Three lessons from writing this blog

Since I started this blog in October 2013 the frequency of the posts decreased to intervals of two months due to the other things I’ve done next to it. So I hit the mark with 25% degree of performance of my original goal to post “at least two times per month” for projecting my entrepreneurial journey. In the process of maintaining this blog I was taught three lessons:

1. Sunken costs & Cost-Benefit-Ratio
There exists a concept which is called “sunken costs”. By definition these are costs which are lost either way. Whether you go on or you break off. For example people who buy a ticket for cinema and recognize after 10 minutes of the movie that they don’t like it, tend to remain seated because of the money they spent for the cards. But this amount of cash is lost anyway. So it would be much more logical to get your butt out of the show and do something you really like. To stay watching the film won’t bring you back any of the dollars you’ve spend. Usually you still keep your seat.
We face this kind of moments quite often but most of the time we cannot see them immediately. What we can do to avoid staying with sunken costs in big moments of life, is check for the cost-benefit-ratio. Just compare the costs of something (whether it’s cash, time or energy) and its benefit with each other. As soon as you notice that the costs are way bigger than the profit you get, it’s time to change something, or at least trace it for the next time. If it’s not getting better than alter the course. The benefit from writing every two months was high enough for me to move on with it.

2. Forget about the 100%
Before I started to write my first article, I spoke to an experienced blogger who told me that I should be aware of the fact that it’s very hard to provide content in short periods. Not mainly because of the subjects (that’s another reason) but simply because of the time it costs. However, I wanted to post as often as possible and already after the first few posts I had to admit that I couldn’t handle that frequency. That was frustrating because I missed my goal. Then I remembered that my initial drive was to practice English and write down all the lessons learned to keep track and retrace my journey later on. And that can also be done with more infrequent posts. So never mind.
I read some time ago that the perfect rate of completing your goals lies at about 66% or 2/3. Everything below can demotivate you very fast; all the numbers above are too easy and could be formulated tighter.
So high goals can bring you to new heights and better results but before setting them, you should accept that it’s ok – and maybe even well – to not reach the 100%.

3. Don’t diversify too much – Set priorities!
It’s great to be interested in many things and to try out various different activities. But sometimes there are so many that it’s hard to concentrate on all of them. And it can be very, very difficult to set priorities and decide which ones to spend time on regularly and on which ones far less or none at all. I have learned over the last year that starting too many things at the same time can cause to rock the whole concept.
At the end of the day it’s about cash in business/earning life. With this perspective many things and cool projects get a new status – also this blog. Sooner or later you have to concentrate the greatest part of your energy on the cash-generating things to ensure that your basis is as safe as possible. With the cost-benefit-consideration you can balance fairly well which ones of your activities should get the most attention. What helped me a lot is a real spreadsheet with the top 3-5 things I want to keep up with and keep track of them. If one thing, which basically shouldn’t consume so much time, prevails, you can strictly let it out and pursue the other ones. This can sound a little bit too strictly but without a routine it often slips out of your mind after some days. Another way would be to focus on the one most important thing and go ahead with it for a longer period of time.

Finally, even if this shouldn’t be used for all parts of your life, a rational approach often helps you to get a clearer view and reveals weak spots. So prevent sunken costs, set challenging goals and focus on your priorities 😉

Finances of a startup – The basics

Over the last two years entrepreneurial finance crossed my way quite often. I didn’t really recognize how much importance lies into it, despite of the facts that of course we planned the finances at the beginning of our first startup and that I attended to a university course “due diligence with excel”. Maybe I couldn’t see behind the glasses, because every entrepreneurship book only talks about the vision or because we only did the due diligence for stock-exchange enterprises… But I don’t want to deny. Startup finances are a definite lesson learned for me.
A huge problem with this subject is that you don’t learn what it really means to do your startup finances in most of the university seminaries – you only do it theoretically. In my opinion it’s very difficult to understand what you actually have to do in reality. And when you don’t study economics, you don’t know anything about controlling and financial planning of a (young) company at all.

Fortunately recently a young professor joined our university and started the professorship…Entrepreneurial Finance. Yeah! Thanks to Prof. Braun I got a fairly new and interesting perspective on the topic. Most of all, because we completely went through a real startup case based on an excel sheet and spoke about actual positions in the specific calculations. Unfortunately time was limited, so it was hard to defer to particular startups of the participants. And there were quite a lot of founders in the rows.

I’ve done a good deal of research since then and tried to intensify my knowledge about entrepreneurial finances, because it’s so essential for every company – whether you work for a market-listed corporation or with two colleagues on a new project. To sum it all up I want to give you a short overview about what are some “pillars” of finances in a startup. I will engross the thoughts later on, but let’s keep that in mind as a start and see what’s coming up!

