Open Q&A about Startup Grind | Startup Grind Founder Derek Andersen

So a lot of people will raise money on an idea, right? And then that idea will fail, and some of them switch to another idea. Some of them just go harder and deeper into that idea and try and make it work. What I'm basically saying is, certainly get your product out as soon as you can. Y Combinator, the best incubator in the world— Draper's maybe the best outside of Y Combinator— The most successful, I would say, the most billion-dollar exits. basically everyone else combined, they say get your product out in 2 weeks, whatever it is. So that's great advice. That sounds like the same advice that Tim gives. But if you're going to raise money, be confident that you've got something. Don't put that added pressure on yourself. Don't put yourself in a bad situation where— You're not ready. Where you have no other options. You know what I'm saying? Like, when you're at this stage, you kind of got to have a couple of balls on the table, right? If your career is the roulette table, like, you got to have a couple of bets out there and you got to have a couple of chips here. And then at some point, you go all in on one thing. That would be raising money, right? If you raise money, you kill everything, you focus on that. But as you're trying to figure it out, like, Keep a couple of, even if they're small bets, keep a couple of small bets in different places where you can still be creative in other areas and you can still kind of, you don't have all the pressure on this one thing has to work or no one will ever talk to me again. Do you know what I'm saying?

Yeah.

Yeah.

First, how do you figure out when was the right moment to How did you figure out that this would be possible? And, well, just answer that, and I have a second one.

I talked to my wife for 2 years about me wanting to do it, and I never really had the right idea to do it with. And then at some point, you know, I loved working at EA. I performed well at EA. Made great friends there, but it wasn't the environment I wanted for my life and I just finally said, well, if this is not what I want to be doing in 20 or 30 years, why am I wasting my time now doing it?

But it's kind of hard because you don't have anything planned and you just go there and see.

Well, I did. I had a startup that I was trying to— that I tried to launch. It was not successful, but I did have an idea. I did have a product that I was trying to launch. If I could redo it, I would have gotten customers first. I tried. It's very hard to have a full-time job and then also trying to get a startup going on the side, which we did for months, but I would have gotten more traction than I had. That would have probably been a smart thing to do. But it's on a— when is the right time? How much money do you have saved? How much risk— do you have? How good of insurance do you have to have? I waited 6 weeks until after my son was born because if there's some medical issue, I wouldn't have quit. If I needed EA type of corporate insurance, I would have never quit. So what is your risk profile? How big is your mortgage? All those things factor in. How much student debt do you have? All that kind of stuff.

So—

So when is the right time? I would say launch or leave with something in your hand. So again, you're not dropping, putting all your balls on, OK, I'm going to get out and I'm going to— you've already placed some bets before you leave. And you've already spent a lot of time staying up till 2:00 or 3:00 in the morning trying to figure out— this is what I learned at EA. If I went full speed at EA, 110%, I was in the top 2% of all employees. I knew this from my ratings, right? But then what I learned was, was that if I spent 70% of my time at EA and all that extra time on something else, I was still in the top 10% of employees. So I just— what I did was I just took that— again, I like spread my risk out. I took that extra energy I was putting into EA, I put it into my own projects, my own things to get them going, and then when I quit, I had a base. I had something to jump, jump into.

I see. And you have some— like you said you lost $35 million.

Well, I didn't lose $35 million, but one of my advisors lost $35 million.

So do you have some tips? I mean, sometimes you just go forward in one project and you think that this would be amazing, but it does not. How do you figure out when to stop or to jump to another project?

That's a great question. And so in the last 5 years, I've probably built 12 products. And some of them were just side fun things. I built a site that helped you calculate what the cost of a bad meeting was, just because I hate meetings. So when I say 12 products, so it's not like I'm launching 12 social networks or something. And I think the— how do you know when to move on? Well, when I move on is when I've exhausted all options in spite of all my hard work, all of my options are exhausted, but I'm not desperate. You don't want to get to the point of like, again, you have like—

You're desperate.

