How to Build and Scale your Startup with Mike Knapp
Given the ratio of startups that make it to some measure of success vs those that barely make it past their first birthday, you could forgive a successful founder for staying with their one go. Not so for Mike Knapp.
An ex-Googler, Knapp paired up with friends Jodie and Michael Fox to launch Shoes of Prey, an online marketplace for customisable shoes, in 2009. While he loved working at Google, he said, the trio had promised each other years before that they would start a company together.
“In 2005 we agreed to a specific timeline: four years to learn as much as we could in our corporate jobs and save as much money as possible. One day in late 2008, the three of us went to the beach and decided it was time – we’d start Shoes of Prey,” he said.
“I remember tendering my resignation. I was living in San Francisco at the time and working at headquarters in Mountain View. My boss was pretty dumbstruck when I explained to him I was leaving to start a women’s shoe company! I had really enjoyed being a Google software engineer, but I really needed to be the author of my own destiny.”
From San Francisco, arguably the epicentre of the world’s startup scene, Knapp moved back to Brisbane. While the city’s entrepreneurial landscape is now growing fast, with Knapp himself recently taking on the role of entrepreneur in residence at the River City Labs accelerator program, it was a different story eight years ago.
“Back then there was very little – if anything – in the way of a startup scene in Australia. Being an entrepreneur wasn’t particularly cool. People really didn’t understand why we left our perfectly good jobs at Google and an ad agency. It made us seem a little crazy,” he admitted.
Knapp moved back in with his “loving and supportive” parents, his support network, and bunkered down with his cofounders for the next six months to build the first version of Shoes of Prey.
While they had been planning on building a company together for four years, Knapp admitted the trio were “incredibly naive” when they started the business, which in turn led to challenges everywhere they looked.
“We knew nothing about shoe manufacturing or how the fashion industry worked; two critical aspects of our business. In fact it took us years to learn how critical those aspect were and find appropriate experts to help. Just about everything else was hard as well: hiring, firing, cash flow planning, raising money, marketing, keeping customers happy, getting our pricing right,” he said.
“The list was endless, and still is, even to this day. As soon as you conquer one challenge, another one pops up.”
Looking back, Knapp believes the biggest mistake the business made was not seeking out experts early enough, though the fact two of the three cofounders building a women’s shoe business were men.
“We just couldn’t understand women’s shoes from personal experience. That’s less of an issue today – we now have many brilliant people who do understand – but in the early years it cost us a lot of time,” he said.
Personal experience that did come in handy was Knapp and Michael Fox’s time at Google.
Knapp explained, “We saw how they crafted their culture and how they scaled operations. The ‘Google way’ was very influential on us, down to providing free lunch for our employees. In the early years we’d often be paying for those lunches out of our personal savings account. It was really important to us; we understood the value.”
With persistence key, Shoes of Prey eventually got a “huge lucky break” in the form of Mike Cannon-Brookes as an investor.
“It was incredible to have someone like Mike come to our early board meetings. He knew almost nothing about women shoes, but boy did he have a lot of smart things to say,” Knapp said.
Fast forward to 2016 and the business had raised almost US$26 million in funding, become a fixture in David Jones stores, and expanded into the US. It was around this point at Knapp decided it was time for something different; remaining a shareholder in Shoes of Prey, he moved to begin work on Mottle.
At the moment, Knapp said Mottle is “very experimental” and with it he is playing with “the concept of human connection”.
“To put it another way, I really love it when meet someone wickedly smart who teaches me a timely lesson. In the abstract, that’s what I’m exploring. So far I’ve released two versions of Mottle, and I’ve learned a huge amount. With the next iteration, it might start to make more sense.”
While he said he enjoys “day zero” startups, the experience of launching a company the second time around has been an interesting one for Knapp.
Some things are easier, he admits, like watching your own negative emotions.
“Self doubt, the fear of being wrong, the panic of not making money, confusion about your life’s purpose, and so on…you realise these emotions are normal; you’ll have good days and bad,” he said.
That being said, he reminded, successful companies aren’t built in a day.
“It takes years of persistence to build an overnight success story. Whether Mottle is successful in the long term will simply be a matter of whether I can persist. That’s easier said than done,” he said.
Aside from switching sectors from retail to social media, the other major change in the Mottle experience is the fact Knapp is doing it alone – and it’s this he’s found hardest.
“Honestly, being a solo founder totally sucks. I wouldn’t recommend it. You need cofounders because starting a company is really hard, and two or three heads is much better than one. I thought it might be easier as a solo founder, but I was wrong. My advice: find people that compliment you.”
It’s these learnings that Knapp is now sharing in his role as entrepreneur in residence at the River City Labs accelerator, and through his workshop, How to build and scale your startup, running October 14-15.
The intense two day course will allow participants to workshop their business with Knapp, covering everything from customer discovery to designing a company culture and mission, hiring and managing your first employees, developing a minimum viable product, technical project management, and more.
“Think of it as your ‘startup orientation’. I really wish something like this existed back when we were starting out,” he said.
In particular, Knapp is eager to push participants to experiment, something he said Shoes of Prey was reasonably good at in its early days, and which he is now rediscovering the joys of as he builds Mottle.
“It’s more than likely your startup idea is wrong in some material way. You need to become disciplined about creating experiments and learning as quickly as you can. Too often I see entrepreneurs spending months, if not years, building the wrong thing. That can spell the end of your startup if you’re not careful,” he said.
With the workshop limited to 12 places, Knapp said participants will be able to learn from each other, and give and receive honest feedback to set them up to go on building for success.