So let’s start: Why is this subject so important to you as a founder?
A financial overview gives you both the opportunity to see the weak spots of your business model in retrospective and also lets you know which resources you have to spend in the future.
Finances of a startup are most of all based on a balance sheet, an income statement and a cash flow statement which can be complemented by researches about the market, product analyzes, operating numbers, etc. But these three are the ones you should know inside out. You’re a lucky one if you have a finance expert in your team, but every co-founder should understand the basics. There even exists an entire job for the details – the accountant or further on the auditors who do official finance review for big companies. But back to our topic – what do these three calculations exactly do?

1. Balance sheet
Divided in assets and liabilities, a balance sheets shows you, where your money comes from and wherefore you spend it. The liabilities consist of owner’s equity (money you got without any time restrictions – e.g. the capital brought in by the founders team) and liabilities itself (debt capital – borrowed cash which has to be paid back to a bank or a supplier). On the other site you got your assets – current ones (like cash) and non-current ones (cars, machines, manufacturing plants… – everything which cannot be brought to liquid cash very fast). If you want to know how much equity your startup has, you have to subtract the liabilities from your assets  the residual amount is your owner’s equity. The balance sheet is a great tool to see in which values your capital and your incomes are placed. Based on that you can calculate if you e.g. have too many products stored in your warehouse or whether or not you’re liabilities towards your main suppliers are in a good frame.

2. Income statement
The next part, the income statement, is meant for every business transactions affecting your net income, so you sell products? It will appear in your income statement. You had some depreciations on assets in the last year? Income statement-worthy! How many taxes do you have to pay? Featured in the income statement! Result of the whole process is your overall profit, or loss. Very interesting is that you can see how strongly your remaining amount of money is affected by depreciations and taxes after withdrawing your operating costs like bought material and expenditures for sales.

3. Cash flow statement
The cash flow statement is my favorite one, because it shows you how much cash you’ve earned by operations and where you can spend it. It’s separated in cash flow resulting from operating activities, cash flow resulting from investing activities and cash flow resulting from financing activities. The first one – operating activities – includes all of the costs you need to keep your business running. Personal expenses, taxes paid, interests paid to name some output factors and received payments and generated cash from operations for some input examples. This part covers the process for producing, selling and delivering your product or service. Second part: Investing activities. Sale and purchase of assets and made/received loans are part of that. Everything you do to invest in the future of your company. The financial activities are mostly not as necessary as the other two ones for a startup, because they aim for dividends and company shares, so this reflects how your company is financed. In most of the cases a young startup is financed by founder’s capital or maybe a bank credit.

How do all three correlate?
They’re all sections of a bigger system – the annual accounts. Intersections are on the one hand the change of cash and cash equivalents between the cash flow statement and the balance sheet and on the other hand the profit/loss among balance sheet and income statement. Cash represents an asset in the balance sheet and the cash flow statement complementary reveals the reasons of changes. Whereas the income statement explains how a profit or loss is achieved, the balance sheet displays shifts in equity based on net profits or deficits.

As you can see from balance sheet to income statement to cash flow the calculations tell more and more about your stock of liquid cash – one of the most important resources in your startup. You can earn as much as possible, if you have no cash left over in the middle of the year (due to investments or because your customers haven’t paid already) it can be very, very difficult to get new money in a short period of time. And even if you find an opportunity to borrow you some, you often have to pay a lot of interests on it.
So do your finances, make your planning and never run out of company’s lifeblood 😉

General lessons from coding

Now that I digged a little bit deeper into the topic of coding (especially Android applications and so Java of necessity), I recognized some fascinating things you learn from programming in general. A few habits you automatically integrate in all your working activities after you started writing code and which help you quite a lot to get all of your work done faster, easier and more efficiently.

I’ve tried to put that in words both to remember all of the coders among us that coding gives you more than you might think and also to take all non-techies on a journey about six things many techies set focus on and which may also be helpful for you:

1. Get a clear structure in everything you do
At least since you’ve written your tenth Java file and your third new XML file for your screen layout or took a second look on your fully unstructured Java code months later, you start to set great value upon clarity of your programs. Can anybody including you understand what you scripted weeks before? Did you put in enough notes to make sure that your code is self-explainable?
In general terms that means: Always reflect in the perspective of your opposite whether your explanations and phrases are logic and simple out of his or her view. Also imagine you’re reading your texts and mails a few weeks later. Will you get what it all was about through reading them? Consider all the important aspects of your project and if they’re just too many, mind-map it and break it down into smaller pieces.

