Startups

Angel investment from this rookie’s perspective

Beautiful carved wooden angel - photo by Wolfgang Moroder

Beautiful carved wooden angel – photo by Wolfgang Moroder

“I saw the angel in the marble and carved until I set him free” – Michelangelo

Last month I made my first angel investment. I know many of my blog readers are entrepreneurs and startups and some of you are or will be seeking angel investment, so I thought it might be useful/interesting for me to jot down (from a poacher turned gamekeeper type of perspective) for you a few of the choices I’ve made along my own personal investment journey and why – in case it helps you.

To set the scene I’ll start with why I’m doing a small number of early stage angel investments in the first place and what my criteria have been. My main objective was to eventually select a handful (my final number is three) of early stage startups where I liked the idea but more importantly liked the founder or startup team. My motivation is to use some of what I’ve learned starting and scaling my own businesses in the past to help a small number of other people get through their early growth stages less painfully than it was for me. If I make any money along the way, I’ll celebrate that as a bonus. Making money is not my primary objective – which is lucky because many of the wise heads I know have gleefully warned me (a few of them several times over) that it’s impossible to make money by investing in early stage startups.

A couple of other bits of info make up the full picture. Although I’m a member of a couple of formal angel networks, I haven’t invested through them or as a part of any of their syndicates. So far anyway.

Finally, the startups had to be somewhere on the spectrum of my own areas of interest so that I can add value. This inevitably means software, X as a service or platform, community, scaleable, public sector, always something to do with people and how they can save time or money by collaborating, learning from each other or working together.

I’ve been talking to startups for years. It’s a natural part of what all entrepreneurs do. For me the night out that will always trump all others is one where I can watch other startup entrepreneurs pitching. I just love that initial rush of thoughts about another person’s ideas – working out the angles on the business models and the commercials…seeing if I can spot some opportunities that they’ve overlooked. As an aside, I love it even more if it’s something I’ve considered doing myself in the past but haven’t been able to work out the commercials or the logistics and then someone else manages to do that (for example, Northern Irish startup Send My Bag).

As a seasoned and successfully exited entrepreneur, people seek me out anyway for all sorts of reasons. Because of this it was fairly easy for me to start about a year or so ago to assemble a long list of 20 or so potential investee companies and kick off an initial conversation with the founders as a way to start my selection process.

This is what I was considering:

• Do I like the product or product idea and am I convinced it can scale?
• Would I buy it myself for my own (theoretical) organisation to use?
• Is the founder credible, articulate, stable and sensible but with a dollop of sparkle?
• Do I like them enough?
• Can I see myself working with them over the next 3-5 years?
• Are they resilient enough to keep things moving forward when times get tough and do they have the grit to sack bad hires quickly and stand up and fight for themselves and their company when they need to?
• Are they well-informed about their competitors and the way the market is moving?
• Can the founder front the business; are they likeable and convincing without being arrogant and smartass?
• Is their company valuation reasonable and realistic?
• Do they have a good overall grasp of what their next 2 years looks like in terms of back of the envelope targets, resource requirements, funding, effort needed, team, etc?
• Is the founder generally on top of their workload and easily able to articulate key messages and information?
• Are their targets and forecasts reasonable or complete pie in the sky?
• Can I clearly see how I can add value to both the founder and the company?

It took me a while to put the above list together as I’ve never written it down before. In case you’re wondering – yes – it is more or less in order of importance to me. I did say this blog was going to be about my own personal investment journey…

Only companies that passed the first 2 questions made it onto my long list of 20 companies in the first place and then between June and December last year I whittled those original 20 down to 3. I guess where it gets interesting is how I did that. I’m afraid it isn’t scientific for anyone who’s expecting a checklist and a spreadsheet.

A few fell at the valuation hurdle. If all you have is an idea and you don’t have any product built or any customers, your company in my eyes is not worth £1m. Simple as.

A few others fell by the wayside because of the founder. The trick here is to keep meeting with them until you’re either convinced that they’re the real deal or until they let their guard down and expose themselves to be anxious, needy, deluded, arrogant, ego-driven, greedy, selfish, brattish, indecisive or any of the many qualities you as an investor don’t want to see in a startup CEO or leader.

Some over time I just had a bad feeling about, or something told me that the founder wasn’t 100% honest – I could just feel it wasn’t good when I scratched the surface.

Others I lost because a few months in the product was no longer holding up or it became apparent that the founder wasn’t able to move at the pace required to get to market within their window of opportunity.

A couple went because the founder had more than one focus and it became apparent that they were spread too thin and weren’t giving any of their projects the attention they deserved.  A couple more because the founder knew it all and wouldn’t listen to any advice from me or from anyone else.

