5 mistakes from a founder – and how to come out alive

Andreas Jürgensen shared his journey as a founder at the In a Learning Loop Meetup in Copenhagen, highlighting critical mistakes and valuable lessons learned along the way. The talk, titled “5 Mistakes from a Founder… and How to Come Out Alive,” provided insights into scaling high-performance teams and navigating the challenges of entrepreneurship.

Personal background and early ventures

Andreas began by sharing his personal background and early ventures. He reminisced about founding his first company 29 years ago and how his experiences shaped his journey. With a career spanning several startups and corporate roles, Andreas emphasized the importance of learning from each experience.

He recounted his involvement with companies like Saxus and his first job at Interactive. These early roles laid the foundation for his understanding of the tech industry and its evolving dynamics. The journey wasn’t always smooth, and Andreas candidly shared that despite the challenges, he valued the lessons learned along the way.

The birth of Passendo

The story of Passendo officially began in 2016. Andreas and his co-founder Anders started building a platform without a clear product-market fit. This lack of direction led to significant mistakes. The initial platform was designed to help large B2C companies manage email permissions for newsletters. Despite having a promising idea, the execution lacked thorough market research.

In 2017, they secured their first client, a significant milestone that initially made them feel like millionaires. However, the excitement was short-lived. It took a year to finalize the deal, a period filled with uncertainty and overconfidence. Andreas emphasized the importance of conducting thorough market research and understanding customer needs before committing to a project.

The first big mistake: Building without market validation

One of the critical mistakes Andreas highlighted was building a product without proper validation. They spent significant resources creating a platform that they thought was valuable, only to realize later that it wasn’t aligned with market needs. Andreas advised founders to talk to potential customers, understand their pain points, and validate the product idea before investing time and money into development.

This mistake cost them valuable time and resources. Andreas stressed the importance of learning from this experience and advised against building something just because it seems cool. Instead, he encouraged founders to focus on building products that solve real problems and have a clear market demand.

The second big mistake: Lack of focus

Another significant lesson Andreas shared was the importance of focus. Initially, Passendo tried to cater to various client demands, which led to confusion and inefficiency. It took them two years to realize the need to focus on a specific niche—email marketing.

Once they decided to focus solely on email marketing, they experienced peace and clarity. Andreas highlighted the importance of saying no to distractions and staying committed to a defined direction. This focus allowed them to refine their product, better serve their clients, and scale more effectively.

Cap Table management and equity distribution

Managing the cap table and equity distribution was another crucial lesson. Andreas recounted how early mistakes in equity distribution led to complications. They ended up giving significant ownership to advisors and partners who were not actively contributing to the company’s growth.

Andreas emphasized the importance of being cautious about giving away equity. Only those who are genuinely committed and contributing to the company’s success should be part of the cap table. He advised founders to seek fair valuations and only take investment when necessary and with a clear plan for utilizing the funds.

Scaling challenges and investment missteps

The journey of scaling Passendo was filled with challenges. They expanded rapidly, hiring new employees and opening a sales office in London. However, this aggressive scaling strategy backfired. They failed to achieve the expected sales growth, leading to financial strain and the need to downsize.

Andreas shared that a significant mistake was not understanding the market well enough before scaling. They hired senior sales and marketing personnel without a clear go-to-market strategy. This led to wasted resources and time. The lesson here is to thoroughly understand the market and have a solid strategy before scaling.

Understanding core business and delegation

Understanding the core business is essential before delegating responsibilities. Andreas admitted that they hired people without fully understanding what they needed. This lack of clarity resulted in inefficiencies and unmet expectations.

He stressed the importance of founders understanding their business’s core challenges before delegating tasks. This understanding allows for better management and ensures that the team is aligned with the company’s goals.

Balancing growth and stability

Balancing growth and stability is a continuous challenge for startups. Andreas advised founders to avoid unnecessary investments and focus on sustainable growth. He emphasized the importance of having a clear understanding of the market, a solid product-market fit, and a well-defined strategy before seeking investments.

Learn, Adapt, and Persevere

Andreas concluded his talk by reiterating the key lessons learned from his journey. He encouraged founders to validate their ideas, focus on a specific niche, manage their cap table wisely, understand their core business, and balance growth with stability.

Despite the challenges, Andreas remained optimistic about the future. He shared that Passendo is now growing steadily, with a clearer focus and a stronger understanding of their market. The journey of entrepreneurship is filled with ups and downs, but learning from mistakes and adapting is crucial for long-term success.