about startup ideas today and i think i just want to hammer down the point that the idea is not very important the idea is an entry criteria in entrepreneurship and stuff but it means the idea just has to be good enough it's not like the the better the idea is the more successful you will become but the idea is shitty you will have zero chance of success uh but it just has to be good enough and there are tons of examples of companies actually didn't have a great idea but they had a pretty good idea and over time they could shape that into becoming a better idea they could shape the world around them to think that that was a good idea so i think just want to hammer down that point an idea in entrepreneurship is an entry point it just has to be good enough and then you go with it basically like choices then you go with it and you will shape it over time so you have the idea and this is really where we see startup and founders struggle in their mind it is because they have the idea and they see a huge potential and they see all these different types of potential customers and i remember that from having my i have been two stars as well and every time i i had so many potential customer segments you could go after these requests for these you could have these and you should you create this slide on the billion dollar market that you show to investors the thing is that as a startup you two people and you raise like a hundred thousand two hundred thousand or something you haven't even raised money you have a little bit of saving there is no chance in health that you will ever ever meaningfully approach that market which you're thinking about the billion dollar market it is like being in two lions and going after that zipper package in fact the the only absolute certain way not to get a separate would start would be to go and chase all of them that's that's the certain strategy of not getting a single one so what you need to do is you need to isolate identify and isolate a part of that market a part of the group or the separate one separate that you could actually catch but the question is of course which one right which one are we focusing on because there are so many potential customers out there and we know they're slightly different but actually if you dig down into the granularity of customer segments they are not different and i think this is really one of the things that we try to teach startups that they are not all the same but you need to have seen a lot of follow-ups to really make that clear to you so the way we look at it and the way that we see these things play out is that they are really in the beginning three different customer segments that the early stage father will will have some kind of interaction with uh and and i think one of the most dangerous things and where startups really go wrong is that they start extrapolating learning from the wrong customer segment um so the first ones who always buy from your friends the first one who signs up they know you their colleagues or their friends and your friends or their friends of your family they know you and they do it because they want to help you you're just taking the lead become an entrepreneur and they're clapping and they think it's awesome and they want to help you so things like your packing grows very low and and they're not critical and you think you have product market but in fact you do not have product market fit because these people actually don't have a need for what you have actually created so the second group and this is really the most dangerous group for startups that we see this is really where startups fail is because they at some point you will meet beyond friends you will meet crazy people and there's a china crazy people out there and those are people who are interested in new stuff and there's a lot of people interested in new stuff so if you're creating something new a lot of people will be interested and they will want to meet with you and they want to talk to you and they will write your emails and they will enter into some kind of dialogue with you and startups fail because that they spend the entire runway talking to these people because they will they're always interested but they actually don't have a true business need or true personally but they're interested because they have a personal interest in your area of you or something new and most others fail because they keep talking to these people you you succeed as a startup when you idea meets what we call the beachhead which is really the first customer segment who has a valid need for your product who's willing to buy from an unknown startup an unknown product from an unknown startup now buying something from an unknown style of unknown product they never heard about is basically some kind of insanity why would you do that the only reason why you would do that is if you are desperate only reason why you would do that is if you're more or less desperate so what really defines the most important the most important segment for it's not a really bad way your idea is being validated it's not with your friends it's not with all the crazy people that always loves new things that run around at the conferences who who to check propaganda buy stuff at kickstarter no no the the the ones where you really get validation is the beaches because they have a true need now they are desperate and the reason why they're desperate is typically because it is a subsequent of a larger segment that no one has cared sure typically of course they're new i just wrote a blog post about my first startup we tried to do a ticketing platform back in 2016 and uh basically the internet enabled event manager to create their own tickets so we went to all the venues and concert places and said you're normally using ticketmaster why don't you use our system there was another startup that started at the exact same year as we did with the exact same idea and that was eventbrite and then price didn't go after ticketing they went at the meetups meetups had no there was no market whatever social media enabled