And so I was left with three – which was the number I was hoping for in the first place. Two of “my” founders are female and one is male. They all share a number of important qualities and despite their differences they’re remarkably similar.

This blog is part of a short series and I’ll write about the companies themselves next time around.

If you have any questions please ask them in the comments section below and I’ll do my best to answer.

Startup recruitment – reject show-offs, clowns and mavericks …

Bryan Keating - possibly the world's best Chairman

Bryan Keating – possibly the world’s best Chairman

From the warmth of my temporary California base this week I noticed with interest that successful scaleup Futuregov is advertising publicly for an Executive Chair. Why with interest? Well really it’s because these types of appointments are so rarely advertised in a scaleup or SME.

This got me thinking about small business recruitment in general and what a dark art it is. Staying with the Exec Chair campaign for a moment, I can understand fully why Carrie & Dom are going down this route – it widens the selection pool beyond their own (extensive) networks and it’s a more transparent, open and fair process. But will it get them the right or best candidate? I’m not sure. Inevitably, processes that open some doors also close others.

In my world, the more usual way to bring someone into your small business as Chairman or a NED is to go out to your network and then make direct approaches to people, or a person, that you think may be suitable. A number of conversations take place behind closed doors and the “target” individual will make a decision based on any combination of the following and more – do they like your business, do they like you, how much else have they got going on right now, does your opportunity complement or conflict with their other current activities, can they see clearly how they will add value, what are you offering them, how’s it going to look on their own cv, are your exit aspirations linked to their available forward timescales, etc

Many of the sorts of people that I might approach if I was seeking an Executive Chair would never participate in a public recruitment process. They wouldn’t wish to be open and transparent in their dealings or intentions and they simply wouldn’t compete in a public way with others – definitely not. So well done Dom & Carrie for being brave enough to run a process that rules those people out and good luck with finding the right person.

There’s a wider issue here and one that I’d never really thought about much – despite having spent an awful lot of my own time during the past 10 years actively recruiting people into my own teams. At a dinner in Dublin last year I found myself sitting next to the head of a very, very large software company’s 2,000 person development team. We chatted away and inevitably the conversation turned to how difficult it is for a small business to recruit decent tech talent. My dinner companion at this point happened to say to me that he has a rule whereby he never recruits people via recruitment agencies or headhunters. Never. No exceptions. His reason for this was simple and straightforward. He believes that only second rate candidates use their services. He recruits only via his company’s new graduate programme and he sometimes interviews people recommended by others in his network or team. His further rationale when I challenged him a little on this was that he may occasionally miss a good person in this way, but the amount of time he saves by not bothering with or interviewing “bad” candidates was considerable and the trade-off was worth it. It also saved him from the nuisance factor that recruiters & headhunters introduce into your business – once they’ve placed a candidate with you they continue dialogue with your employee so that they don’t miss an opportunity later to make more commission when they can persuade that person to move again.

Later on I thought about my own career path and realised that I’ve only ever formally applied for two out of the numerous jobs I’ve had in my working life – once as a new graduate (I got my first job by applying via an advert placed in the Guardian) and again when I was moving to a new country (Northern Ireland in 2000) and didn’t have an existing network. Everything else I’ve ever done has come to me through my network.

Recruiting the right people into your team is the hardest job of any startup or scaleup CEO. I don’t care what any recruiter or HR person says about this, recruitment into your team is a nightmare and often it’s completely random as to whether or not the appointment you make turns out to be a success. Drawing up endless criteria and scoring lists of candidates against them? For the most part a complete waste of time and energy and it turns the process into something akin to the very worst excesses of procurement. Recently I’ve heard of a couple of people in my own network who’ve been encouraged to apply for vacant posts by the Chief Executives of those organisations. Both have gone on to apply & attend interview and both were unsuccessful. What’s that all about? Were they being used as stalking horses by unscrupulous Chief Execs wanting to make up their interview numbers or was it that the panel had a scoresheet that had to be adhered to on the day and therefore the Chief Exec was over-ruled or outvoted and their preferred candidate ousted by someone who happened to interview better on the day. (Rookie startup CEOs – this is something else to definitely watch out for – the professional interview performers – great at interview but by the end of Week 1, you realise with a sinking heart what a dreadful mistake you’ve made.)

Instead, satisfy yourself in the first 5 minutes that the candidate really wants to work in your organisation for the right reasons and has a clear view of where and how they can add value. Also, reject all show-offs, clowns and mavericks, no matter how interesting or compelling they seem. Believe me – all they will bring to you is a huge time sink and disharmony in your team.

For me, this is an interesting topic because despite having built world class startup teams several times over on a shoestring, recruitment is something I’ve struggled with over the years. I’ll readily admit that some of the worst and most personally painful mistakes I’ve ever made in business have been recruitment related.

