Ep. 32 - Aleksandra Medina & Katrin Kaurov

I honestly don't think we would have been able to pull off the first couple of months of Fridge if it wasn't for COVID, because everyone was at home, everyone was kind of bored, there was nothing else to do, everyone had so much more free time on their hands. You know, if we were to try to fundraise and bootstrap, like, no one ever would be willing to get on a Zoom call with us, ever.

Today we're speaking with the co-founders of the fintech app Fridge, Alexandra Medina Katrin Kaurov.

I feel like people like to say, oh, I got lucky, or you got lucky, but there's no way for you to get lucky if you don't put yourself out there.

For a while, like, it's so nice to have like your business plan on a perfect sheet or paper and like everything is laid out there, but like reality is different. And sometimes you don't need any like hard to even try that out. Like you just got to go to like Washington Square Park and talk to 20 people or like you got to do one event with one student club and you're probably already going to learn a lot from that. But I think taking that first action step can be really, really hard because it's easy to be like at home just like working on this day and night, but you're too afraid to show it to anyone.

We're going to be covering a number of topics in this episode, including how to learn from failures in the early days, how to fundraise, and some of the subtle nuances founders may not know about the VC space. For all of this and more, stick around for the episode. I'm Cassius Felicella, and this is the Homeroom Podcast. I'm always impressed with founders who are honest and transparent about the mistakes they made along the way. And when I asked Alexandra and Katrin about one thing they wish they did sooner, it was the following.

We showed our product to people that we were making it for way too late. You know, in the early days, the people that you are going to reach out to and like ask for feedback, they're people that are really close to you, they're your friends. And I'm not gonna lie, like in the very first days, like it's not like everyone's like, Oh my God, yes, this is going to be a success. A lot of people are a little bit skeptical. They're like, oh, good job. So cute. A little side project. So you feel a little bit embarrassed or ashamed to show it because you're like, oh, I need to prove that this is something serious and that people have to take me seriously. This is something that I really believe in. So kind of getting over that, actually just putting it out there, you'll save yourself time and effort.

Yeah, I think kind of piggybacking on that, Failing quickly and learning from that is super important. Having focus, I think, is really important because when you're building a startup, it's really easy to be always busy, but not really know why you're doing all those things. And it's easy to talk to many people for advice, but I think having like one goal that you always have in mind, like for example, this summer the goal was to launch. So like every action went towards that, then it was to grow. So I think having that one focus point is really, really important. Otherwise it's so easy to be like, 24/7 busy and you don't really know for what. Um, and second part I think is early team is so important. You shouldn't bring anyone a team you don't think who's outstandingly amazing doing something that you are not capable of doing. I think every person needs to be someone who's like irreplaceable.

I then switched the conversation over to venture capital. Historically, the VC space has been incredibly opaque, and for founders, it can be quite a daunting task for someone in their 20s to reach out to a middle-aged money manager. Here was their take on the dos and don'ts of fundraising.

Kind of the mistake we did was trying to get to institutional capital and all those funds really early on. So we got our initial capital from the first accelerator we did. So I think accelerators are a really great way to get started because you also get certain type of credibility. For us, it was the name of Mastercard, and in the summer, the name of NYU backing us up. Really in the early days, maybe the accelerator grant is kind of all you need at that moment. And then that already introduces you to the network of investors because we didn't have that network either because we started during COVID I remember the day we were like, we started fundraising. We were like, so what happens? Like, who do we talk to? You know, getting as much credibility and visibility is important and accelerators help that. And I think also being out on every social media channel is really, really helpful. We ended up getting the first checks actually through personal contacts, which was through school or through a network. But again, even to get that from like your personal network, you gotta build up your credibility first. Like you can't go and ask people for money. They need to come and offer this to you, which means you gotta make this into like an attractive value proposal. I would say beyond the personal network, it's really a numbers game. We talked to over, I think, 100 VCs at this point. Now we confirmed 2, and I think it's still like a really big success of confirming them, just knowing that it takes 100 people, which means like a couple hundred conversations to confirm one or two, just not to get discouraged if like the first 5 or 10 don't work out, because it's totally normal. It took us a while to realize like what were soft nos. You know, in the beginning when a VC or investor would get back to us, they're like, it's a no for now, but like we would really love to come in like once you guys launch or like in the next round. That means no in the investor world. So learning that I think is really important as well, and being fine and moving on and not counting on anyone's like kind of false promises. And then I would say like a very practical piece of information for fundraising is like, you never want to reach out directly to an investor. You want someone to do a warm introduction to you. So really finding those people who can do warm introductions, who might be like maybe founders in the investor portfolio companies or like anyone else that they trust who has credibility, like building that network is so much more important than like directly, you know, knowing investors. So I think having people who kind of have credibility in your industry and who champion for us, whether it's your advisor or friend or former employer, anyone. I think that network is really, really important and it's never too early to start building that.

