“When it is dark enough, that’s when you can see the stars” – Quote I read 10 years ago, but don’t know who to attribute it to.

Sitting at the breakfast table alone, 500 kms away from home, I’ve got to thinking how things can change pretty quickly. Just 12 hours ago, a few hundred people were cheering at me, laughing at my jokes, putting me center-stage. Now… I’m sitting at a table alone, in a big hotel lounge, drinking my coffee.

But let’s rewind: In the past years I’ve been performing a lot at Science Slam – a poetry slam for scientists. When I started, it was a bit to conquer my fear of speaking infront a lot of people and also just to have fun. Recently I’ve gotten more and more paid gigs as well, especially as part of corporate events.

After your 15 minutes

The challenge is, I have 10 minutes on stage, afterwards the jury (i.e. the audience) gives points for the performance, and then prizes are given away for some of the slammers. So it’s literally 15 minutes stage-time.

But what happens after that? Often enough… nothing, really. If you traveled from far enough and won’t make it home in the same evening, you’ll stay at a hotel. Sometimes this adjustment is difficult, you were cheered on by 200, 400 or even 600 people – they found you awesome, you get a prize, even more cheering – I’ve won 6 of my last 7 Science Slams. And an hour later – you’re walking through the streets alone in the rain, soaking wet, just trying to find an open place where you can get some food in this strange city.

You finally get some food, go back to the hotel, I usually watch a sit-com or half a movie, and then go sleep. Waking up the next morning, “sobered up” from last night’s excitement, you get to the breakfast table alone, grab something to eat and coffee and then start your journey home.

Crashing from a “high”

The part after the stage-time can feel really lonely. It’s like a small “crash”: From 15 minutes of a big hall cheering you on to no one recognizing you. It’s like eating sugar, getting a high blood sugar level, and then once the insulin has its work on it, your blood sugar levels go below normal levels, you crave more sugar. One thing that can prevent this, is to eat stuff that doesn’t increase your blood sugar levels by much – whole grain stuff, fat or protein. “Long-term” food, if you will.

I think this can be applied to startup life, you might get cheered on for a while, get some external confirmation that what you’re doing is really cool, but that can go away in a flash. You need something to sustain you, through tough times, to when your methaporical blood sugar level is crashing. You should be guided by your passion, your goals, your vision (or in 7-habits-speak, your principles). You get support from your partner, family, friends. Perhaps even from colleagues who are in similar situations (and don’t lie by saying “everything’s going great!!” even though it isn’t). And without a good foundation, your crash will be hard.

A passion-based startup.

I think this is what startups and founders should recognize, that fame and recognition can just go away in a snap. People cheering you on can be very short-lived. That’s why you should work on your “passion-based startup”. I’m a big fan of organic growth, and if possible no external funding, because then you are in full control of your startup. One of my role models in this case is 37 signals, namely Jason Fried and David Heinemeier Hansson. Their main focus is not to get on as many news portals as possible, their focus is to create something awesome. Something they want to work on forever. Creating a work-life-routine that can be sustained for 50+ years instead of working 60-100 hours / week until your psychological and physical limit is reached.

Sure, getting on the front page of TechCrunch is nice, but does that help? Is it just a superficial high, getting external recognition, perhaps getting a few thousand visitors? It’s dangerous to expect that suddenly everything will change. It’s dangerous to let go of your passion that made you want to create an awesome product, an awesome service and instead chasing being mentioned in a website or other publication.

Using momentum is good, and you can use it for some growth spurt, but don’t let go of the solid principles that got you where you are now. Your passion is something YOU control – not letting external confirmation control you is critical. Enjoy the moment, but don’t let it take you off your path. Make your passion your driver. Be a passion-based startup.

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It seems to me that in the past years (especially when working in the sustainability area in Germany) the discussion around collaborative consumption (CC) has increased significantly. I also keep meeting up and discussing with new founders who are working on new CC ideas. Many are still struggling to find a business model and some are approaching it from an environmental perspective and see perhaps the business side as a nuisance they will need to take care of later. I’ve been thinking a lot about the idea of this new “sharing economy” and just to see how it will / might change business in the future.

Collaborative Consumption has been all around us

I think CC has been around for a long time. Busses, trains, libraries are (government-supported) collaborative consumption spaces. Taxis, hotels, car rentals or even restaurants are private ventures, but also part of the “sharing economy”, if you will.

I think the current “hype” is because of the now available technology, especially the mobile internet, which provides the infrastructure for efficient information exchange and thus gives space for new business models. A company like Airbnb, Carsharing (especially P2P-carsharing), Foodsharing (new project in Cologne), sharing / lending of things that you own, etc, are all new businesses that have grown because of the availability of fast internet and mobile technology.

Reduced transaction costs make space for new business models

Where the “transaction” costs e.g. the costs to exchange information and agree on a contract, used to be very high (e.g. get a room in a hotel, renting a car), mobile internet has reduced these transaction costs by automating many things and within a couple of clicks you can exchange information quickly. Thus the “sharing economy 2.0″ are mostly derivatives of already available services or things that we do (e.g. lend stuff to friends), but make use of the very high efficiency of internet transactions.

Because 25 years ago when you wanted to rent a car, you would’ve needed to call the car rental company (from your landline phone), find out if there are any available cars, have it reserved, fax the confirmation and whatnot. This would be inefficient if you just wanted to rent a car for just 2-3 hours. The availability of (cheap) internet has made it possible to e.g. reduce the processing time to rent a car down to 15 seconds or so (when I want to use carsharing – I just login, find the type of car I want, set the times I want it, and that’s it).

I think one of the main challenges for many will be getting to profitability (for enough interactions and revenue you need enough users in a sharing economy business). As I’ve mentioned in a previous post, I think growth and revenue are fine, but profitability is key. How much funding you get also doesn’t define the success of your business.

Granted, in a sharing economy, getting a lot of people to use your app / website / service is crucial (similar to social networks, you need enough people to use it to create enough interesting interactions), but it’s also important to make a profit and make the business financially sustainable.

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To bootstrap or to seek funding, that is the question

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With incubators, crowdfunding spots and more financing opportunities popping up (especially in Germany I’ve noticed this), many people are looking to get funding via these financing models, so to get a faster kick-off and perhaps beat the competition early in the game. But which is better? Bootstrapping and trying to get enough traction without external [...]

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