Interested to hear your views, hints and tips for others on small business recruitment so please do share in the comments section below. The photo above is of Bryan Keating, the best Chairman I’ve ever worked with or for. Although having said that I’ve always loved the story about how the founders of the Innocent drinks company used to employ a 50p piece in the early days that they referred to as “The Chairman”. They flipped it for a simple heads or tails decision when required. I don’t know if the story’s true or not but certainly food for thought Dom & Carrie?

Going the extra mile…or why the little things in life really do matter

Extra Mile - Palm Springs style!

Extra Mile – Palm Springs style!

Do you remember this poem from your schooldays?

For want of a nail the shoe was lost,
for want of a shoe the horse was lost,
for want of a horse the knight was lost,
for want of a knight the battle was lost,
for want of a battle the kingdom was lost.
So a kingdom was lost—all for want of a nail.

I was fascinated by this story as a child and it’s a theme I often return to when I think about startups or small businesses. As an aside, the idea of a small issue leading on to something much bigger lends itself to many aspects of life outside business too – but more about that later.

In my mind, there are two ways that smart small businesses elevate themselves above basic bog-standard delivery and every new business struggles with either or both. Those organisations that can get these two things right effortlessly, consistently & with grace are the ones most likely to succeed.

The first part is about making sure that nothing important gets dropped. I know there’s a saying in startup land – “if the wheels don’t come off, you aren’t going fast enough”. Ignore this sort of silly “bro” culture nonsense when you’re starting your business – startup chaos is never fun from a customer perspective. If you can get efficient delivery right with some consistency in the early days as you expand beyond your founder team and early doors customers then you have a chance. It’s always very difficult to instil your founding team’s customer service ethic into your employee team. Fact. You can devise methods of measuring and monitoring customer service standards until the cows come home, but in my view the better way to tackle this when you’re starting out & beginning to expand and grow your team, is to focus on bringing the right people on board in the first place. People who already share your values and have the right mindset.

It’s ok to make a rare exception (maybe someone completely new to the workplace?) but really take care with your early recruits as those first team members are the foundation on which you’ll build out the next layer as you expand and then the layers after that. Never, ever employ someone who in the first 5 minutes of a job interview can’t articulate to you why they really want to work in your business and what specific value they will bring to you. That “better a hole than an xxxhole” statement is very true and one that I wish I’d paid attention to a bit more closely myself on several occasions – because you do really know in your gut whether or not someone is right to bring into your team. It’s all about creating the right sort of culture in that first wave of team members. If you get this wrong you are lost. In the course of my career, the most difficult customer issues I’ve ever had to resolve have been minor situations made worse by lack of communication or people in my own team lying to customers in order to cover their backs.

Also – everyone screws up from time to time. This is ok. The important thing is to learn as a team from mistakes made and to fix things for your customer as quickly and painlessly as possible for them. If you get this bit right, you could find yourself in an even better position with your customer because they’ve seen how you behaved in a time of adversity and they will admire you more if you’ve been honest.

The second part of this blog is more fun – once you’ve figured it out. What does “going the extra mile” actually look like in your particular business? I once heard Doug Richard say “any conversation with a customer is too short” – and he’s absolutely right. Without knowing why your customers buy from you instead of anyone else and which bit of what you provide they value most it’s pointless trying to go any extra miles as you could be wasting your time providing them with something that doesn’t really delight them and may even annoy them. U2’s music for example!

Everyone knows that startups have to over deliver. It’s one of the ways to get your first few precious customers – the ones that will hopefully go on to become ambassadors for you. Subsequently, stories about delivering customer delight and the resulting karma are legendary in entrepreneur circles. Hearing these tales from other entrepreneurs is one of my favourite pastimes and in my anecdote kitbag I have countless stories of huge contracts won on the back of a small act of kindness delivered at some point in the past. One is about a sales guy getting home at night & receiving a call from a school he’d just delivered some computer kit to that day. The teacher called him because he was delivering a presentation the next day & the printer cable he needed was missing. The sales guy didn’t complain, quibble or argue – he simply grabbed a cable from the office, turned the car around & drove the 70 miles back up the road to take it to the teacher with good grace. Years passed and the small computer company had pivoted & grown into something much bigger and different. The teacher changed jobs too and when he was looking for a supplier to provide an airport security system, he went back to that same sales guy.