all these small groups and different cities to go and meet up and they the ticketmaster didn't serve them they were desperate they had no ticketing solution now but meet up school over time and today that is the core of the reason why eventbrite became successful we had to fold because we just talked to crazy people they wanted to talk to us but we spent the entire runway talking to people who would actually never buy and that is what happens with starters when they fail they spend the entire runway talking to people who would actually never buy the product but they show interest and it confuses us because we confuse interest with need or confuse interest with desperation i think one of the most important takeaways for me when looking at multiple companies having run over the same that is really the same pattern that constantly emerges so what you need to do is basically you need to focus all of your energy in on a single spot within the customer broadcasting segment which is really called the beach head and you can illustrate a little bit like this if you wanted to take an enemy beat you wanted to take an enemy territory you have limited resources with your military and this certain way to fail would be to try to attack the entire beach at once you will get mowed down the only possible the only scenario in which you will actually exceed if you concentrate all your forces on a single spot of that beach and that is what we call the beach head and if you do that you can overwhelm the force you can go in at this tiny part of the segment and become dominant you become a monopoly so donkey republic for example that went through our program in 2015 we really helped it with that because they wanted to change city uh transportation in general and we basically told them no no no find a small beach here then they did so they went up the tourist in copenhagen coming in living in airbnbs we wanted a sit bike per day that's how they get started they could dominate that completely so everyone we said don't go anywhere else until every single tourist incoming higgins coming in with a launch arranged channel they're using the dumpling republic then you can go to commuters then you could go to other cities but the common monopoly with that because with them you can build a perfect part of market because they're desperate they're literally district because they don't know where all the station bikes are and they don't know where the bike shops are where they can actually go and rent the bike they're desperate so this is what you need to do this is where you get your validation and from there you can grow and when you landed on the beach you can go you can you can you can you can you can you can see your your surroundings you can find the next best place to move to that part of the beach and then you do that again and then you move to another part of the beach and you can continuously do that until you take an entire beach and that is how it started scales and how it works successfully so what is a good beachhead so a good beach has has those kind of characteristics here they are desperate that means that they have a need a validity they're not interested they're not they're not it's not a personal interest they are desperate because they have no real solution so do i my money that's a good example right because the parents and then what had served parents and pocket money solutions for the digital system right so they were sort of a desperate for a solution because the the piggy the the peaking bang was what was the alternative they also need to be identifiable you need to be able to identify them sometimes we have starters coming up with some theoretical beachheads that they that would never be able to identify they also need to be accessible with your resources right so don't go after like ceo fortune 500 companies in the us ceos as your customer segment because you'll never get access to them and typically your accessibility is actually what defines the beachhead because within your resource base and within your team setup you will have people who you can reach and people you cannot reach so that is that is that is very like typically one of those things that's restricted right it's also very good that they have money because you're just selling something startups and students and all of these like customers that startups often come up with are actually terrible customer sectors because they don't have money unless you have some other way to monetize them but it's really nice to have money then it's really good if they have reference about you so that means that they basically that means that if you then other people and look up to them and other people want to be like them um because if you can get the b check then other people will see the beachhead using it and it will inspire and instill confidence in other adjacent customer segments to all to use this product so reference value is important it's really nice if they're part of what we call a dentist community things community really means that these people talk a lot because if they talk a lot then this idea will spread within the beachhead so the opposite of a bench community will be an author so don't create a software tool for authors that can help them like create better sentences because an author will isolate himself five years into a wood while writing a book and he loves the product that no one else would ever know but a really good customer segment of people who talk a lot with each other and share ideas so that the density of the community and then i would say the last the most important thing which you will never find in the business book but you can only you will only know if you tried doing startups yourself but also close to a lot of startup founders you need to have empathy for your customers because doing a startup is essentially signing up to serve a group of people for your entire life for at least 10 years you're going to serve them you're going to be there for them you're going to think about them you're going to take their phone call you're going