Jonas is building a new community for startup founders and had questions on how to grow the community, the business model, and how to give value.
Jonas: I would really like to talk about a project which I’m working on and I would like to hear your thoughts about it. I’m working on this project called Affordance and basically, we are just focusing on very early-stage founders who are working on on-site projects, and we are looking at how to scale that into startups. So you might see it as a pre-accelerator kind of startup, pre-Y Combinator startup. We are looking at some of the bottlenecks that they have in the very early stages, and you’re trying to remove those and help them.
Raj: Gotcha. And is this a service? Is this a platform? How are you doing that?
Jonas: So it’s a platform. Inside the platform, there are different kinds of services, like consulting as well. Something like what we are doing now, so you can consult with experts, but you can also find people to work with. You can find deals that reduce your startup costs. Some of the things that usually startups have to pay for. Those kinds of things.
Raj: Gotcha. What’s the goal of this project? What are you looking to get? Are you looking to take equity in these things? Are you looking to sell them services?
Jonas: Very good question. That’s the long-term view. The long-term business plan is to have some equity in the product. Also to be able to raise a fund and also inject it back into the platform for projects, which we are growing.
Raj: So now I understand what you’re trying to do. What’s the problem that you’re trying to solve today?
Jonas: The problem is we already know that there’s a big mismatch between side projects and investors. Investors really don’t pay attention to that at all. When you’re talking about a side project, it’s probably not yet found its customers and probably haven’t really grown that much in terms of revenue. So it’s very hard for investors to really connect with that. Getting investors on board; I would say the main problem is there’s a two-sided marketplace, whereby investors are not really on board and the founders are really on board. But the other parts, which are really the anchor, are not really on board, such as investors and experts.
Raj: Let me ask a big question, which is maybe there’s a reason why the investors aren’t on board, which is that so many of these projects don’t go anywhere or are actually bad ideas. So how do you address that? You wanna get investors on board, so how are you addressing the issue? That’s 90% of these, 99% of these will go nowhere.
Jonas: Right. Very good question. So that’s pretty much it, we know that there is a high rate of failure, but we really don’t know the reasons. We really don’t know the reasons why those failures happen. The hypothesis is that if we remove the very common obstacles, perhaps we can also increase the rate of success and on the platform will be able to filter as well. It’ll be an application batch by batch basis. That’s another way to reduce the risk of a high failure rate.
Raj: So you are gonna be doing some filtration before they get into this platform. Now, are they paying you for the platform? Is it a free community? What’s your model? Because if you’re talking about raising and you’re building a two-sided marketplace, which I’m telling you right now is the hardest thing in the world to do. How are you gonna get there financially?
Jonas: I would say, to be honest, I really did think in the beginning about making it a paid platform, but then I look at my customers, I’m thinking of side projects, early founders. I feel like they’re not the best people to be asking them to pay so much. So for now, I just made it free. But some of the core services, like talking with some experts, perhaps can be paid. It’s experimental. I don’t know what you think about that one.
Raj: It’s possible. Let’s say you got an accountant, you get a lawyer, you get a hosting company. For some of them, like lawyers, you can’t share fees. You can’t share in any of that revenue, but for accountants, you can get referral fees, affiliate commissions for various platforms. Presuming that they’re consumed, my gut is that’s not gonna be a material amount of revenue. Certainly, not enough to do paid advertising, to get these people. That my gut, feel free to prove me wrong. Because you’re looking for people with side projects. It’s really hard to identify who these people are because they might have a day job at Cisco and they’re coding at night. They want Cisco to know about this. So they’re not posting anywhere. It’s not on their LinkedIn. There’s no way to know they have it. You have to be doing some pretty broad-based marketing or organic marketing on LinkedIn to get these people in there. It’s gonna be simply too expensive to pay, to get people on your platform compared to the revenue that is gonna be offset there. So, you’re gonna have to bridge that somehow.
Jonas: Yes. Right. That’s absolutely fascinating.
Raj: Yeah. I guess then, your question is how do you start building the marketplace? Is that what you’re getting at?
Jonas: I guess it might be something like community. I guess the community is more towards founders and experts.
Raj: Exactly. I think you’ve been thinking about this a lot longer than I have, but I would think about running events, online events.
