Not everybody is built to become an entrepreneur. It takes a special type of conviction, perseverance and luck to be able to keep fighting despite the early challenges every entrepreneur faces. For NewsCred Founder & CEO Shafqat Islam, giving up was never an option even if it took 3 years before NewsCred really started taking off. But in those 3 years and the years that followed, NewsCred has gone on to raise over $90M and Shafqat was able to gain invaluable lessons that he shared with me in an interview.
1. Life is too short not to take risks
It was the day NewsCred CEO Shafqat Islam got married when he decided to quit his lucrative job at Merrill Lynch and do a startup. And sometimes, taking this initial leap of faith is more important than having a solid business idea.
"We had some ideas but I didn't have a compelling business model ready to go yet. We started working on an early version of NewsCred but it was a totally different business."
NewsCred's initial business was consumer facing and was like a Reddit or Digg for surfacing higher quality journalism. The news couldn't just be popular, it had to be fact checked and credible. While NewsCred's mission to surface really high-quality content remains intact, it's now a very different business and platform.
2. You're going to struggle
The reason why NewsCred eventually pivoted their business idea was because of their initial struggles. But the key trait they had that helped them push through? They refused to give up.
"We then pivoted the business to a B2B business after 6 months of trying the consumer-focused version. We quickly realized that that idea was a nonprofit one and other nonprofits were working on the same problem. It wasn't a business."
This new version would license content from all these magazines and publications that users online could use.
3. It's okay to pivot
This pivot into a creating a marketplace for all professionally created content and news on paper sounded like it could compete with the likes of AP and Reuters but it turned out it wasn't a good business either. So NewsCred had to do another micro-pivot.
"The market opportunity was small and customers didn't really have the money to buy this solution. We kept at it because we thought AP and Reuters were legacy companies we could disrupt."
4. Be irrationally optimistic
Three years into the company and NewsCred was making a little bit of money but the business just wasn't growing like a startup normally would. But Shafqat and his team stuck to it. Why?
"Most rational people would have thrown the towel but I always tell people that entrepreneurs have to be irrationally optimistic because there's no reason why we should have kept going."
5. Find a way
At this point, NewsCred was running out of cash and needed to raise a seed round to help them continue on. Shafqat would attend a friend's wedding in San Francisco and spent 3 extra days meeting investors, going up and down Sand Hill Road and becoming one of the first companies to get funded through AngelList.
"Naval had just created AngelList. It was an email newsletter at that point and I found a way to hustle into the newsletter. Most of them said no but in a last ditch effort, Mike Maples from Floodgate Fund gave us our seed round."
Securing this seed round would turn into a lifeline that would lead to more good things for NewsCred.
6. Grab an opportunity when it strikes
The NewsCred team was putting up some AdWords for publishers when Johnson and Johnson ended up finding these AdWords, clicking on it and needed content to educate their customers on a new application they had built.
"That was the aha moment and we never really had a board meeting where we sat around to discuss if we should change the business. We just went after that opportunity organically and said, 'shit this is the real thing'. Then we went all in."
This new bet on becoming a content marketing platform would prove to be the right opportunity.
7. Let the market decide where you go
While entrepreneurs should always have the conviction to bet in the future and the unknown, you have to make bets as well and let the market help pull you into the right direction so you can build things that people want.
"We didn't build this then looked for customers. We let marketers say that I needed to create my own content as well as license material that you guys have. Then the marketers told us they had so much content now and didn't know how to manage it. So to simplify life, we built a SAAS content marketing platform."
8. You need to hustle to build a marketplace
After building two marketplaces, the licensed content marketplace, and the original content marketplace, Shafqat has had his fair share of experience building marketplaces.
"At that point we were over 100 people and I could've made this into a big project but instead I picked one guy who was super young and told him to build this entire new business line and hustle his way through it. He did things like find customers who needed help with content through oDesk and eLance postings then he would reach out to them to build the demand side. He also used Mechanical Turk to find freelancers on LinkedIn and send them emails building the supply side."
9. Trust in referrals
Shafqat has no problem working with friends. In fact, he only works with friends.
"My co-founders, I've known them for 15 and 25 years respectively. Our head of legal is my cofounders friend from university. I don't have any problem hiring friends. Take that guy who built that content marketplace. If he has a guy he recommends, that guy must be pretty cool and pretty smart as well or he wouldn't hang out with that guy so why wouldn't I hire him?"
10. Never ever give up
"Never ever ever ever give up. Be irrationally optimistic about what you can do and what goals you can achieve. In the beginning, spend as little money as possible but when things are starting to work, spend as much money to grow fast then know when to take your foot off the gas."
11. Cherish the 'karaoke' moments
His final words during our interview when I asked him what his most memorable moments were:
"I love those moments when it's 3 pm on an afternoon and I'm like 'Holy shit, we're doing 10m in revenue. I thought we were going to go bankrupt a few years ago'. Or those moments when you're in karaoke and you're like, 'these people I love them like family'. Those are the moments that are really special."