Why Most Founders Pivot Before They Succeed

0:00Alex Chisnall:Did anyone tell you at the start that it wouldn't work? My last startup managed to raise quite a decent amount of money with scaling. And unfortunately, it all sort of came crashing down. I was borderline depressed. Tom, who's my co-founder, so he WhatsApp me saying, I've got this great idea for a new business. Do you fancy being an advisor to it? I waited three days just to make sure that I was fully ready. But then three days later, I said, scrap this, I'll come in and co-found this with you. One of my startups failed because we were married to the solution, not the problem.

0:38Alex Chisnall:What stops founders from building something meaningful isn't the lack of ideas. It's the fear of getting started. I'm Alex Chisnell, and this is Screw It, Just Do It, a podcast for people who are ready to stop waiting, take action, and make things happen. Sounds like from our previous conversation, you were always entrepreneurial. So what industries have you been in up until this point or haven't you been in? Yeah. So first one was oil and gas randomly, then software, then off camera, we were talking, that's when I took a slight career shift in my sort of mid twenties. I've luckily been part of or co-founded two startups since I was sort of 18 and I didn't know what to do next.

1:24So then I moved into events and nightclubs and festivals and pubs and sort of living the dream as somebody in their late 20s. Yeah, definitely. But then COVID hit and I wasn't living the dream. So then I moved back into sort of frontier technology like five years ago and I've been in tech since.

1:42Alex Chisnall:and what like experiences do you think from from your upbringing your background do you think actually shape the way that you you think that you're from the outside looking in looking for different opportunities and kind of sizing them up and deciding whether to go in or not go in etc because not everyone's wired like that right yeah so I've never never had a job other than sort of six months when I was 18 at Ladbrokes, working as a cashier. Never done anything else in terms of working for somebody. And I've asked myself that question sometimes as well, like, why can't I just go get a job? Why can't I take the easier route?

2:26I won't say easy, but easier route. I think it's something to do with the way I was brought up. So I was born in Wales to two immigrant parents. My mother was a toilet cleaner growing up. My father was jobless. So that meant that we actually had to start looking for opportunities outside of the UK. So we ended up moving to Saudi Arabia when I was five, then Dubai when I was eight, then Cambridge when I was 11, then I moved to Brighton when I was 18. So that sort of ability to go into new territories and new ideas and new cultures and realize that it's not actually that scary to go jump off into the deep end.

3:12I think that's sort of really molded the, I don't like to call myself an entrepreneur, but the person I am today.

3:22Alex Chisnall:Why don't you call yourself an entrepreneur? I've got friends like this, and they call me like a business owner. I own a business. But they won't call themselves an entrepreneur. So I'm always interested in that. I don't know. I don't know why I wouldn't call myself an entrepreneur. I think it's because my identity is not an entrepreneur. My identity is somebody who really enjoys trying new things that most people around me think that I can't do and proving that I can. If there's a short version, if there's one word for that, then I would call myself that. And where does that proving people bit come from?

4:02where's that wired?

4:04Alex Chisnall:I think through my school years I was not the academic one I spent a lot of time in detention suspension police cells but I always felt I would say almost like an outsider to that environment not to friends and stuff I had a lot of friends and I was very lucky with the relationships I had but the process of going through like education made me feel like everyone was pushing me one way and I was not good at school. All my teachers knew it. Everyone around me knew it. And I felt like, well, I need to be good at something, right? I need to do something. And I think growing up, I needed to end up proving that the whole model that you're forced to go sit in a school classroom from nine to five, memorize textbooks and write those textbooks out at the end of the year was the way you judged people on like how how successful they were going to be so I think by time I was 18 I was like okay well I'm just going to prove it that it's not the grades it's not the teachers I've still got something about me yeah um it's something I say to my kids that as well with and you've articulated it really well that you're literally learning a textbook and then you're regurgitating the textbook and I'm just and I'm just like, you just got to play the game.

5:32Alex Chisnall:I said, as hard as it is, if you want to do X and you need Y to get that, then give them what they want. Literally deliver them. And it's the same for a job interview, right? Or you work out what they want to hear and you're selling them what they want to hear. Yeah, I actually hate job interviews. So I just interviewed somebody before this and they asked me, I know we're going off topic here a little bit, but they asked me before the meeting, like, what should I prepare? And I was like, there is nothing to prepare. Like, if you prepare something, that is not startup world. Startup world, you have no time to prepare anything unless you're talking about sort of fundraising.

