Jakob Fricke on Entrepreneurship, Innovation, and Talent (Episode 1)

Transcript

Jesse: Welcome to my podcast, Journeys with Jesse. On each journey, we'll explore a strand of my intellectual curiosity. This very first journey with Jakob was recorded remotely between Berlin and Tbilisi in December 2022. I hope you'll find our conversation inspiring. Let's dive right in.

[00:00:43] Introduction

Jesse: Jakob Fricke is the Chief Product Officer at door2door, a re-engineering public transport company that develops and provides on-demand public mobility solutions for commuters. Previously, he's worked at Samsung NEXT Ventures, tape.tv and Daimler. He's a two times founder, passionate about side projects including Pic Pack, an on-demand service, printing your favorite photos on high quality magnets, Inspiratio, a focused newsletter, reading app, and Moy, organic pantry supply sold in bulk.

Jakob, welcome to the show.

Jakob: Thanks, Jesse, for having me. It's a pleasure.

[00:01:20] Jakob's curiosity about entrepreneurship

Jesse: Rumor has it that you wanted to start a topinambour business as a child. What piqued your curiosity in entrepreneurship?

Jakob: That's a really good question. It's been a while since then. I was always pondering around with ideas. I think I was reading a well known German business magazine called "brand eins" there were a lot of stories about entrepreneurs and their successes.

 In our family not directly, but you know, in the broader group of friends, there were always people that have been entrepreneurial. So I think there were always some inspiration that I took from there. 

I can't really recall how I actually got into the idea of selling and topinambours, but I think it was something that we had in our garden and it was, an obvious thing to try. 

Surprisingly it didn't go that far. I stopped briefly thereafter. I think the website is still up and running. You need to have a flash player. So I think it was still built on flash. It's not really a thing anymore. But yeah, technically the website is still around.

[00:02:15] Starting his first business

Jesse: Cool. After completing a bachelor of Arts in Corporate Management and Economics at Zeppelin University, you started a publishing business. Tell me the story.

Jakob: This is a bit more straightforward than the super serendipitous answer that I gave you to the first question. 

Back then I read The Long Tail — Chris Anderson's book — about the new media landscape and laws in media that came up with the internet.

I think I was driving back from a vacation with a friend of mine. We pondered the question why the long tail in the book industry wasn't really there. It was there for used books, right? There were lots of platforms that allow you to buy used books, but it wasn't really there for new books.

 That's really where it started. We had the realization that a lot of publishing houses had long, long back catalogs. So titles where they have rights, but they don't actively market or print them cuz usually the problem is that the demand for these books is a few hundred or a few tens or whatever.

 Back in the days, at least you printed in batches. Like you had to print a thousand and there was money sitting on the shelves instead of being in the bank account. And that was pre the big wave of print on demand and e-books, which obviously changed the game.

 Essentially, we had the idea to automate book production. So both the book setting process as well as the e-book creation process and therefore had different unit economics that are more in favor of monetizing the back list of publishing houses.

 And then we go to publishing houses and say, Hey, you guys sit on a lot of valuable assets that you can't monetize. But we have a machine that allows you to monetize these more effectively. 

 That was basically the idea. Unfortunately, we made too many mistakes and timing wasn't really in our favor and also the capital markets were not there yet where there are today. That was 2008, 2009, 2010. So it was a completely different landscape, at least in Europe. We stopped after probably two years.

[00:04:03] Shutting down his company

Jesse: So you think it was more a timing problem? Or was it rather that you might have found a problem that was too niche? How do you think about that?

Jakob: Yeah, I mean it was definitely also, we did a ton of mistakes. The most probably honest answer is that we didn't make it. Timing was definitely also an issue. We were one of the first companies that launched on Apple's iBook store, which came out in Germany back then.

 So we were really early on a lot of topics. Also print on-demand and the cost structure, print on-demand wasn't really our favor yet. That changed dramatically in the following years. We did a lot of stuff that was a bit too early, ahead of the curve, I would say.

 And that also contributed. In the end, we didn't manage to pivot in a way that brought us success. It was also a lot on our side. I usually say it was my master's. I never did a master's degree. I only stayed with my bachelor's.

 So in a lot of ways I see that as my two years master's.

[00:04:54] How college prepared Jakob to start his company

Jesse: That's a very nice framing. I like that. 

How did college prepare you for starting your company? Directly or indirectly.

Jakob: Yeah, it's really, really hard to teach in a traditional university setup entrepreneurship. You can, and I also obviously attended a class about the topic. That never really helped me in any form. You can actually take some things depending on the uni. 

One is definitely network. I still have the ability to tap into certain networks that I took from uni. Secondly, but that was specific also about our university. It's not necessarily the norm, is that we learned to tackle big unstructured problems. If you start a business, it's like a humongously big unstructured problem.

