Clever or Clairvoyant?
A very good friend of mine once told me that he constantly found himself telling his ex-wife, “clever I am, clairvoyant I am not”. I’m not sure if the “ex“ is important in that last sentence, but I was reminded of the story over the last week as I spent much of it neck deep in Excel files, formulas and financial projections.
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The week started like a one man Punch and Judy show with much wailing, gnashing of teeth and self-harm. I then had a "the emperor has no clothes on" moment when people finally admitted that everybody knows that whatever numbers you put down, that they are always wrong. The end of the week then turned into a rather fun game of whack-a-mole… hmmm, move year two churn down half a point, increase virality in year one, stir it all around, and now we have beautiful users, revenue and EBIT growth curves.
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But if it’s just a big game, one might well ask why spend the time doing a set of numbers at all? The seemingly counter intuitive, but actually massively useful answer, is that you don’t do one set of numbers, you do three…
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Building one set of numbers helps you think through the different levers that are required for your business… You will attract users (think cost of customer acquisition); they will send out invitations for meals to friends (think how many friends, how many invitations); that will attract restaurants (how many?, where? what is your saturation point for a given city?); some of those restaurants will subscribe to FFLOK (what level, how much revenue); and some of those might even leave in the future (churn)…
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But building conservative, mid range and optimistic projections actually teaches you a whole lot more about which are the important levers for your business that you really need to focus on e.g. how many friends each invitation is sent to, and how many friends actually confirm their participation; now I suddenly start to realise a new way of prioritising the build of new features into the app.
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Now show me those investors!
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However as you might expect, that information alone is not actually enough for a conversation with investors. I got some great advice Monday from the guy who runs France’s €50M seed investment fund. He shared with me his informal rules of thumb for what he always looks at before investing in this type of mobile consumer app; (1) the release cadence - our team should be releasing a new version of the app every 3-4 weeks, (2) the location of the users (FFLOK is clearly a global play), (3) user reviews on the app, and (4), various other information from the super useful app analytics site called Sensor Tower…
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And so with that, I now feel well prepared to start searching for the required funding to get FFLOKs around the world off the ground and into restaurants near you.
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I really hope that you’ve enjoyed these weekly musings on building my startup. I promise to continue sharing periodic updates with you and please feel free to share them with any of your friends (subscribe button at the bottom). However if any of you are interested in getting even more engaged in the adventure, then now is the time to throw some caution to the wind and provide a little angel investment.
Whilst I can’t promise wonderful returns (despite what the Excel file says), I can promise that all shareholder meetings will be in the south west of France with a great bunch of people in a rather pleasant vineyard.
Please contact me if you’d like to be more involved.
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And so with that, all that’s left of the Founder Institute is a graduation session next Monday in Paris… and then it’s off to start changing the world, which is of course, where this whole thing started all those months ago.
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Thanks for reading.
Aidan
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