My Experience At Entrepreneur First
TL;DR: Great program, can recommend — but there are a few things you need to know.
A girl matched me on Bumble the other day and messaged me: “actually, I just want to know about Entrepreneur First. I’m thinking about applying — should I?”
I was intrigued. That was different from the usual “hi hows it going”. And I could relate.
In May 2020, I asked myself the exact same question. Except for a few articles on Medium, there weren’t many experience reports, and it’s hard to tell whether the program truly is right for you from the company website. They do put in a lot of effort (e.g. here), but I wanted an unbiased view.
So today, let’s talk about what I learned in the past three months participating in the BE6 cohort in Berlin.
What is Entrepreneur First?
“EF is the best place in the world to find your co-founder and build a technology startup from scratch.”
Essentially, EF brings together highly intelligent and ambitious people and provides the minimal necessary framework to find your next co-founder and then build a company. The program is divided into two phases: “Form”, and “Launch”.
In the “Form” phase, you get 8 weeks of time to find your co-founder among the 50–100 people in your cohort. It starts with a kickoff weekend, where you meet your cohort peers and learn everything about the program and the framework. After that, it’s mostly “supervised networking” — you show up at the co-working space, meet a ton of amazing people, and start ideating together on what you want to work on.
Once you’ve formed a team, you start working on your company together with your co-founder. EF supports you with weekly check-ins (both individually to make sure you’re still sane and in your team to ensure you’re making progress) and is very good at encouraging you to break up your team (more on this later).
After week 8, if you don’t have a partner, you leave the program. If you have a partner, you get another 6 weeks to prepare for the “Investment Committee (IC)”, where you pitch to the investors of the underlying VC fund.
If they decide to invest in you, they invest the equivalent of 80.000GBP in exchange for 10% of your company.
After the investment, the “Launch” phase begins, in which they coach you through the next steps until “Demo Day”, on which you pitch to a ton of well-networked investors. I didn’t make it past the IC (or even to IC), so I can’t really talk about that phase.
That’s the general overview. Let’s dive a bit deeper into the team building phase and the single steps.
In my experience, you go through seven stages of team building.
Step 0: Preparation
Before the EF program starts, you already receive a lot of content to prepare you for your time at EF. It’s great stuff and definitely worth reading, as well as participating in all the webinars they provide prior to starting the program.
This is especially true if you’re a technical founder and/or have no prior experience in entrepreneurship. There are lots of things you need to know, and it’s never too early to start. Even I, having already founded a company, learned a ton from the material.
Step 1: Understand what you’re really good at
Before you jump into any teams, I highly recommend understanding at first what you’re really good at. EF calls this concept “Edge” (more on that here), and it’s trickier than one would think.
First, you need to figure out if you’re a “domain edge”, “tech edge” or “catalyst edge”.
Domain edges are people that have lots of experience in one very particular industry (one of the guys in our cohort had worked for 20+ years in the healthcare industry).
Tech edges have a particular technological skill, such as my friend Xavier, who knows — among many things — how to 3D print an artificial heart or how to save data in DNA strains (don’t ask).
Catalyst edges are divided into “talkers” and “doers”. Talkers usually have a business background and are really good at selling and building the infrastructure needed for a business; Doers usually are some sort of software engineers that can build any product.
As with everything in this world, things aren’t black and white. And this is where you need to dig really deep.
EF strongly relies on the principle that you should only build companies that only you can build. For instance, if you’re dissatisfied with the quality of the pizza that you ordered, because it’s just not as fresh as it would be in the Pizzeria, you may want to invent a vehicle that bakes the pizza on its way to your house.
However, you’re definitely not the only one aware of this problem, and anyone else could found the company too (as a matter of fact, someone did indeed found a pizza company that bakes the pies en route). Unless you have a crazy new technology for making pizza or have ridiculous experience in food logistics, you likely don’t want to found that company. Therefore, ask yourself: “what do I know that others don’t?”
You’ll probably come up with a few things, and these are the things you want to take to ideation. It pays to think about this beforehand, as 8 weeks really isn’t that much time to build a team.