 There's nobody that's structured that for you, and then you work through it. You are the only one that is responsible for structuring it, breaking it down, validating certain pieces of it, and then executing. If you get thrown into a class where you have to read the original texts as preparation, completely overloaded with complexity both in terms of it's all English — I'm not native obviously — but also in terms of the complexity of stuff that's written there, that was definitely a helpful exercise. It's more the tooling than the actual content that we 

Jesse: One is the network and two the methodology that you acquire while in college, correct?

Jakob: Yeah, I think that was my case, right? I think there are definitely different universities that different personas have different takeaways. But for me these are the two things that stayed.

[00:06:21] Choosing side projects

Jesse: You've launched a considerable number of side projects over the last 10 years, and I imagine you've tinkered with at least 10x the number. How do you decide an idea is worth pursuing?

Jakob: I think the nice, but also dangerous part about side project is that you don't go too deep into analysis. Some of that stuff really started just because I wanted to learn new technology. One thing: I wanted to get into Ruby programming or, the other day I wanted to get into a specific Ruby Library that helped to create PDFs — that was still related to the publishing company back then.

 The easiest way for me to motivate myself and to keep learning is not to learn in the abstract, but basically get a tangible product that I wanna build that forces me to learn the stuff and go through the valleys of tears and I don't understand that hours. 

That's mostly how it came. That's also why I didn't really start 10x of what I did. I've had a bit of time started tinkering with technology or with other ideas and then took that as inspiration to follow through and build that stuff.

 It's really unspectacular in that sense, but it's mostly out of curiosity, out of wanna learn something, wanna try something. The easiest way for me to force myself to do it actually — basically a forcing function — is to figure out what's a simple product — most of the time it wasn't even a business — that keeps me going and gets me to the level of depth that helps me to understand things better.

[00:07:43] Projects that didn't make it to market

Jesse: Cool. Are there any noteworthy projects you worked on that you didn't take to market, but you think they're interesting, but maybe for your own curiosity?

Jakob: Not that many. There's a couple of things that didn't survive. They were online and public for a while. I did a social network for recipes so you could share your recipe and follow people and see what they share and this kind of stuff that died at some point cuz I didn't find the time to properly migrate from one technology stack to the next one.

And then at some point the provider shut it down. So there's a couple of things that didn't survive. But I mostly tried to build in public and in the open and not hide too much of that. It's also part of the fun: getting feedback, showing what you do.

 I think there wasn't any major thing that I actually finished that stayed private in that sense. 

[00:08:33] Timing of taking his projects public

Jesse: At what part of the building process do you take it public? Some people they start like totally in public. They code in public, but most, take it into public once they've got a minimal viable product.

Jakob: It was more of the latter. It needed to be functional. My technical pros or skills are so bad that I don't want to see anybody see myself failing, going to Stack overflow and figuring out how to get out of that rathole again.

 Mostly, some degree of usefulness was there when I started sharing it and trying to get feedback et cetera.

[00:09:07] Getting traction

Jesse: How did you take it from there? Did you start marketing or just family and friends letting them test it? What's your process after that?

Jakob: Product people tend to do product and that's what they like. Cause comfort zone, right? They don't think that much about go to market, et cetera. There's also the other type of personality that comes from the marketing go to market side of things. That's the comfort zone and they don't necessarily have the comfort in building products. I'm definitely more in the first bucket.

 Since most of my side projects have not been started as this is supposed to be a business.

So it was never first line of thought how do you get traction? What are the channels? How big are channels and what cost can we scale these channels to acquire customers? So it was really building a product. I didn't even know a lot of times if it actually worked in the end, right?

Like was starting and getting into it. Once I had something that was tangible enough and I got some feedback that was confirmative of what I build. Then was the point where I tried to figure out what's the right way to market it. I guess there's no perfect answer, like no playbook that goes across everything, right? That's a substantial difference if you do e-commerce versus if you do an app for the different channels they need to understand different metrics, but mostly I started with friends, people that I know.

 Sometimes I did reach out to press and got traffic from there. I tried paid, I tried the whole toolbox of modern digital marketing tools at some point. But it really depends on is there a business model.

 If there is it's obviously easier cause if you earn 15 bucks per transaction, you can spend a few bucks versus if it's a free product, then it's significantly harder. I also did a lot of launches on platforms like AngelList not AngelList I think it was a different name.

I forgot the name. But then also Product Hunt and others. Trying to leverage what's there.

[00:10:55] Focusing on the outcome

Jesse: Do you think there's maybe an advantage to not having the profits in mind at the first place. Do you think there could be a potential advantage over focusing on the outcome?

Jakob: I think it depends on the objective. I never had the objective to earn a million dollars with any of the projects. But I was mostly your objective to learn stuff, have fun tinkering. In that sense, I think I always achieved what I wanted. But I never earned significant amount of money with any of the things that I did, even the ones that I commercialized.

