This interview is with Mick Liubinskas, co-founder of the startup business incubator Pollenizer. Pollenizer is a successful startup incubator in Australia that co-founds, builds and invests in web businesses.
Prior to Pollenizer Mick had extensive experience running startups and working with startups like Kazaa, Zapr and Tangler. Then at the start of 2008 he joined with Phil Morle to create Pollenizer which has since gone on to work with high profile startups like Spreets, 99Dresses and Posse.
In this interview, we go into detail about focus, finding co-founders, testing business models and much more.
The full interview, (in audio) can be downloaded here: Startup Business Incubator Interview - Mick Liubinskas - Pollenizer
The full interview on video is here:
If you prefer text, here’s the Summary Notes:
Pollenizer is a venture development company. It’s basically a serial co-founder of web businesses. Either internally we come up with business ideas or more traditionally, a founder comes to us with an idea. Founders typically come to us to propose their idea, share experiences on building a business, learn more about building a web business, or to find a business partner.
Pollenizer helps founders form brand new companies by putting in some equity and working with the founders on all aspects of the company to ultimately grow the business. Pollenizer is not a consulting firm or service agency, so you cannot hire Pollenizer to work on your startup. Pollenizer only does partnerships and always takes equity since there is so much risk early on and not much money, all parties have to be vested in the long run. Pollenizer turns small ideas into big businesses.
Pollenizer as a Co-founder:
The whole Pollenizer team, 18 agents in Sydney and about 50 in Southern India, takes the slot of one co-founder. The team is comprised of CTOs, Product Managers, Designers, Engineers, and QAs who work together to build new web businesses.
As a co-founder, we face significant challenges on a daily basis. Through this, Pollenizer is able to explain and address some concerns their founders may have including:
- Why manual testing should be done before building the product
- How to build a fast and moving product
- How to find customers
- How to find investors
- How to get investments and turn an idea into a real business
Mick and Phil (co-founders of Pollenizer) are involved in every business on Pollenizer. However, in terms of the day-to day tasks, a Customer Development Manager works hand in hand with the businesses on Pollenizer to help them find investors. The CDM helps with the first steps of the business process, including helping write the first deals, get the first customers, the initial marketing and more.
Focus is something Mick traditionally failed at. He thought he was focused until he had his share of failures. Time after time, founders would tell him stories of failing businesses, helping him to see the massive distraction that happens when you’re not focused.
The danger usually happens early on in the business. There are too many opportunities and there are a lot of things that need to be done and many ways to do it. It is even harder at this point time because the dot-com industry is global and anybody can put up a site from anywhere at any time.
When starting a business, not knowing what to focus on is one thing and losing your focus in the process is another thing. It is very easy to get caught up in an idea and lose your focus. Mick emphasizes to focus on depth first, then breadth. A small business with a lot of depth grows faster than a broad business with no depth. Mick recommends proving value at the tiniest level possible, since it is the fastest, cheapest, and easiest way to grow a business, and then focus on the bigger picture.
What to focus on:
Don’t look at the process as building a business, but rather see it as testing. Most people believe you have an idea, build the business, launch it and test it, however it is important to test it before you build the business. Pollenizer tries to help people understand that they need to:
- Forget building the business and core assumptions.
- Get rid of procrastination and over analysis.
- Act on it.
There are two integral things to consider:
- Value Creation – asking people what they like
- Value Capture – asking how much do they care
Startups need a good idea, as well as strength of value that people care about. Two important things for start-ups to consider are:
- The idea – the product/business to be launched
- Testing - see if people would care about this product/business
It’s always important to get information from people to understand if and why they care. Charging money is a key score card because when people like the product or service offered, they are willing to pay anything for it. This gives a company the signal to build this product/business.
After the process has been validated, it is important to focus on knowing if people value the product or service in terms of marginal profit. We never get to 100 percent validation, but Mick believes around 60 percent validation is realistically profitable and fewer than 50 percent validation suggests that there is not enough evidence.
Why testing is important:
- It’s gives confidence
- It is the fastest route to learning
- It’s the cheapest, fastest way to learn big chunky lessons about business
- It reduces the risk of paralysis
Key considerations when building the product:
- Don’t build a product to attack the whole world
- Build a product and go for a niche (look for depth)
- Keep the business small and go from there
Investors hate products that are boring, however, small and simple ones can have a big impact if they are well tested.
Failure happens when you focus on too many things. No matter what happens, stick to the 6-week manual testing process. Realistically, enthusiasm could be gone in six weeks, but stay focused and keep going. Make life simple by pulling out the focus into a live base environment.
Methods of testing:
- Know your priority
- Test and retest
Flexibility is more important than stability. Getting the right tools is just as valuable as someone’s perception of the product or service.
Raising capital: business strength
Mick advised that a rough goal of raising $20,000 a month is enough to show there’s a business. If you can consistently make $20,000 a month in revenue, this will show you are not kidding around. It may not be a huge sum but it shows a lot of business strength. Having a product that a thousand people use three times a week also shows strength. Take a risk, get out, sell and raise capital. As your relationships with investors develop, traction builds and within 12 weeks there will be money in the bank. Investors need to have faith in your plan, so never cheat them.
There is no business model that is perfect and evidence of strength is very important. Don’t build a big community and see if it can be monetized. Test the strength of the community and gather evidence that people care first, then focus on the business model.
A co-founder is extremely important and can be very helpful, as Phil was when Pollenizer was developed. Phil and Mick complement each other in skills and match in terms of values, principles and character. The way they approach challenges is very similar, which works well. Do not choose someone to be a co-founder based on the fact that he or she is a good friend. In addition, do not base the equity on where you are now, but rather base it on what you’re going to do together to build business.
Bootcamps are ways for Pollenizers to help founders who are starting any businesses to get a job. It takes focus, process, and manual testing. The bootcamps give a hands-on and more practical project that is useful. In addition, entrepreneurs interact at the bootcamps, which helps them further build their networks.
The entrepreneur vs. the idea
The founder is more important than the actual idea because the idea will likely change over the course of development. However, investing in merits creates a potential growth.
Things to remember:
- Have a big vision on how to sell the product (to get through the failures which happens consistently)
- You need a strong team, strong leader and manager
- You must be able to confront things
- Persistence is key
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