My own favourite is a Learning Pool story. Sam Barbee & I went to a large and remote unitary local authority to deliver a lengthy sales presentation to a big group of people in a most unsuitable room. It was one of those rooms used for computer training and many of the people were hidden from view behind computer screens. We didn’t know anyone in the group and introductions weren’t made. The council had recently become a unitary authority, swallowing up the district councils in the process. Many of those in the room had been through long drawn out rounds of local government restructuring and were feeling fragile and bruised. Sam & I soldiered on with the presentation. Suddenly a woman at the back got to her feet and announced that in her previous role she’d been a Learning Pool customer in one of the district councils. Without waiting for permission, she launched into a tale about how she’d been working one day as administrator on her Council’s learning environment and had got it into a bit of a muddle. Tired and fed up she went home. Next morning she came into work with a feeling of trepidation, knowing she had to undo yesterday’s mess. She switched her computer on and immediately realised that her Learning Pool account manager had noticed overnight that she’d got herself into a muddle and without waiting to be asked, had gone in & fixed it for her. She finished off by saying that in all her years of working in local government she had never worked with a more customer focused supplier than Learning Pool. It was incredible. Sam & I could have kissed her. The atmosphere in the room changed in a heartbeat and 6 months later, after jumping through all the usual procurement hoops, the contract was ours.

But where do you draw the line? And how do you know what your own extra mile is? This is the tricky bit. As a small company you have to find ways to delight your customers that don’t eat too heavily into your margin – but you can only do that if you know your margins on your various products and services and the dependencies between them. So – know your customers and know what they want from you, know your margins and be aware across your team of where you have a bit of space to give a bit more. Delivering the extra mile doesn’t have to cost you a lot of money but you do need to give this some thought. If you get it right, it will pay you back in spades and you’ll sleep easier at night. A good start is to make a vow never to nickel and dime your customers from Day 1 and to always extend the same high level of courtesy from everyone in your team to everyone you deal with – no matter who they are.

I’d like to hear any of your stories about instances of a small act of kindness in business paying back many fold so please do share in the comments section below.

On a personal note, I keep a loose mental tally on favours I’ve done in business for others and favours I’m owed. I can’t help it – it’s the accountant in me wanting to classify everything in life into debits and credits. Don’t worry – I haven’t started noting it down in a ledger yet. I try to keep it so that I’m in credit with everyone in terms of favours I’ve done for them. I’ve done this all my working life and it’s only ever led to good things happening for me – and it means that when I really need a favour or need someone to pull me out of a hole, there are usually lots of people I can ask.

Why are charities struggling to build and launch digital products?

NESTA audience

NESTA audience

This week I was privileged to keynote at the NESTA Impact Investment team’s Going Digital launch with NESTA’s Katie Mountain and Isabel Newman. Katie & Isabel asked me to speak because of my fairly unusual perspective – a tech entrepreneur who’s actually worked recently on a revenue generating digital project launched by an established charity. Earlier this year I was lucky to spend 4 happy months at vInspired, working with Sam Sparrow, Hannah Mitchell & Damien Austin-Walker getting awesome microworking platform Task Squad finessed and launched.

This blog covers the key elements of my NESTA talk without the personal anecdotes and side stories I included on the night. I should also just add a point of clarification here. This blog is about charities/CICs/social enterprises launching revenue generating digital products and services; it isn’t about making charity core business more digital. You won’t be surprised to hear that I have a view on that as well, but that’s for another day. It’s also not about my specific experiences at vInspired – it’s more generic observations across the whole sector. I’ve been a charity trustee myself for well over 10 years.

NESTA's Katie Mountain

NESTA’s Katie Mountain

At first glance, established charities appear to be ideal environments from which to launch digital products. They are crammed full of bright people with tons of good ideas, despite what they say they have more money to invest in product development than most startup businesses, they have a deep understanding of their target market and there’s lots of goodwill towards them, there’s existing infrastructure in the charity for the project to draw from (finance, office space, marketing & PR, etc) and they have easy access to politicians. So what’s making it so hard?

It’s unfamiliar territory…and there’s baggage

The best startups are said to be those that are “scratching an itch”. The entrepreneur sees a gap in the market and develops a product or service to SELL into that gap. The entrepreneur begs, borrows and steals seed funding and assembles a team focused on getting that product or service built and to market as quickly as possible. Money is frequently the key driver but money also qualifies early market interest in the product. Private sector success is often determined by getting to revenue in lightning speed & “owning” that niche before anyone else does. The founder or co-founders have probably had to put their houses up as collateral to raise the seed funding. The team eats, sleeps and breathes the project. Everyone’s under a lot of pressure. Often an unhealthy amount. Despite this, 80% of tech startups fail in their first 18 months according to Forbes (we’ll return to the 5 top reasons for failure at the end of the blog for anyone that’s interested). Charities simply do not work at this pace – but the private sector SMEs they’re competing against do. That’s a challenge.