Step 2: Form a team
Now that you’ve figured out what you’re good at, it’s time to talk to others. While the conversations usually flow very naturally, I always tried to check a few boxes:
- Do we want to work in similar fields? Shane, one of my friends from the cohort (who also has a fantastic blog), wanted to do something with digital advertising. I wanted to do something related to fitness or healthcare, and wanted absolutely nothing to do with advertising. Even though we get along really well on a personal level, we didn’t have good co-founder fit.
- Do we share the same values? I have plenty of strong beliefs about how I want to run a company. In particular, I don’t believe in working 60+ hour workweeks — unlike many founders. Therefore, if the person I’m speaking to thinks that overtime all the time is the correct approach, we’re probably not the right fit.
- Do we speak the same language? Can you communicate effectively? This doesn’t just hinge on language, but on type and speed of thinking. Sometimes you don’t match up in the way you communicate, and that’s fine — but then you probably should not be co-founders.
Before forming a team, you cannot possibly figure out whether you actually want to found a company with this person — you just want to make sure that there are no hard restrictions.
If you check these boxes, then you should team up. My recommendation is that you do this as early as possible (I formed my first team a week before kickoff weekend) in order to understand the process better and to get started on ideation. When you’re in a team, you’ll get more coaching and you can quickly see whether you work well together (in another team, we worked for exactly three days before breaking up).
And that’s what’s next: ideation.
Step 3: Ideation
Together in your newly formed team, you put together the beliefs that you’ve formed in step 1. From these, you develop “hunches” on what problems might derive from your beliefs in the future. And from these hunches, you develop business ideas.
For instance, one of my beliefs is that 99% of people would strongly benefit from having a personal trainer. That’s rather unpopular, given that roughly 1% actually has a personal trainer. From there, we developed the hunch that people don’t have a personal trainer because PTs are too expensive. That led us to the idea that if we could build an AI that both generates training programs and gives real-time feedback on the execution of your exercises, we could build a great business.
“Could” is the key term here. We now had a hypothesis on what might be a good business — but we had no idea if the market would actually respond to it.
Step 4: (In-)Validation
With your newly found idea, you create a set of hypotheses and run through a few basic exercises. Those include: market sizing, competitor analysis, calculation of unit economics and creating a basic business model. This will give you the firepower to answer the basic investor questions that you will be facing eventually.
Note: I wrote a more detailed document on how I do this using a pitch deck for investors, so you can kill two birds with one stone. Send me an email to email@example.com and I’ll send it to you. :)
Also, you’ll be doing a lot of customer development. If you take away one thing from EF, it’s an obsession with customer development.
You don’t want to build a product that nobody wants. Instead, you want to understand what the problems of your customers are, and you want to validate your previously formed hypotheses. In order to do this, you speak to potential customers over the phone or over Zoom. The more they talk, the better — and hopefully you’ll learn enough to pivot your idea or maybe even to realize that you might be onto something!
Mandatory reading for EF participants is the book “The Mom Test” by Rob Fitzpatrick, and I can only recommend that you read it before you join.
Really. It’s that important.
Step 5: Breaking Up
In our cohort, approximately 60 teams formed and broke up and 8 of them were left by the time IC came around — so chances are that you will go through this step at least once (I formed and broke up five times).
At some point, you will hit a rough patch, when you realize that your idea might not be as good as you initially thought it was. That’s when you are encouraged to break up your team, and start the hunt again for a new co-founder.
Breaking up is important to not waste any time. However, I strongly believe that great startups are great because they know how to deal with adversity and this is one of my two major critique points for EF: at the slightest sign of adversity, you’re encouraged to break up instead of pushing through. While that may work in the majority of cases, always take it with a grain of salt: if you truly believe that you two are onto something, then by all means go for it.
Good founders will push back if they really believe they’re onto something, and ideally back it up with data and traction. As with everyone at EF, your coaches have strong beliefs, weakly held. Give them the data to change their beliefs.