Jonas: Right. Beautiful.
Raj: You’re building this in your closet. Doing more like a webinar-style, inviting some of the experts who would be in the community. Go find those experts, invite them and then do specific events that you’re building a product in your basement. Here’s what you need to know. You bring the experts, they give 10 minutes about it. And then after 15 minutes, give some value. And then you say, if you want more help, here’s how you apply. Then you give them the way to apply and get in there. And essentially use that as a marketing engine. Linkedin is gonna be your friend. Absolutely. You can stock up on product hunt looking on LinkedIn, all these places and start doing that. And I do it with events
Jonas: Wow with events! Absolutely a great idea. I like that one. I definitely think that would be the approach that I will take with this one.
Raj: Good. You’re gonna get it there. And that is a way you can do it with pretty much zero cost. I mean, close to zero cost. If you’re doing it with events, it’s just all your time. Then the community itself, have you built that, or is it something you’re building now?
Jonas: The community of founders is, there are people waiting for the product to launch and they are really interested in grabbing it. The one other idea that I’ve been thinking about is that if it’s batch-based and you also create those aspects that will help them if they go. Let’s say for three months. So that could be another way once there is a community, that would be another way to accelerate the whole thing.
Raj: I like the curation idea because a pure marketplace is really hard if you’re waiting for the lawyers and the accountants and the tax experts and all these folks to show up and you don’t know who’s gonna participate. If instead you go and you say, “Hey, you’re a good startup lawyer. You’re not a partner at a big firm. You’re still looking for a business. You love the startup scene. Come in here, you’ll be our guy while we start this thing.” And you get those stable people. Then it’s not really a marketplace and it becomes a lot easier because now it’s a curriculum.
Jonas: Exactly. That’s how I’ve been recently thinking about it; that it’s more becoming a curriculum and knowledge base.
Raj: Yeah, exactly. I think if you do it that way and or not that’s gonna depend. I mean, you could do it in a batch because if you are making a curriculum, one good way is to do your first batch and you develop the curriculum as you go. All you have to do is the outline. And then you do a series of training, you record the training and there’s your curriculum. Everyone else can go through it.
Jonas: Okay. That’s beautiful. I’m just wondering about something, is this recording available?
Raj: This one that I’m making right now? Yes. I’ll send it to you.
Jonas: Oh, that would be great. Appreciate it. I’m finding this very interesting. And perhaps, for the last few minutes, I was just wondering if you could tell me about Five Minute Accelerator and your approach, what you’re doing.
Raj: Yeah. So essentially I’m doing these because I’m doing some investments in companies, but I’m not always available to do that. I make these recordings because I think it’s a kind of thing that is very educational. I share these recordings so other people can see the kind of expertise that I can bring to the team. And it’s a way for me to attract good companies to me. And at the same time, give you free value. Hopefully, as you succeed in the future, you’ll think of me.
Raj: It’s a combination of giving out the best advice I have for free and guess what that’s marketing
Jonas: Now, I’m really curious about this idea because as you mentioned, this marketing route is very interesting. I’m thinking about what would be your interest if you are on the platform and you’re able to do this. Let’s say like once a month or whenever you are available.
Raj: I can try it. So set up the platform. If you can make sure that people will show up because what I don’t wanna do is to be waiting around, have no one to answer questions. But if you wanna either promote a Five Minute Accelerator to your community or we can do something that’s similar to it there. Let’s talk about it. You just shoot me an email. You should ever need a reminder for the session. You just reply to that. Tell me when you got it set up. Once you’ve got people in the community, then let’s talk about what we could do.
Jonas: That’s beautiful. I’m very happy and honored to talk with you. I really appreciate it. I have to say your advice is priceless.
Raj: Well, I’m glad it’s helping. As you’re building and you’ve got some more questions, just hop on another one of these sessions. I do them pretty regularly. As you’re growing, you have more questions just pop on and we’ll talk again. Okay?
Jonas: That’s beautiful. I very much appreciate it.
Raj: Okay Jonas. Well, great talking with you. Be in touch. Email me what’s your community set up or pop on here and we’ll talk some more. Okay?
Jonas: Right! Thank you very much. Take care.
Raj: Take care now. Bye.