 If you're gonna go for maximizing your financial outcome, I think it's a bad strategy to start tinkering. I've been really mindful about, and thoughtful about what is the business model? How defendable is it? How scalable is it?

What's the market actually? What's the customer profile? I think that's super important stuff. If I I wanna start a business that maximizes my financial outcome, I would ask different questions. I would also start from a different angle than just having a free weekend and start tinkering around with some technology.

But I mean there's enough examples in history that tinkering sometimes lead to an insight or lead to something that turns into a business. it's not necessarily the wrong path. There's a lot of examples where they turned out to be super, super valuable.

But it's probably the wrong path if you wanna maximize for financial outcome. I don't know if that's the straightest line to a success.

[00:12:12] Leveraging serendipity

Jesse: Makes sense because innovation can be a process of serendipity, but you need to increase the odds that the serendipity can happen. You can't do it two days and hope that you will come up with the perfect idea. You would need to do it over a longer timeframe, let's say five years. If you do it every day, then the likelihood will definitely increase. 

 I'd like to speak about serendipity. It plays a larger role in life than is generally acknowledged. I'm thinking of innovation, or finding co-founders or job opportunities. Do you have some tools or tricks you've used to stack the odds in your favor?

Jakob: Empirically, to answer that question it's hard. I can't A/B test my life and what would've happened if I've done it otherwise? I truly believe there's a high degree of our life that is not controllable and that is definitely, in the realm of serendipity or full of surprises.

 I think there's the saying from Pasteur luck favors prepared mind. That's definitely something. If you are open and have certain questions that you look for that definitely helps. That's one. Second, really expose yourself to interact with people from different backgrounds. It definitely adds a lot of different views that might be really hard to come up with on your own. 

With the internet, we have tons of knowledge that you Google. First of all, the problem obviously is on the flip side, that that's too much to actually look up. You can't browse it anymore so you need to have a filter. Secondly, the really interesting unfair knowledge is still sometimes hidden or not online or not public at least. More closed circles. Specifically if you look at companies, at startups there's still like a lot of intransparency and also specific domain expertise. If you look at specific industries or segments of industries, it's really hard to understand the problems from Googling and sitting afar. If you immerse yourself into these specific problems, hang out with people, gets you a degree of understanding and depth, that's really hard to capture otherwise.

 You can't really structure that. You can obviously try to get in touch with as many, people as you can, but ultimately it's being open minded. Expose yourself as much as you can and then embrace what you see. You either find something or not, but there's no guarantee obviously.

[00:14:21] Remote vs. in person work

Jesse: I guess serendipity works well in real life, but there's this debate whether it's possible to recreate online and many people think we will go back to the office at least hybrid, and they don't think remote work is gonna stay for most jobs, at least.

What's your stance and what are some risks or opportunities for remote work?

Jakob: Yeah. I just had this morning a call with another person and he said — he sits in Amsterdam — it sounds like most companies force people back at least to the office a few days a week. The jury is still out there. I think there is certain companies, certain cultures of companies probably also relates somehow to the average age of the employee of company.

 There's people that grew up in a different environment. They need to have a different type of tooling. And they're probably not generation mobile. I think that there won't be a black or white answer to if we're gonna see only remote and distributed or only in person and office.

 I think we see both and we see more of both. Especially these days where companies try to go back to at least part-time partly remote or hybrid setups it's still a hugely underrated opportunity for specifically early stage companies to tap into a broader talent pool if they are remote friendly and distributed versus the rest. 

 There's obviously some challenges. Sometimes in person adds a different layer of quality to conversations. In my experience remote does not mean that everybody sits for the whole year remotely. I think on flip side you spend less on office, you spend significantly more on face time. 

That you fly people in, put them all in one room for a week, even if you don't do too much program, but make sure they are having a few beers in the evenings, they get to know each other on a personal level. There's trust building. And there's a different level of working.

 It's not necessarily cheaper overall. On the flip side, it doesn't mean just because you work remote, you stay remote, but it also means that you do way more in person gatherings of some sort than you would do otherwise. At least in that kind of structured, organized form.

[00:16:19] Starting your career or new job remote-only

Jesse: I'm wondering whether it isn't more difficult to tap into this unfair knowledge you spoke of earlier when you're just starting out and you start remote only. Isn't it more difficult?

Jakob: Your point is about job starters or juniors that I fully get. It was way easier historically if you start a job, come from uni, don't have that much work experience to be in an office. You get a better feeling for what's going on, who's important, who's not, what are the power hierarchies that you have in certain organizations. There's a lot of subtle things that you pick up and learn and understand that I do strongly believe are easier to understand in the kind of in, in person office setup. 

 I think if there's a good HR program that takes that limits into account and designs a strong onboarding program for juniors you can compensate to a good enough degree of the pitfalls or shortcomings of remote and distributed only.