Concrete tips:

  • For all the iPhone/iPad users: GoTasks or might help you track all of your tasks and also look after the checked ones. Simple and effective, to get a structure in your daily routine
  • Try to focus and expand your knowledge in these four areas: Finances, Appearance, Nutrition/Sports, and Relationships – Spend 20 min. at least on each of these subjects every day. These topics should be a main part of your daily routine
  • Plan your day in the morning: Do the most important things before midday and get up early! It won’t bring you anything to watch Youtube videos or TV from 11 pm to midnight. Better go to bed and start a power morning next day

2. Same input won’t change your output
Many people expect new results even though there always giving the same input. Coding shows you pretty hard, but effectively, that there won’t be any new outcome as long as you put the same code in. You have to change something.
Nearly the same in your daily life. When you reach boundaries, you have to go new ways, try a different strategy. You don’t get gains while doing workouts day by day? Try a new routine, new set combination. You get a minus on your bank account month by month? New way: Analyze your spending and cut down everything you don’t need essentially (Clubbing, Streaming abos, eating in restaurants,…)
Most people already know that strategy from their own electronical devices. They know that you can’t type in the same searching words and expect a new search result.
But they don’t transfer this on for example their relationships. In an argue they show the same behavior every time and wonder about why their partners always react the same way.
If you want a different reaction, other results, you have to change your input.

Concrete tips:

  • For every area in your life you feel like don’t getting forward, like you reached a imaginary border: Change your input, extend your ingredients
  • Turn your way of expression: Formulate positive! Your mind overhears the word “not”. So say “I will win!” instead of “I won’t lose!” as an example

3. Be a hustler
“It’ll be okay”, “Let’s see what time will bring”, “Life is rugged”….Yeah! Life is rugged. But just sitting there and saying that won’t change anything. Sure there will be situations where you give all your best and you’ll still fail. But without hustling you don’t even have the chance to win. Especially in programming your code won’t do anything new without inserting fresh lines (despite it is a self-learning algorithm).

It’s the same with all your actions. You only ascend when you put hard work into it. Even if you start with nothing, you’ll improve with every hour of putting yourself into.

Concrete tips:

  • Write down your long-term goals with priority and force yourself to spend at least half an hour a day for your most important goal
  • Do only one thing at a moment. Use tools like to support you with that

4. Knowledge community
You just can’t know anything – Make sure you regularly meet with people who can push you forward with their know-how and experience.
In coding, there is one essential site I think every programmer visits from time to time – But also for other issues there are expert forums, websites and conferences. Make sure to regularly check out which events are worth visiting.
Be open-minded and share your experiences in a good mood – this will leave a mark and give you the opportunity to connect with new people.

Concrete tips:

  • Remind yourself to always ask people you just met how you can stay in touch. Add them in social networks immediately after meeting to make sure that you don’t lose contact. You both never know when it could be helpful to know each other. Thank them for the awesome time you had together by shooting them a short message.
  • Check out “know-how hot-spots” for your current projects (that could be anything from networking events to university classes and online courses) and make contact to the gurus in the field

5. Adapt to environmental changes
If android brings out a new version, also the application developers have to bring out updates for their apps sooner or later, because otherwise apps from competing publishers will be preferred by your customers.
Same thing in the real world: You don’t spend time on developing yourself and progressing? There’s always a better one for your job. That sounds hard, but it’s not as terrific as you might think now. In our world it’s quite normal that you have to adjust to changes. Technology, infrastructure, job. You’re forced to do it every day. And most of the times you don’t feel like you’re forced to. It’s subconscious. So why don’t adapt on a conscious level too?

Concrete tips:

  • Get in touch with at least 1-2 technologies each month (visit a fab lab and try out a 3D printer, test drive an electric car,…)
  • Accustom yourself to a completely new hobbie like playing the guitar, bouldering, volleyball, coding, painting, writing a blog) every half a year and try it out for a few times. It will definitely extend your horizon!

6. It is ok to fail
Don’t get me wrong! I do not mean that you should fail often. That’s not very good for your career. I just say that you shouldn’t worry to long about failing and you absolutely shouldn’t let yourself keep off of something you want to do. With coding you learn that it’s ok to fail and while programming it’s quite normal to fail from every half an hour. Failure tells you that you’ve done something and that is good. The only thing that you should completely avoid, is to make the same mistake twice. Learn from your faults and move on.
That applies to nearly everything in life. In real-life failure often puts you in kind of a paralysis. You simply cannot react and you’re waiting for the perfect strategy to come over you. But life isn’t about perfect plans. It’s about finding a suitable solution and starting. Many situations will push you down, whether in business or private setting. But in the end life’s not a sprint, it’s a marathon. Acceleration, speed, but first of all perseverance. How hard you can get hit and still move on.


  • After new/interesting situations or when finishing a project, Write down your lessons learned. Keep kind of a LessonsLearned-Journal
  • Smile about failure: Don’t worry, if you fail. Work on the things which you can change and accept all the other ones as experiences on your way to success
  • After you’ve failed at something, move on immediately to learn that it’s bad, but you can overcome it