S1 EP21 | Electra Coutsoftides and Alexander Hall - XWorks
S1 EP21 | Electra Coutsoftides and Alexander Hall - XWorks
Key Learnings from Episode 21: Building, Rebuilding and Staying the Course with Electra Coutsoftides and Alexander Hall, XWorks
In Episode 21 of Beyond the Raise, Alex speaks with XWorks co-founders Electra Coutsoftides and Alexander Hall about building a business through changing markets, multiple iterations and six years of learning. From recognising the real problem beneath their original product to rebuilding with AI and operating with a much leaner team, they explore why resilience, conviction and the willingness to change almost everything can be essential when building an early-stage company.
Moving from ‘Tell Me’ to ‘Prove It’
XWorks is built around a shift Electra describes as moving from ‘tell me’ to ‘prove it’.
Historically, companies have been able to report information through forms, certificates and self-declared figures. Increasingly, particularly as the European regulatory landscape changes, businesses need to demonstrate the evidence behind those claims.
That becomes difficult across global supply chains because information exists across different organisations, systems and formats. It can include PDFs, handwritten documents, transport records, certifications, commercial records and even WhatsApp messages.
Most existing systems are designed to collect that information. XWorks is focused on establishing whether it can actually be trusted.
Key Takeaways
Supply chain reporting is moving towards greater demands for evidence and verification.
Information is fragmented across different companies, systems, languages and formats.
Collecting data is different from establishing whether that data can be trusted.
XWorks is building verification infrastructure designed to address that gap.
Sometimes the Real Product Takes Years to Reveal Itself
XWorks began with a thesis in 2020: data emerging from the waste and recycling industry was going to become increasingly valuable.
The first version of the business focused on creating transparency in waste and recycling markets. As the team moved deeper into traceability and digital passports, however, another problem repeatedly appeared.
Before higher-level tools could provide value, customers needed the underlying evidence to be checked, reconciled and proven.
Eventually, Electra and Alexander realised this was not simply an implementation challenge surrounding their product. It was the product.
That led to what Electra describes as the third build of XWorks: a verification layer focused on establishing the trusted information underneath transactions and supply chains.
Key Takeaways
XWorks has evolved through several iterations since its original 2020 thesis.
Repeated customer problems helped reveal where the real value sat.
Verification became more fundamental than the higher-level tools built around the data.
Sometimes the recurring problem surrounding a product is actually the product itself.
Rebuilding Does Not Necessarily Mean Starting Again
Changing direction after years of work can feel like throwing everything away.
Electra does not see XWorks’ journey that way.
The code, interface and vocabulary have changed, but the underlying commercial thesis has remained remarkably consistent. The team has continued to believe that industry data would become valuable and that businesses would eventually need a better way to establish the truth behind it.
The previous six years therefore represent accumulated knowledge rather than wasted effort.
The founders describe carrying the ‘scar tissue’ of those years with them, but that experience has helped them understand what the business ultimately needed to become.
Key Takeaways
A major product rebuild does not necessarily mean returning to zero.
XWorks’ underlying commercial thesis survived even as the product changed.
Previous iterations generated knowledge that informed the current verification platform.
Experience from unsuccessful or incomplete approaches can become an advantage in the next version.
When You Are Early, Survival Creates Optionality
There were points during the XWorks journey when Electra and Alexander considered whether they should continue.
One piece of advice stayed with them: if you are early, your job is to survive long enough for the market to arrive.
The founders believed the underlying problem was not disappearing. If anything, it was becoming more visible, even though the urgency and commercial demand had not yet caught up.
That distinction helped them maintain conviction.
Their challenge was not simply to keep building regardless of what the market said. It was to survive long enough to continue learning whether the problem they believed in would become commercially important.
Key Takeaways
Being early can require a different mindset from being wrong.
Survival gives a startup more time to understand what the business needs to become.
The persistence of the underlying problem helped XWorks maintain conviction.
Staying alive creates options that disappear if a business runs out of time or capital.
A Changing Funding Market Forced Greater Discipline
XWorks joined Techstars at a point when venture capital was widely available to technology startups.
The accepted model encouraged founders to build teams ahead of the next funding milestone, grow quickly and use that progress to raise the next round.
Then the capital environment changed.
Suddenly, assumptions that had shaped the startup market no longer held. XWorks had built a team for a funding environment that was disappearing and had to confront what the business genuinely needed in order to survive.
That meant making difficult decisions, including reducing the team.
Both founders are candid about how painful that experience was. People had trusted them, invested their time in the vision and helped build the company, only for the business to reach a point where it could no longer sustain the same structure.
