Compete

Otto was my first startup. Big reveal: It failed.

My first startup failed. 

We went to investors with a pitch-deck, a £10 million ask, and cashflows mapping dozens of scenarios. We took brokers for drinks. We branded all our documents ‘Otto’, and none had typos. Our shirts were dry cleaned, and our business cards were not quite the cheapest. To our delight, exciting meetings converted to term sheets. Yet, investors never signed the documents. Momentum wained, and a year of pitches later, I realised it was over. Were startups always this hard? 

I don't revel in failure. In most cases, you can avoid it by thinking more or working smarter. You can dodge failure by asking the right questions or being honest with yourself. But Otto failed.

Yet, when we started Otto, it wasn't going to fail. It was the future of retirement living. Otto was building flats with an Ikea-like design and Ikea-level pricing. Competitors built villages with over-priced bungalows, yet we were 40% cheaper. Otto's had a balcony, and retirees would have bants in their managed community. They'd be happy in the home cinema. Better still, each building would drip with care technology. Over 300,000 people turn 65 every year, yet only 4,000 retirement living houses are built. This business was a no brainer. We told everyone about it.

On a cold Monday morning in January 2020, my co-founder quit. Fourteen months after we incorporated, it was the end. I sulked around central London for the rest of the day. I brought a religious book from a Hindu fundraiser, hoping to get some insight. It offered none. The type was too small, and I was too distracted. Was my failure inevitable?

Competition corrupts. Competition can creep into every crevice of a founders journey. It blinds reality. We’re too prone to thinking what's valuable is what the other person is doing: We're obsessed with the other. 

Competition corrupted Otto in two ways. First: One of the earliest questions we asked ourselves is 'who is the competition?' We did hours of work on competitor analysis. We had schedules of competitor specifications. Yet we had nothing about our customers' needs: I never met a customer. We thought about how cool we looked, but not what we did. 

We didn't start from first principles but from the playbooks of others. This meant that, weirdly, we defined our ambitions by the work of others, not from our ideas. We were 'prettier' or 'more community-led.' Yet nothing was new: There were no unique insights. 

Second: I really really gave a shit about what people thought of Otto. Otto was my baby. The font for the logo took ages to choose and the development sites were splendid. I told everyone what I was doing because I wanted validation. Did I want to talk at them about my rubbish A-levels or my inability to get laid? No. So I'd talk about Otto instead. I was competing for their approval, and I didn't want to scale down the dream. Why build a couple of flats, when we could make big a village of them! Of course, no one was watching, and no one cared. When Otto failed, few noticed. 

Moreover, my obsession with thinking bigger drove us towards larger and larger sites. It was unrealistic. Was anyone going to lend a 24-year-old with little development experience £10,000,000 (note all those zeros) with no traction. The answer was no. We lost touch with what was possible (or even likely) because I wanted to look successful. I was competing for the appreciation of others. Starting small (and in my mind unsexy) would have been easier. So, now we know!

There is no need to compete. Every potential competitor is a partner. Likewise, it takes humility for a team to accept it isn't working, bin their work and pivot. It’s the honest thing to do. There is no notion of 'status building' when you've pivoted eight times. At Otto, we never changed direction because we cared too much about what people thought, not what was real. I look back with horror at how hard it is to start a business when competition is leaking in. It's like putting petrol in a diesel engine: You can go so far, but then the motor will die, and your team will take the bus instead.