Supporting Collaborative Entrepreneurship: Interview with Austin Neudecker
“Build something quickly; get it out there, be embarrassed about it.”
Austin Neudecker, “startup addict” and co-founder of the non-profit Startup San Diego, has built and advised fledgling tech companies over the past 10 years. Through failed attempts in the medical technology space, his experience has spanned a stint in venture capital and founding innovative businesses like Temi, a speech recognition service that we, the Penn Innovators in Business Team, use ourselves! Currently, Austin strives to close the resource gap in his hometown by advising companies, planning mentorship programs, and most importantly, facilitating a collaborative, positive platform by startups for startups. The Penn Innovators in Business Network asked him to share the lessons he’s gleaned from his experience that has helped him scale his learning cycle of failures and successes into constant growth…
What would you change about your undergraduate experience?
“My undergrad was intense; while I really enjoyed ‘surviving at MIT’, unfortunately a lot of the classes were very theoretical. I learned formulas, how to break down big problems, but after graduating with EECS & Management degrees, I really didn’t know how to code (except for in an arcane language that wasn’t practical). I wish I had picked up more tangible skills like modern coding languages.
Getting a Wharton MBA, I learned about the basics–what it costs to get a customer, what a customer is worth to you. These are super valuable skills that you need in any company; learning about the sales process and how to negotiate.
Frankly, the skills that I fall back most often are experiences that come from getting out there and building things. You learn a lot more, and it’s very practical. I encourage undergrads to get involved with an early stage company or just start your own. Even if it’s not the next Facebook, you’re going to learn a lot from doing it rather than reading about it.”
Paint the rosiest and grimmest picture of startups.
“When people think about startups, they imagine it’s manifest destiny–‘I’m going to go out, change the world, introduce something new that people had never seen before, make a ton of money, and be the boss along the way’. Although some of those things could come true, I think most are fallacies. The entrepreneurial journey is a roller coaster.
People don’t give enough credence to the fact that there are certain things that are not fully in your control. For example: nobody could have predicted that COVID-19 was going to impact all of the startups in the hospitality and service space. There are companies here in San Diego that are doing incredibly well because they deliver food to home (i.e. Mercato), while others are doing dismally because they depend on people showing up to a resort. Being able to roll with the punches is important.
The other thing new entrepreneurs don’t realize is that when you start a company, it becomes a big part of your identity. You become ‘the person that is doing _____’. If your startup doesn’t succeed, you feel like part of you has died. [Entrepreneurs] tend to be alone in that journey. It can be a very significant moment and we don’t talk about that openly as entrepreneurs as we should.”
Advice for students who are seeking career paths in technology?
“If you’re going to join an early stage company, look for one that just raised funding from a venture capital firm that is well respected. A pro tip: go to the venture capital funds that you respect and tell them you’re interested in working with one of their portfolio companies. They might be able to tell you which companies are good and refer you, which is a really strong recommendation if it comes from them.
As an advisor and investor, I have my own five questions that I ask companies to see if they have achieved ‘product–market fit’ (if they’ve correctly matched the problem and solution):
- What does it cost to acquire a customer? (CAC)
- What is a customer worth to you? (LTV)
- What channel are you getting those customers from? (Channel)
- How scalable is that channel? (Initial Market Size–Note: not the traditional, entire market)
- Tell me about your growth over the last 3–6 months. (Ideally in revenue or user engagement)
If they can give me clear and positive data as answers, they actually have a handle on what’s going on.”
What inspired you to create Startup San Diego?
“When I returned back to San Diego seven years ago, the ecosystem felt very fragmented. There were organizations around town that had their own little fiefdom. They had their own investors, mentors, resources, and wanted to hoard those resources for their own companies. It didn’t feel very collaborative and entrepreneurs felt torn by which group they should join. It felt inverted to what I’d seen in New York and in Silicon Valley. Several entrepreneurs, myself included, got together and formed an organization called Startup San Diego, a nonprofit ‘by startups for startups’.
The goal was to build a community where we openly share our challenges and make the best resources (employees, mentors, capital, programs, etc.) available to everyone. How do we make sure that people who enter the community get plugged into all the excellent resources that are available and act as a support group for each other?”
Tips for starting a company on your own?
Tip #1: “Let the numbers be the guide on whether your business is being successful or not. It’s very easy to trick yourself by looking at specific moments of success. You should celebrate them, but don’t delude yourself into thinking that things are going better than they are.”
Tip #2: “I was taught two very different ways to look at startups: 1) the venture capital way (How big is the market? How many people will buy this?) which is a very top-down view, and 2) the Y Combinator view of the world, which is a very bottoms-up view. The Y Combinator program pounds the idea to go out and find a really small group of niche users that need [a product / service] so badly that they are solving the problem in other ways. Learn from these passionate users and deeply understand their problem to build something they can’t do without (they would be very upset if you took the new solution away), and then incrementally build out into a broader set of users.”
Tip #3: “Build something very basic quickly; get it out there, and be embarrassed about it. It’s better to get feedback as quickly as possible. The startups that do really well are those that release new interactions rapidly. They have the shortest learning cycle. Those are the ones that always beat the, ‘I’ve done my research, now I’m going to hide for six months, build this amazing thing, release it, and then we’re going to watch the world just eat it up’. That almost never works. People that incrementally fail and change quickly are almost always better than those that wait a long time.”
Tip #4: “Always be scaling what’s working. Spend 80% of your time on the things that are proven to work, but spend 10% to 20% of your time–even as you’re growing–trying a new channel or experiment, putting up a new landing page. Always try to find that new growth engine.”
Written by Grace Wu
