AdDuplex Post-Mortem. Part 3: Startup Sauna and Silicon Valley
This is part 3 of my attempt at analyzing my experience building AdDuplex (2011–2023). AdDuplex was the widest ad network on Windows. You can find the genesis story in the first part and forming a company around it in the second.
By early 2012 I had the company established, first employee hired, and we were head down into improving the product. I think as a way of easing Paulius in we made our first “side-project” in the form of WindowsPhoneSites which was a catalog of websites and blogs where developers could seek coverage for their apps and games. And, also, I somehow managed to convince Long Zheng to do a redesign of our website, which came with a new logo as a bonus.
We had to change the website as the time progressed, but the logo persisted until the last day.
We had a long list of things to do in front of us and the modest resources to cross off items from that list one by one. As a side-effect from the research trying to get the angel investment, I was tracking all things startups but wasn’t paying too much attention to anything but the tasks at hand and our immediate industry. I knew about startup accelerators like Y Combinator and Techstars, but those seemed way out there, and the ones that were closer (both geographically and realistically) didn’t seem like a great deal when we already found our market and were just churning new features and trying to grow.
But then there was Startup Sauna…
Startup Sauna
Startup Sauna was modelled after the above-mentioned US accelerators but… I must stop now to warn those who are pure capitalist libertarians to take a seat — you’ve been warned. Startup Sauna didn’t take any equity from the startups it accepted, it didn’t invest anything, it also didn’t cost anything, and even provided boarding, and, if, I remember correctly, even covered travel expenses. And there was no catch (well, besides Finnish weather and expensive beer). All of this was supported by the Finnish government in a push to establish Finland as a startup hub in the region. So, the only potential downside of going to Startup Sauna (provided you got the invite) was dedicating six weeks of your time to it. As a developer pretending to be an entrepreneur being forced to dedicate 1.5 months to focus on the business side of things sounded like a great (even if scary) proposition to me. And it was in Finland right next to Nokia, who just announced their switch to Windows Phone.
Lesson learned: Sometimes there’s such a thing as a free lunch.
As someone who was raised in a soviet school and then watched it all explode, I’m very wary of getting valuable things for free. There must be a catch! There wasn’t in this case. And even though I have some philosophical objections to government money competing with the free market, it’s much harder to object when it positively affects you personally 😉
There was one problem though — it was a competitive program and getting invited there was very far from a given. The selection process looked like this: they would go on a “recruiting” tour across the region (and beyond) they called Startup Sauna Warmups. These were local one day mentoring events for local startups. The event culminated in a pitch competition and several teams with the best results were getting invited to go to the final program in Helsinki/Espoo.
There were a lot of stars aligning in that period and one of them was the Startup Sauna Warmup in Kaunas (1 hour drive from me) in March 2012. I applied and got the invite. Getting invited to the Warmup wasn’t surprising as I think it was fairly inclusive and we were already doing something notable. But then I had to pitch AdDuplex. And that would be my first ever public pitch. For a 36-year-old introvert developer this sounded scary. But that was a period in my life where I was determined to get out of my comfort zone — pitching it is.
This was the opening slide of my pitch deck:
Anyway, I think I did enough research to convey the message in the slides and what I was saying, but how I was saying it left a lot to be desired.
So, overall, as I saw it, we had an already working small-scale business, in an area that was very related to Finland (though there was a lot of negative sentiment, as I learned later), and the business and presentation skills were exactly what Startup Sauna was meant to develop. Without being pretentiously humble, it made sense to me that we made the top-3 at the warmup.
My friends at TropicMind which later transformed(?) into tutoTOONS decided to drop out, and we became the first choice (not that it mattered) from Lithuania. Now it was a matter of complying with a few formalities (which I can’t remember), getting the official invites, and… actually deciding to go.
For a 36yo with a newly minted teenager at home this wasn’t the easiest decision to make. Additionally, some of the local mentors at the warmup with whom we came up in the local industry were confused why someone with greying hair and some demonstrable experience in the field would want to go to some “camp for students.” Those were easy to ignore as I knew the answer — I had no business education and very little proper experience, so going through a bootcamp sounded like the right way to get it. And as for leaving home for six weeks, I realized that I have lived all my life in Vilnius and the only times I left were on vacations. So, I actually wanted to go somewhere. And when you are a part of a startup picking steam (beyond the “I have an idea” stage) it’s not that hard to sell the idea of this being a steppingstone to getting that yacht (or whatever) to your spouse. Paulius was young and single, and an adventure with full board wasn’t so hard to sell to him, either.
Speaking of boarding, Startup Sauna offered free accommodation in 4-person rooms in a hotel. And that’s where this 36-year-old draw the line 😅 I never lived in a dorm, and I wasn’t going to start at 36 spending 6(!) weeks in a room with 4 dudes. Luckily, Airbnb was already a thing (I was surprised when I checked now) and I found a brand-new apartment to rent in a Helsinki suburb. It was reasonably priced at the time, but it meant that commuting by public transport to the Startup Sauna premises would be challenging and time consuming. So, we decided to drive to Finland…
For someone living in a fairly cold place driving 700km north and finding piles of snow still present in places at the end of April was fun and in a way uplifting. Hey, we live in the south! The apartment we rented was new and in the middle of nowhere. There weren’t many distractions between going to the Startup Sauna Garage and home, so we got down to business.
The experience in the Startup Sauna was pretty much what you would expect from a startup accelerator. And if you don’t know what to expect, our time was divided between working on fine-tuning our business with coaches and mentors, polishing, and practicing our pitch, meeting potential investors, some “team building” activities with our fellow startups, and just working head down in-between all of the above. I was doing most of the things above and Paulius was left to work on actually building stuff in the meantime. Overall, I think we didn’t even lose anything in terms of productivity in those weeks at Startup Sauna while gaining a lot of things I wouldn’t get otherwise.