Key Takeaways
XWorks scaled its team during a very different venture capital environment.
When funding conditions changed, the business had to reassess what it could sustainably support.
Reducing headcount was one of the most difficult parts of the founders’ journey.
External market changes can expose assumptions that previously appeared fundamental to startup growth.
More People Do Not Automatically Mean More Progress
One of the biggest assumptions XWorks has changed is the idea that growth means increasing headcount.
Alexander describes how building departments and hiring senior roles was once treated as evidence of progress, particularly in conversations with investors.
The founders now think differently.
Instead of asking how many people the business should employ, they ask what capabilities genuinely need to exist.
AI has reinforced that approach. XWorks can remain extremely lean while bringing in specialist human expertise where it creates the most value.
In retrospect, not raising significant funding earlier may have helped. The company was forced to stay agile rather than building an expensive organisational structure that would later become difficult to change.
Key Takeaways
Headcount is not necessarily a useful measure of progress.
XWorks now thinks in terms of required capabilities rather than required departments.
Staying lean forced the founders to make more deliberate product and business decisions.
AI makes it increasingly possible for small teams to achieve work that previously required much larger organisations.
AI Allowed Electra to Build What She Had Already Designed
AI has had a particularly significant impact on how XWorks has built its latest platform.
Electra had spent several years developing the logic and structure of the verification engine on paper, informed by the company’s previous work, regulatory knowledge and an earlier pilot.
She had also repeatedly wished she could build more of the technology herself.
As AI coding tools improved, that became increasingly possible.
Using Claude and ChatGPT, Electra was able to turn much of that accumulated thinking into the latest version of the platform before bringing in experienced external engineers to review and validate the work.
Their assessment gave the founders confidence that much of the difficult underlying work had been successfully built.
Key Takeaways
Electra had spent years developing the thinking behind XWorks before using AI to build it.
AI allowed domain expertise to translate into working software more directly.
External senior engineers were still used to review and validate the platform.
The technology accelerated execution, but it depended on years of accumulated knowledge about the problem.
AI Can Execute, but It Should Not Always Decide
Despite using AI extensively, Electra is clear about where she believes its limitations lie.
AI can be extremely effective at reading, extracting information and accelerating execution, but it can also drift when it is not given clear boundaries.
That matters particularly in a regulatory environment.
XWorks has therefore chosen to use deterministic rules for decision-making while using AI to accelerate appropriate parts of the process.
The distinction is important: AI can help process and understand large amounts of information, but the system should not independently decide whether something satisfies a regulatory requirement.
For Electra, building with AI herself helped reinforce the importance of those guardrails.
Key Takeaways
AI is highly effective at execution when it is given appropriate boundaries.
Drift becomes particularly important when technology is operating in regulated environments.
XWorks uses AI to accelerate processes rather than make regulatory decisions.
Deterministic rules provide a more controlled foundation for decisions that need to be defensible.
AI Could Change What an Early-Stage Team Looks Like
The founders believe AI will fundamentally change the structure of early-stage companies.
Rather than immediately building large functional departments, Alexander expects more startups to begin with smaller founding teams supported by AI and specialist external expertise.
Domain knowledge and commercial ability may therefore become even more important.
Founders still need engineers and other specialists, but they may be able to hire them later because more can be achieved before those teams are built.
The change also creates longer-term questions. If fewer junior engineers enter the industry because AI is performing more entry-level work, the traditional pathway towards becoming a senior engineer could become more difficult.
For now, however, XWorks sees the ability to operate leanly as a significant advantage.
Key Takeaways
AI could allow startups to remain smaller for longer.
Domain expertise, commercial capability and the ability to orchestrate AI may become increasingly valuable.
Specialist human expertise will still be required, but potentially at different stages of growth.
Reduced demand for junior roles could create longer-term talent challenges for some industries.
The Market Finally Developed the Urgency XWorks Needed
XWorks does not view its early years as evidence that the original problem was wrong.
Instead, Electra believes the direction was right but the urgency was missing.
Traceability could previously be treated as something useful to have. Increasingly, being unable to prove provenance, material composition, emissions, chain of custody or supplier information can delay procurement or prevent businesses from accessing markets.
That changes the commercial conversation.
Regulatory developments have created consequences around evidence and verification that were not as immediate when XWorks began.
The founders therefore believe the years spent developing their understanding were necessary to be ready when that urgency arrived.
Key Takeaways
XWorks believes the problem existed before the market felt sufficient urgency to solve it.
Regulation is increasing the commercial importance of verified supply chain information.
Failure to provide evidence can now affect procurement and market access.
Being early in the market gave XWorks time to develop the knowledge behind its current platform.
