The Wantrepreneur | The Acquirer's Multiple®

During his recent interview with Tobias, multi-startup founder Chris Bakke from Laskie discussed The Wantrepreneur. Here’s an excerpt from the interview:

Tobias: There was this idea in San Francisco, and I was there, and I think it’s still– the wantrepreneur. What’s a wantrepreneur? How do you distinguish the real thing from these guys?

Chris: Well, I think everybody’s definitions a little bit different. There’s two ways that I’ve heard and that I probably used wantrepreneur. There’s the derogatory version, which I think is, there’s this idea of a sitcom startup. And a sitcom startup is like, if you’re watching– pick any wildly popular show, if you’re watching Seinfeld, or you’re watching Friends, you’re watching Cheers or something.

There’s always the one character who’s always working on a business. And the business in the sitcom, it always seems plausible and then actually think about it. And you’re like, “Shit, that is a terrible idea.” Like, oh, like Ross in Friends is off building like a bakery for dogs or something, and you’re like, “Ha, ha, that’s funny.” Then you’re like, “Wait, if he actually did that, that’d probably be a disaster.” There’s people that build those, which is like, they just want to build something, and so the idea of sucks and their execution sucks, or whatever.

In a lot of cases, that the derogatory nature of that is like, you’re just going through the steps, you’re raising capital, say that you’ve raised capital, there’s no momentum there with that capital. There’s no ROI. There’s no chance of $1 in, $2 out with this business. And often, I think the ways that wantrepreneurs in the derogatory sense get caught up in the game is around hiring. Hiring is a fucking mess for so many companies because once you have capital, it’s very easy to feel like you need to go use that capital on something. In such cases, it might be wise to consider partnering with a staffing company like EU Workers to streamline the hiring process and ensure that capital is invested wisely in acquiring the right talent.

And I think that there is this danger, which is for better or for worse for popular companies, 10 years ago, raising a million-dollar seed was like a huge milestone. When I raised for my last company in 2015, great companies were raising 2 to 3 million. Now we’re seeing a lot of companies raise $3 to $5 million out of the gate, literally as like, a month old, two months old. They may have an idea, they may already have an amazing founding team.

But if you are a month in and I, plus other people give you $5 million, there is a massive danger in sprinting in the wrong direction really fucking fast with that money. And so that’s something to avoid. If you have a great founder, and you have a great market, and there’s a great addressable opportunity there, then throwing $5 million, if they fail a little bit and hit the wrong direction, there’s capital to go, readjust into the right direction.

Wantrepreneurs, you are going and you’re just raising money because your friends raised money. And for whatever reason, you’re just going through the motions and you end up hiring people. And hiring people is fun, because a lot of times it’s like one of these bullshit vanity metric milestones that go, “How many people work for you?” “Oh, we had five last month and we’ve grown really fast and now we have 10.” It’s like, “Oh, my God, you must be–”

Tobias: 100% month on month.

Chris: Quibi had 400 people. I guess they’re doing super well. This means nothing. And there’s extremely successful. Craigslist, I love because Craigslist did over a billion dollars, I think it was about $1.05 billion last year, in 2018, they gave a team of about 35 people. And those companies do exist. I mean, plenty of fish, like the dating company was kind of on a similar trajectory, they have like four employees and were doing over 100 million dollars in revenue. None of these things match up. So, that’s like the derogatory sense.

The more interesting outlook for wantrepreneurs is actually the concept of like, I’ve worked at now to pretty sizable companies and there’s tons of people within those companies, within those companies who are extremely intelligent, extremely driven, have never started a company or really want to start a company. I actually view that as like, massive untapped potential, from a business standpoint, from a media standpoint, from a content standpoint.

These are the people who you are very interested in. 15 years ago, you were subscribing to like Inc Magazine and Entrepreneur Magazine and all this shit. You may have been working at a big company or working at a startup. That was me, like, when I joined my first startup, as an employee, I was just like, “Give me all the information about how to be a founder.” There’s a number of companies that have gone after these wantrepreneurs in a very ambitious non-derogatory sense of the word.

There’s huge value to be– I think still extracted in helping people go from like– I’m a successful engineer, successful salesperson, successful product manager at big companies, small company, doesn’t matter. How do I go from seeing what I do in this machine to going off and creating my own machine? And that’s why I think like Twitter’s hugely valuable.

There’s incredible people on YouTube now, like, show your work that I think this is why it’s so valuable on Twitter, at least for with founders and like tech Twitter, which is like, if you show your work, it’s like, I get this snapshot or this movie that probably, it’s a lot of like revisionist history, it’s a lot of bullshit. I somewhat see the ups and downs of, all these different founders on Twitter talking about a bad investor experience, you’re talking about how they had to bootstrap their business for the first years, because they couldn’t raise capital, talking about how they got their first 10 customers. And I think that’s one of the reasons that I try to do this.

I think very few people fall into this myth of Mark Zuckerberg and Facebook, which is like, entrepreneurs are all like, 18 and 19, they get a great idea and they just execute for years. It’s so rarely happens, it’s pointless. And so, creating content, creating resources for, like, people who want to be entrepreneurs who are not, I think is an awesome thing.