My story until 08.2016 — nestpick
A valued friend of mine says, that “Life is about figuring out what your game is and playing it”.
I think that is also why my father always wanted me to get experience working early on, so I started my first job when I was 12. I did it for the money and just the money. Naturally I never looked forward to it, but rather hoped for the time to pass by quickly so I could spend the money I made. When I turned 14 I was legally allowed to sign a real hourly work contract so I started working next to school. Turned out that was even worse. Getting paid by the hour meant that you were literally just selling your life-time.
I started to understand why everyone was just counting the days until the weekend. Why everyone tried to get past those 5 days so they could enjoy 2. I definitely did not want to live the next 60 years like that. I put myself on a quest to design a happier life style for myself and to find out what game it was that I wanted to play.
I started building little businesses myself like I had seen my dad do for the last 20 years. I started getting paper delivery jobs and distributing them to my friends or made attempts at breeding aquarium fish to sell them.
I learned that you could definitely make money not just selling your time, but also your thoughts and ideas.
Once I started my studies I realized for the first time how expensive life can be. I experienced the feeling of eating pasta with butter 7 days in a row. It was not pleasant but I knew that other people definitely had it worse.
However I am still thankful to this day that my parents kept me on a tight budget. If I wanted to start eating pizza, salad or a bit of meat in-between pasta-dinners I either had to save money elsewhere, or I had to make some extra money. That is when I started making money on the side in college by connecting landlords and tenants.
Effortless-Housing
Effortless-Housing, a real estate agency, became the most successful business I had founded up until that point. We made decent money for a student business and it was exciting for the first year.
The two things that made us successful really were 1. that we spoke English and could help people from abroad and 2. that we would actually respond to people.
However, after some time the money just did not make up for the fact that we were just a real estate agent. We charged a fee that everyone, especially we, knew we did not deserve for showing an apartment and preparing contracts.
We just did not feel proud of what we were doing.
So I was left with two viable options. I could either sell the whole business or find a way for us to actually do something that would make us proud of what we were doing.
It turns out that the biggest problem of a real estate agent is their limited scalability due to the viewings they are organizing. One person organizing viewings cannot rent out a place in Berlin and San-Francisco at the same time.
By that time, we realized that more and more people (at that moment 30% of our customers) were renting an apartment with us from abroad. The potential for a scalable real estate agent was found and therefore the potential to build something we could be proud of.
So Effortless-Housing became nestpick a booking platform for international students that launched in May 2014.
Nestpick
At nestpick I had the opportunity to work together with people that I would describe as nothing but outstanding. They too had made significant progress in figuring out what their game was and played it together with others under the umbrella of nestpick. We certainly did not know everything, nor had we experienced everything yet, but we had the attitude to make it happen. We grew more and more and I like to believe that was because we focused on the right things. We focused on enjoying ourselves, learning and most importantly the customer experience we were providing.
Our biggest realization was probably that more and more of our customers booked places with us while already living in the Netherlands — as opposed to the international students we had originally focused on. They just enjoyed the convenience and they trusted us. Therefore we started looking at the opportunity of building a new, secure and enjoyable way for people to rent their home.
To accelerate our growth even more we started fundraising. Our goal was to raise EUR 250 K. The first, the second and the third VC showed interest and we quickly realized we could raise a lot more than the original number. EUR 500 K offers came in and then EUR 1,5 Mio. During this time the Global Founders Capital Fund from Rocket Internet also started talking to us. They wanted to get in on the ticket and we were open to the possible investment.
The move to Rocket Internet
In December 2014 Rocket invested and we moved to their HQ in Berlin, excited about the opportunity to learn, create an even better customer experience and have even more fun. 17 of the 25 people working back then at nestpick were ready to cut all ties (even their studies) with Rotterdam and move to Berlin. Within 3 days we did just that, not even knowing what apartment we would live in, just full of excitement and energy. I am still amazed by that energy today and believe there is no greater sign that our company culture just kicked ass.
The situation, however, quickly soured. It turned out that I had not spent enough time to diligently check if the values and vision of nestpick were or could ever be aligned with our new investors. The answer to both was a clear no. But because the investment capital had not yet been transferred, there remained a window of opportunity.
We started looking for a new investor to replace Rocket. We came close, but ultimately did not succeed. The deal went through. With the news, all of the 17 people that came or were about come to Berlin from Rotterdam quit within a period of two weeks. For them there was no trust and therefore no point of risking everything.
I am still sorry today, that I did not succeed in finding a different way. I can however say that I did the best I could.
I was again left with two choices: Leave as well or stay and fight for what nestpick was and could still be with the new opportunities we were given in Berlin.
I stayed and fought.
I now realize I did it at a cost. I neglected many tasks, including talking far less with customers than I did before and instead spent much of my time dealing with the natural politics that arise once a lot of alpha people are put on a project.
