My mistakes leading a startup of 8 people

My mistakes leading a startup of 8 people

Working in a startup is hard, founding a startup is harder and leading one without funding might seem even more difficult. This guide elaborates on failures I've made leading a team without paying a salary and how you could possibly avoid them.

1. Let's give you some context

Did you know that Wavect has been a Social-Tech startup until October 2020? I've founded Wavect in October 2018 while being in Florida, USA as I did an exchange semester at that time. Attending an American university gave me a true motivational boost, as the majority of people are eager to learn something new and either want to be successful in life or have some sort of impact to society. I've met a lot of amazing people during that time, did a lot of meditating to reflect on what I want in life and started to search for a way to make something out of my life.

I've had some sort of a hedonistic approach to life (= basically just trying to enjoy life as much as possible, e.g. bungee jumping, skydiving, travelling, ..) before working on my own startup. A good old friend of mine, which had been in Thailand during his exchange semester at that time, asked me to work with him on a Blockchain startup which still tries to create a decentralized digital identity. During the first few weeks, I've encountered that working hard actually can be quite fun and gives you most of the time more energy than it takes (especially when pursuing something you believe in).

The people I've surrounded myself with, the whole atmosphere and the startup feeling (even though we worked remotely) gave me a positive charge. I've started reading at least one podcast or summarized book a day (e.g. Blinkist, Audible,..), increasingly began to get my hands on technologies I wasn't even aware that they've existed and wondered how I could gave more people the same feeling, positive charge, happiness & meaning. I meditated every day, woke up early, studied for university, worked on the Blockchain startup, did a lot of sport, attended several clubs, still did a lot of fun things (e.g. roadtrips, sea travel, kayaking, ..) and recognized how efficient one could actually use time to achieve what you want.

After a few weeks, I wondered if one could monetarize good deeds (e.g. gathering trash, doing sport, attending social activities, ..). The idea was actually quite simple -> Build a social network where people receive challenges based on their moral concepts thanks to Deep Learning (e.g. environment protection, health, solidarity) and reward them with rebates, vouchers or even products from sponsors (communes, enterprises, NGOs, ..). In the end the prizes itself would be personalized too (to maximize the incentives to solve the challenges). After evaluating the technical feasibility and starting with a vague first business plan, I approached several friends to work with me on that concept which all have been scattered across the globe at that time (Thailand, Austria, Canada, USA, New Zealand,..). We started doing weekly meetings, elaborated the business model & did a lot of research to choose the ideal tech-stack to implement our platform. That's basically how it all began, let's jump to the errors I've made during that time. Please note that this blog post only covers the mistakes I've made leading my team specifically (e.g. marketing/communication errors, wrong approaches, funding, business-model, general processes, etc. are not covered).


2. How (not) to lead an unpaid team

It's all about context. You'll lead teams differently across different industries as well as depending on the character traits of your team members. Moreover, many other factors like age gaps, different values (e.g. money, social impact, curiosity, ..) etc. can make a huge difference. As a consequence, the experiences you may have made could differ from mine. If that's the case, let me know as I would love to hear about your story! So, let's get started.

2.1. Stay consistent with your vision

I would say one thing I've definitely done right was having an extremely strong & compelling vision about how we could change the world for the better. This vision gave our team a strong drive in the beginning, productivity sky-rocketed and we were always 10 steps ahead of most other startups starting out at the same time. We already protected our intellectual property, had a website, a well-elaborated business plan, did a lot of Marketing, applied for several funding programs, had a stable & almost production-ready prototype, registered for startup competitions and had one presentation after another. Everything seemed great, but just like other startups we've experienced one failure after another.

Staying positive when everything runs fine is easy, but the more failures we've encountered the harder it got to stay consistent with our vision & business-model. We started having discussions whether the business model itself was faulty and could even work in the long-term. Although having a really well-elaborated business plan with over 50 pages adressing all sort of topics (market entry, marketing strategies, blue ocean diagrams, work breakdown structures, a scalable software architecture, etc.) we still had to fight with our core concepts every day. Every new failure had shown us that something was wrong with our presumptions about the market and mass psychology.

While our faulty business model was one thing we had to deal with, the common vision we had faded out. We started to focus on problems which made it increasingly hard to find solutions for problems we actually could have solved. Negativity sometimes took over and I tried everything to pull the team together. Internal disputes increased and at a certain point of time they required so much energy & time to resolve that the whole startup slowed down and even got stuck. We then got the chance to attend a big trade fair and got invited to have a presentation at 4Gamechangers in March 2020. Our drive, motivation & efficiency were back and we thought this could finally be the chance we've waited for so long. And then just 2 days before the trade fair & 3 days before the presentation at 4Gamechangers everything got cancelled due to Corona. This huge pull-back, the prior internal doubts paired with a destroyed business model due to Corona (we basically tried to bring people physically together) made it clear; the startup is dead.

So, what could be the key-take-away from this story? If I would have stayed consistent with our vision and wouldn't have overthought our business-model by letting negativity taking over then who knows, maybe we would have found a way through this crisis.

2.2. Wording is everything

First of all, what was good? We had at least weekly meetings where we talked about problems, the tasks for next week and some personal things to let everyone feel that they are a vital part of the team. We had team-building events, in majority had fun working together and everyone clearly stated their opinion at any point in time. Therefore, the communication itself was great. Sure there is always a way to do it better, but I think we were absolutely fine for a startup at that stage.

So, what could have been better? I always tried to keep the communication as authentic, positive, engaging and uplifting as possible. Nevertheless, as there were times when failures & time-pressure have been dominant, I sometimes let my team feel the negativity which has overwhelmed me during that time. This especially happened, when I knew that we could have avoided a failure when one or two team-members would have done something differently. Sure, you should tell your team, when they make a mistake, but you have to be very careful about your words especially when they are not receiving a salary (basically working for your vision, curiosity & fun). Nothing destroys intrinsic motivation more than deconstructive feedback. Although, I've always put a tremendously amount of energy into holding my team together, keeping the communication positive and resolving all sorts of conflicts within and with my team as soon as possible; the damage was already caused in such cases. Even though everything seemed fine again after resolving internal conflicts, the positive charge was gone for a few days or sometimes even weeks.

2.3. Mindset first

Our social-tech startup Wavect always has been an impact-driven organization and that worked incredibly well for us. But as we progressed & the team partially changed, the value structure shifted. Some just wanted to be financially successful, others were purely determined to create an impact and others were just curious about how much they can learn & achieve. At a certain point there was some discrepancy, although having talks regularly about every team mate's values and goals. Thus, the bigger your team gets the more diversified it will usually become.

Having a team full of people with different values, skills and goals is a great thing as it makes your organization more flexible, agile and creative. But a too diversified mindset can be very poisoning at least within young startups, when a common vision and value structure is everything you have. Thus, in the end a common mindset will either lift you up or pull your team apart. As a consequence, choosing the right team-members could also decide whether your startup will be successful or not. Rejecting potential teammates is especially hard, when you have a huge vision which will require a lot of workforce, but mark my words -> it's better to achieve your goals slowly than not all.


3. German Livestream

I went live on 10th February 2021 with Simon Nopp from Inndisus. Thus, we talked about our failures when founding an own startup. What have been your mistakes? What did you learn? Let us know on Instagram, LinkedIn or Facebook.


I hope you've liked this quite personal post. If you have any further questions or constructive feedback you can contact me via Facebook Messenger (right lower corner) or via E-Mail 'kevin.riedl@wavect.io'.


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