to take all of their their complaints you need to like these people if you do not then you will start to hate them you'll start to hate them because they will reject you they won't they will be troublesome they will they will constantly demand things of you so that is very very important you need to have empathy for your customer and then you can really validate your idea if you can find the speech head then you got validation validation doesn't happen with the friends and the crazy people validation happens when you hit a customer segment which is defined as we would say the beachhead wheeler people who have a valid need for your product and they're desperate so they're actually pretty easy to get in contact with but you have to be able to identify them and go after them and that is the most important thing okay so i write a lot of blog posts and so on if you want to connect with me i'm always open to be connected on with linkedin and you'll just find my name one of the few people with my name in the world so just you'll find me and i write a lot of stuff and yeah you can try to if you are close to riga you can sign up for overkill if you're close to competing you know where to find me that's it i'll try to turn on the video again for the q a that's perfect thanks maybe also if you cannot share your screen david and then we go to the q and a we are right on time um and so if you cannot mute um perfect so i think let's let's go to the q a and and i think the first one is to tour so sure if i should beat devil's advocate i would say oh my god how can you do that b2b sale from the beginning are people really really to to to pay upfront you know how do you do it in real life could you come some examples where where you know you serve for all startups have managed to get money out of business to business basically from the onset yeah so um actually b2b is the most easy way to do uh five sales to begin with uh b2c is harder because when you have a b2c company you need you know thousands and millions of customers because you know they only pay you whatever 50 kroner months whatever but b2b is much easier because especially in denmark you know you can always book a meeting you know someone who knows someone then you get a meeting so it's easy to get meetings i know from england it's harder you know to just call someone in london and book a meeting because there's so many gatekeepers but getting a meeting and then you so i also saw a question saying how can you sell something you don't have and so on but you go out and sell the idea and you say listen we are building something and with this you will have 10 more sales would you be willing to buy that when i have it next week and that's all you need you just need someone to say um yeah if you bring me that i will you know i will sign off so if you can sell it if you know get the money before you have it that's good selling and you should try that but getting a commitment saying if you bring me that i will buy it and and i when i started my first company 20 years ago we shared or actually we had three shape who lived with us in our offices uh in copenhagen so they came with us and they that you know three shapes today is a super um successful company don't hear so much about them but but they are really doing well and they have done a 3d scanner and and when i started uh they built it almost out of lago and i remember standing the first you know mvp in in our office they built it and it looked horrible with middle things and so on and almost made out of lego and they sold that to the first company in denmark they they went out and said here's the here's a product it can help your production save a 10 cost they explained how it would work and the company said you know what we will buy that when you have it and here's a half million upfront and of course that was a great selling but if you really go out sell the idea you may get a commitment that could be enough but it could also be that they actually sign up and say you know when you bring us that we're on i i can also great to i can also share my first experience actually also b2b so one of my first companies was a very nerdy software company doing encryption for banks and why would a bank ever buy from a small startup well normally they wouldn't but actually to take david's words they were desperate because there was some hacking going on so normally there will be a fantastic bad beat set segment but for that specific point of time six nine months they were great so what did we do i was they were actually working when i met them and the first time a commitment they had before i came was that the banks were willing to spend time with them so i came in as a ceo slash early investor and i said hey dear founder let me talk to the two biggest banks in denmark and they actually spent time with us defining their problem and they invited people in so that was some kind of commitment as a store said ideally you want money from day one that's of what you want but what you're getting is you're getting commitment that they're spending time with you and six months later they might be willing to pay a lot of money but what you can do in month two or three you can say to them now we have the mvp and that's great you know the real product will cost you 1 million euro what if you gave us 50 000 euro to play with the demo version that's a commitment right so you can imagine a bank if they say they're willing to spend one million euro in six or nine months they should also be willing to spend ten thousand or twenty thousand euro right now so remember when we talk about this this is a process and you're most likely not getting uh all the money from day one but having them to spend time and resources and lay down a little bit of money is it and i will actually also second would toss it b to b is is actually the easiest thing but b to c is really hard because b to c it's really hard to get money up front you know when had the last time you have paid money upfront for my net so in b2c it's typically more about you building a crappy version