The second part of this point is that the startup begins with a blank sheet of paper. For charities, many are creating digital projects to diversify away from dependence on government grants or to simply boost their income when other sources are drying up. This is a different type of driver. They are trying to do something that’s well outside their core business. They say that building a tech startup is like jumping off a cliff and assembling the plane on the way down. You need your team to be focused and on it. In charities, the digital project is often something people in the team are doing as an addition to their original day job. Working on projects part time is far from ideal and just doesn’t work. One of my conditions upon joining vInspired was that I would only undertake activities where I added value to the Task Squad project and did the things that other people in the team couldn’t do at that time. I stayed away from all-staff meetings, writing reports for trustees and so on.

The environment is risk averse…and no-one has any skin in the game

In my experience, many charity CEOs are very entrepreneurial. They’re also swamped with a million different things. Senior teams and trustees can be very risk averse. Back to that 80% failure thing – this is a high risk and uncomfortable place to be where you have to allocate money and time to something that probably won’t fly. Many charities are only engaging with this process because they are desperate to generate new income. Funders and sources of finance like NESTA, the Nominet Trust, the various social angel groups, will invest in certain projects but they expect to see the charity provide match funding, especially if it has reserves. This puts constant additional pressure on the startup project team as they are under non stop scrutiny and find themselves fielding questions from people in their own team unfamiliar with this territory and expecting to see results fast. For the people in that startup project, the “us” and “them” is very tricky. At least in a private sector startup you’re all working on the same project.

Mary McKenna

Mary McKenna

Too much investment can be a curse

In my view the best digital products start out on a shoestring budget. That way the team is more creative and it’s less of a big deal if the project fails.

A few people when they heard I was giving this talk lobbied me to say the issue for charities in building and launching digital products is lack of money and resources. I’m afraid I disagree. A large budget can lead to laziness, excessive outsourcing and maybe a “build it and they will come” product.

Back to the trustees. Often they meet infrequently but they’re the people who approve and sign things off. This doesn’t sit well with agile development, pivots and product iteration. All startup projects pivot. Getting the trustees into a place where they are comfortable with the risk involved and buy into the match funding element is definitely a challenge, but without it projects are not investor ready.

There’s a lot of meetings and governance

I understand the reasons why charities do this but it’s an additional overhead that other startups just don’t have to deal with. In an early stage private sector startup, decision making sits in the hands of one or two people. They have authority to do what they like. It’s their money. Decisions are made quickly and based upon imperfect data and information. Things move at pace. There are no reports to write, the list of KPIs or metrics monitored in the early days is short or non existent, there’s no-one else to keep in the loop, social impact isn’t measured. A charity tech project has to do all of these additional tasks on top of build and ship.

Pace is the single most frustrating aspect of working in a charity that I experienced. That and having to book meetings with people you can see across the room & who you just want to speak to for two minutes – because that’s how things are done. The structured environment slows everything down.

NESTA Panel - Isabel Newman, Mike Dixon, Kieron Kirkland, Emma Thomas and Shreenath Ragunathan

NESTA Panel – Isabel Newman, Mike Dixon, Kieron Kirkland, Emma Thomas and Shreenath Ragunathan

The team is any organisation’s most valuable asset

Charities have great people. Sam Sparrow who leads vInspired’s Task Squad project is one of the most impressive and talented people I’ve ever worked with in any business. There’s been a terrific drive to get a lot of charity team members onto and through accelerator programmes. What charities are bad at doing is allowing their newly trained intrapreneurs to be responsible and accountable and just to get on with things; especially with people that are considered to be “junior”. Structures are hierarchical where they need to be flatter and more matrix or project driven. In a tech startup, the most appropriate person is allowed to get on with what they’re good at within clear and agreed parameters. I’ve found that in charities, the decision making boundaries are sometimes unclear and this is one reason why the CEO and trustees end up as bottlenecks.

On top of this, there’s a Europe (world?) wide shortage of digital skills, developers and people with good commercial skills and there’s a great deal of competition to attract the best talent. Because these skills are in short supply, the people taking important decisions may not be properly equipped to do so – especially about digital. This results in poor commissioning and bad management of suppliers.

Here’s my presentation slides from the night:

I’ve probably just scratched the surface here and am very conscious that I’ve put forward an awful lot of challenges without many useful solutions. Fortunately, on the night there was an expert panel present (Kieron Kirkland of Nominet Trust, Mike Dixon of CAB, Emma Thomas of YouthNet and Shreenath Ragunathan of Google) all of whom were able to voice their own very practical advice on how the sector can improve in this space.

