Discovering Entrepreneurship

My entrepreneurial journey began unexpectedly in Hamburg, Germany, a city not renowned for its startup culture compared. It wasn't until my third year at university that I encountered my first entrepreneur friend, Michael. His venture in Switzerland, where he sold books sponsored by corporates to students, fascinated me. This business model not only undercut Amazon's prices but also allowed him the luxury of traveling South America, all while a hired CEO managed the operations. This encounter was a pivotal moment, opening my eyes to the potential of entrepreneurship. Initially, my academic pursuit in Industrial Engineering and Management was aimed at carving a career in consultancy, targeting firms like McKinsey and BCG. However, meeting Michael shifted my aspirations. I realized that my true calling was in building my own business.

First Ventures: Learning Through Trial and Error

Driven by this newfound passion, I launched my first entrepreneurial venture just three months after meeting Michael. I started importing Pisco from Chile to Germany with two friends in Hamburg. Our vision was to introduce a luxury spirit to create an alternative to traditional potato and wheat vodkas. However, we soon faced distribution challenges, and my lack of personal passion for high percentage alcohol led me to exit after a year, giving the majority stake to my co-founder. Undeterred, I ventured into real estate, buying up and reviving undervalued Gründerzeit and Art Nouveau buildings, which were my secret passion for a while. 

Tech Startup: A Leap into the Unknown

My first strike into the tech world came with an ambition to digitize the private equity real estate industry when I tried to raise my first real estate fund. My fund administrator's insistence on using a fax machine was initially frustrating, but it soon sparked the realization of a new opportunity. This startup journey, however, was fraught with challenges. My co-founder left early, and I was thrust into learning every aspect of running a tech startup alone – from defining the CEO role and hiring talent to fundraising and developing customer-centric technology. I sought advice but was so busy with the day-to-day that I was not able to dedicate enough time to engaging advisors and creating an effective idea exchange. 

Confronting Startup Realities

Let me give you an example. Despite raising seed and Series A funding and growing the team to 30 people, I noticed a disconnect between increased headcount and productivity. I initially tried to solve problems independently, relying on books and team analyses. Only after a couple of years, I have found the right advice from a very talented founder, and there it finally clicked: Learning on your own from your own failures and experiences is not nearly fast enough to upkeep with the extreme speed a startup operates. You NEED advice, and you need it often.. without excellent advice, you will eventually fail as you are too slow. There are, of course, exceptions: When you hit the right time with the product, VC money or revenue might just flow, but when the hype diminishes, things break if they are not set up right. 

Second-time founders need advice, too

Some people say that only first-time founders experience a need for advice. But that's a misconception as there is always a first time, particularly when you're growing the startup further than you have before. My first startup arrived at the pre-seed stage, my second at the seed stage, and my last one at a Series A. In addition to the complexity of navigating different industries, every stage brings new challenges, where advice is invaluable. 

Advise is paramount, but team internal advice is seldom

In the whirlwind journey of scaling a startup, advice is a priceless commodity that can originate from various sources. Initially, you may find pearls of wisdom within your team, especially if you've been fortunate enough to bring on board the right mix of talent and have incentivized them appropriately. Yet, consciously hiring the right people and avoiding the pitfall of all team members wanting to grow and prioritize their own department is a Herculean task, often left to the whims of chance.

How about advice from VC investors and board members?

Sometimes, this mentorship comes from your board members, especially if you've had the foresight and opportunity to choose investors with stellar reputations and experience. These investors, maybe viewing your venture as a fund returner, may allocate their most knowledgeable partners to guide you. This counsel, although invaluable, is part of a delicate founder-investor relationship. Founders often feel a compelling dependence on their existing VC investors. This is especially true regarding their involvement in subsequent funding rounds, which is crucial to avoid signaling concerns to potential new investors. Therefore, founders might not discuss insecurities and challenges as openly as they would with others. Conversely, VCs may tread lightly in their advisory role, cautious of overstepping and potentially alienating the founder, which might lead to their exclusion in future rounds, as, let's be honest, founders are cocky sometimes. This dynamic highlights an underlying conflict of interest, suggesting that the effectiveness of board guidance is not as robust as generally perceived. 

Founders advising Founders

Reflecting on these issues, I recognized the immense value of an advisory board consisting of independent founders. But as I delved into the creation of FounderSwap, I faced a crucial question: How could we ensure that the advisory board, comprised of founders immersed in their own ventures, would commit their time to helping each other? Was this objective practical, or merely an illusion?

The Genesis of FounderSwap

Then, a moment of clarity emerged: the compelling power of financial rewards. At the heart of FounderSwap's approach lies the innovative concept of equity exchange among founders. This strategy involves swapping a significant portion of equity with fellow founders, creating a mutual investment in each other's success. This approach not only aligns our interests but also establishes a shared commitment to reciprocal advice. Unlike typical VC/board/team dynamics, this model avoids conflicts of interest, as founders in our network aren't expected to participate financially in future funding rounds or create opportunities for personal gains. FouderSwap's structure is designed for authentic, unbiased, long-term support, steering clear of the entanglements that often arise in other advice relationships. 

Collaboration and Confirmation of the FounderSwap Model

But my journey with FounderSwap only really started when I met Lavine, the driving force behind FounderCircle for the past three years. Lavine had successfully cultivated a vibrant global network of over a thousand founders. Together, we engaged in extensive discussions with a diverse group of venture capitalists and hundreds of entrepreneurs. These brainstorming sessions validated a key premise: by ensuring that the founders in our network are not only of exceptional quality but also bring complementary skills and perspectives, we could create a model far more effective than existing market offerings. To reinforce this innovative approach, we've assembled a distinguished advisory board and investment committee. The details of these eminent members, who are set to play a pivotal role in guiding FounderSwap and selecting & matching compatible founders, will be progressively revealed on our website. 

The Road Ahead

If I had access to such advice at the beginning of my journey, the impact on my industry and the valuation of my startups would have been significantly greater. Now, having navigated the full cycle of startup development across various domains, I see the transformative power of a well-structured, incentivized advisory board. FounderSwap is more than a platform; it's a community where the next great innovations will be nurtured. We're excited to share our journey with you and invite you to be a part of shaping the future of entrepreneurship. Apply for our next cohort and join a movement where visionary founders empower each other towards unprecedented success.

Jakob 

Co-founder FounderSwap