6:12But fundraising is my job. I'm not going to hire somebody to do fundraising. So it's the ability to quickly think on your feet. It's the ability to act under pressure. So I'm not going to tell you what I'm going to ask you. I'm not going to ask you to present anything to me. I'm going to just come sit with you for an hour, hour and a half, and I'm going to ask you questions and see how you react to those questions. Like, that is the true test of whether somebody can take startup life. Obviously, corporate life is a bit different. You have three months, multiple quarters to prepare these huge projects and whatnot.

6:44But yeah, the guy I just spoke to came from a very corporate background. I was just like, let's just forget all of that.

6:50Alex Chisnall:What do you think was the hardest question you asked him? Or through him the most, maybe? I think it was really digging into is, does he really understand what startup culture means? And I mean, he answered it well, by the way, answered it very well, I think, unless he prepared that question. But again, the thing that most people don't realize, if you haven't been a founder before, or you have a corporate background, is there is no strategy. the strategy that you write down usually is to please some investors the strategy of a startup is turn up every single morning figure out problems and deliver solutions that is it and then you just do that the next day the next day the next day and you hope it compounds at what point did you decide to go all in on your current business then uh mucker ai yeah see i have this weird mental illness, I would almost call it, where I can't do anything other than be a founder, I think.

7:55So my last startup managed to raise quite a decent amount of money. We were scaling, built a big team. And unfortunately, it all sort of came crashing down at one stage where we just couldn't raise additional funding for multiple reasons we don't need to go into. And I was borderline depressed. I had no idea what to do next. I was in the wilderness of this weird mental state. And Tom, who's my co-founder, knew that. And I had said to him, I don't think I'm ever going to be a CEO again. I don't think I'm ever going to be a founder again. That's how sort of depressed I was. So he WhatsAppped me saying, I've got this great idea for a new business.

8:44do you fancy being an advisor to it? And I was like, an advisor, okay.

8:49Alex Chisnall:That is different. I'm not sure how to be an advisor. He pitched the business to me and transparently, the second he pitched the business to me or finished pitching the business to me, I knew I was going to turn to him and say, look, okay, I'll come in and co-found this with you and I'll take the CEO role, you take the CTO role, et cetera. I'm not advising you. I waited three days just to make sure that I was fully ready. But then three days later, I said, you know, scrap this. Scrap this. I'll come in and co-found this with you. And since then, I've been all in. Quick one before we get back to the episode.

9:26Alex Chisnall:If you'd like to meet some of the founders you've heard on Screw It, Just Do It, join me at the Festival of Entrepreneurs on the 3rd and 4th of November at the NEC in Birmingham. 200 speakers, two days of practical business insights, and it's completely free to attend. Head to festivalofentrepreneurs.co.uk to register. We actually co-founded the last startup together and that was six years ago. So we worked together for a very long time. But the pitch was pretty simple initially and it has evolved. The pitch was AI voice assistant for tradespeople, solo tradespeople initially. We've now moved to teams, but tradespeople are drowning in admin.

10:08And what's worse, nearly half of the 1.1 million tradespeople in the UK are neurodiverse. So they're dyslexic, ADHD, OCD, et cetera. And that's leading to like 80 % of the market suffering from adverse mental health issues. So his idea was specifically build an AI voice assistant where they can speak to it. And Mucker would essentially automate all invoicing quotes, job management, whatever it is, accounts, blah, blah, blah. So for me, that was like a little bit of a penny drop moment because one thing that I have learned through scaling other businesses is the problem really has to resonate. And the problem is the most important thing, not the solution, not the way.

10:55Home point, right? Yeah. And that problem is a huge problem. A lot of tradespeople are, in the nicest way possible, accidental business owners. So they've been great plumbers, great electricians. They started scaling a business, they started hiring people and they're not entirely sure how to put processes in place, operations in place, how to use the right technology, CRMs, et cetera. So if we could just do all of that then how much pain is that solving and how quickly have you managed to get

11:27Alex Chisnall:get traction and um you know prove product market fit exactly uh i mean almost immediately i'd say so again i'd imagine so so yeah yeah i mean we're we're lucky because it's neither of our first radios yeah so getting to market building the product fundraising so we closed a big pre-seed round we're just about to open another round we already have a lot of that committed um we our model was simple you know validate validate validate so we just put out one video on instagram it was put i think it was like i don't know 70 80 pounds behind it something ridiculously cheap next thing we know we had 500 people on the wait list so we're like okay let's just build this think as quick as possible, get it out there.