 I do a hundred percent get that the feeling of belongings of understanding a company, the subtleties of running an organization it's definitely easier cause it comes without explicit managing, it comes implicitly out of the box if you do in person.

 That's definitely a challenge.

[00:17:30] Why there are so few successful remote-only companies

Jesse: Remote only is a recent big thing. There aren't many very successful companies that work remote only. GitLab comes to mind. Do you think it's because there was a smaller pool in the past 10 years and we gonna see in 10 years in the future that there will be a bigger pool of very successful remote only companies?

Jakob: The pool will grow for sure. Also on a pure kind of technical level, it was really hard to employ employees across continents, time zones, and countries without having a physical presence there. There are more firms now and companies that do that as a service for you. So take that complexity away. 

Historically you had to have a subsidiary in each country where you employ somebody. And that's hugely complex if you just hire one person in Senegal, and as a European entity, you set up a subsidiary there.

 It's not worth the effort to hire one person. Either do a complete hub, then it pays off or it doesn't. Even just from a infrastructure perspective, it was really hard to do that. At least in a legal, not gray zone ish way. And lots of that got more easy now.

 From that perspective we have seen for sure, even if there's now some going back to the old ways of doing things, we still have significant culture change in a lot of companies where people have seen what the advantages are, how much flexibility you could gain.

 Specifically in tech, there's still a lot of pressure like what I see companies can't even put a job ad out these days saying we are in office only, in person only, remote is not a thing. I think everybody says that. Not everybody means it. But at least on paper, the market is still competitive enough that as an employer in the technology sector, you can't really say we're completely remote unfriendly.

 That's gone. So yeah, as a consequence of that we see more bigger companies emerging that are at least really remote friendly or even completely remote first and distributed first.

[00:19:24] Misconceptions about innovation at companies

Jesse: Amazing. Let's speak about innovation. You've facilitated innovation environments in both startups and corporate settings. What's a common misconception stakeholders hold?

Jakob: Probably the biggest one is that there is a clear industrializable process behind it. So you say if we do this stage gate process then it happens and we get reliable, repeatable innovation, whatever that means at the end of the process. That's a bit shortsighted. I haven't seen any examples where that is as easy as a lot of consultancies sell it to companies. So probably that's the biggest misconception or pitfall that any organization independent of size would fall into.

[00:20:03] Jakob's definition of innovation 

Jesse: What's your definition of innovation? 

Jakob: That's a hard one I never really thought about that one. It's definitely something to do with a process or technology or some form of IP that has not been there, but is promising to have significant impact. There's a lot of stuff that has not been there, but for good reasons. Cause nobody's interested.

 Stuff that is new relatively to what was around before and has the potential to have a hopefully positive sometimes even negative impact. The atomic bomb could also be argued as being an innovative thing.

 And the jury is still out there if it's positive or negative. Anything that has significant impact of any form and has not been seen before yet, really so it's substantially new. That would be probably like my attempt to put my hands around it.

Jesse: Interesting. I've read Matt Ridley's book, How Innovation Works, and he defines innovation as bringing the invention into something that's practical, reliable, and affordable. You could invent the perfect machine, but it doesn't scale beyond this one machine so it's not practical for the use of people.

 Matching that to your definition it makes very much sense that it needs to be usable and have a big impact. You can't just build something that's very complex but not usable.

Jakob: Yeah, it's good that he is in line with me and I should definitely read that book it's still on my on my list.

[00:21:35] Regulation & innovation

Jesse: You've written an article about the scooter regulation of cities. How can governments impact innovation in terms of startups and allowing new things to happen, but also obviously not letting everybody go crazy and create stuff that has negative impact?

Jakob: Yeah, that's a really hard and good question. There're generally two school of thoughts: There's the American way of looking at things where you say we allow everything by default and if bad things happen, we start regulating. There's the opposite, more European way of looking at things where we say let's first regulate it before we know what the potential is and then see what comes after, right? I'm obviously a bit unfair here for both sides I guess. Anyway I truly believe that a certain degree of freedom to experiment is definitely a prerequisite and should be enabled.

 I do get that there are certain things that do make sense to prevent. Both in terms of labor laws or any type of harmful impact for the broader population. Ultimately, it should be easy, fast and not too complex in terms of bureaucracy to start something out.

 The bigger you get and the more successful you get, the more legit it is to regulate and put a framework around it. There's in some jurisdictions this idea of legal sandboxes . For example, if you go for autonomous vehicles and you want to play around with them, you can obviously do a legislation that runs across the whole country at a point probably where you don't know that much about how they're used, what the pitfalls are, what the problems are, what the chances are.

 Or you could say we kind of define this legal sandbox for some part of the city or some part of the country or whatever. Run that for a year or two or five . Make sense in that specific case, learn and then take that knowledge and turn it into broader legislation.

 From a legislator perspective being a bit more nimble, trying to understand actually what the impact is before you overregulate it, that seems to be the right balancing between the two, right?

