The 3 Things We Look For in Founders
+ The S23 Batch Has Graduated, We're Launching Startup Academy!
Hi there,
In case you missed it, the latest batch of Summer 2023 has officially graduated! Even though this marks the end of the program for them, our founders are only just getting started. We're excited to see where they go from here. On Iterative's side, we're gearing up for the next batch already and are stoked to invest in more companies.
As for this month's newsletter, we've gathered a few of our best content for you. In 10 minutes or less, learn more about…
The 3 things Iterative looks for in founders
How to strengthen your Iterative application
Besides content, we've also got a lineup of exciting announcements. We're launching a few initiatives, and we'd love for you to join us - keep scrolling to see more 👀
- June
The 3 Things We Look For in Founders
By Hsu Ken Ooi, Managing Partner of Iterative
Maybe the most common question I get is what do we look for when deciding to invest in startups? The answer is surprisingly simple at a high level but exceedingly nuanced in practice. At a high level, we (and I suspect every investor) want to invest (1) in a startup working on an important problem and (2) in founders who can solve that problem. The question then becomes how do you assess each of those things?
1. Does What They Say They’re Going to Do
Often people will call this execution but I find that term to be imprecise. What does it mean to be great at execution? My definition is simple, you are great at execution if you consistently do what you say you're going to do. If you say you're going to launch X feature by next week, you launch X next week. You say you're going to grow 10x in the next 3 months, you grow 10x in 3 months.
I can't overemphasize the consistent part of this. Lots of people can do what they say once in a while or for a short period of time. Very few people can do it consistently over the years. I could, and probably should, write an entire post on how to do this but I'll save the suspense. There's no secret trick. People who do what they say consistently aren't better at setting expectations, they don't encounter fewer problems than other people, etc. They just get it done. They think carefully before they make a commitment, have a good plan on how they're going to achieve it and when they run into problems, they do the math and find a solution.
2. Convincing
Most founders become founders because they want to build something or solve a problem. What they quickly realize is, that to build or solve that problem, they spend most of their time convincing various people of various things. They need to convince users to use a product they’ve never heard of before. They need to convince people to leave their cushy jobs to join their wildly risky startup. They need to convince investors to invest in their startup that does something nobody has ever done before.
If a founder is not convincing, it will be almost impossible to build or solve the problem they're working on.
Note: It's important to note that I chose the word convincing and not charismatic. Most people think founders need to be charismatic but I disagree. Being charismatic is one way to be convincing but in my opinion, not the most effective. For example, I find that being someone who does what they say they're going to do is a far more effective way of being convincing.
3. Internally Motivated
We believe founders who are internally motivated (care about solving the problem, opportunity to learn, etc.) are more resilient than those who are externally motivated ($, being famous, etc.). Why? Being internally motivated makes you result-independent.
The process of building a start is tumultuous. The lows are lower than the highs are high and you spend considerably more time feeling like your startup is going to fail than succeed. That also means if you're externally motivated you're going to spend more time feeling like you're not going to get what you want out of starting a startup. You're going to quit.
If you're internally motivated, you won't be bothered too much. If you started a startup to solve a problem or the opportunity to learn, those things will always be true, regardless of how it's going, as long as you don't quit. When things get really bad, and they're going to get really bad, that's what you're going to need to keep going.
Those are the 3 things we look for in founders.
It's important to note that these qualities are required but not sufficient to be successful. It's not uncommon for someone who consistently does what they say they are going to do, is convincing and is internally motivated, to fail.
Almost always it's because of the choice of problem they decided to work on - I wrote about that here.
Happy Graduation, Batch S23
Another batch, another graduation ✨
12 weeks ago, we kicked off the S23 batch in our first ever in-person orientation, and last week, they officially graduated. Our founders did a fantastic job on Demo Day, and we're so stoked to see where the companies go from here - this is really just the beginning for them.
To the founders, thank you for trusting Iterative to be a part of your journey. You bet on us as much as we bet on you.
Apply to Iterative
The S23 batch ending also means we're ramping up for the next batch. We've already sent out multiple offers, and we're looking for more startups to invest in! If you're a founder and working on something, here are 5 reasons why you should apply to Iterative:
Founder-led - All Partners in the company are or have been founders. No exceptions. This is important because unless you've been a founder before, it's hard to empathise. If it's hard to empathise, it's hard to help.
Strong Guidance - Related to the first point. The best advice on how to do something comes from people who have already done it. We help you prioritise, avoid pitfalls, teach you how to think about your current challenges and prepare you for future challenges.
Vibrant Community - We designed Iterative to be the best founder community in Southeast Asia. Specifically, this means a community of founders in various industries, sectors, countries, and company stages that help each other. If you have challenges or questions, it's likely someone in the community can help.
Upfront Investment - Iterative runs its program twice a year but we invest all year round. When we do invest, we invest the full amount immediately. That means you don't need to wait for the batch to start to receive the funds.