12:16And then ever since that, so you sort of end of last year, we've been scaling, pivoting, breaking things, starting things again, revenues going relative, well, really well, to be honest. And we're just about to explore a slightly different model as well, which should get us to some pretty significant scale soon, hopefully.

12:38Alex Chisnall:I've had Daniel Priest on a couple of times, and he always talks about building a weightless at 500 is pretty impressive from very small investments. Again, I just think it's great advice. When I was at Virgin Startup and so many people would come and they'd literally just ask family and friends their opinion. And it's just like, okay, you need to go away, come back in another 30 days and actually ask some people who give you a proper opinion. Or what you could actually do is start a wait list, like literally trial a few Facebook ads or whatever. And that's literally what you did. And you ended up with 500 plus people.

13:11Yeah, and that was the validation for me because we didn't even trial the ads. We just did one ad in a couple of hours, put it up and 500 people. Then we called every single one of them. Not all of them answered, but we called every single one of them, spoke to all of them, validated it verbally as well, got them on side, launched a product, converted them into paying users, got them to introduce us to other people, started scaling.

13:35Alex Chisnall:And was part of that early validation and part of those phone calls asking people like what they would expect to pay for a service like this and questions like that. We didn't ask what or how much. We'd ask whether they would for sure. Asking certain questions like that tends to like skew the data quite a lot because most people would say, you know, 20 quid or 30 quid, you know. It's up to you as the founder to figure out what is that pain or that solution worth. So we did actually start pricing relatively low. That was mainly just for sort of user acquisition purposes. Now we sort of compare our AI agents to salaries.

14:19So you can reduce your headcount or not hire people as your business scales. So you're saving 30 grand, 40 grand, 50 grand on operations managers, operations teams, et cetera. So then our pricing reflects that.

14:31Alex Chisnall:Did anyone tell you at the start that it wouldn't work? Oh, so many people. Really? So many people, yeah. Yeah, and listen, transparently, some of them were right, which is why we did pivot. So our initial model, we thought the pain was most visceral in the solo trades, the individual man and van. And that still might be right. The pain might be sort of most visceral there. But the problem is, is it's very hard to scale. Every time you're acquiring a user, they're just creating one account and not bringing in team members. So we had a lot of people tell us that we were sort of going down the wrong path, especially in the investment venture world.

15:17Some said that we still wouldn't even be able to do it with teams.

15:23But the more sort of user conversations we had, the more customer feedback we had, the more we realized other companies have failed to do this multiple times. Even though there are, I'd say, like three or four unicorns in our segment, most of them really focus on teams of like 50, 100, 200 plus. Our sort of sweet spot now is like teams of two to 20, which still everybody thinks or thought, I'd say, three months ago that we couldn't do it, six months ago that we couldn't do it. But for the last six plus months, we've been proving that very wrong.

15:59Alex Chisnall:Was there a moment that you didn't really do it? Like you said initially, co-founder asked you to come on as advisor. You then start working with him. You've known him for like, say, six years or whatever. I've known him for 15, yeah. You've known him for 15, worked with him. Was there a moment that you doubted yourself or wanted to kind of revisit that decision or was it all in straight away and you're like, yeah, this is going to work? I don't know what's the most exciting answer for you, But unfortunately, I would say no, no doubt at any stage.

16:38And not doubt as in like, I don't think this can fail. Like that's crazy doubt. If anybody has that sort of delusional confidence about their business, then they're almost certainly wrong. Doubt as, I had no doubt as this was the right idea to pursue. Like for me, failure, I've exited and failed and failure is part of the process. So that side of doubt, not necessarily worried about, but no doubt in this was the right decision and the right call to make.