Lesson learned: Harsh critic mentors are the best.
There are all kinds of mentors startup accelerators attract. Some are of a psychologist type and mainly listen to what you say and provide affirmation. That is useful at times, but you quickly forget them. Then there are some grifters who are basically on a hunt to get some advisor stake in an up-and-coming startup without providing much value. There weren’t many of those at Startup Sauna, but I’ve met a few and heard about a few from the others. And then there are few who question everything you say. Those are rare and they feel like jerks at first. But then you realize that this is actually the best kind of mentor. You get so used to selling your bs that you lose touch with reality and just consider most of the things you say as axioms. And most of them aren’t. From what I remember, Osma Ahvenlampi forcing me to justify my claims was one of the best mentoring experiences at Startup Sauna. It’s important that those are delivered in private meetings, though. So, if you are a mentor taking notes, please don’t do this during public pitch competitions and alike — that’s definitely a jerk behavior.
Towards the end of the program, we had a week-long trip to Silicon Valley. If I remember correctly, not every team got to go, but we made the cut. I think we had to justify we have reasons to go there beyond just tagging along on the Startup Sauna schedule and I had multiple meetings setup before I even knew I was going.
Silicon Valley
That trip was probably one of the most tightly packed weeks in my life. Not only did I have back-to-back meetings all week, but they also were dispersed between multiple towns of Silicon Valley and San Francisco. Our base was a motel in Palo Alto, and I had to drive to San Francisco and back sometimes multiple times a day.
Lesson learned: Busy people are sometimes late.
I’m a little OCD about punctuality. I would often get somewhere 15 minutes early and then sit in the car listening to a podcast, rather than trying to be exactly on time and ending up 2 minutes late. That’s because I’m usually very flexible with time — interrupting programming sessions is very easy; it’s getting back into the groove that’s hard. On this trip, I once missed a freeway exit and ended up on the Bay Bridge which resulted in me being 40 minutes late to a meeting. Psychologically this was insanely painful, but this was one of the first events on the way to a healthier relationship with punctuality. I’m still on time most of the time, but if I’m justifiably late for a few minutes I no longer get suicidal thoughts — progress!
You know there’s this concept of people associating a song with some events in their life? Well, I don’t think I have that for anything but this trip. On my trips to San Francisco and back radio was on and it seemed that Americans just discovered a song that was a hit in Europe a year prior. I’d hear Changed The Way You Kiss Me multiple times on every trip. And every time I hear it now, it immediately teleports me to Freeway 101 or 280.
The Startup Sauna program primarily consisted of meetings with investors. Some of them were VCs you’ve never heard of, some were with household name VC firms, but we talked to a low level associate whose job was basically filling the firm’s database. But then there were a few were both the firm and the person we met with were on top of their game. The one I remember vividly was a meeting with Steve Jurvetson at DFJ. It was a team meeting, so we were all in the same room and basically went around the table presenting our startups and answering questions. The level at which he was able to discuss details with such a diverse group of startups was very impressive.
Lesson learned: Kids, go work for a FAANG as a janitor.
One of the things I’ve noticed time and again, is how investor ears perk up when they hear that founders of this no-name startup previously worked at Google, Netflix, Microsoft and/or Amazon (preferably with an AND). I doubt it’s super important in the final stages of negotiations but it’s definitely way easier to get your foot in the door with big tech on your resume.
Anyway, for me the VC tour was mostly educational since I wasn’t planning to raise money at that exact time. But you have to start way before you are actually ready to raise.
Lesson learned: Investors invest into lines, not dots.
I think it’s Mark Suster who coined this phrase. And if you look through the investment announcements you would often find that the investor met the team some years ago and decided not to invest at the time, but they kept in touch, and now had a long-standing relationship that culminated in this investment. For a tech or product centered founder this is annoying as you don’t want to think about raising money except for the short bursts when you are actually after money. But that’s how it’s done for the most part.
Even though I wasn’t after an investment right at that time, I had to pretend I was. And hearing investor feedback was really valuable and at times funny.
Lesson learned: There are many ways to say no.
Since investors “invest in lines” they really try to not say a definitive “no” and won’t tell you “You suck!” Instead, they try to come up with elaborate ways of saying exactly that but framing it as a compliment. My favorite that I heard for the first time on that trip but would hear a few more times later on is “I can totally see how this is a 50-million-dollar company, but we are looking for billion-dollar companies.” For a brand-new founder who maxed out their credit card to make an MVP that 50m “valuation” sounds amazing, even though it was just a polite way to tell you to get lost… for now.
As for the meetings I’ve arranged myself (it’s possible that I’ll mix some things as I was in San Francisco once before that trip and many times after), I’ve definitely met a few potential partner/competitors, visited Uber’s office when they were just a 40-person team, and met Ben Riga who would later become my podcast co-host.
All in all, this was a very eventful trip as was the whole Startup Sauna experience. I’ve gained a lot of insights, made many meaningful business connections, and a bunch of friends all over the world. I’m really grateful to the team, coaches, and mentors at Startup Sauna for letting me be a part of it. I started to name people but realized that I will definitely forget someone and that would suck. So, thank you to all of you! 😘
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In the next part I write about raising that VC money.
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P.S.: with the announcement of AdDuplex shutting down and this blog post series I keep getting asked about what I’m up to these days. Check out marker.js if you need image annotation in your web app, and the upcoming JavaScript diagramming library.