It's do or die. Whenever I hear people say like, if I don't raise this month, I'm done, that's a very hard situation. Like, they've waited too long. They've not planned properly. So when I look at things that are failing and going down the wrong way, I say, okay, like, what is my cliff, my death point? And then I walk back off that and say, okay, like, 6 weeks, 2 months, 3 months, depending on your own situation. Maybe it's 2 weeks. But like, OK, if this doesn't work by this day, I'm going to do this. I'm always thinking of an exit plan. I'm always thinking of the next— what's going to happen. You know what I mean? But if you're getting terrible customer feedback, and you're iterating, and you're still getting terrible customer feedback, if you can't get anyone to pay for it, and you've been trying like crazy for months and months and months and months, years or whatever, those are bad signs. You know, and you need to evaluate, do I not understand the market properly or does this just need more time? It's a really hard thing to do. When I finally went full-time on Startup Grind, there were 2 chapters. So it was not clear that there was something there. But what was clear was it had— well, it wasn't clear there was something— there was big potential there. What was clear is there was something there because We're getting 500 people and people are really passionate about it. And we're getting all these huge speakers and they're putting energy and time into it as well. And it was like we weren't even trying. So it was like one day a month. And it was like, I'm not even trying and all these great things are happening. And I'm spending 29 days a month on this other thing and nothing good is really happening with that. So that was like— and another thing is I would say mentors and advisors. You need to find good people who will tell you straight. What's up? And I had an advisor, and I met with him. We had breakfast, and he was like, I don't know about this, but the startup grind thing seems to be pretty cool. Maybe you should spend more time on that. So then I went from 95/5 to like 70/30. And then after a few months after that, I said, OK, I'm going to go 110 or 120, and all I'm going to do with this is try to sell it. Just like, what can we get out of it? How can we reuse the technology? Get whole on it. And that's what we did. And then when that was done, then Hundred, I put all my chips on that because it had, by that point, we were in 20 cities and it was really starting to move. Yeah?

So my question is mainly around scaling. How do you scale a brand like yours where you can go to someplace like Africa and still preserve What mechanisms have you put in place?

Well, the first thing I did was I only knew that if I did the training and if I picked people, then it was on me. So I personally approved the first 125 cities. And you couldn't start a city unless you talked to me about it, unless I looked at it. And I got it wrong probably 20% of the time and got it right 80% of the time.

time.

So it wasn't like I'm perfect. But at least they heard it from me. And then that way, it's not this game of telephone where I'm telling somebody and then they're telling you and then it's getting— the message is getting diluted over time. And so that was probably the biggest thing was that. And then us being totally focused and having a very, very simple product structure. We look at our events as a product. So we do one type of event. It's a fireside chat. It's 2 people. We film them. It's a local person. We don't fly speakers around the world. If you're in Tel Aviv, you've got to get people from Tel Aviv. If you're in Palestine, you've got to get people from Palestine to come speak. So we put in these very, very simple rules. And the simplicity plus the message always coming from me, that made it so we created a bunch of champions around the world where The guy in Melbourne and the guy in London frankly do a better job than I ever did. And some people in the community are more passionate about Startup Grind than I am. It's kind of a funny thing. John Hyde, OK, good example. Did an amazing job on the team in Monterey Bay. I didn't even meet John until he was already fully involved. I met him at an event.

John's my roommate.

Oh, he is? OK.

Me too.

So that's not necessarily scalable. I don't scale. But in some ways, you don't want to scale in the beginning. You just want it to be right. And you want this— you're here, and then when you get to here, you want this to be right. So we could be in 500 cities, but we want it to be right. We want to have our brand to be right. We don't want to have some issue in some random place around the world. I want to be on CNN, but not because something bad happened. And the other thing is I think always looking at your customer. This was always about helping entrepreneurs. That was on my board from like 3 or 4 years ago. And what are my values? If it doesn't match the values, we don't do it. And I'll interview somebody and they'll look perfect on paper, And I'll talk to them, and they'll say certain things. And I'll say, like, I would never do that. I would never say that. And sometimes that's good. Sometimes it's like, wow, I would never say that. I should learn from this guy. But sometimes it's like, he's not like us. She's not like us. And so I don't want to bring that person into our ecosystem. And that potentially has all sorts of adverse consequences. We've done it, and we've messed up. And then we learn from it. Our application process completely changes every 6 months.

Wow.

So it started with me getting on the phone with anybody that applied. And now it's apply, and now do all this work, fill out all these applications, and then someone will meet with you and talk to you about it briefly. And then we've scaled that as we needed to. We originally would just publish all the events. And it wasn't scalable. And then we got to about 10 events a month, and it was like taking our team like hours and hours and hours, dozens of hours to like put these things together. So we built a tool that made it really like take 5 minutes to publish the events, and that's how we scaled it. That's how we do 100 events a month, because of our technology. But like we never planned to build technology, you know? It was just like, well, we have to solve this problem for us. And I've learned if you solve your own problems, but also if you just keep focused on your customers' problems, religiously focused on it— and that's where it's good if you're the customer. It's great because you're just constantly solving your own problems. That's what I do. When I look at our own products now, I just say, OK, what are our biggest customer problems? What are our directors, those people you saw in the video, how can I make their lives better? That's what we build. Full stop. It's really simple.

So you're not trying to solve the problem of the customer.

And if it doesn't, then we're wasting our time. And I've wasted a lot of our time trying to do other stuff, and it doesn't work. So now I'm like— well, at least right now, I'm back in where I've been kind of consistently over a long time, but just back and saying, OK, screw all the other things we think we could do great. Let's just solve our customers' problems. And that's always worked out for us.

Awesome.