and prove with the retention rate that that people are using it maybe i can give the word to you david because you're both seeing b to b and b to c so when they enter your program what's a typically type of validation they have done so they don't have money but what do they typically have well they typically have pilots running talk to someone who has signed up to do a pilot if it's consumers they typically launch the app to be in in product hunter somewhere else i got around a thousand and two thousand maybe up to 10 000 users at that point but like i said we're looking a lot of at who are those people right because i've seen and you know that like tons of pilots never become anything because the guy who signed that loi basically just did our personal injury he couldn't commit his business really to anything and so we really we really need to understand like the the the source of that but that's typically what we see in stagewise yeah so i think the next question is also about what kind of commitment does other investors that could be a business thing to want to see i can start and then i can maybe give the word to two afterwards so in a b2b uh you know the typical business angel invest more or less the same time as an accelerator goes in right more or less so what do we expect if it's a b2b then i expect as a business saying that they have talked with a lot of potential customers really talk no not service but really understand in this organization there are many other organizations as david said and our solution could be used in 20 different industries but we can see for this specific industry and exactly it's a cfo in that metal industry that need our software i think that's the absolute minimum and then of course my next question would be if we interest could say could we talk with some of those together right because they are sort of telling me how many they have talked to and how good relations they are and i'll typically look them in the eyes and ask okay could we visit them together right so i'll say in general business angel evaluate qualitative data from a much fewer customers um but really understand what problem you sold to them and that this speech hit is really the one um b2c i don't do that much but what i see for my friends invest in that it's really about this early retention data that you are launched a free app and that there are groups that are using this and it's not paid advertising but they more or less again tour you have also did some business angel investments what have what have you what would you like to see well it's interesting actually because i've done a lot of investments but i also got a lot of investments into audio and and also my money but especially audio was like a typical vc you know thing and the funny thing is that you know in in when you have business angels and you want investments from them it's much more about as you say and i agree with you it's to me as a business agent is is a lot about uh the the the the customers that you have or you talk to and and that and i may even go out myself and try to sell it or even call a couple of friends in that section and say hey i got this product you want it so i may even try to sell it myself uh if it's b2c you know if i'm the target group and and i don't you know get it then you know it's hard but if i'm attack group and i you know i'm like yeah i could buy that and that you know that means a lot and if anything is that that's how it is in the beginning with with business angels it's it's a lot about the product market fit and and if it's there but then later when you're trying to get vcs on board it's they don't care about that they just care about of course that you should sell it and you can sell it but at that point it's more about uni economics that that okay you got a thousand customers but can you make money out of that so so i think that's very interesting that that in the beginning when you sell it is you sell more the idea and the product market fit and that i found a place in the market where they need this and they're desperate as as david says that's in the beginning where where we as business agent is like yeah there's a product and there's a need for it and let's go and then later on you need to focus on unit economics and and make a business out there so right now with my money uh we really got a market fit and we got over a thousand customers who is paying every month for this product but now it's all about unit economics that can we make money out of it can we make a good enough deal with mastercard so that the few money we get from every customer don't you know we have to deliver everything to mastercard so um i agree with you it's it's a lot about the five first clients so the first clients are they there so david um i think there are two questions here that are relevant for for the platforms business right and i know you have invested into some of them and it's also stated here it's a classic chicken and the egg you know how do you typically see the initial validation not in year two or three when it's about uni economics but when they meet you and said i want to do a matchmaking platform for this industry or these these consumers what kind of validation would you recommend well typically you start with the supply side it can be for some special instances you start with the demand side but typically you start with the supply side so you basically go to on the supply side of the platform say okay so you have this service or you have this product or somewhere else and give me a i'm building this marketplace and what i can basically help you with is expand your market find your customers so if you upload your product to my marketplace i'll make sure that i'll find people on the other side now you have a problem because you have to fulfill that promise right but there is no marketplace unless you have supply side because all the the your value proposition to the demand side is basically you have aggregated the supply side so you need to go and negotiate as much supply as possible and then go on the demand