Conviction Comes from Loving the Problem, Not the Product
Electra describes one principle as particularly important to maintaining conviction: fall in love with the problem, not the solution.
XWorks has changed its product repeatedly because the founders were not committed to preserving a particular interface, technology or implementation.
Their conviction was attached to the underlying problem.
That made it easier to discard parts of the business that no longer fitted while continuing to pursue the original thesis.
For Electra, this distinction is critical for founders. If conviction becomes attached to what the product currently looks like, changing direction can feel like failure. If it is attached to solving the problem, rebuilding can instead represent progress.
Key Takeaways
XWorks’ conviction has remained attached to the problem rather than a specific product.
Product iterations can change dramatically while the underlying mission stays consistent.
Founders need to distinguish persistence from attachment to a particular solution.
Understanding the invariant problem makes it easier to change everything around it.
Co-Founders Do Not Need the Same Strengths
Six years of building together have also shaped how Electra and Alexander think about co-founder relationships.
They share belief and drive, but their strengths are different.
Electra describes herself as more technical and focused on the architecture and vision, while Alexander brings a stronger commercial perspective.
That difference creates what they describe as a healthy tension.
A solution has to survive both filters. It needs to make technical and structural sense, but it also needs to be understandable and commercially attractive to the customer.
The founders do disagree, sometimes strongly, but they see value in listening to the other perspective and allowing that tension to improve the eventual decision.
Key Takeaways
Co-founders benefit from complementary strengths rather than identical skill sets.
Electra brings a technical and architectural perspective while Alexander focuses more heavily on the commercial side.
Disagreement can improve decisions when there is mutual respect underneath it.
The strongest solutions need to work technically and make sense to the customer.
A Failed Funding Round Is Not a Failed Company
For founders facing a missed funding round or discovering that a product is not working, Electra recommends separating the event from the underlying problem.
A failed funding round does not mean the company has failed. A wrong product does not necessarily mean the problem is wrong.
The more useful question is what the experience revealed.
What does the founder know now that they did not know 12 months earlier? What did the failed deal, product or process expose? And how should that change the next decision?
For XWorks, the last six years have involved repeatedly asking those questions and feeding the answers back into the business.
Key Takeaways
A failed funding round and a failed company are not the same thing.
The wrong product does not automatically mean the underlying problem is wrong.
Setbacks become more valuable when founders identify what they have learnt from them.
The next decision should be informed by new evidence rather than simply reacting to the disappointment.
Starting Again Can Put You Further Ahead
One of Electra’s biggest changes in perspective is how she thinks about starting again.
Six years ago, discarding a product and rebuilding might have felt like failure.
Today, she sees the accumulated knowledge behind that decision as progress.
The current XWorks platform exists because of the previous versions, customer conversations, regulatory learning and mistakes that came before it.
That makes the business further ahead than it would have been without those iterations, even though the product itself has changed substantially.
The founders are now more willing to discard anything that no longer serves the underlying problem.
Key Takeaways
Rebuilding can represent progress rather than failure.
Previous versions of XWorks created the knowledge behind the current platform.
Founders can become constrained by how they think a product is supposed to look.
Protecting the core problem while changing the solution creates greater freedom to adapt.
Looking Ahead
For XWorks, the opportunity now lies in applying six years of learning to a market where verification is becoming increasingly important.
The regulatory landscape is changing, buyer urgency is increasing and AI has made it possible for the founders to build with a much leaner structure than might once have been required.
Their approach is therefore very different from the startup model they encountered earlier in the journey.
Rather than measuring progress through headcount or appearances, the focus is on building the capabilities required to solve the verification problem and bringing in specialist expertise where it genuinely adds value.
The product may have changed several times, but the thesis underneath it has remained remarkably consistent: trusted data will matter, and businesses will increasingly need to prove what actually happened across their supply chains.
Final Thought
Asked to distil six years of building into a handful of lessons, Electra and Alexander return repeatedly to the same themes: survival, adaptability and knowing what not to change.
Hiring ahead of certainty was one of their biggest mistakes. Assuming more people would automatically create faster progress was another.
Their experience has instead taught them to protect what Alexander calls the invariant: the underlying problem. Almost everything else can change.
It also means recognising the difference between being early and being wrong. Being early is not an excuse to ignore evidence that an idea does not work, but a market that is not ready today does not necessarily invalidate the problem.
Perhaps most importantly, founders do not need to look successful while they work it out.
Awards, headcount and visible activity can all create the appearance of momentum. XWorks’ experience suggests that the more important work may be much less visible: staying alive, learning from what goes wrong and continuing to refine the business until the market and the solution finally meet.