Navigating the Idea Maze: Lessons from Building, Breaking and Rebuilding

When I started my founder journey 6 years ago, I subscribed to the default startup path: pursue hyper-growth fuelled by venture funding. The rules of engagement with capital markets seemed easy to understand on the surface — build a business that can grow to $100M in revenue within five to seven years. It’s a race for scale, in which it’s widely accepted that only 1 in 10 ever get there, paying the bills for the 9 that don’t. Along the way, the cost of raising more venture funding will decrease as your probability of achieving the expected revenue levels increases.?It’s an oversimplification, but that probability is what most investors underwrite at each interval (seed, A, B, etc). Fun fact: $100m is also generally the minimum annual revenue required to pursue a Nasdaq or NYSE listing — U.S. is still the largest venture funding pool in the world, hence benchmarks are dollar, dollar bill, y’all ??.

If startups were cars in a race, products would be engines and venture funding would be nitrous oxide or NOS ???? — unlocking bursts of motion-blurring speed that can win races, while simultaneously increasing the chances of crashing and burning if used improperly.?As a driver, you need extreme focus to avoid the worst outcomes and time your acceleration bursts for the circuit i.e. market. Being a first-time founder, I generally try to learn by osmosis, watching and listening to winners. Unfortunately for me, this was a lesson I learned the HARD way. It’s nothing short of a miracle that I’m still at it today.?

In 2024, we decided to build a new product for the mobility industry from the ground up. After partnering up with Idan Jaan and Howard Sommerfeld , I wanted to try a different approach, inspired by Paul Graham essay classics like Default Alive, The Fatal Pinch and Ramen Profitable. Instead of leveraging the conventional venture funding cadence that sustains high-growth startups, we prioritized a different foundation for our ambitions: compounding product efficiency.

It seems obvious that compounding revenue is a lagging indicator of a compounding product metric (# of users, deal speed, lifetime value etc)… but when you’re swinging from fundraise to fundraise to breathe, it’s easier to lose sight of the fact that a disciplined singular product focus is a prerequisite for the compounding to occur. You might end up brute-forcing your revenue growth, blinded by a false sense of accomplishment of adding another $1m in revenue on your quest to $100m. This year, we obsessed over how to make our product a more efficient compounding engine, week in, week out. Rinse and repeat, without fail. If we lost conviction that it’s the right product, we’d course correct quickly.?

Sure, we weren’t left with much of a choice given the state of capital markets for South African startups. Region aside, there also weren’t nearly as many successful investor memos with the word “Mobility” this year either — “AI” stole the show by a long mile. Regardless, I’m super proud of where this reformulated ideology led us in just months… An imminently profitable product that users love with phenomenal compounding potential! The “laws of early-stage growth” differ fundamentally from later stage business — which happens to be the root of classical business education. Don’t expect to apply much MBA theory to this race. In the startup world, diversification doesn’t mitigate risk… it dilutes focus. It stifles compounding, making execution more expensive — a silent cost inflation killer ??.?

Yes, the inputs required to build a compounding product engine are always market specific, so it’s dangerous to generalize. Some markets may demand more patience or include the burden of needing to tar the road while racing. But in all markets, there’s no escaping that product repeatability is the highest goal in the early stages and your engine just can’t be reliable without it.?

Grateful to all the investors, advisors that insisted on teaching me this simple yet profound lesson — sorry it took a crisis to finally understand what you meant ??. h/t Justin Spratt Kanyi Maqubela Steve Jang Jim Chu Pardon Makumbe .

?? Full podcast episode here. Thanks Hugo Suidgeest for the gift of reflection that this conversation gave me.