 You still want to avoid negative externalities for the broader society. You don't wanna stifle any form of new innovative services companies. That's ultimately the driving force of any economy.

 So yeah, finding this balance and more innovative approaches to frame these, to regulate these or give them enough leeway until you regulate them is an essential part of the puzzle.

[00:23:50] Europe's stance on regulating innovation

Jesse: Are we seeing this coming in Europe? I get the impression that Europe tries to prevent all the negative impacts by not allowing it in the first place. But doesn't see whether there actually are negative impacts?

Jakob: I'm definitely not the expert on the topic. There is still kind of stigma in Europe of being completely bureaucratic, innovation unfriendly. I think there's definitely some truth to it if you look at how complex it is to set up a company in Germany. 

 You could make it way easier and friendlier and still keep the same level of security and auditability and whatnot that is important if you run a company. But on the flip side, there's a couple of things, so for example, Germany has one of the most advanced AV laws that's also fairly flexible in the way it's structured. So that's something I looked into the last year or so. That's one of the most progressive laws in terms of deploying AV fleets across the globe at the moment. 

Another good example to my understanding is FinTech. So If you look at the fairly harshly regulated FinTech industry in the US and why there's been fairly little innovation. And then see Europe where the legislators even at EU level forced banks and financial institutions to open up their systems, APIs, so others can build on top, standardized a lot of the protocols.

 That even was probably a nice example of legislator forcing more innovation in a fairly regulated and stiff industry. There are good examples, but obviously we wanna see more.

[00:25:11] How to facilitate innovation in startups

Jesse: Right. Let's circle a little bit back to innovation and startups. What's like a good starting point, good environment to facilitate innovation in startups?

Jakob: It boils down to probably three things. It's kind of the people like who is part of the group, and I think there's a lot of people that are the right ones for this. And there are a lot of people that they're just harmful in the process. And then partly processes. Not processes in the sense that's too narrowly defined we covered that a bit earlier if you promise a narrowly defined process it's all gone. Spit out a hugely profitable, innovative ideas that's not the case. But still the way you look and the way you organize yourself and the way you capture knowledge, et cetera, does make a big impact. Thirdly, as combination of both is also the culture.

 Are you open minded, do you share knowledge? Are people embracing collaboration? direct feedback? There's a lot of things that you can't really formalize in processes that are probably more related to who you hire and who you bring on the team specifically for these open end explorations, which usually that type of stuff is. It's not narrowly defined, what do you want to achieve? It's not narrowly defined how you're gonna get there.

It's not narrowly defined what exactly are the building blocks of getting there. So it's really important the culture and how you're gonna set that up.

[00:26:25] Constraints, goal-setting & pushing towards the edge

Jesse: basically you choose the direction in which you wanna go. Then you set some rough borders, so to say. And you need a good culture, work culture, and startup culture and the right people that bring you towards this direction. Correct? 

Jakob: Yeah, I think scoping and constraints are important. Setting the boundaries, I think that's really important. Sometimes too much money can be a problem even. Having a lot of boundaries, having constraints, I think can be helpful in the sense that it sometimes nurtures creativity cuz you have to figure something out without too much resource, for example.

 The goal needs to be clear, but it needs to be an abstract goal. It can't be too narrowly defined. Otherwise, it takes away too much of what you wanna see.

 And really people, a lot of people that I would look for are kind of non-linear CVs, careers. They probably have experience across two different industries or innovatively have self-taught or anything that is a severe of the break in that sense. 

That's definitely something that I saw over the years that is more helpful. Definitely people that can work on the high stress, high uncertainty. A lot of people, they want to know what to do. Like if they come into the office on Monday, they wanna know what to do on Friday that's not gonna be the case here.

 Sometimes if you come in Monday morning, you don't even know what you do around lunchtime. That's something you need to be comfortable with and lots of people are not, and that's fine. There's different environments and different challenges for all of them.

 Also you always try to bring these teams to the edge in the sense that you wanna really go above and beyond what you usually would do, what the obvious answers are. But you don't wanna break that team. You still wanna keep morale and happiness.

 Also from management's perspective, walking the thin line between really pushing them up to the edge, but not beyond. That's also really important. The moment in this uncertainty field that you probably hit around the edge. That's, where the interesting piece is happening. 

Also managing that process. Giving everybody comfort to go into that area as a manager, it's also really important cuz that's where the magic happens usually.

Jesse: Yeah. It's this Goldilock Zone where you are challenged to a certain degree that it's almost over the edge, but it can't be too much because then you will fall and it won't work either. 

Jakob: Yeah 

[00:28:38] Overcoming obstacles

Jesse: That's a very good point to transition to overcoming obstacles. Tell me about a challenging time in your career and how did you overcome these obstacles? 