Step 6: Get Funded
Once you’ve gone through a few iterations with a few co-founders, hopefully you’ve found a team that has a promising idea and that you feel comfortable in. Now it’s time to work on your product and prepare for the investment committee, in which you pitch to EF representatives in order to apply for your funding.
Not every company gets funded, but if you do, this is where the real fun begins. I can’t tell you much about it, as I never made it to IC in the first place, but from what I see from my fellow founders is that it certainly doesn’t get easier.
This is the process that you’ll go through, and the process I went through. I’ve already outlined a few of my learnings, but there are a few more things that I’ve taken away from the program which I would like to share.
Screw originality. If you can come up with an idea, others can too. Focus on edge fit and execution.
If you look at the leading companies in the world, none of them were the first ones to come up with their corresponding business model. Amazon didn’t invent mail-order. Apple didn’t invent personal computers. Google didn’t invent internet search. Facebook didn’t invent social networks.
The one thing they have in common is they simply did it better.
Even after an excruciating three day ideation process, the vast majority of things that you’ll come up with will have been tried by somebody else. That’s good — because if there’s competition, it’s a good sign that there is also a market for your product.
You don’t have to reinvent the wheel. Instead, ask yourself: why should we build this business? What do we bring to the table what others don’t?
And then you execute. Use your edges to create an unfair advantage over your competition. Maybe you have a great network in the domain you’re working in. Maybe you’re at the cutting edge of research and know things others don’t. Maybe the companies building the products are still stuck in the 90s (like this competitor for one idea I pursed, wearables for the elderly). Use this to your advantage, and do it better.
Ideas are easy. Execution is difficult.
It matters what the most ambitious people do, but ideally they found a B2B SaaS company.
EF’s tagline is “it matters what the most ambitious people do.”
I strongly believe in this statement. Many ambitious people I know do things that add exactly zero value to society, such as investment banking or management consulting. That needs to change.
The reality at EF is a bit different. While you can try to build any business, you have to keep in mind that EF is, at the end of the day, a venture capital fund that needs to produce returns for its investors.
They’re looking to invest into companies that give them the highest possible upside with a decent downside floor. B2B companies tend to have an easier time driving sales (as business clients aren’t nearly as price sensitive as consumers) and engaging in more long-term client relationships. SaaS companies can scale quickly and infinitely without a lot of upfront cost.
EF will push you away from anything that isn’t “on edge”, cannot answer “why you”, “why now” and doesn’t have a sizable target market. Which arguably would be a waste of time, anyway.
But unless you have ground-breaking technology, strong unique insights into the domain or just a ton of traction, be prepared that EF will also push you away from building anything that’s B2C or related to hardware (because “hardware is hard”, as you’ll hear very often). It’s simply too risky for them to invest in.
For someone like me, without a lot of prior working experience and no technical background, this left few things besides B2B SaaS on the table.
Again: this is fine, EF needs to make money too, and B2B SaaS is a good business. Leading up to the program, I just didn’t understand the dynamics of venture capital well enough and assumed that one could found anything at EF. Whichever company you create, it still needs to check all the boxes. Which brings me to my next learning.
Very few businesses that are inherently good are actually fundable.
Just because your business idea has a decent target market and will be profitable at some point doesn’t mean that a VC (and thus EF) is going to fund it.
Venture capital is a highly lopsided game. The assumption is that up to 90% of backed startups will fail. This, in turn, means that every company that is funded needs to have the potential to return the entire fund (and sometimes even more).
EF’s biggest exit so far, Magic Pony, sold for $150 million to Twitter. Assuming that EF retained its 10% stake in the company (no idea if they did or increased the capital), this translates to a $15 million return for them. That’s not nearly enough to return the entire fund, but is still a very good return on a $110k investment (today’s equivalent of 80k GBP).
These are the kind of returns that VCs are looking for. A 3X return might be interesting for angel investors, but is laughable for VCs.