For anyone who’s wondering about the top 5 reasons startups fail – here they are:

  1. Lack of deep market knowledge – know your audience!
  2. Lack of USP or the ability to properly articulate it – market test your idea, work on your messaging and remember that some ideas are just bad ideas.
  3. Failure to communicate and lack of clarity
  4. Leadership issues – not so much for a charity – this one is more to do with flaky founders or personality clashes amongst co-founders that lead to the startup imploding
  5. The business model is wrong or underdeveloped – this one is KEY – spend as long as you need to getting your business model right

As always I am very much looking forward to your comments on this rather long blog. I hope we can have some useful and positive narrative about what we can all do to make this better because frankly, we really need to. If you have any questions for me about any of the above then please get in touch with me or post your questions up in the comments section for everyone to read and I’ll do my best to answer them.

The 5 hardest startup lessons I’ve had to learn

One of my highlights of this busy past week was chatting with the Public Service Launchpad cohort of entrepreneurs & intrapreneurs in London and sharing with them a few of the hard lessons I learned as we were building Learning Pool.  Even though I probably scared the life out of everyone with my stories a few people have asked me to blog this session so here we go.  I’ve organised my thoughts into my 5 key learns – I’m sure other entrepreneurs out there will have more of their own to add.

PSLaunchpad-2

Lucy Knight’s amazing sketchnote of my talk.

Relentless execution is required to the exclusion of all else.  The odds are stacked against you in a startup.  70% will fail and won’t make it to the end of the first 18 months.  You have to move your project forward every day.  This means no distractions or other side projects.  No social life and the bare minimum in terms of spending time with your family.  I can remember my mum saying to me that she saw less of me in those first 2 years at Learning Pool when I was 20 miles down the road than she did when I was previously working in London 500 miles away.  If you’re only prepared to work 60 hours a week in your startup you might as well forget it as you’re wasting your time and everyone else’s.  You have to deal with exhaustion and sometimes the sheer boredom of it as you spend a lot of time doing stuff you don’t enjoy.  You have to use every minute productively.  Make all your phone calls when you’re hanging around.  Use time on planes to write blogs and website content.  If you go away on holiday, expect to work every day – even if you have a co-founder and team.  There’s no off button.  You’ll work 364 days in those first few years (everyone’s entitled to take Christmas Day off!).  You’ll also constantly iterate and pivot based on customer feedback, make endless decisions (often with insufficient info), do your damnedest to hit deadlines, overdeliver and do rework for customers without being paid for it (suck it up) and you’ll always be selling and doing a load of other stuff you’ve never had to do and are probably uncomfortable with.  It’s quite common to hear startup entrepreneurs talk about all the stuff they’ve gradually shed to make more time in their working week and in extreme circumstances that will include sleep.  I was discussing this with Mark O’Neill of Government Digital Service this morning & we concluded that kickstarting an early stage startup is like throwing cats against a wall and hoping some of them will manage to scrabble up to the top – not that Mark or I would ever do such a thing.  Also the knowledge that others out there might have cats with sucker pads instead of paws…

Financing – should you take investment or bootstrap.  Sometimes this decision is dictated by your product.  You can’t launch a new drug or build a semiconductor company without investment.  If you take investment, expect to be bitterly disappointed by the early doors valuations you receive and brace yourself for the late night calls and crazy demands of your investors.  They’ll all spin you that line about owning a smaller slice of a bigger pie.  If you bootstrap, be prepared for the pressures that will bring.  Complete focus on getting to revenue, constant running of your numbers, daily cashflow forecasts, making the awkward phone calls when you can’t pay your suppliers.  Having to borrow from the bank and then compartmentalising that worry.  Being really honest with yourself or yourselves about where you are against your business plan.

3.     Learning properly how to sell and all the boring stuff you have to do in order to sell successfully – scanning for tenders, writing responses, following up for feedback when you don’t win them, iterating your pitch, implementing and using a CRM (I know at least one startup entrepreneur who used to fire people for not keeping the CRM up to date), getting ISO accredited, building a brand, having a proper sales deck and collateral, constantly refreshing your website content.  The discomfort of making yourself pitch if you’re not a natural salesperson and (if you’re sensible) learning to sell in pairs.  Making smart decisions about what to chase with your limited time and resource.

My friends Martin Howitt and Lucy Knight from Devon County Council

My friends Martin Howitt and Lucy Knight from Devon County Council

        Dealing with your own people.  You can’t afford anyone experienced so you recruit for potential.  That then requires a lot of time (that you don’t really have) as the team doesn’t know much and therefore they run everything past you.  Not many people can write coherently so you’ll spend a lot of your time re-doing what others have done – usually after they’ve gone home or gone off on holiday.  I found a lot of time is spent trying to second guess the mistakes your team are going to make in some sort of order of priority.  In reality, not that much bad stuff happens.  It’s the excruciating moment when you see an email that’s gone out or overhear someone talking nonsense on the phone.  It’s useful to teach your team early doors how to make their own decisions.  If you don’t do that it will add to your own already massive decision burden.  Letting people go when they don’t work out.  This gets a bit easier over time and the interval between joining and leaving certainly shrinks dramatically.  Disappointment when people you’ve been good to let you down.  That doesn’t get any easier.  The realisation that you’ve become a worse person inside yourself over the years.