As a follow-up, I asked if there was anything counterintuitive about raising capital.

I would say, which is very surprising, that investors don't even often play around with the product. It's more about FOMO. There's a lot of that herd mentality. If one person puts money in, other people will. Like, it's really hard to get that first person who takes kind of that leap of faith. So it really, you need like that first, first point. For us, there was like a Shark Tank kind of mock-up pitch competition where Mark Cuban's portfolio manager really liked Fridge and said it in front of everyone, which kind of got the first check.

Exactly.

Yeah.

Oh, one credible person's like, oh, that sounds cool. And everyone's like, oh my God, wait, I need to get in.

Yeah. Always need to say that like, you have so much interest that you're about to close the round and you have like 3 days to say yes or no.

You have $500 in the bank and you're like, yes, this is your last chance. We're so oversubscribed.

It's kind of really about the story you build around that as well. And now we're at the point that we got our first big investors as well, that next round, hopefully it's going to be so much easier. I mean, fingers crossed. But I think just creating that FOMO, honestly, and knowing how to kind of position yourself and market yourself is really, really important. If you, if you grow from like 5 users to 25, if you put that in percentages, it sounds much better. It's 500% growth. That's amazing. And like everyone does those things. So like not being ashamed to like market yourself as much as you can, both your personal brand and your company. I think it really, really matters because everyone's pushing their best angle. And I think you really gotta keep doing that.

One of the biggest takeaways we've seen from previous episodes pertains to having domain expertise. However, when we talk about this, it doesn't necessarily mean having a university degree in the subject matter. Raw skills are more important than credentials, and the story of Fritsch is exactly that.

None of us studied finance, so you can do whatever you want. Just go and learn. I studied more of like a design technical degree, so I do believe that I'm well positioned to build a product. Not necessarily a finance product. So being in that early accelerator really kind of gave me like a crash course and like a master's in finance. It was absolutely terrible. I like cried myself to sleep for the first week because I was like, I don't understand a single word they're saying. I was like, I can't believe I'm trying to get a degree in like 3 weeks.

But you can do it.

Like, I mean, and that's what I meant when I said that like COVID was really like the catalyst for us because If I had like a full-on social life, I wouldn't be able to like be up at 2 AM Googling like, what is an ACH payment? And there's so many resources out there. So you really can go through every single video YC Corner has ever put out there and just give yourself a degree in whatever you want.

Yeah. And like also talking to founders who've been in the space and just doing research yourself. I don't know. I feel like at this point we know every single fintech app out there and we probably downloaded every single one of them. And that's something you don't particularly learn in a university. I think it takes around like 6 months to a year to develop expertise in a domain. And I think we did that. I think that was the time that it took us. It was a really heavy lift, as Aleksandra mentioned, like it was really hard at that accelerator and terrifying because we didn't really know what's going on. And it's a huge learning curve, which was why in the beginning things were really hard. I don't think there's any domain you can teach yourself with the right advisors, mentors, and like resources that are literally out there for everyone on the internet.