Jakob: A lot of obstacles were just complexity. When I joined, for example, from the startup world and went to Daimler, which is a corporate 360,000, at least back then behemoth. That was humongously overwhelming in the sense gazillion of different abbreviations that I don't know what they mean.

 Like cryptical systems that send you emails that I don't understand trying me to approve certain budgets or vacation. It's really a complete different world. If you are not socialized in that world, it's just crazy complex and crazy a lot.

And I think there's no if somebody has one I'm happy to hear. But I haven't found any shortcuts there, really. It's just grinding through, putting in extra hours to understand what's important, what's not, what's signal, what's noise.

 That takes time. There's no easy decoder that you can buy that takes that signal or noise and tells you what's what. I think for me it was mostly obstacles like putting in extra effort, putting in extra time, going above and beyond and then kind of solving them. 

I don't know if that's an interesting answer, but I haven't really found a lot of shortcuts in life to be honest. Just doing the work. 

Doing it consistently 5% better than the rest does, I think brings you a long way, honestly. The compounding of that is really powerful.

Jesse: It's very interesting because it shows that in so many areas in life, it's about showing up consistently and then letting the compounding effects do the rest. If you come up with a smart solution and try to out maneuver this obstacle you might get lucky this time, but it's very difficult to replicate this over a long period. 

[00:30:28] His learnings from stressful times

Jakob: Yeah. I also had really hard times where I have to fire like half company. Things are not pleasant. You don't go in Monday morning and say, Hey, good week. There were times where I worked for companies where we didn't know how to do the payroll at the end of the month.

 We didn't have enough money on the bank, so we had to figure out how to get that, what conditions. And that adds a lot of stress, obviously. I had that multiple times in my career. But the hard times, are usually also the formative times.

 You learn way more about people who you can trust, how to steer through uncanny valleys in these times. And it's fairly easy to be a manager if everything goes up into the right. If the tide or the wave lifts you up, then I think it's fairly easy to surf. The hard part is if you get into the valleys and the dark times. 

In that sense, obstacles can teach you. You can probably learn more getting through them than you learn in the easy, in fairly good times.

[00:31:19] Consistency, luck & shortcuts

Jesse: Yeah, that makes sense. Choosing the more difficult path with the better return over the long run will probably work better than, as you said, having it easy. Once you run into issues your system will break down because you aren't resilient for that.

Jakob: Yeah, that's right. You could look at having these outlier facts. Like you play lottery and once in a while you hit jackpot and then you earn like a lot of money. There's a fairly little chance. The easier, but less sexy probably and less kaboom like is obviously you save a bit every single month and then hope for compounding effect and do a couple of smarts in between, smart moves in between.

 Same there. If you think there is a bunch of shortcuts that save you a lot of time or move you fast ahead. Sometimes there are these things that pop up randomly. But mostly it's hard to count on them and probably it's better to prepare yourself mentally for more conservative strategy that is compounding over time.

 If there's a couple of lucky shots that happen in between, take them, be really happy about them. But it's really dangerous to build a strategy around it cause the likeliness and the frequency that they come is unpredictable to at least my understanding. 

[00:32:28] Nurturing talent at Techstars

Jesse: Since september, you've been a mentor at Techstars. Tell me more about your role and what it takes to nurture talent.

Jakob: It's not necessarily a new experience to me as I've been angel investing, working closely with founders. Pretty much in the early days pre-seed first money in, rough idea, not necessarily product market fit yet. I've been doing that a lot, but I've never been doing it up until then in a formalized setup. This year I tried to help out the guys in Stockholm at the local Techstars chapter. 

It's nice in a way for me, I hope it's also nice in a way for the founders. But from my perspective, it obviously helps me to increase my pattern recognition mechanism. Cuz you see lots of talent fairly early in their journey mostly. And you easily see a lot of repeating Mistakes is probably the wrong word, but opportunities to improve.

 I do enjoy that quite a lot. Basically complimenting my angel investment. 

 The second part of the question was more around how can I support. 

I mean there's a lot of smart and way smarter than I'll ever be able to give answers around everywhere. But I'm trying to come up with the right questions, examples and pointers than trying to be the smart ass that knows everything else. Cuz mostly I don't know. The markets are specific and the problems also tend to be specific. At least the details and the details usually matter. 

It's really focusing on asking the right questions, giving pointers and potentially sometimes even opening doors if I can and connect them with a potential customer or somebody to validate a certain idea further or potential hire.

But that usually comes a bit later. So what Techstar usually do is really in the formative first month of a company. And that's usually not the biggest problem at that stage.

[00:34:08] Identifying talent

Jesse: Amazing. So if you were to identify talent how would you go about it and what are some markers or personal characteristics you look out for. 

Jakob: It always relates to the context or what role you need to hire for. There's different talent that you need to have for doing bookkeeping and accounting than talent that you need to have for incubating a business.

 I would definitely look for different traits in the two examples. It heavily depends on the situation and the context. But two things I would over-index relatively to the rest no matter what. 