It was a vital time to have these conversations though as we were about to make the transition from a student platform to creating a new way for people to rent their home.
But because we didn’t have these customer intimicy through continous conversations the realization that people booking locally had different expectations towards our product than people booking from abroad came later than it should have come.
4 months of more mistakes than necessary followed. It was easy for a whole organization to keep itself busy, without creating any value for anybody else. You have the feeling you are working harder than is healthy but nothing moves. So you get frustrated, angry and even act unfair especially towards the team and things become even worse.
So we saw no way but to reduce the size of our large team so that we could have a fair shot at focusing and at building nestpick with an improved set of values and people. These improvements and subsequent growth allowed us to raise a sizeable Series A from some of the greatest VCs in Europe.
The Series A
After the Series A it became obvious that we had taken too many shortcuts to get to where we were. That we had sometimes not taken those essential extra 5 minutes to ask that one person that might need to be included in a decision or those extra 30 seconds to just once more make sure we thought of everything.
Most importantly though, I took some short cuts with the process of choosing our Series A investors. I had always loved the opportunity of building a different kind of community and culture within a company, since you can choose the kind of people that become a part of it. You can choose those who live by the values that the average person might not live by and have an organization that works completely different than the rest of the world can.
So after we hired practically absent of any hiring process in the beginning of 2015, we started having people in for trial days and interviewed candidates 3–5 times. Generally built up some of those processes that were the foundation to such a great culture that we had in 2014.
That never applied to investors though. I didn’t check them and their values like I did the people I worked with early on. It was a critical mistake. Today, I ask myself “Why?”.
The efficiency of a board, which is particularly necessary in the early days, correlates largely with the amount of trust among its members. The amount of alignment in the values among all the investors and the founders.
And for trust to exist there must be an alignment in the values among all the investors and the founders. I though had not spent enough time with our investors to generate that kind of trust. I now believe we should have gotten drunk with them, should have gone camping — whatever. Just something that would have allowed all of us to really get to know each other as people and to show what kind of values we live by.
Because it is in the bad times that you desperately need that trust among the board. It is therefore just so essential to be completely honest with any investor up front. Over time they will figure things out anyway and it will backfire the moment you hit rough waters. And in the end it was that missing trust among all of us that led to inconsistent ideas about nestpick´s strategy and current status quo.
One example: I am a big fan of Fred Destin and in his approach of finding and hiring the core team before scaling as being a key to success. (Check out one of his most famous talks here: http://www.mindtheproduct.com/2014/10/fred-destin-you-need-to-embrace-chaos-to-succeed/) So it was really time for us (actually for Fred Destin already a bit late maybe) to hire the greatest leadership team possible.
As I felt that we did not yet have all the skills on board to create a better rental process, it was most important for me to complete our leadership team after we raised our Series A. I saw that as the only chance to make up for some of the shortcuts we took earlier.
Due to the pressure I felt also because of a lack of trust among everyone that was part of the board, I spent too little time aligning the priority of completing the leadership team though. So while I worked on finding and convincing the greatest people of the start-up world to join us on our mission, other board members expected us to now focus on Marketing, Sales or our unit economics.
Over time the vision for nestpick within the board just differed more and more and we never started working on what would have probably helped the most — the trust among everyone. Had we tried, we would have either figured out that our values and resulting visions would never align or would have increased trust, allowing us to create real value.
At one point I just had to conclude that I would not be able to or willing to lead nestpick in the direction that Rocket Internet wanted to bring the company. I therefore took one of the hardest decision of my life: to leave.
What comes next
I do not think that I have found my final game but I have learned a bit more about what my game is. My game is to build meaningful products, with people I admire and trust and that trust me just as much. Just as importantly, I have learned that trust is among the most valuable things a team, a board and a customer can have. Because trust is motivation and energy.
Nothing kills motivation as easily as a lack of freedom and trust, for instance nothing turned my motivation off as quickly as getting the feeling that an investor thought they wanted nestpick to be successful more than I did.
What else have I learned?
I learned that everything starts with who, not what.
I learned that taking on money comes at the cost of giving up control, which slows decisions down.
I learned that no matter how big you are or how much money you have — keep talking to your customer.
I learned that money cannot solve all of your problems.
I learned that the value of a strategy is determined by the amount of buy-in generated during its formulation.
I learned that feedback only becomes really valuable when it´s continuous.
I learned that you should lead with product.
I learned that human empathy extends to the experience a company provides.
I learned that I love the start-up world!
All of these learnings and more I will take forward and use them to support teams that are building great products based on values I align with.
I thank everyone who supported me in my nestpick adventure, who believed in me, taught me, gave me feedback and trusted me.
And I look forward to continuing to make this world better together with you.
Have a great day,
Fabian Dudek
