Ask a founder: James Hurman

Real Answers to Your Burning Startup Questions.

James Hurman, Founder of Caffeine, Previously Unavailable, and the Master of Advertising Effectiveness, and Co-Founder of Tracksuit and AF Drinks is in the hot seat today. Know a Founder to take the seat next? Let us know hello@caffeinedaily.co

‍What is the biggest mistake you see early-stage founders make when trying to find product-market fit, and how can they avoid it to ensure they're building something people truly want?

There are a couple of things that come to mind - the first one’s pretty obvious, and that’s being seduced by your own idea. ‘This is a great idea and now I just need to figure out how to make people buy it’ is a really bad place to start. It’s better to start with the mindset that ‘this is a bad idea and now I need to turn it into a good idea’. Even if you think it’s a great idea. A truly great idea is one that people part with money for, even when the product doesn’t exist yet. With Tracksuit, Ideally and my Master of Advertising Effectiveness programme, we sold significant revenue off a powerpoint deck describing the product and showing some mocked up screens. Only then did we actually build the products.

The second thing, related to that, is getting ahead of yourself and expending cash or other resources as if you’ve already found product-market fit, or are just about to. You probably haven’t, and you’re probably not. You want to save all your money for execution. Churning cash prior to PMF is just digging a hole you then need to climb back out of. And unlike digging an actual hole, the digging bit is really easy and the climbing back out bit is really, really hard. You want to figure out the most capital-efficient way possible to get to PMF. To experiment incessantly and as cheaply as possible toward the ‘aha’ moment when people start saying yes, relatively easily, and sign a contract or give you money. Then build the team and operation to execute.

I really enjoyed the recent Diary of a CEO podcast with Mac Randolph, one of the Netflix founders. He talks through their super-hard path toward PMF, all the mistakes they made, and how they learned to experiment ever-more cheaply toward the product feature that finally got them PMF. It’s a great story and consoling to be reminded that even massive successes like Netflix were bad ideas at the beginning.

‍When developing the story behind your brand, how do you strike the balance between authenticity and what resonates with your audience, especially in a saturated market?

The conventional wisdom is that you use customer research to understand what they want, then build a story that aligns with that, then make the business adhere to that story. That’s BS and it doesn’t work. Reasons being that (a) humans have a familiarity bias, meaning customers will lead you toward a story or brand that feels like everyone else’s, in a world where being distinctive is much more important than being ‘right’. And (b) that groups of people can’t easily adhere to anything that isn’t true and doesn’t come naturally. Your story is as much for your staff as it is for your customers. And if the company naturally acts in a way that suggests the story isn’t true, the story isn’t believed internally, and that trickles out to the story tanking externally.

When Adam Morgan coined the term ‘Challenger Brand’ in his seminal book ‘Eating the Big Fish’, he talked about ‘lighthouse brands’. These were brands that stood apart from everything else and attracted people toward them and their unique point of view, as opposed to trying to say what customers thought they wanted or were immediately comfortable with. Challengers succeed because they win people over to their point of view, not because they appease their customers. At Amazon, one of their core principles of innovation is ‘we’re prepared to be misunderstood for a long time’. What they mean by that is that when you have a novel idea (or story), most people won’t get it at first. Amazon don’t get dissuaded by that. They understand that people take a little time to calibrate themselves to a new idea. Some people (especially early customers) need to ‘get it’ and love it straight away, but the rest will metabolise it over time and eventually be won over.

The balance is (a) make sure it’s authentic AF, (b) find the language that compels people over time.

Also, FFS don’t go into saturated markets. It’s a crazy place to start. As a founder, your first job is to identify a meaningful problem that no one else is solving and that people would pay to have solved, then create a novel, valuable solution to that problem. When you do that, you don’t end up in a saturated market.

As a founder who's started multiple successful ventures, what was the most surprising challenge you faced in the early days of launching a new business, and how did you overcome it?

This is interesting because surprising challenges are just so common when you’re creating something new, so I’ve learned to put myself in a mindset where I see them as BAU as opposed to challenges. I’ve been (metaphorically) punched in the face so many times that I just expect to be, and I’ve evolved to stay pretty calm and just do what’s needed.

To be honest, the biggest one was probably when we launched Caffeine with my original co-founder Julie Gill, who had a serious cancer diagnosis about a week after we launched. That threw everything into total disarray. Julie was the CEO and the revenue driver for the business, but more importantly she was a human-being, facing the biggest personal challenge of her life. Jules is a massive trooper and consummate professional, and was hell bent on handling the chemo while also driving the business. Any normal mortal wouldn’t have been able to strive on in that way, but Jules insisted on it. I struggled with my sense of duty to Jules and her health, and my sense of duty to the business, and it was really tough for me. Eventually it became clear to Julie that her health and recovery was far more important, which I was relieved about as I was so worried for her. So I scaled the business back to a burn that we could afford, then re-based and built back up from there.

One thing I learned from Richie McCaw was a trick elite athletes use. He talked to me and my team about how overwhelming it can be to run out on the field in a critical test match, with the lights, the screaming crowds, the other team eying you and the nation’s expectations on your shoulder. He had this acronym - W.I.N. - which stands for ‘what’s important now?’. He’d focus on the present and what he needed to do in the moment, and put everything else out of his mind. It’s a great trick for founders. Often, we have the luxury of thinking many steps ahead. But in a moment of intense pressure, focusing entirely on what’s important right now is a way to quieten the mind and take the necessary steps, one by one, that get you back to normal mode.

What was important in the Caffeine situation was to look after Jules as the first priority, and then look after the business as best we could, and take a little more time than anticipated to get it to a good place. It involved a heap of tough decisions and a really long period of uncertainty and stress - but the fact that you’re reading this today, well, guess what, we made it through! And Jules has made a full recovery and is doing great building her Best Places to Work business.