General Information
Flux was founded in 2018 by Nick Ionita, Max Goodberg, and Wei Wei, who all met at a prior start-up, FreeWheel. All three founders started at FreeWheel when the company was about 25 people, growing the company to over 1,000 employees and an acquisition by Comcast. The company founded itself on the opportunity to reduce the frustration that comes from employees when they lack a visible career path at their current employer. This frustration results in a loss of good talent for the employer as employees usually start to seek new opportunities outside the company when that path isn’t clear. This problem was something the founders believed they did well at FreeWheel but got increasingly difficult as part of a much larger organization (Comcast).
Flux was raising its Seed round when we visited and were in the early stages of product development. Rather than immediately leaping to building, the team spent time testing the concept and willingness to pay with potential customers and refining the broader idea to a starting point which began raising capital on. The week after we visited Flux, they had finalized their fundraise. Most of the pitching for capital was done directly through people within Nick’s, Max’s and Wei’s network. All three founders worked closely together as business partners at Freewheel and one of the biggest challenges they saw with the acquisition was how to keep a balance between innovation and maintenance. This ultimately led to them leaving FreeWheel in order to focus on other innovative ideas.
Product Innovation
Max stated clearly that the product is the key for a successful company, and it is impossible for new companies to compete on features and pricing of existing products. In other words, it is important to have a clear business case for your product. As a founder of a company, you must be able to clearly state what makes your product different from your competitors’ products. As a start-up, you also must have some sort of validation phase where you speak to potential customers in order to determine that they would be willing to pay for the product. Nick also mentioned the importance of product innovation, that you mustn’t be afraid to kill a product if the market or resources change. Adding to that, it is important to know your core business and that everything you do must support the core.
Innovation Process
In order for a company to successfully innovate, it is important that everyone has access to the necessary information, and in a small company, all the information that has been collected by employees should be reachable for everyone.
At Flux, which currently has 4 employees, they are working with a Slack channel where everyone posts articles that could have an impact on the business. The information can flow easily from employee to employee with this method of communication, and everything is also stored in one specific place, easy to reach for everyone. However, a Slack channel is most likely not an efficient way to communicate and store information when a company becomes bigger, and when growth happens, it is important to establish new ways early on to document and share knowledge between employees. The ability to share is crucial in order for everyone to be able to bring innovative ideas to the company, something that the whole company should work towards.
Innovation Metrics
Since Flux is a new company, it does not have any specific metrics for success established yet. However, one metric that always needs to be considered is the response from customers. If a customer is satisfied, they will continue to use the product, and more importantly, speak highly about it to other potential customers. Nick and Max also think that it is important to compare everything to your business case that you have created. By creating a business case, it will be easier to determine if the development is going hand-in-hand with the long-term goals and if anything in the case should challenged based on new information. The last metric Max and Nick mentioned is the quality of the data you are using. Software companies today are working with a large amount of data, but it is important to measure that you have high quality data as that will help you to grow in the long run.
The Cluster Advantage
Both Max and Nick think the advantage of the cluster is huge, especially for a start-up. Since a start-up does not have a lot of resources, the concept of co-opetition is a necessity. With the help of co-opetition, a company can leverage good relationships with potential customers, as the company they are co-opetioning with would be able to act as a reference, which is important in order to become established on the market. Another strong advantage of the cluster is the strong network that exists with experts within the industry. The strong network helps to recruit the right people you want to have in your company. Max and Nick emphasized how important trust between people within the company is, and by being in the cluster you can hopefully convince the people you trust to work for or with you. In the cluster, the universities are a big resource as well, however, for start-ups, the direct benefit from universities is hard to see other than bringing new young talents to the cluster.
Fun Fact
We got to have BBQ and pick the brain of one of the founders and his wife who is a Venture Capitalist.
Memorable Quote
“As a startup, you’re smaller than a lot of other things, so you must use nimbleness and lack of history to your advantage” Nick Ionita, Co-Founder and CEO at Flux