If your business doesn’t have the potential to be a unicorn, it likely won’t be funded. And unfortunately, very few businesses actually have the potential to be a unicorn. This doesn’t mean that they’re not good businesses, it simply means that they’re not interesting for VCs.
Surrounding yourself with highly intelligent and driven people is AWESOME.
As someone who has always done things a bit differently, EF was the first time in my life where I felt like I had found my tribe.
Everybody is open to new ideas, new assumptions, and instead of asking “what could go wrong?” asks “what could go right?”. I love that attitude, the non-judgmentalness, and the quick thinking. Whenever I’d walk into the office, I felt like the least qualified person in the room. That’s great — it means you can learn something from everyone there.
There wasn’t a single day where I wasn’t looking forward to having accidental conversations over coffee or beer through the program, where I wasn’t looking forward to hearing the pitches on Friday, where I wasn’t looking forward to have a challenging discussion with someone.
EF does a great job at putting together very different people with similar mindsets. And only there I realized how much I had been missing a similar community prior to moving to Berlin.
You have more skills than you give yourself credit for.
When you look at your own skillset, it always seems to mundane, so obvious. Because to you, everything you know is “normal”.
At EF, I realized that not everyone has the skillset I have, and that there is actually a benefit in being a businessperson. I’m just super happy that the tech guys are passionate about tech; what I wasn’t aware of is that they think the exact same thing about businesspeople.
No matter what your skillset is, it likely is more special than you think. You know a lot more than you would assume. Never forget that, especially when you notice that you’re talking to yourself negatively and/or comparing yourself to others.
With all that said and done, one question remains:
Should you participate in the program?
In short: yes, you should.
Before making that decision, you should be asking yourself a few questions though:
Do I really want to be an entrepreneur? Being an entrepreneur means being accountable for everything that happens in your company. It means that weekends no longer exist — while you may not be working, but your mind will still be racing around your company. It’s hard, but it’s worth the effort.
If you’re not ready to found a company, EF will catch you in the interview process. You’re not going to be successful in the program if you’re not willing to go all in. And this means that you may have to move, quit your job, rescind other duties.
It pays to think about that before applying.
Why do I want to be an entrepreneur? If you’re looking to become highly independent, work less and not having to listen to anyone, EF is not the place for you. EF is for entrepreneurs who want to challenge themselves, change the marketplace (and ideally the world), and who are ready to grind it out. If you want to become an entrepreneur to become independent, you’re likely better off creating your own bootstrapped lifestyle business.
No judgement here, both VC-backed and bootstrapped startups are great. But be prepared that in a VC-backed startup, you will still be someone’s bitch. Instead of being accountable to your boss, you’re now accountable to your investors and your customers. And you have to be fine with that.
Is this the right time for me to found a company? Trick question. There is never the right time to found a company. There are just difficult times and less difficult times to do so, as founding a company is inherently risky and exhausting.
If you want to play it safe and not take any risks, keep your current job. You can always find an excuse not to do it, but some excuses are actually valid.
Your personal life should be in order, as should be your financials. EF does pay a stipend, but it certainly helps having saved a solid amount to solve problems that may appear along the way. You will not have a lot of energy to focus on things outside of EF, so it’s better to eliminate distractions first and then join.
If you answer these questions sufficiently for yourself, then by all means: go for it!
It’ll be awesome.
Join as an individual, leave with a company. I may not have left with a company, but I left with something even more valuable: friends. EF is one of the hardest things you’ll do in your career, and friendships are built by doing hard things together.
Companies, money, people, all that can be taken away from you. Experiences cannot. I’m thankful I got to make this one, and hope you get to do the program too.
Oh, and the girl that matched me on Bumble? Well, unfortunately, life isn’t like the movies, and we didn’t go on a date, move in together, get married, have kids and then spend the rest of our lives together. We actually never met.
But who knows, maybe we’ll cross paths at some point at an EF alumni event. Until then, I hope I’ve spared you from using a dating app in order to figure out what EF is like. :)
Note: EF didn’t ask me to write this article nor paid me for it, and while I consulted with them in the editing process, it reflects my views only.