In 1999, Toomaj Freydouny embarked on his first entrepreneurial endeavor, founding a startup called Gigafox. Despite his best efforts, the venture ultimately failed to gain traction and achieve success. While Gigafox may not be a household name, the experience proved to be a valuable lesson for Freydouny, serving as a catalyst for his personal and professional growth in the business world.
Toomaj is a seasoned entrepreneur and marketing strategist, who has spent the past 24 years honing his skills in the business world. Specializing in reviving failing companies, he has made a reputation for himself as a go-to expert in the field.
His latest success story is KUMMUNI, a Berlin-based proptech that faced bankruptcy just nine months after its launch in 2020. He took over the company in January 2021 and the company underwent a remarkable transformation, becoming a sustainable proptech powerhouse within a mere two years.
In this interview, we shall delve into the perspective of Toomaj Freydouny regarding what he deems to be the most significant marketing error.
In 1999, you embarked upon the ambitious endeavor of establishing Gigafox, a venture that met with failure. What factors do you believe contributed to this unfortunate outcome?
When I reflect on the time when Gigafox ceased to exist, I initially believed that I would never discuss it again. However, as of late, I have found myself frequently recounting the story of my first startup!
One of the major challenges I encountered with Gigafox was my limited knowledge of marketing.
Looking back, I realize that my lack of understanding of marketing was a significant hurdle for Gigafox. My friends and I were excited about our project and eager to share our stories, experiences, and improvements with others. We enthusiastically gave interviews and engaged in extensive marketing efforts, years and months before the project was fully prepared. Unfortunately, our overzealous marketing approach ended up undermining our credibility. In short, our premature marketing efforts prevented us from being taken seriously when it was time to launch the product. When discussing your aspirations with others, it is important to exercise caution and consider your words carefully. Sharing your big dreams can be exciting, but it is crucial to be mindful of what you should and should not reveal.
The market is a highly competitive field where every tool plays a crucial role. Just like in a war, marketing in the promotion sense can be seen as a weapon. However, it’s important to remember that in this battle, the bigger competitors have their own powerful arsenal. So, when you bring out your pistol in the market, be prepared for the bigger players to unleash their artillery!
What is the biggest mistake that a startup can make? Is it underestimating the influence of marketing?
When it comes to startup mistakes, it’s difficult to pinpoint a single “biggest” one. While marketing can certainly pose challenges, it’s not the only issue to consider.
However, if I have to point one, that should be mimicking a stable company or worse, a well-known brand is the biggest mistake a startup can make. Almost every startup and young company has a desire to mimic a well-known brand. For example, this can be seen in their efforts to hire a CMO with at least 10 years of experience and a track record of creating a well-known brand, while the business itself has been around for less than 10 years!
In the startup environment, there is a prevalent epidemic. Many aspire to become the next Apple, yet they overlook a crucial fact: Apple did not achieve its success overnight. It is important to remember that Apple was not always the Apple we know today.
When it comes to copying a well-known brand, it’s important to understand that success is not guaranteed. What worked for that brand may not work for you, and you may not have the necessary resources to replicate their strategies. It’s important to focus on developing your own unique brand identity and finding ways to differentiate yourself in the market.
Throughout your career, you have worked for both corporations and startups. Now, based on your firsthand experience, which of these two distinct realms do you find yourself leaning towards? Why?
I have primarily worked as a marketing consultant for corporations. While my experience in this area is limited, I have had the opportunity to gain a deeper understanding of startups. Throughout my journey, I have launched, failed, managed, and consulted for various startups. Given the choice, I would always choose to work with a startup.
Corporations are like giant creatures. They possess an inherent weight and resistance to change. Therefore, their size and structure make it difficult to adapt quickly. On the other hand, startups are the antithesis of corporations. They are nimble and flexible, able to pivot and adjust rapidly in response to market demands. This inherent agility is a defining characteristic of startups, allowing them to navigate the ever-changing business landscape with ease. Unlike their corporate counterparts, startups can swiftly embrace new ideas, technologies, and strategies, positioning themselves for success in today’s fast-paced world.
In your opinion, what is the biggest difference between a startup and an established company?
Pivot! Startups and established companies differ significantly in terms of their history to analyze. Established companies have a rich history of drawing insights, allowing them to identify what works and what doesn’t. In contrast, startups either lack a history to analyze or have a relatively short one that offers limited information. This disparity in historical data can have a profound impact on decision-making and strategic planning for both types of businesses.
As I’ve mentioned previously, it can be a mistake for startups to simply copy established companies. One of the main challenges faced by startups is the lack of historical data and experience that established companies possess. Established companies have a track record that can be analyzed and learned from, providing valuable insights into what strategies and approaches have proven successful for them. Startups, on the other hand, are operating in uncharted territory, with limited data and a higher degree of uncertainty.
Startups thrive on innovation and the ability to think outside the box. With a lack of history, they have the freedom to explore new products, approaches, strategies, and even names. This flexibility allows startups to pivot and adapt to the ever-changing market demands. Rather than being a weakness, the absence of history becomes a strength, enabling startups to embrace experimentation and drive forward with fresh ideas.
Startup founders and cofounders are crucial. Who would you consider as an unqualified founder/ cofounder?
The one with ego, and the one who doesn’t respect money!
Both, those with egos and those who don’t respect money are ill-equipped to run a business. Their lack of humility and financial responsibility will inevitably lead to failure. The egotistical founder will prioritize their own ego over the success of the business, making decisions based on personal pride rather than sound business strategy. On the other hand, a founder who doesn’t respect money will squander resources and fail to make prudent financial decisions. In either case, the chances of the business thriving are slim.
Surprisingly, both seem to have an insatiable desire to imitate a well-known brand or a business figure. It is astonishing how they both exhibit such a hunger for mimicry!