side and you have a very little bit of time window of opportunity here because the people if you it could be pizzerias right there as but it could be other things as well but basically they signed up and they had some friction and and someone and you promised them a lot of orders a lot of customers a lot of people buying their stuff and you have i mean you need to deliver on that pretty quickly so what you want to do is that you want to you want to re you don't want to create a global marketplace you want to create a local amount of place so let's say like the simple example would be like pizzerias of course like then you create density within an area so actually people within close to that area you collect all the supply side and then you and then you go after the demand side in that area so you have density so you can make that that fit work right but it could also be like if you do second hand things then start with one city because i'm never gonna go from copenhagen to always to buy a used like a used computer monitor so that supply side has zero value to me the only value that it has is the supplies out there is within the range of me right so always think about it you have to one marketplace is not a marketplace my marketplace is a myriad of small marketplaces that can interact with each other and what we see uh when we look at these big pocket places like like like all of those we know today we think they're one marketplace but that's not how they would build that's how not what they actually are so so that's generically how you do and i'll second that i also recommend when people come to me students whatever as a marketplace i would say how can you validate that by not doing a marketplace you know how can you handheld this and basically because the marketplace is supply and demand matching and of course you want that ideally to be fixed in this so you can do it only with three percent you know commission but if you believe that you can match buy and sellers do that manually as you said go out to the sellers and said i can get 10 customers for you and of course the the sales and marketing costs for you initially will be way too hard high but that's okay because what you're validating is not the unique economics you're validating the need and then later on you can create you can say a new platform um the next question that might be the the last one we will take is about the price um you know how to set the price i can start by selling my insights maybe go to tour and david um i think it's a classic question initially what is the right price and i'll i'll answer differently in saying the price would always be dynamic and not you shouldn't be too cautious about setting the right place in the right price initially because it will change so many times basically any software as a service you're using right now and it's successful i can guarantee that they have changed pricing and price models 10 times so of course initially you want to have some money out of the customers because that's the validation but you also know it's basically b2b that the first price you're getting for reference customers will be very low because they know the value so if you come to any business and said i'm a startup you have a problem of course you'll tell them that the real price is one million kroner but they're not be paying with one million kroner and don't get too caught up in that i actually talked to a business the business startup once and i saw that they have an increasing price over time and i asked them so how are you setting the price we don't really know how to do it basically what we are doing is we increase the price with every customer and until we see enough customers saying no we will continue increasing the price because the value of your product also goes up when you have a better brand and more functionality or whatever and i'll maybe hand it over both to tor and david so tour what were you saying how do you set price and what are your thoughts on that yeah i've tried a lot about this you know a bit with language wire and then especially with audio and now a little bit with my money but i don't find pricing in the beginning important what is important in the beginning is that you're getting customers who gets dependent on your product and keeps going so it goes back to when someone comes and pitch an idea say yeah we got a hundred thousand downloads you know the next question from any investor will be okay fine and how many of those are still using your product if it's free or not how many are using it so to begin with it's all about getting people hooked on your product then pricing you can always change and you do and in language wire in audio we change prices all the time and i even had two price consultant helping us in audio over two times where we had specialists from london flying in to help us find the right price and one of the things he said as you also said nikolai is that if you haven't lost any customers due to pricing your prices are not high enough and also i learned many times during my startups is that it's actually pretty easy to to uh to change your prices to go higher so i would just say get started and and the price is what people are willing to pay and and also you know where your competitors are and so on but in beginning it's not important what is important in the beginning is to get uh customers who don't churn because of you know your shitty product or maybe they didn't need the product in you anyway and then you find out uh so don't lose customers in the beginning on price but later on you have to make unique economics and you have to make a profit profitable company and then you have to to care about it but the beginning it's all about getting loyal customers who stay with you who don't journey david yeah so i think it's a little bit dif it's a bit different from if you're doing um if you're doing a business to business in in the enterprise side and into consumers if you're doing business to business and and heavier stuff i would never put a price on that in the beginning i would