For most entrepreneurs, 2020 was a year of massive opportunity and challenges. On March 09, the Dow Jones Industrial Average experienced its worst point loss in history as global markets experienced what appeared to be a sudden free-fall. Industries have either flourished or continued to suffer following March’s crash, largely due to government-imposed lockdowns. Entrepreneurs now, more than ever, have been put to the test to keep their businesses afloat and in some cases take advantage of the opportunities presented.
Julian Fuchs is a serial entrepreneur and angel investor. Focusing primarily on fintech, adtech, and – most recently DeFi – he’s built and successfully exited from three businesses. Now a partner at Digital Rain, a Berlin-based venture capital firm and startup incubator, Julian spends most of his time identifying, investing, and working with entrepreneurs. We caught up with Julian to discuss his journey and pick his brain on how to succeed as an entrepreneur during times of uncertainty and the business opportunities he sees right now.
1. What do you attribute your success as an entrepreneur to?
It sounds cliche, but it’s mostly just a matter of grit. When you’re starting a new business, there are inevitably moments when the whole thing seems like it will fall apart. Those are precisely the moments you need to double down. Remember though, your role as the founder is to guide the ship, so rather than micromanaging, your aim should be to inspire confidence in your team. That’s where strong leadership really comes in.
When the going gets rough, the tone you set as the founder will have long lasting implications for the success of the venture. Successful businesses are made by hardworking people, and as the founder you need to make sure your team understands the vision and is motivated to get the job done. One other thing I will say is that, the fact of achieving success in a venture is a major driving force for further success. In my case, once I got my first taste, I realized I could never go back to being an employee.
2. Have any of your business ventures failed, and what’s the biggest lesson you learned from failure?
My first three ventures were total failures. When I finally experienced a small taste of success on my fourth attempt, I realized the failures came down to my lack of leadership. So the lesson learned there for me was that again, as a founder, you need to inspire confidence. At the same time, you do of course need to know when to give up. Ultimately, a lot of success comes down to being in the right place at the right time, so you may have to try several ventures before you hit a winner. In that respect, we can say it’s somewhat of a number’s game.
3. From the perspective of an angel investor, what’s the biggest mistake entrepreneurs make when pitching to you?
For entrepreneurs, you need to understand that angels are constantly inundated with proposals. If it isn’t immediately apparent that your pitch is a home run idea, chances are the angel won’t look into it closely. One of the easiest things you can do to ensure angels give your proposal the time it deserves, is to first establish a connection.
For example, check the angel’s LinkedIn and search for mutual contacts. Then ask one of those contacts to reach out to the angel on your behalf. If you still don’t get a response, don’t be afraid to do a polite but insistent follow-up. Angels know that grit is what makes ventures succeed, so they appreciate the hustle. When it comes to the pitch flow, don’t be afraid to keep asking for follow-ups. Sometimes angels are just too busy to remember.
4. What sectors excite you now?
Direct To Consumer (DTC) brands with sustainable approaches such as using only recycled plastic, no plastic at all, sourcing from carbon neutral factories, and so on. Particularly in Europe, there’s currently huge momentum for sustainable business models, with a variety of incentives and disincentives coming online through regulation as governments act to mitigate climate change risks.
There’s a huge opportunity for forward-thinking businesses to reshape their business models and capitalize on this shift.
5. A lot of people are excited by the innovations being made in decentralized finance. Does this have any implications for startups?
Certainly DeFi presents new opportunities for entrepreneurs to raise capital, but it’s still early days. Unless your project is “crypto-native” it’s probably too early to consider raising using DeFi tools for financing. That being said, entrepreneurs should pay close attention to the space as there’s an incredible amount of innovation happening.
At the simplest level, there may be opportunities to, for example, integrate crypto payments into a product as doing so can bring a new user base. One example I came across recently is an online travel agency (OTA) that aggregates all the listings from traditional OTAs (like Expedia, Airbnb, etc), but allows users to pay with crypto for bookings. As the world moves toward digital payments, and people become increasingly aware of privacy and de-platforming issues, offering that additional functionality can be an important differentiating factor.