Long Road to Product-Market Fit: Allan Wille, CEO of KlipFolio (Part 2)

Sramana Mitra: Very typical overfunding, lack of discipline story.

Allan Wille: It really is. I don’t think we’ve seen that kind of feverish pitch to the same degree. We saw IoT and Big Data, and now we’re seeing the same thing with AI. I think there’s a lot of money being thrown at some of these companies, perhaps, prematurely.

Sramana Mitra: There’s plenty of money being thrown around, especially in this whole unicorn phenomenon. You may have seen it already since you follow my work. We’re doing this Debt by Overfunding series right now.

Allan Wille: I’m a big believer that funding at the wrong time can be a kiss of death. For my first company, it wasn’t the kiss of death, but it nearly rendered us completely dead. The company has figured out a path to go forth quite successfully.

Sramana Mitra: This is the same company that you’re still running?

Allan Wille: No, that was different. They even did an IPO in 2002. I left that company in 2001 to start the current company. It was an interesting time as a young entrepreneur to be thrown into this mix of greed and blindness. Our company survived, but just barely.

Sramana Mitra: I was doing my first, second, and third companies prior to this one in the mind-90’s till the beginning of the 2000 decade. Our careers were accelerated careers because of that madness. I had three CEO jobs before that decade was over. They were all my own companies. I raised money. It was just wild.

Allan Wille: I actually think, in some cases, they taught us the wrong lessons.

Sramana Mitra: You’re right. I agree with you. They didn’t teach us the fundamentals-oriented approach. They taught us to rely too much on venture capital.

Allan Wille: Very much so. That has been unfortunate. For so many things, history has a short memory. I think there’s still too much reliance on venture capital.

Sramana Mitra: For sure.

Allan Wille: I speak to so many young startup companies. I’m amazed that they often put venture first. I ask, “What is your plan?” They say, “We’re going to go out and raise money.” They say this before they have identified the buyer that says, “I love your product.” It’s difficult. Money is sexy for better or for worse.

Sramana Mitra: The problem is that the first time entrepreneurs have not been taught the fundamentals-oriented approach. They’re basically reading constant discussions of fundraising in the media, so they equate raising as entrepreneurship success because that’s what gets celebrated. It’s very difficult to turn this around. As you know from my work, we are working very hard to try to turn this around and rectify this fallacy. It’s very, very difficult.

Allan Wille: I actually align with what you’re doing – the idea of education first. You run an incubator, but it’s an education-first incubator. About six months ago, I was flipping through one of the national newspapers here. I was reading the business section where I saw three advertisements for accelerators. It struck me the wrong way. It left a bad taste in my mouth because here you have a lot of young companies that are getting involved with an incubator or an accelerator and it’s an equity-based, pseudo-funding model that puts them on that track. 90% of companies that are there, legitimately, should not be on the funding track.

Sramana Mitra: That’s right. This fallacy is rampant. There are almost 8,000 incubators and accelerators in the world. It’s spreading like a virus. Most of the businesses are not fundable.

Allan Wille: I know. You have a bigger voice, but I’m trying to do my part.

This segment is part 2 in the series : Long Road to Product-Market Fit: Allan Wille, CEO of KlipFolio
1 2 3 4 5 6 7