João Romão : Turning the tables
Nominated by Vasco Pedro from Unbabel, João Romão gives us his insight on the Portuguese scene and shares his experience as a co-founder. From having what he thought to be the next big idea with Wishareit to adapting the technology and creating Get Social, João shares what he learned from his failures and successes. An inspiring story from someone who refuses to throw down the towel.
How did Wishareit begin and what led you into the startup world? We noticed you started at Novabase before sailing into new waters.
Yes, I worked there for a year. Well it’s a IT consultancy firm, it has a cool environment but as a Junior consultant you don’t have a lot of impact. However, I really enjoyed my experience there working as a Business Inteligence Consultant. It was a job where I could use my knowledge in tech and empower it with the business side. Even so, it was a quite limited job.
After a while I had an interesting meeting with a senior manager asking me what I would like to do next in Novabase. I was very interested in Novabase Capital so I told him I would like to be part of it and help out somehow. Well, way before I finished my sentence he said, “I mean, which programming languages do you wish to work with on the next few years within your department”. That meeting was a turning point that made me feel I wanted to be in control and make a difference. At that time we had a creative group of colleagues at Novabase and we kept on thinking about new solutions for simple problems. Pedro Moura was one of those guys and together we thought about the concept behind Wishareit because of a couple of problems with Christmas gifts back then.
I was the king of pitches but the fool of revenue.
From the corporate world to the startup scene in a couple of months, that’s quite a change. What’s the story behind Wishareit?
From that crazy idea to making it actually happen was a blink of an eye. At that time, I started working on the idea after considering an opportunity at Banco de Portugal. Three months later we were already meeting other startups and people within the ecosystem in the Silicon Valley Comes To Lisbon event. People like Miguel Santo Amaro from Uniplaces, Diogo Teles now from Faber Ventures and Anthony Douglas from Hole 19 were new in the scene and we were feeling motivated and challenged by each other and the environment growing around us.
So in a couple of months we started working on the concept, tuning things and figuring our business model out. Shortly after that, Moura left Novabase and joined me full-time. We won a couple of awards, I was pitching in every single competition that I could, I was the king of pitches (remember the tiger costume?) but the fool of revenue. However, as it turns out we survived for a year or so and then Wishareit kicked the bucket. Mainly due to the business model and the financial results. We started looking at what we had and figuring what we could still save from it.
What went wrong with Wishareit?
We made a lot of silly mistakes but I would highlight the naive American-wannabe mentality we were so fond of. At that time we believed a lot on user metrics, almost as a vanity metric really. The truth was that it wasn’t generating sustainability. Soon after, it became a life threatening problem to the company. We went south when we realized, due to the hype around Portuguese startups, that we could go to a TV show and get 5000 users and then face a desert crossing for a week or so. And guess what, at that time, a new startup was born in the US called Pinterest. Some people told me, “you now have a competitor in the US”, and actually it had some points in common but it was a whole different value proposition. Pinterest is now valued at $5B and we ended up only reaching thousands of users. The active ones were really good users but in the end of the day there was no business model.
The day we closed the round I had 3 cents on my bank account. João Romão’s net worth was 3 cents! Which, believe me, sucks.
How did you manage the migration from Wishareit to the newborn GetSocial? How was the relationship with the investors at that point?
In May 2013 we made a final effort for Wishareit. We tried something out during Mother’s day. A PR campaign with a nice push and it actually worked quite well, conversion-wise. At that time we tried to create company pages inside Wishareit for brands. We got some relevant brands on board and things were working out. After a while we realized brands were interested in something social related but not in the same format as Wishareit. One of the brands told us ”we don’t want to be on Wishareit, we want you to be in us”. Some brands were interested in the Social layer Wishareit had going on. So our business plan would actually be different, becoming something more like a B2B2C. But then, brands weren’t paying a dollar and we needed something different. We had the brands and their contacts so we found a new opportunity. How could we make a difference at this point? Well, I started pitching at every pocket full of dollars with a concept of a “White Label Social Shopping as a Service”. The goal was to add a social layer to e-commerce businesses. Imagine an online shop associated with a social login where you can check if your friends like the product and so on, as simple as that. We figured that was something different and therefore Wishareit should be put to rest. The Business Angels on board Wishareit were really fond of the new concept and new company and after investing 50k in Wishareit we managed to get Portugal Ventures and Faber Ventures on board too and raised a 630k seed round.
GetSocial was born in September 2013. The day we closed the round I had 3 cents on my bank account. João Romão’s net worth was 3 cents! Which, believe me, sucks.
What about your team? How do you manage a situation like this?
You let go… There is no other way. If you don’t have money, you have to let them go. It really sucks but it is what it is.
And then at Get Social you faced the same kind of problems with the team. What happened at the time?
GetSocial was born with four founders. We soon hired our first developer and after that we gradually hired more people: two more devs and some marketing/sales people. And yet again we did it the wrong way. We hired way too early and too many people at once. Today we’re only five people and we’re trying a different approach: everyone does something that can help marketing & sales.
I was fortunate enough to keep all my team focused and working even harder since this happen
You recently had 2 co-founders leaving the company. How were you able to keep the car running?
