Lessons from a 2-time unicorn builder, 50-time startup advisor and 20-time board member | Uri Levine

Uri’s background (00:00:00)

• Co-founded 10 companies, 4 still operating.
• Been on the board of 20 companies, currently on a dozen.
• Advised over 50 founders and startups.
• Wrote a book titled "Fall in Love with the Problem, Not the Solution: A Handbook for Entrepreneurs".
• Steve Wozniak praised the book, calling it a life-changing Bible for entrepreneurs.
• Mark calendars for 30 days after hiring someone new.
• Ask yourself if you would hire the person again knowing what you know now.
• If the answer is no, fire them immediately.
• Most people miss the most important slide of their presentation: the first slide.
• The first slide is presented for the longest time, so put your strongest point there.
• The second most important slide is the last one.

Falling in love with the problem (00:02:50)

• Entrepreneurs should focus on deeply understanding and solving a problem rather than immediately seeking a solution.
• A compelling narrative about solving a problem resonates with customers and increases their investment in the entrepreneur's success.
• Mercury simplifies complex financial operations for startups by offering bill pay and accounting capabilities, providing precision control and focus, and enabling efficient operations.
• Over 200,000 ambitious startups trust Mercury to optimize their financial performance.
• Mercury partners with reputable financial institutions like Choice Financial Group and Evolve Bank & Trust to ensure secure banking services.

Signs this is a big enough problem (00:09:01)

• To determine if a problem is significant enough to pursue, it's important to get feedback from a diverse group of people, not just close friends and family.
• Speaking with at least 20 people outside your immediate circle can provide validation on whether the problem is real and worth solving.
• Solving a problem is often the simplest way to create value, although occasionally entirely new inventions can be successful.

The importance of passion (00:10:52)

• When choosing a problem to work on, it's crucial to be genuinely passionate and excited about it, rather than simply pursuing a business opportunity.
• The journey of solving a problem is challenging and requires sustained drive, which can only come from personal passion.
• Engaging others to fall in love with the same problem and follow your leadership requires genuine passion for the cause.

A pivot example (00:12:04)

• Oversee deals with the biggest secret in the travel industry: airfare fluctuates after booking.
• Started a company to monitor itineraries and rebook flights at a cheaper price if the price drops.
• Realized that consumers were not willing to take the necessary action, so they pivoted to B2B.
• Successfully saved corporations about 10% of their travel budget.
• Lesson 1: Don't be afraid to pivot. Sometimes, the problem you're trying to solve is not as big as you thought, or there's a bigger problem that you're not addressing. Be willing to change your approach if necessary.
• Lesson 2: Don't underestimate the importance of customer engagement. Make sure your customers are willing and able to take the action that is required to benefit from your product or service.
• Lesson 3: B2B can be more successful than B2C. In some cases, it may be easier to sell your product or service to businesses than to consumers.

Where to find startup ideas (00:13:59)

• To find a great startup idea, identify personal frustrations or problems that bother you and validate the problem by speaking with potential customers or businesses affected by the issue.
• The startup journey involves frequent ups and downs, and failure is a necessary part of trying new things.
• Embrace the concept of "good enough" rather than striving for perfection through iteration.
• Product-market fit is crucial for a startup's success and is the longest and most crucial phase in building a company.
• Once a company achieves product-market fit, they should not change the product as it provides value to customers.
• The key metric for product-market fit is retention. If customers are not returning, it means the company is not creating value.

Finding product-market fit at Waze (00:21:55)

• Waze initially struggled to achieve product-market fit outside of Israel but found success after iterating on their product based on user feedback.
• Waze's crowdsourced approach to data collection allowed them to quickly scale their map and traffic information globally, but they faced challenges in certain countries like Japan due to different house numbering systems.
• In the early days, Waze used retention metrics such as frequency of use and 3-month retention rates to gauge product success, recognizing the importance of the "third-time comeback" metric.
• Waze's approach to solving traffic congestion focused on providing accurate travel time estimates and creating certainty for users, rather than building tunnels like Elon Musk's solution.

The different phases of a startup journey (00:29:43)

• Entrepreneurs should focus on one thing at a time during each phase of the startup journey.
• The first phase is figuring out product-market fit, which is crucial for success.
• If a product or service has a high frequency of use, it can rely on word-of-mouth growth, and the business model can be figured out later.
• If a product or service does not have a high frequency of use, it is essential to figure out the business model before focusing on growth.
• Airbnb is a counter-example to the idea that high frequency of use is necessary for word-of-mouth growth. Its unique and cool experience has driven 70% of its growth through word-of-mouth.

What investors don’t want to hear (00:36:45)

• Investors don't want to hear the truth that entrepreneurs don't know how they will bring users.
• Investors want to hear a coherent story about the business model, how the company will make money, and how much customers will pay.
• Investors have the final word on whether or not to invest, so entrepreneurs need to have a compelling story.
• LinkedIn is a cost-efficient way for B2B businesses to reach their target audience.
• LinkedIn ads allow businesses to build relationships with decision-makers, including senior executives and C-level executives.
• LinkedIn generated a 2 to 5x higher return on spend than any other social media platform.
• Audiences on LinkedIn have twice the buying power of the average web audience.
• LinkedIn offers targeting and measurement tools specifically built for B2B in tech.
• Entrepreneurs can get $100 credit on their next LinkedIn ad campaign by going to linkedin.com/SlodLenny.