 These are usually, people that have a non-linear career. People that migrated somewhere or switched jobs. there's usually a strong signal that they work through hard times, can manage to deal with a high degree of uncertainty or probably have a clear idea of where they want to be. Also probably value where they are relatively to being born into that situation. So that's something that I've seen consistently being a really helpful pointer or mark.

 Secondly, I would always over index on intellectual raw ability, passion versus experience. If I could choose, I would go for like the ones that are more hungry, the ones that have more like intellectually raw power versus the ones that have the better, more polished track record in that specific area. 

These are two general rules of thumb and obviously it really depends on the situation, but that's the two things that I would over index on.

 People that bring the capacity, even if they don't have the experience to grow into anything is worth more than if you have a hyper specialized person that is maxed out but brings the right set of skills to do that job cause they've done it before. 

 I would most likely prefer somebody that has not done it before, but brings the capacity to easily venture into that role, understand it, improve it than the one that has done it before. 

Jesse: Yeah, in this case you've got skills or a mindset that are very transferrable, whereas in the other case your knowledge or your experience is very domain dependent. Now, also a third marker I would look out for is integrity. That's something that might differentiate potential candidates.

Jakob: Yeah, I wouldn't probably look out for it, but I would look out for red flags. There's a couple of things where I would look for positive signals and then there's a couple of things they're obviously negative signals or red flags. Anything that signals dishonesty or missing integrity is obviously a red flag and no matter what, that would be out of any consideration. 

 But it's a good point. Sometimes it's also easier to describe what you're not looking for. It goes back to the Via Negativa, and the Romans.

 But that thought is generally a really helpful concept. It's easier to figure out what doesn't work, than what works. Specifically in context where you have a high degree of variety, high degree of uncertainty which is usually all the interesting questions on planet Earth.

 In that sense, it's probably easier to approach not by saying exactly, this is what I'm looking for, but more from the angle of what I'm not looking for, what's the stuff that's not working. And then narrow down the potential set of candidates or answers if it's more abstractly. 

Jesse: Cool. Yeah, I think inverse problem solving is a very good idea in this case. 

[00:37:08] Cities he would move to

Jesse: Now I'd like to transition to some fun questions. If you could no longer live in Berlin for whatever reason, which country and place would you pick and why?

Jakob: Hmm. I really love Beirut and Lebanon.

 It's probably not a really safe place where I find a lot of work. So if that is constrained, then it's probably not the best city. I think Tokyo, Japan is still a country that I really am interested in. Been a few times, but definitely wanna go back.

 What else? I think Europe, I do like these mid-sized European capitals like Amsterdam, Amsterdam is technically not the capital, but you know what I mean? Or Copenhagen, or Stockholm. They have a nice ratio of size to what they offer in terms of culture, in terms of internationalization. These cities have a really nice ratio of quality of living and size.

So not the Cairos or Mexico cities of this planet or Chinese cities, but are more sizable but still have a really high degree of quality of living. 

[00:38:12] Technology innovation & talent clusters

Jesse: Cool. If you were to maximize for innovation and talent culture, which city would you pick in that case? Also let's imagine you're at the beginning of your career.

Jakob: The Bay area , if you look at technology, it's probably still like the most dense part of technology expertise in the world. Also areas like the electronic districts around Shanghai, Guangzhou et cetera in China, if you're more into hardware. It's another really strong ecosystem around this.

 It depends a bit on what you wanna look for, but probably these are still by far the outliers in terms of network effects of talent, expertise, suppliers, capital, universities specifically, if you look at the Bay Area that I can imagine.

[00:38:59] Which path he would choose after high school

Jesse: Let's stay in this scenario where you're at the beginning of your career, you finished high school and you're deciding between college, starting a business or getting a junior position at a startup. Which path would you choose and why? Admission and costs are not a factor in all three cases, so you could pick basically your favorite university and you would be accepted in this case or company, if you will.

Jakob: that's a really good question. I think I do like my time studying. And having a light start into adult life could also be helpful. You still have like 30, 40, 50 years depends in front of you so why overly ambitiously starting with the career.

 Also like, honestly speaking, there's still a lot of glass ceilings for people that have not graduated. Depends a bit on the industry and obviously technology sector is generally a thing more open towards non-conformist careers. The technology sector is also like a small portion of the total economy.

 Specifically if we live in the startup technology ecosystem, we sometimes overestimate the actual size and impact across the whole economy. Realistically it's just what it is. There is a glass ceiling, there are problems. There's less pay grades for people who have not gone through the traditional academic career path.

 Makes sense probably to start with something. And also I think a lot of people just need a bit of structure around getting that tooling. I would probably still go back to uni.