5.      Working out the people mix, building the culture you want and creating a cohesive team.  After all it’s your opportunity to create the sort of business you’ve always wanted to work in yourself.  Sticking to your values and not compromising on them.  It’s easy to own the moral high ground when you’re a PAYE person; you soon discover where your values limits lie when your house is on the line.  The stuff you find out about yourself that you may not necessarily like.  Burying that ego that’s been growing during your years in education and when you were climbing the career ladder.  As Jim Collins says in Good to Great, looking in the mirror when things go wrong & through the window when things go right (to see who else was involved in getting that good result).  The sheer amount of time you will spend with your co-founder(s) and team in those early years.

Gloria and Katrina from the Diverse Leaders Network, part of the PS Launchpad

Gloria and Katrina from the Diverse Leaders Network, part of the PS Launchpad

So – I hear you all ask – this sounds bloody awful so why bother?  That’s easy & I have 5 reasons why it’s worth it:

1.       The Prize – financial and other.

2.       The huge satisfaction you get from building something from scratch that you’re proud of.

3.       The highs are amazing.  When you make a big sale or you land a sale where you started out as the underdog.  When you win a big award.  I still remember how I felt the night the call came in telling us we were the Intertrade Ireland regional Seedcorn competition winners.

4.       Putting yourself out there as a startup entrepreneur means you meet some great people and have some incredible experience.

5. Nothing can touch being your own boss and taking control of your own destiny – no matter how terrifying that can be from time to time.

I h  I hope this rather long blog has been useful to someone out there and I’m dedicating it to all the people who helped us when we needed help – you know who you are.  If you have any comments or questions feel free to add them in via the comments section below and I’ll do my best to answer them.  Good luck to all the PS Launchpad projects by the way.  I’m waiting for you guys to connect with me via the usual channels!

All change…

Learning Pool Team

Learning Pool Team

In the many years I’ve worked in startup land I’ve watched other founders and CEOs hang around for far too long – hell I’ve probably even worked for a few of them – and I’ve always been pretty determined that I wouldn’t repeat the same mistake myself…so after 7 long & happy years as part of the Learning Pool senior team I’m disappearing back into the tech startup scene proper.  Working in a scale-up can be great – but it isn’t for me.

In reality what this means is that I’ll continue to do some stuff for Learning Pool that I really love (strategic sales, profile building, input to long term strategy) but less of the operational day to day matters that if I’m honest with myself I don’t really enjoy.  I’m going to get out of the way & give my co-founder space to build the company to the next stage with help from our very able management team.

So…what’s next for me?  I’m going to return to working with (most definitely) early stage (most likely) tech startups with (most probably) quite young teams, helping out with all those things that many first time entrepreneurs find troublesome – raising finance, finding & managing investors, picking which product or version of a product to back, getting to revenue on a shoestring, determining the best market entry strategy – all the stuff I love doing.

And guess what – I CAN’T WAIT.

So how do I feel at the end of a day spent mostly on the phone breaking the news to my team and a few trusted friends and associates?  Most of all I feel proud of what I’ve achieved over the past 7 years.  We’ve built a robust, growing company with a fabulous community of customers, we’ve assembled a world class high performing team and we offer scaleable and useful technology at an affordable price.  I also feel dizzying waves of excitement that are masking a sneaky bit of underlying sadness.

I’ll leave you today with a quote from Alexander Graham Bell “When one door closes another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.” 

Watch this space!  I hope you all have comments 🙂

10 Cardinal Rules of Business Networking for entrepreneurs (and others)

GIEF Crowd

Assembled crowd in Dublin Castle when I arrived

In my world it’s quite common for entrepreneurs who are a bit further ahead than the rest of us to put something back in terms of the people following in their trail.  This can happen via formal networks (Digital Circle, Irish International Business Network, Global Irish Network, Chambers of Commerce, CBI, etc – we all have plenty of groups we’re members of) or it can be more informal – people you already know or meet along the way or via events that provide access to the Great & the Good (Culturetech in Derry is a recent example of a fabulous event that was bunged full of tech world glitterati as was the EBN Congress event run by NORIBIC in May with illustrious keynote speakers such as Steve Wozniak and Tim Smit).

Being able to ask questions of the people further ahead is mission critical to an entrepreneur (and corporate world managers I guess).  Even better is using networking to find yourself a small number of mentors and advisors with whom you can start an ongoing relationship.  Having personal access to leaders with proven success is a well known piece of the entrepreneur puzzle and one which significantly improves a startup’s chances of making it to the end of that all important first year.