Fundraising tips (00:39:51)

• Uri Levine, a successful entrepreneur and investor, shares his insights on fundraising for startups.
• Israeli startups tend to be leaner and raise less money compared to American startups, yet achieve successful outcomes.
• Fundraising is a challenging process that requires a different approach from building a product.
• When pitching to investors, it's crucial to start with the strongest point, such as the problem being solved, traction, or the team.
• A compelling story for fundraising should focus on creating emotional engagement and demonstrating the usability and feasibility of the idea.
• Investors are likely to reject most pitches, so entrepreneurs should be prepared for numerous rejections and focus on crafting a compelling narrative that emphasizes the product's value and user experience.
• Entrepreneurs should prioritize selecting the best opportunities rather than pursuing every good idea.

How to make your presentations stronger (00:48:00)

• The most important slide of a presentation is the first slide, not the introduction slide.
• The first slide should be presented for the longest period of time and should contain the strongest point of the presentation.
• The second most important slide is the last slide, not the summary slide.
• The last slide should repeat the strongest point of the presentation and can be used to recap everything or tell a final story.
• No one will cut you off if you have "One More Story" at the end of your presentation, so use this opportunity to recap or do whatever you want.

A wild fundraising story (00:50:30)

• Uri Levine shares a story about how he convinced an investor to invest in a startup by telling a detailed and believable story about a personal experience with a microwave.
• The investor was impressed by the authenticity of the story and the level of detail provided.
• Levine emphasizes the importance of using details to make a story believable and authentic when pitching a product or idea.
• A story doesn't have to be true to be effective, but it does need to be believable and authentic.

Firing and hiring (00:53:44)

• Firing underperforming employees is crucial for the success of a startup.
• Top-performing employees may leave if difficult decisions are not made.
• When hiring, assess new employees after 30 days and provide more equity to those who prove their worth.
• If an employee is not a good fit, terminate their employment immediately.
• Seek confirmation from top-performing employees before letting someone go.
• Asking tough questions is essential for making the right decisions.
• Evaluate underperforming employees for continued employment.
• Put a calendar entry 30 days after hiring someone to ask yourself if you would still hire them knowing what you know now.
• If the answer is no, let them go.
• Apply this principle to all areas of life, such as relationships and career choices.
• Set a timeline for making decisions, as it is easy to procrastinate indefinitely.
• Most decisions are two-way doors, meaning they can be changed, unlike decisions such as having children.
• Get really good at firing quickly and decisively.
• When interviewing candidates, speak with references to get honest insights.
• A simple question to ask references is, "Would you hire him or her?"
• If the reference says yes, ask why they didn't hire the person themselves.
• Look for references who give quick and positive responses, such as "Take the guy."

Understanding users (01:04:10)

• Steve Wozniak, co-founder of Apple, highly recommended Uri Levine's book as an essential guide for entrepreneurs.
• Different users have unique ways of using products, and there is no single correct method.
• To create a successful product, it's crucial to comprehend the underlying reasons behind users' behavior and cater to their specific needs.
• Users can be categorized into various segments based on their adaptability to new things, including Innovators, Early Adopters, and the Early Majority.
• The Early Majority holds significant importance as they constitute approximately one-third of the population and can determine a product's market success.
• However, the challenge lies in their fear of change, which may lead to resistance in trying new products, even if they offer value.
• Simplicity is paramount in product design, and removing unused features that add complexity is essential.
• Observing users' behavior and barriers to using a product provides valuable insights.
• Unexpected uses of a product can reveal deeper user needs and preferences.
• Different user groups have distinct needs and behaviors, and understanding these variations is crucial.
• The late majority of users tend to adopt a product only when compelled by necessity or positive recommendations.

Talking to the right users (01:12:08)

• Speak with users who failed to use the product or were unsuccessful to gain valuable insights.
• Avoid spending time on users who are not a good fit for the product.
• Focus on users who are far down the funnel but still bounced.
• Failure is inevitable and an important part of the journey.
• Getting up after failure makes one stronger.
• Parents should teach their children to fail to help them grow and discover their passions.

Lightning round (01:15:34)

• Uri Levine, a successful entrepreneur and investor, recommends the books "That Will Never Work" by Mark Randolph and "Atomic Habits" for understanding entrepreneurship and personal growth.
• He enjoys playing chess, appreciates beautiful Persian rugs, Mercedes cars, and courses on nervous system regulation.
• His favorite life motto is "don't be afraid to fail," emphasizing the importance of accepting uncertainty and learning from mistakes.
• Uri is involved in multiple startups addressing challenges in retirement planning, AI for medical knowledge, mobility, medical services, and education.
• His book, "Fall in Love with the Problem, Not the Solution," provides practical advice for founders from idea to exit and can be found on Amazon and Barnes and Noble.
• To connect with Uri and follow his work, people can find him on LinkedIn or reach out to him via email.
• The podcast is available on various platforms, including Apple Podcasts, Spotify, and the Lenny Podcast website, and listeners are encouraged to subscribe, rate, and review it.