🔎 Founder-market fit: the key to success?
Founders Factory Startup Bulletin #18
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When Luca Cartechini and Gian Maria Gramondi met at business school, they quickly knew that they would go into business together one day.
This sounds unusual: you normally think of great ideas forming, with teams following. But for Gian and Luca, it’s almost the opposite: a great founder pairing, with the ideas following. In their case, following some years later, after respective careers through e-commerce and venture capital.
Their success at Shop Circle is no doubt in large part due to its founders, their characteristics, and their complementary skill sets. In sum: the founders suited the market they were targeting. This is what many would call founder-market fit, the topic we dive into in this month’s newsletter.
Also in this newsletter:
Our top recommended reads
Highlights from Founders Factory & our portfolio this month
Opportunities for founders
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🔎 Founder-market fit: the key to startup success?
This is excerpted from an article written by Shop Circle founders Luca Cartechini & Gian Maria Gramondi. Read the full article here
Earlier this year, in June, we brought our startup Shop Circle—a first operator of ecommerce tools for Shopify merchants—out of stealth mode. Not only had we raised $65 million across multiple funding rounds, we were already working with 70,000 merchants and had over 100 people on our team.
Many investors write about repeat entrepreneurship being a signifier of success: and yet here we were, first time founders, showing considerable traction so early in our journey. Might this be down to ‘founder-market fit’?
NFX’s James Currier lists four characteristics of founder-market fit:
1. Obsession
“Don’t start a company unless you can’t not do it… unless you can’t sleep at night and your brain is exploding with the idea.”
We’ve always known that we’ve got the determination to go the extra mile when it comes to running a business. This wasn’t something we’d do in our spare time, as a side hustle, but rather something that we wanted to commit ourselves to full time. We’ve always felt that we’ve had youth on our side too—we might not have the commitments and responsibilities that may restrict us from taking certain risks and wholeheartedly pursuing success.
2. Founder story
“The Founder has to fit with the market, i.e. the customer, and vice versa. Customers have to identify with the Founder’s story and believe that there’s a compelling “why” inside the Founder”
For Gian—my experience in the e-commerce industry helped us build a product that was of genuine value to ecommerce merchants. My role at Amazon worked directly with brands across several categories in the marketplace, meaning I could closely identify the problems that merchants were facing, and how we could build a suite of tools that would support their businesses.
For Luca—my perspective from the world of venture capital underlined that there was clear demand (and therefore an obvious market opportunity). I saw the growing trend in investment for e-commerce aggregators: companies who were buying up brands from platforms like Amazon. We saw an opportunity to build the first operator of tools for e-commerce brands, presenting a suite of software to them to help them grow their business.
3. Personality
“Markets tend to attract people with similar personalities. Are you the kind of personality that can fit in and make connections with your peers in your market?”
Our complementary personalities have played a big part in our success. Luca’s personality leans towards the analytical and strategic: from my career in VC, I’ve always been quick to identify trends and see where long term opportunities are. Gian’s personality leans towards the practical: my consulting career showed me that the aspect of work I enjoyed the most was the execution side, the getting the job done. This is a key role as a founder: you’re the number one executor of decisions.
4. Experience
“Certainly, we do look for Founders who have enough industry experience that they understand the market. But not so much experience that they don’t have any disruption left in them.”
While we’re relatively early in our careers compared to some founders, between us we’ve gained several years of experience across consulting, investing, and e-commerce. As earlier outlined, understanding the operator perspective in ecommerce, as well as the analytical approach to finding opportunities in the market, has brought Shop Circle to where it is today.
➡️ Read the full unedited version of the Shop Circle story here
📚 Our top recommended reads
How to get your startup acquisition ready (Sifted)—tips for getting ready to sell your startup, including advice from Fanbytes founder Timothy Armoo, who sold earlier this year to Brainlabs
The changing policy landscape of Women’s Health (Founders Factory)—following the publication of the Women’s Health Strategy in July this year, we gather thoughts from across the ecosystem about how founders can drive forward innovation
Softbank: The Twilight of an Empire (The Generalist)—a deep dive into the rise and fall of the once great VC fund, now left to pick up the pieces from a number of well-publicised disasters
Social vs Science Experiments (Not Boring)—the difference between testing before you launch vs testing as you launch
💸 News from the Founders Factory portfolio
📱 We launched a partnership with hubraum & Deutsche Telekom (Europe’s largest telecoms provider) to build new startups in the telecommunications sector
🛠 Roomix is live on Crowdcube, crowdfunding £180k to build out their personalised DIY platform
👗Zoa Rental & Hirestreet founder Isabella West was named in Retail Week’s Tech List, celebrating the 50 most influential individuals in global digital commerce. Zoa also launched Rental Lab, a retail innovation programme aiming define standards for circular ecommerce
🕹 We launched a partnership with global brand activation business Pico, to build and scale startups in Web3, martech, gaming, and event activation
🧑🍼 Parental support platform Kami was named ‘Most promising large business’ at the KPMG Black Entrepreneurs’ Awards, celebrating Black-owned businesses in the UK
🏥 Insurance innovator Qumata was named in Wired Magazine’s Europe’s Hottest Startups in 2022 list
🛒 Shop Circle, meanwhile, were named in Beauhurst’s London Tech Startups to Watch 2022 list
🍟 Robot kitchen startup Karakuri launched its latest product /FRYR, automating fry lines in restaurant kitchens
🕹 Landvault CEO Sam Huber was interviewed by CNN in their ‘Decoded’ series, talking about virtual real estate and opportunities for brands in the metaverse
🏅 Hurun announced their inaugural list of 100 British Entrepreneurs Under 30—including Fanbytes’ Timothy Armoo, TheUp.Co’s Charlie Baron & Hugo Tilmouth, and Perlego’s Gauthier Van Malderen & Matt Davis
📆 Opportunities for founders
Growing a data analytics function (November 15th, !8:30 - 21:00, London)—discover the untapped possibilities of data at this event hosted by Balderton with speakers from Wayve and Beauty Pie. Read more and sign up here
Mission Possible: A retrofit revolution (November 24th, 12:30 - 13:30, online)—founder of Mission Studio startup Furbnow Becky Lane joins Nesta to talk about her startup’s mission to accelerate home energy efficiency. Read more and sign up here
Looking for a CTO - we’re hiring three CTO/co-founder positions for our Venture Studio. Read more about each company and the role in the job descriptions:
Nickel AI: https://bit.ly/3DPM31O
Freebird: https://bit.ly/3Fzzn0u
Healthkey: https://bit.ly/3SUrkOs
See you next month 👋
Interested in reading more of the same insights? Check out the Founders Factory blog, and previous newsletters. Want to learn more about Web3? Read & subscribe to ff3