5 lessons you can learn as an early-stage startup founder from the Netflix series "The Playlist"
Already seen it? "The Playlist" has been running on Netflix since 13 October. The series is based on the true story of Spotify founder Daniel Ek, but many elements of the series are purely fictional. Nevertheless, as an early-stage startup founder, you can learn a lot from it. Here are the top 5 learnings for you!
1. create a solution for a relevant problem!
Founding a start-up is a trend - despite the crisis and dampened expectations - and that's a good thing. But your startup can only be successful if your idea solves a relevant problem for your target group. How can you find out? The best way is to approach potential users directly and ask them about numerous facets of the problem you want to solve. It is even better if you set up a test situation directly and check your potential customers' willingness to pay long before you have perfected the solution.
Of course, you don't have to reinvent the wheel. Sometimes it's enough to simply make an existing solution even better. The series "The Playlist" is a good example of this. Daniel Ek was not the first to come up with the idea of making music freely accessible and free of charge for all users. However, he was successful against the competition because he created two key USPs (unique selling points). On the one hand, Ek was strongly focussed on its users and managed to make music available quickly without long loading times. On the other hand, he secured the rights to the music and thus also got the record companies on his side. Which brings us directly to the next learning.
2. talk to the right people!
When Daniel Ek talks to some record company bosses at the beginning of the series, they reject him. They either don't take him seriously or see him as a threat. Until at some point the right person takes notice of Ek and his idea.
Especially at the beginning of your start-up, you will almost certainly encounter people who will reject your idea. If you listen carefully, every rejection can help to sharpen the problem and thus the solution. However, you may also need to sharpen your target group. Firstly, concentrate on identifying the buyer group that is not orientated towards the mass market and sees the potential in innovation. These innovators and early adopters, i.e. those who actually want to use innovative solutions, need to be identified. Then continue to develop your product until you can significantly expand your target group.
3. be prepared with the vesting clause!
The most successful start-ups are rarely a one-man or one-woman show - you are simply better off with a founding team, and a diverse one at that. Of course, it can happen that priorities shift over the years, team members move on or even leave - this is also addressed in "The Playlist".
Major disputes can be de-escalated at an early stage with a vesting clause in the shareholder agreement. In it, you specify the period in which founders must "earn" their shares. A defined period of time determines how long a shareholder must at least work for the startup in order to be entitled to any shares at all. In good leaver and bad leaver event regulations, you can also stipulate what happens to the company shares in the event of a departure.
4. incentivises key individuals with the help of a VSOP
In episode 3 of "The Playlist", a new employee joins the company in the form of Petra, whose example illustrates a real problem faced by start-ups: There is too little capital, but at the same time a high demand for qualified employees for key positions. The solution: a Virtual Share Option Programme, also known as VSOP. The virtual shares are intended to motivate people to drive the startup forward and are only utilised in the event of an exit. Another advantage: you can save yourself a trip to the notary! In addition, the right to have a say in shareholder resolutions is excluded. This is also an important point for potential investors.
5. don't forget your stakeholders!
In the fifth episode of the series, founder Daniel Ek experiences what happens when you focus too much on shareholder management and ignore the stakeholders. The artists whose music Ek uses on Spotify are dissatisfied because they cannot make a living from the streaming revenue. A balanced relationship between shareholder and stakeholder value is therefore essential for your startup. Although shareholders are very important, especially for early-stage start-ups, stakeholders ultimately determine the success of your product.