echo that i remember working closely together with templify and basically trying to do that and we test a lot of things and definitely you do not want to have a price because people in the enterprise business business they need they like to define their needs as well and you basically come up with a price and they don't lack money so they're willing to pay their desperate and desperation means they're willing to pay whatever you charge basically unless it's unreasonable to have the problem solved right so so prices are not important of course if you're targeting consumers they need to know what something costs right and what is very important for you is reference pricing so basically whatever category are they putting you into because they will compare you to whatever seems the next you know the next logical of the reference point so what you really need to do is to escape that you want to create a new category perceptual category basically like like fitbit created like they like to the fitness trackers you don't compare the price necessary to a watch you don't sit and think this is very expensive watch because you think about it as a watch basically you want to you you want to get away from that so that one reason why duncan republic is actually rather expensive to rent the bike with duncan probably goes to 10 euros a day but but but that's a different reference point right from from from from buses and metros which are much cheaper but those are used by commuters right so you don't want to position it in a computer product you want to position as an experienced product to tourist it it goes into a different perceptual category so be cognizant of that be very cognizant of how in consumer space you are what category you're creating if you're creating header or if you're landing in a category that has already very established price points because you will be you will be judged in relation to those yeah and i think time is up we'll take one final question here and that's about how you reach out to those potential customers i can start by saying my insights and then give it to two and david i would say that's exactly why you need a sales person in your team or you're the salesperson right because you need to be able to go out there and i see it again and again especially among students where you feel in some way inferior it's based in the b2b you don't really want to go out and talk to them and oh my god this person has a fancy title and you really don't want to do it but there's no way around it there's no way around going to talk to you you can't get these insights from a facebook advertising or google adwords whatever of course you can try to get leads by and whatever but it ends in dialogue and how do you get that dialogue that is by having a fantastic story and people want to talk to you is that by emails typically not is typically by meeting people grabbing the phone meeting people at conferences etc etc and that is very hard for most first-time founders and that's also why it's so easy for me as a business angel to use that validation because if i meet them and say you need to do it if they are not willing to do that i don't feel comfortable doing that i think there's a very small chance they'll be successful entrepreneurs because you need to do that it's a big part of a startup is selling to journalists to customers to partners um maybe your insights on on what you would recommend how you get these kind of insights in the beginning as you also said it's super important that you do your own selling because you have to talk to the client and there's a lot of product market fit going on in the beginning so you can't just hire someone to take the sales because they won't be fit to do that because in the beginning you have to change the product all the time once you got the product you've got 100 customers using it it's fine there might be small tweaks then you can hire someone just remember sales guys are simple people you know sell this and and and that's it you know they are not they cannot you know like maybe we should turn it around and do something else you know that's up to you to do uh b2b is easy you just call people and book meetings and sell it on a meeting uh hopefully when corona is over um that's easy uh b2c is a little bit harder but you can still do you know facebook ads and so on i always say and i think i use that as an example and they like to your classes is that if you want to do a flying bike or whatever just put an ad on google and facebook where you have nothing but just try to see if you can sell it by doing it like that and then just make a landing page saying sorry i'm glad you've made it to here we're not ready yet but put in your email right here and we'll get back to you but just to see if you can sell it online with no help but you know just banners and so on just just go out and sell it uh how you think you want to do it even though you don't have it and then just to see the reaction if people will take the bite uh whatever david find comments on that no i don't know you said something smart things and we over time so i'm not gonna so uh don't worry we're done in 10 seconds um we is if you didn't get your cred question answered on then we just want feedback we're running these open door sessions where you can get half an hour not to pitch your idea because it's not about getting investment it's about getting feedback we have the net next open door on september 2nd uh you can go to preseatacademy.dk and apply there there's limited amount of seeds and finally the next startup talk will be at czech bbq which would be digital so again it'll be a virtual one we have more details later on about timing of that but we will have a session there on either september 17th or 18th um and as you know this talk today has been recorded so you receive the recording of this in your inbox in a few days so i guess with these words i'll start by saying a big thanks to tor and david for taking a time out and scary insights here and a big thank all of you for attending this spot and see you soon bye