If there's anyone who's like looking for a job in an industry they're not necessarily like super specialized in, something that has worked really well for us and like me especially, for example, like I go through our App Store reviews and if there's someone that leaves an App Store review that I'm like, oh, that's very thoughtful, I would reach out to them and be like, hey, like tell me more. I'll have this conversation because that's very helpful for me. And if I'm impressed by your ideas, yeah, you can come to work for us. We're building this product for university students, so I don't care what you study. If you're a university student and you have money that you're trying to manage, it's helpful for me to have you on the team. And I think that's true for every single product out there.

Whenever you switch your industry, it's really important to think what were certain things that you learned from your past industry, which maybe gives you that competitive edge. Like, I think, you know, the way we position Friction, its branding and like social media presence, I definitely think that's something that has made us stand out. But that comes from the fact that we don't have a finance background. We did totally like different things, you know? And I think that actually really worked in our favor because we think differently. Like a person who's been like working 10 years in finance, they can't relate with a broke young person living in New York. Like we can because we are living this. So, um, and I think that's like be more in your favor than having that like finance degree. So yeah. But again, I think at this current space, you can just do whatever you want.

Yeah, I mean, there's like hundreds of thousands of people graduating every single year with a finance degree. You have to find like, if you didn't graduate with a finance degree, but you are an amazing UX designer, like they probably want you more than like just another generic Stern graduate, right?

In the last decade, entrepreneurship has become a trend that more and more people gravitate towards. And as a result, it's gotten glamorized. There is a misconception that starting a company is a very rosy experience where a product is released, it's brought to market, everyone gets rich, and they all live happily ever after. But this couldn't be further from the truth.

I think, I think one thing that actually people don't talk too much about is kind of like the whole like founder burnout thing, you know. I think like you see so many of those like overnight successes. That's not true. Um, and like everyone we talk to, like even people who are positioned as those overnight successes, they're like this is not real. If you look what we've achieved, I think it could be considered like a very successful year. But day to day, so many things have gone wrong, like breakdowns and losses. And I think just people don't talk enough about the failures and the fact that things are just hard and sometimes you just gotta keep grinding on a day-to-day basis. You have many days where you just keep doing the same thing and just hope at some point something will work. And I feel like this day to day isn't hugely reflected. I think nothing really happens by accident, and I think that's like a huge misconception about startups, that if someone succeeds, it was an accident. Like, it was never ever an accident, you know. It's— there's always so much like hard work and kind of like sacrifices behind that.

I think the whole thing is so overglamorized. Every single time you actually meet or speak to a real founder, you'll see how tired they are. And if you just ask the right questions, no one is ashamed to admit. Like, we We went through an onboarding event with our VC, and we spoke to one of the founders of a super extremely successful fintech company that's like right now, like magical, like success out of nowhere. And I spoke to him, I was like, oh wow, like how did you do it? Like, is there anything you would recommend? He's like, you don't realize, like before this happened, we worked for 7 years. We pivoted so many times. There were 3 times where we basically ran out of money, and no one talks about it because it's not like a cool the whole PR angle.

So like maybe the glamour is not there in the way you would think. It's there in more like a mental set, you know, like I genuinely feel like this morning I was so excited when I woke up to come to work. I genuinely think there's no better feeling than that. Like there have been some really hard periods this year, but at the same time, like when we have like our team coming to WeWork, I'm like, oh my God, Alex, we created this, you know? And like you create something from nothing. It's in a sense, a very creative thing, right? This morning I was walking around Soho and it kind of hit me and I was like, this is so cool, you know, like we did it. So, so yeah, I would say like there are two sides to this entrepreneurial story.

This concludes today's conversation with Aleksandra Medina and Katrin Kaurov, the co-founders of Fridge. If you liked this episode, be sure to give it a download as well as rating and review wherever you find your podcasts. We upload every Thursday at 9 AM Eastern, 6 AM Pacific. So be sure to tune in next week for other amazing guests. Until then, I'm your host, Cassius Felicella. Thanks for listening.