Yesterday I attended the 3rd Global Irish Economic Forum in Dublin Castle.  It was hosted by the Taoiseach & the Tanaiste and is a biannual gathering of 250 of Ireland’s most influential & successful people.  This year the Tanaiste decided to include some Northern Irish businesses amongst the 100 SME businesses that are invited & that’s how come I was there.  It was terrifying.  I only knew two people there out of two or three hundred when I arrived.

One of the most frequently used phrases I heard yesterday was “I will help you if I can” – but as an entrepreneur how do you respond to and action that offer in order to get most benefit out of it for your company.  I thought about this a lot on the way home last night & decided to write a quick blog.  As usual, the list below is not finished or complete so please do add your own tips in the comments section & we’ll all be pleased to read those later.

  1. Have an elevator pitch and be ready to trot it out anytime & anywhere.  Keep it brief or you’ll lose your important audience.  Be able to flex it so that you can give a different version dependent on what sort of person you are pitching to and what country they are from – are they a potential door opener, investor, mentor.  If you aren’t good on your feet you need to practice this to the point where it just rolls out effortlessly freeing you up to watch their body language & listen & respond to their points/questions.  If you can’t do this, don’t put yourself through the pain of going to this sort of event.  Instead find someone who can do it for you.
  2. Don’t be afraid to approach people and always ask for help – when you get to a place where you feel you are comfortable to ask for some support just go ahead and ask.  Hardly anyone ever says no.  I’ve only been turned down by one person – it’s someone you all know so DM me if you want me to spill the beans – I can’t do it on here!  But it was only one person and I’ve asked hundreds for help.
  3. Don’t be afraid to be ambitious – in my group yesterday someone asked if a couple of the US heavy hitters could help her secure Hillary Clinton as a keynote speaker for her conference next year.  Time will tell on that one!
  4. Before you ask, be very clear about what it is that you want them to do for you.  I have a couple of “open” offers right now where people have offered to help me with “something” – but I don’t yet know what I can best use that offer for.  Help could be making an intro to someone to joining your board or investing in your company – and anything on the spectrum in between.
  5. Never expect someone like this to do any heavy lifting or grunt work for you, that’s your job.  What I mean by that is you have to do the homework and present the information to them so that all they do is give you an opinion or a steer – don’t expect they will do your market research for you.  If for example you were looking for a channel partner in an overseas territory, research who the players are, what their characteristics and pros/cons for you are & then ask for some advice in which 3 out of the 10 in existence are best for your company to approach.
  6. Be 100% serious when you execute on whatever it is you’ve asked the person to do.  If someone opens a door for you at your request then do your homework & don’t screw up the sales pitch when you get there.  It’s not just your own chips you’re using – it’s the chips of everyone similar to you that’s following on behind you.  I heard one US mentor describe this yesterday as “political capital”.  I’ve also heard it called “reputational capital”.  What does that mean? – I make an intro for you, you show up half prepped or don’t turn up, I’m now in a much worse place with the contact I’ve sent you to.  No pressure but be careful what you wish for and only engage if you know you are ready.
  7. Some access is for a one-off offer & some might lead to an ongoing relationship – be careful to work out which it is early doors.
  8. Related to the above point, if it’s the start of an ongoing relationship you probably need to meet a few times before both parties are comfortable.  The first time you meet just establishes that you like each other & possibly have a common interest.  You now need to get to know each other a bit better.  As the “recipient”, you need to do the running to make sure the relationship develops.
  9. When you have a new advisor in your circle, don’t just use the red phone and ring them when you need a decision made or have a crisis.  You’ll get far more out of the relationship if you keep them up to speed with what you’re doing & how things are going as you go along.  Again, it’s up to you to find a way to do that & put the work in to make it happen.  These guys are never going to be chasing you.
  10. Finally – when you’re at this sort of event, be brave and approach strangers and start up a conversation.  Everyone is there because of one or more vested interests of their own and they want to talk to you.  Never forget that people prefer to do business with people they like so at initial brief meetings like these be pleasant, don’t argue and regard it as a way of “interviewing” and filtering those that you will follow up and keep in touch with.  I came away yesterday with a handbag stuffed full of business cards and today will be spent following up with the people I met.

A few weeks ago at Culturetech festival in Derry I was lucky enough to meet & chat with Wilson Kriegel (former COO of OMGPOP, creators of Draw Something) and he said something that has stayed with me.  You start forming relationships the day you are born; growing and nurturing those relationships is key to the success of an entrepreneur.  Yep – at the end of the day business is all about people – nothing else really matters.

If you’re just getting started with networking, here’s a link to an earlier blog I wrote a couple of years back https://kickingassets.co.uk/so-you-want-to-network/