True. Unfortunately, two of my co-founders left GetSocial by the end of 2014. Something people have to understand is that a startup is a roller coster of emotions, wins and losses. I was honored to have these guys with me from the beginning, sacrificing their careers, their wallets and sometimes their personal lives. Then again, it’s two years of hard work with no results, which brings down the morale, the struggle and the hunger. Once that happens, there are two situations that you, as a CEO, have to get straight. First, you have to get your team committed to what’s left. Be as honest as possible, explain them everything they need to know, give them options, share your vision for the future and ask: “Are you still with us?”. I was fortunate enough to keep all my team focused and working even harder since this happened and the results are visible, with solid 16% growth week-on-week in 2015 (with a 5 person team). The second situation you have to get straight is coming clear with your investors. Pick up the phone and call every single investor. Spend 10% of the time explaining what happened, 5% why and have the other 85% booked for explaining why this is not going to hurt the company, what’s the strategy and how will you get there. It was a hard blow, but we came through, together.
In your opinion what are the major mistakes you should avoid when building a startup?
All the mistakes that we’ve done in the past, for sure. We keep talking about 3 things within our team:
- Work hard to reach a product/market fit
Many companies focus a lot on product instead of focusing on sales. You have to be sharp and find out what your users are looking for and maybe you need to design something way simpler than you initially thought. I would also strongly advice against any product development based solely on personal intuition. For instance: we recently came up with a new tool for media use and journalism — Social Beat. It’s a simple tool that allows you to keep track of the trending articles from your competitors and gives you real time info on it. It is what I like to call a pure MVP: its ugly, has no amazing experience or incredible features. What you see is what you get and it does the job perfectly. We had a meeting at GetSocial about that tool and I asked: “How’s Social Beat selling?”, the answer was: “I’m not selling it because I believe it’s too simple and you can’t pick your country and (…) ”. That’s the wrong approach for me. Leave it up to the market and lets see what happens. One hour after that meeting we actually closed a deal with a Finnish newspaper. Try to figure out the use of your product and don’t over do it, just do it. That tool was a week old and was making money already, that’s what it matters.
- Be careful with early hiring
It’s fundamental that you keep your company working efficiently and that you have the team you need to deliver. Nevertheless, you should bear in mind you are hiring within a strategy. A huge team is going to be financially heavy if something goes wrong you have a lot of people depending on you. Above all things, in an early stage startup try to hire the “all around shooters”, talented people who can easily work on Developing, Designing and Selling if there’s a need for it.
Feedback with a dollar attached is way better than free feedback. I mean, we used to have free trials, now we have paid pilots. Often you have many leads due to free trials and you wish to get some feedback for your product. What really happens is that you end up with a huge pipeline of prospects that generate a huge product pipeline with lots of crazy ideas. You end up developing and improving your product to meet everyone’s needs and in the end of the day no one buys it. The paid pilot offers commitment. It offers a chance to focus on your customers instead of low potential leads.
It’s our duty, as entrepreneurs, to let others create themselves and grow in the ecosystem.
You were initially at Startup Lisboa with Wishareit, then you left for your own office and now you’re at Faber Ventures. What are the main differences between the three?
After leaving Startup Lisboa we felt like the cool kids on the block. On our own and having a blast but the truth is, we were victims of our solitude out there. We had no interaction with other companies, we had a distant relationship with the ecosystem and we were falling behind. When we joined Faber Ventures we felt like we could get stronger. Not only because we were part of Faber Ventures but because of the knowledge sharing we can take from being under the same roof with several different young companies.
Regarding Startup Lisboa, I would say everything has its own time. It was amazing to be incubated there and all the networking and knowledge powered by Startup Lisboa but in my opinion it makes no sense to make it last too long. When we left the incubator we did it because we felt we should give that space back to the ecosystem so that other startups can benefit from it. It’s our duty, as entrepreneurs, to let others create themselves and grow in the ecosystem. It is harder to do so if you have limited seats and one gets comfy on one of them.
What about the future of the Portuguese ecosystem? What’s next?
We’re waiting for a big success case, an Exit, an IPO, a series B or C, anything big really! I believe this year we’re going to witness that with two or three startups. I would say there will be a couple of double digit million exits in 2015/2016. I would put my money on Talkdesk and Unbabel and still consider Uniplaces for a serious round of investment too. All three companies will most certainly be success cases anyway.
And what about you? What would make you feel you hit a home run?
All the experience is worth it at this point. It’s like a hands-on MBA or even better than that. I would say I made a massive network which is possibly my most valuable asset. All the skills I collected from these adventures make me feel very comfortable and fulfilled, from team management, marketing management or product management, I did it all. When it comes to GetSocial, I don’t know what the future holds but I do know it has space to improve and grow. I imagine it being acquired by a major software company someday and our job is to make the cake big enough. The only thing I do know is that when that day comes I will be taking a nice trip and rest for a while.
Who would you invite aboard the ship next for a pier-to-pier?
Like where this is heading? Did João Romão give us the right coordinates for the next interviews? Then, stay tuned for the following pier-to-pier with the fellow adventurers.
Originally published at startupship.org on February 14, 2015.