"Failures are good. Test quickly and learn as much as possible."

An interview with Piotr Kulesza - Founder of RTAventures VC and advisor at Point Nine Capital

He came to Ljubljana to check up on one of his children: a two year old startup Doctrina, working on an Online Platform Connecting Pharmacies & Pharmaceutical Companies. RTAventures, which was founded in 2011, focuses on early stage companies with online solutions. They need to have an already working product. As Kulesza say, they, at RTAventures, learned the hard way, that a good idea can be deceiving.

On a scale of one to ten, how big fan of books are you?                      ...Nine.

What kind of books do you like?                                                              Various: as a young kid I was reading a lot of science fiction. I like history books, books describing true stories, especially in business, so you get an insight into how a specific company was built, or what kind of life an entrepreneur had.

So you must have read the biographies of Steve Jobs and Elon Musk. I haven’t read Elon Musks biography YET. An electronic version of the book is waiting on my devices.

Which lessons can you, as an investor in early stage companies, take out of these books? Obviously there is no single gold recipe for success, you can  seek for inspiration  in how people behaved in various difficult situations. Some ideas can be applied to your business. For example Predictable revenue is basically a recipe for organising your sales efforts and team in a highly scalable way.  Books are all about discovering small things useful for day to day business.

Does getting to know the personalities of successful entrepreneurs though these books help you in any way when looking at CEOs of startups? When it comes to people, you need time to get to know each other with startups. We invest in early stage companies, so they are very small, they have a validated product and some revenues. Despite having an operating product, certain events in the economy or in a given industry, can affect your business. So at the end of the day, the important thing is the quality of the people, the strength of the team. We try to make our decisions relatively fast, but sometimes that’s not possible. If there is a proper chemistry and understanding of both sides, that’s helpful. Choosing the right partner is crucial for any long term success.

One of the things Point Nine emphasized in one of the blog posts was the lack of diversity in the industry. Where do you see the role of women, which are less present in the tech sector then men? We haven’t done any analysis on the reason behind this but I would say it is a natural consequence of  civilisation evolution and role division between sexes.  But the world has changed so much that it will definitely be good to see more and more women in the sector.

Which unique qualities do women in your opinion have, that could have a positive impact in the startup setting? Definitely compassion and looking at things from different angles than men. Men tend not to see some things women can notice quite fast and that can be very helpful.

"We advice people to create a human resource function relatively early, because hiring people is a never ending story." 

Interesting that you mentioned compassion: if you read biographies of successful entrepreneurs they don’t give it much space: the environments were and are rather ruthless. As Jobs put it - there was no place for B players in his teams. You can achieve the ultimate result in various ways. I fully agree that a great team attracts great people. So when you start hiring people, diversity in terms of capabilities of individuals can impact the quality of the team in the long term. At the end of the day the products are designed by people. Expertise and the quality of people is extremely important. We advice people to create a human resource function relatively early, because hiring people is a never ending story. When you grow, you need more people. The faster you grow, the  more people you need.

The start-up market is growing rapidly so there’s a lot of competition among even those wanting to enter accelerating programs. Given the supply, what is still keeping you in early stage investments, where you’re like a parent, taking a child to first grade of primary school over and over again? What really excites us personally, is seeing people build things. The growth of a company is a very rewarding process for those involved. It’s a great journey.

If it all goes well. I agree. We did some investments in ideas in 2007/2008 and failed. We lost a lot of money but we learned a lot. Now we are not investing in ideas anymore but in companies with a working product which has to be used at a meaningful scale. We need to see the product how is it being used and if it created a significant engagement with the users or customers. We make decisions based on that. I think incubators and accelerators are doing a great job in helping people transform their ideas into something working, but for us it’s not the case any more.  Today a combination of a great product and a great execution skills differentiates the success from failure.

It has been proven multiple times that many people across the globe can almost simultaneously have the same idea, but some will succeed and others not. The idea is not crucial anymore.

Is there a company you could say you are at the moment most proud of, in terms of where it was when you got involved and where it is now? We’re very happy about Doctrina. In terms of external validation point of view, DocPlanner and Typeform have been very successful this year with raising money - DocPlanner raised $10 million and Typeform $15 million. 

Based on your experience, how important is the role of luck and serendipity in all this mix of market situation, illusions about the company, speculations …? I believe luck has a significant impact on the results of this game, but as they say:

It’s good to help the luck,  to increase your chances. You can’t simply rely on good fortune.

Some investors will advice start-ups to try get a lot of media attention, which can attract more potential investors. That can be helpful in some situation. There are a lot of great entrepreneurs that don’t do any PR. They focus on their product, delivering value to their customers and users and they have great traction. I don’t think PR is always necessary for success. Sometimes it makes more sense to stay below the radar.

To which extent do you think believing in yourself if helpful and when does it become harmful, because it blinds you from seeing your idea or product is just bad? If you’re doing something and it’s not working, you need to make a change. If you are not evolving, you will die. If you adjust, you will find a bypass around your obstacle and increase your chances of survival. These days you need to be very swift and highly efficient in testing various things and see what is working and what not. At the same time, its very important to think differently, and try to find totally different approaches. But ultimately, if it doesn’t work, it doesn't work.

Elon Musk is an interesting example of an entrepreneur that succeeded in any project he got involved in so far, because he didn't care let failures stop him. And there were many of them... Failures help you achieve the success. Failures are good - you need to test quickly and learn as much as possible. You need to be relentless, need to work in highly efficient way, so you can create a product that creates value. Then you will find a business model for it. 

How often does it happen that you doubt in the success of the ideas you see out there? We don’t like pitching. You can hear a great pitch, but it usually doesn’t tell you the whole story. So we prefer talking to the founders and test the product and get to know each other.

Especially in healthcare it’s difficult to assess solutions without a specialized background. Healthcare is complex by itself, so there is a trend for investment funds and VCs to get very specific in their investments, focusing of narrower segments inside healthcare, even medicine. How do you deal with this? We don’t do biotech, we don’t do medical devices, we are focused in companies that have products online.

Before we finish: you said you like sci-fi books. What role does science fiction have in all this VC, startups, investment, solutions story? It’s all about being curious in new things. About what is coming in the future in terms of new solutions, products.

So you're saying imagination has a big role? Sometimes you need to believe and imagine that something which is really small today, can become really big in the future. You can call it imagination, or sometimes you can call it faith. In investing, it is often relatively easy to be right about the trend, but it’s way more difficult to be right about the timing. Having imagination about how fast certain things can happen, can be very important in the judgement process. 

And we’re back at intuition and luck... We should all do as much as possible to help it.

Is there a technology or a solution you read about in science fiction, and wish it would become an everyday thing? Better logistics with travelling. It still takes a lot of time.

Do you think we will ever be able to tele-transport? I’m not very optimistic here actually (smiles). 

It would be practical…                                                                                            It would be. There are a lot of interesting ideas in the sci-fi books.

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RTAventures did 14 new investments in last 4 years, plus multiple follow-ons. Besides Doctrina, three other companies work in the digital health sector: DocPlanner - a platform connecting healthcare professionals with millions of patients on a monthly basis. Doc-Tech - a marketplace for medical devices connecting healthcare professionals with suppliers of medical equipment and Voxel - a leading network of diagnostic imaging laboratories in Poland.