[00:40:25] Co-founders & college

Jesse: Yeah. As you said earlier, it's a good way to grow your network and to learn this methodology to succeed in a non-structured domain. I bet it's a very good way to grow your social skills as young adult. Finally, colleges can be a good way to find a co-founder, for instance, if you work on an idea and to explore something like you do with your side projects where you don't have the pressure to make money from the beginning like Facebook got started. I guess. 

Jakob: Yeah, it's funny that you say that, I do a bit of angel investments on the side. There's at least two to three companies that I can remember where I put money in, that actually met at uni. That is kind of a formative time. You bond and you probably also get a different level of closeness that it's hard to get in a normal work environment, where everybody's busy. 

There's definitely more examples of that if you look beyond my fairly little portfolio. But it's definitely a pattern that people go back to uni or you hire people from your uni. There's a lot lot of stuff that happens there on a personal level that is hard to replicate in a work environment.

[00:41:29] Challenges to creating college-like environments

Jesse: I agree. I think it would be possible to replicate the formative effects of college, let's say, young people living together and learning the methodology to think for themselves, to organize themselves and grow their network. But it's a different framework than colleges. 

Jakob: A hundred percent. What I'm saying is not that necessarily, the only answer to that result is the traditional college. There's definitely other ways of creating similar environments that nurture similar outcomes.

 That's just the most common and obviously most widely deployed set up. But I do believe there's lots of room to recreate, rebuild similar environments that come to different outputs. The big piece about the educational system is still that the labor market really values certificates and trusts certain level of expertise if I don't have a Stanford a degree or whatever it is. This is hundreds of years ingrained history that sits there. Figuring out a way to overcome that or come up with something that's equally trustworthy is quite a substantial challenge.

 It's both: it's actually getting the degree, having the stamp on your certificate as well as all the soft factors that I mentioned earlier.

Jesse: Yeah. It's a status game.

Jakob: It's a hundred percent also status. Yeah.

[00:42:47] Essentials for college alternatives

Jesse: Can you think of some factors of the college environment? That you would say these are essential if you were to replicate it, for instance, you need a frame that holds you accountable, a frame that allows you to connect with different people, to network.

Jakob: Yeah, it's definitely some mechanics to bring people together. And not just for hanging out, but probably for creating something like working towards a common goal, figuring out how you structure yourself as a group to achieve something. 

There's also the input. A good academic environment provides a lot of stimulation and input for interested minds to start asking more questions, best case, and not just giving answers. So providing that input and stimulation in whatever form by people, by texts, by videos, by computer games. That's also a really important piece. 

Lastly it's definitely also the signaling. The status that comes along with it. Like, yo, not I've achieved something, but I can prove it. That's really important and should definitely not be undervalued.

[00:43:48] The Great Stagnation

Jesse: Yeah, that's a very good idea. Interesting. 

 Many a smart mind considers the innovations of the last decade as rather insignificant in the context of, say, the last century. Do you share this observation, and if so, how do we increase the likelihood of groundbreaking technologies?

Jakob: I do know about these stats that relatively to the input that we provided, for example, the academic system, funding, et cetera, the number of scientists that relatively speaking, the output is worse than a century before. I believe without having better knowledge that these numbers are correct. But honestly, I don't really have significant insight or view on how we can improve that.

 Probably some direction that I would look at are the current structure of the education system. Also something that we briefly talked about in terms of how much regulatory frameworks do we need to stifle or engage with innovation, help companies to be founded help entrepreneurs or scientists to take insight turn into companies, et cetera.

 But I haven't really thought that through. I don't have a consistent framework to answer that question. These would just be areas that I would take a look at and try to understand better and see if there's something in there that would help.

[00:45:02] What he's working on

Jesse: That's a good starting point.

 Let's wrap this one up. 

What are you working on at the moment and have you some cool stuff coming up, maybe Moy 2.0?

Jakob: I don't really have that much that I'm working on. I actually started this year and last year quite actively investing as an angel in pre-seed early stage companies. So I shifted my focus from building my own stuff or tinkering with my own projects more towards helping entrepreneurs to get better at what they do, help with fundraising, help with recruiting, help with strategy, help with product, whatever it is that burns currently.

 I put way more of my extra time there than on my own projects. You can expect less of new stuff coming from me, but hopefully more stuff coming from my portfolio companies.

Jesse: Amazing. If a listener is building a cool company or if they just wanna reach out where can they find you?

Jakob: Yeah, I'm on jakobfricke@gmail.com all in one word. That's probably the easiest and fastest way to reach me. 

Jesse: Thank you so much. I appreciate you coming on here.

Jakob: Jesse, it's been a pleasure. Thanks for having me.

Jesse: Thank you for listening to my conversation with Jakob Fricke. My production process is Work in Progress. I'd love to hear your thoughts and feedback at jesse@gabel.is. If you'd like to listen to future episodes, make sure to subscribe to this podcast on your favorite podcast app. Thanks to Jakob for being my first guest to Lovis for composing the music to Jörg for advising me on the branding and to my friends and family for support.