My Biggest Mistake: Martin Karafilis, CEO of Fishburners
Martin Karafilis is the CEO of startup hub Fishburners. He has a long career and pedigree in the space, but it took a mistake from his first startup to help get him here.
At the end of 2022, Martin Karafilis was named the new CEO of Fishburners. A founder, investor, and advisor in the Australian startup space, he is well-versed in the local ecosystem and where it’s come from in order to help drive it into the future.
Before Fishburners, Karafilis was the founder and COO of Tiliter, a Sydney-based tech company with a focus on AI. He is also an Investor and Partner and KOA Ventures and is involved in Airtree’s Explorer program.
But despite his Aussie startup pedigree, Karafilis had to cut his teeth somewhere. And it was his first startup idea — an audio equipment hire service — that taught him an important lesson when it came to the love of the problem.
The mistake
Karafilis was in love with music. A musician with instruments and equipment to spare wanted to be more involved in the industry.
He noticed a gap in the market when it came to equipment. Some bands, especially up and comers, couldn’t always afford expensive instruments and gear for the studio or touring.
He figured he could fill that gap with an audio equipment hire business, which is a great idea in theory.
Spending my formative years in a Wollongong share house that was at the centre of the local indie scene, I can confirm just how poor musos can be.
But the problem wasn’t as simple as offering equipment.
“It’s quite easy to say ‘let’s make this marketplace and let’s whip this up,’” Martin says.
“What was happening is a lot of the features or things that you’d be building didn’t quite meet the problems’ needs.”
The context
But as Karafilis points out, there’s a difference between identifying a surface problem and the actual nitty gritty and underlying needs of your customer base.
“I was more interested in music itself than the actual operations behind it and learning more about the recording and touring scene,” Karafilis said.
Karafilis admits that he didn’t discover what people’s real pain points were in this space.
“I think what I started to realise as I went along the way was that I probably wasn’t fixing the problem in a manner that created value for the customer.”
“When you fall in love with a problem, you really understand it like the back of your hand.”
The impact
The impact on the business was a simple one — lack of growth.
“There are so many metaphors around this. Say you’re a really good key maker…you’re making a key and then you’re trying to fit it into thousands of locks rather than saying ‘I’ve got a lock and now I need to make a key to fit,” Karafilis said.
“It was hard to understand why we weren’t acquiring more customers. Why weren’t we growing? Why weren’t we going through that growth phase?
“Upon reflection, I was also seeing that on a personal level, my mind, my time, and my energy was starting to go a little bit elsewhere and become distracted.”
The fix
For Karafilis, the fix, in this case, was having the guts to call time and walk away from something that wasn’t working.
“It was probably lucky that I didn’t get too far down the line. I think you can get into a lot of trouble,” Karafilis said.
For me, there was a realisation that I wasn’t in love with that problem.”
Karafilis notes that these are the kinds of things you find out when things are tough in a business, that’s when you have to face the reality of what you’re doing and if you want to do it for the next 10 years.
“What I actually did was take those learnings and start another startup.”
The lesson
Karafilis says that falling in love with the problem first is a lesson he’s taken into subsequent startups and his career in general.
“Something I learned from that process was to really define the problem first and foremost… test the solution and then use a decision framework to actually fall in love with the solution thereafter,” Karafilis said.
“I was really more excited about building a business and the solution itself rather than actually focusing on the problem and saying: ‘Am I in love with what this problem and am I absolutely passionate about fixing this?’”
“I‘m so glad that I got to experience that so early on. It really gave me the tools and ability and knowledge to go and fix that up for the next time around.”