No Program Fees - Startups are not our customers, so founders don't need to pay us anything. There are no milestones to hit, and no clawback fees. Ever.
Ideas from Iterative
5 Questions with Brian and Hsu Ken
Brian Ma and Hsu Ken Ooi often get bombarded with tons of questions, so we put them in a (virtual) room to do exactly that. We posted this video awhile back, and founders have shared the parts they resonate with, specifically…
Different emotions - Hsu Ken and Brian felt different emotions after selling their company - and why this is normal.
Advice to their younger selves - If they could re-do their startup journey, what would they do differently?
Unpopular startup opinions - Why Brian thinks people should abandon SF (👀) and why Hsu Ken thinks the market is more important than the founder.
Watch here.
How to Apply to Iterative Successfully
Founders often tell us they struggle to finish filling up our application form, or that they don't know if their answers are well-structured for what we're looking for. To help, we wrote an article going through some of the meatier questions in our application form, explaining why we ask them and what we're looking for.
Here are 2 questions from the bunch that founders often find challenging - and how to answer them well.
“How big is this problem? Describe how your company becomes a $100M revenue business.”
This is the market size question, just phrased differently. We phrase it differently because we think of the market as a by-product of the problem. How big the market for your product is, is a question of how big of a problem it is.
There are lots of ways to answer this question but typically you’re making one of the following cases.
Large Existing Market – There is a large existing market you can win.
Small, High Growth Market – There is a market that is going to grow significantly over the next few years and you will be poised to capture most of it.
You can still do the classic TAM thing but remember to make the case for one of the above.
How long have you been working on this and what have you learned about this need?
This is not a question about what you’ve learned about startups. It’s about the problem and the users you’re building for. A lot of people end up sharing about their startup experience which is nice but not what the question is about.
We ask this question to gauge how good are the founders at learning from their users.
Most of the high-quality answers to this question have to do with users. It’s often an observation about the type of people who have this problem, a non-obvious insight into how they want it to be solved or how solving it in some new way will yield a 10x better solution.
Read the full article here.
Introducing Startup Academy
We are thrilled to announce the launch of Startup Academy, a free collection of courses, guides, and templates on how to build startups in Southeast Asia.
We work hard to produce relevant and practical content that helps people learn about and be successful at building startups. You’ll (hopefully) see the result of this in the content that we share every month in this newsletter!
Creating useful and relevant resources is only part of what we want to do, though. This content also needs to be easy to find, accessible and structured. We want founders and anyone interested in learning from us to be able to go to a single place to find answers and guidance to all their startup questions. Startup Academy is this single repository to help founders become more informed and better equipped to build their startups.
Here's quick preview of the type of content you’ll have access to:
Top mistakes founders make when fundraising
How to get 1,000+ users with just a landing page and ads
Startup 101: How to find a good problem for your startup to work on
Startup Academy is for anyone considering starting a startup, growing an existing business, or simply curious about startups.
Learn more about Startup Academy and sign up for a free account here.
October Highlights
Sign Up for Our Validation Program: How To Know if Your Startup Idea Is Worth Pursuing
Our Validation Program is back! Last year, 100+ founders signed up for the program, and we're thrilled to share we're bringing it back. Join us for a 4-week Validation Masterclass from 23 October to 16 November. Sign up by 22 October to secure a spot.
Sign up and get…
Lifetime access to video content for flexible learning
Optional homework to apply what you've learned
Weekly Office Hours for more personalised feedback & guidance from Hsu Ken
To see what we'll cover during the four weeks, go here.
Jakarta Meetup: Startup Pitfalls and the Secret to Success
Iterative is hosting a meetup in Jakarta! if you're based in Indonesia, join Hsu Ken as he shares the story of how Iterative began and what he's discovered after working with over 100 startups in 3 years.
Get the inside scoop on the most common startup pitfalls he's witnessed and the 1 thing all the best startups get right. We'll also have dedicated time for audience Q&A , so come prepared with any burning questions you have for Hsu Ken!
Light refreshments will be provided.
Space is limited so register here today.
Date: Wed, 18 Oct 2023
Time: 6:30-7:30pm WIB
Location: GoWork, Pacific Place, Level 2
In the Loop
We're Hiring
We've invested in 100+ companies and 200+ founders - and we're ready to do more for founders. Join us in our mission of helping and working with founders and increasing the GDP of Southeast Asia. These are some of the key roles we're hiring for:
Fund Operations Lead - We're looking for someone who is highly organised, detail-oriented, and proactive to help us scale our backend infrastructure.
Finance Manager / Controller - As we continue to scale the number of investments we make and the size of the checks, you will be the go-to person for all things finance-related, and play a critical role in owning and driving our Financial Management capabilities.
Portfolio Success Manager - You'll be a key part of our Founders Team, working directly with founders we've invested in. Your success will be gauged by the impact you make on their growth.
If you think you're a good fit, or if you'd like to check out the other roles, go here.