I met the team at SWAY about a month and half back. SWAY is a social way to pay or split the bill when you are out with your friends or buying a birthday gift. It simplifies the notion of peer to peer lending. You know that one person in your friends group who always gets to pay for everything and runs behind the rest to get their share of the payment? Well, SWAY makes that persons job much simpler. I believe this is a unique and small enough problem that it can be utilized to really make peer to peer lending much simpler using the network. The team has built the app and it is usable. I don’t have an iPhone to test the app but they showed me the demo and it seems to work.
I believe solutions like this really has the potential to change how things work. I also believe having the idea, building the app are all table stakes what really matters is the growth rate of adoption. If you did not read my blog post “Are you growing at 5% to 7% every week?“, please read it… I will be waiting right here… ok, coming back to SWAY. I like the team, but I have not spent enough time with them to see if they have what it takes. I have written before, Strategy matters a lot, sequencing your activities and aligning everything matters even more. I wish the team understands that and I hope the investors and advisors and everyone behind this team get it as well. I have seen how things get messed up when people who have no clue about building startups start giving advice to Startup founders and totally derail the process. I totally believe in Peter Thiel‘s Law:
A Startup messed up at its foundation cannot be fixed
What do I mean by messed up at its foundation? well the kind of investors who put the first money into the company, the amount of stock given up for the initial money. The dilution of the founders equity. Who is in charge of the company? Why are they in charge of the company? I have seen so many times the founders are not the people in charge of the company it is usually the angel investors. Nothing against angel investors, but when they make money in real estate or fishing or whatever and think they can build high technology startups there is something totally messed up in that line of thinking. The founders background and why they came together to do the startup matters a lot. The founding teams character, attitude and ambition. There are a million things that could be weak points that can cause the total destruction of the startup. There is a reason why majority of the startups fail, actually there are plenty of reasons why startups fail. I have just listed a very narrow few, this is especially true for Iceland.
I think a lot of people think that building a startup is about raising money. I don’t know how many times I have said it but I will continue to say it, Money does not bring traction, Traction brings money. Anyone who invests in startups needs to have an endgame in mind. The endgame is about building a business or finding someone who values the product, data, network effects, brand and/or the team.