17:11Alex Chisnall:And what about building a business in a space that again, from the outside looking in, seems to literally change weekly? how difficult is that but equally how exciting is that I suppose by space I'm presuming you mean AI space rather than the trade space yeah sorry so

17:34it is difficult it is difficult because you have to separate signal from noise quite a lot and I mean nobody gets it 100 % but you have to make a conscious decision to look at every opportunity and really ask yourself signal or noise. Now, don't get me wrong, the pace of development in AI is the exciting part. And it is the reason that we can get products to market way quicker than any one of our competitors. It's the reason that we can validate way quicker than any one of our competitors so the speed is not not only scary it is sort of essential for for us right now but it is really hard to to stay on top of it just takes some discipline what's been the

18:27Alex Chisnall:hardest part of building something in such a fast moving space would you say the fact that it moves so fast um yeah the the the problem is is there's always a new shiny object right and again i've been guilty of this so i'm not sort of preaching i've been guilty of this at other startups where you see a shiny object and you think that that is the route forward everybody's talking about it and it's hyped up and you end up going for it and it ends up being the wrong decision so shiny object syndrome is definitely something that we try and avoid whether the problem is is you never really know for six months 12 months etc so that's that's definitely the hardest part this episode of screw it just do it is sponsored by molten ventures one thing I've learned from speaking to hundreds of founders on this podcast is that the right partner brings more than just capital that's exactly how Malton thinks about backing founders they work with some of Europe's most ambitious technology companies from series a and beyond bringing experience energy and partnership to help bold ideas scale faster go further and become global businesses so if you're building something with real ambition Malton's mission is simple To help make more possible, go to MaltinVentures.com.

19:53AI is going to replace humans. Now, it's slightly nuanced here. AI is definitely going to replace some jobs. But there's a thing in the sort of trading investment world that I picked up many years ago, saying that a trend is your friend until the end. So every single time there's been a huge disruption and a revolution and a new technology shift, the trend has been loads of jobs lost in certain sectors, but humanity moving to other jobs. The problem in this one is, and it's been said before, I'm not the first person saying it, is the pace of change. So do I think AI is going to replace every human being in the world and we're all going to be sat on universal basic income?

20:50I think that's quite a wild fantasy, to be totally honest. Do I think AI could come for your job, not specifically yours, but listeners' jobs? Absolutely. But humans that use AI will replace humans first before AI replaces humans, you know? So the best thing you can do is just become sort of AI literate and AI native.

21:10Alex Chisnall:You talked about pivoting a number of times, Sammy. How many times did you say you've pivoted already and you've talked about pivoting again? I don't know if you can talk about that. Yeah, I mean, we've had one, I wouldn't even call it a big pivot. We've had one pivot, like a structural pivot so far, and that's from moving. And that's not on the product side. That's on the ICP go-to-market side. Yeah. From solos into teams. We are currently mid way through doing a much bigger pivot. But this goes on to one of the points that you made, or one of the questions that you asked was AI shifts so quickly.

21:57You have to be nimble on your feet, right? And the reason why our business is way more attractive long term than an incumbent who is a billion dollar unicorn in our industry is those businesses can't pivot. Those businesses can't structurally change. So for us, we have to use any edge we have. And an edge for us is to quickly turn our business 180 on a dime if there's a legitimate business strategic case to do that. So yeah, I'm all for the pivot. In fact, one of my startups I can think of right now off the top of my head failed because we were married to the solution, not the problem. And we didn't pivot.

22:46Alex Chisnall:Yeah, okay.

22:51Alex Chisnall:What's been the first thing that you've seen in your experience with all your past businesses and maybe this business that when you do scale, what's some of the things that break first? For those listening who are startup, growing, looking to scale, what are some of those things that come up again? Because you've been in a number of different industries, right? Yes. I mean, scaling the first thing that tends to break is culture. Really hard to, really hard. I know there's a lot more focus these days, especially over the last five years or so on culture. Yeah, yeah. So if you're cognizant of the fact that culture can change and can sometimes get quite toxic, if you're in a high hyper-growth startup and you're not looking at your culture and your people and is everybody pulling in the same direction, that can easily break.

23:47And once that's broken, it's almost impossible to fix. A lot of the times happened with my first startup I was only 18, 19, well, when it's in scaling phase, I was about 22-ish. And there was a toxic culture there that we just couldn't end up turning around. So I had to unfortunately let go of quite a lot of senior members of the team there. So I've never allowed that to happen. But the thing with the scaling phase is anything can break. Whatever you're not really paying much attention to can break.