Over the past twelve months I’ve taken a break from the startup ‘networking’ scene.
Getting back into the flow, I was invited to an Entrepreneurs First event ‘In Conversation with Reid Hoffman’. You can view a stream of it here.
As a brief write-up, I wanted to highlight some of Reid’s advice that resonated with me.
“Don’t worry if you don’t know X”
This quote highlighted the difference between the UK and US venture ecosystems.
In the US, Reid highlighted, it wouldn’t be uncommon for a founder to go through a Series A, B or C round, and not know their unit economics.
They’d be more concerned with getting to scale first.
More generally, the advice was that you need to think what rules you can throw out in order to move faster, and in order to play out your hypotheses as fast as possible.
From my experience in the UK startup scene, and pitching to hundreds of investors, I found that they really don’t have as strong a risk appetite as the US. They’ll actually want to see a pretty holistic story. Unfortunately that means we don’t get the luxury of saying “I don’t know” when quizzed about our unit economics, or some other part. If we did, I would guarantee that investor would pass on the investment.
“Don’t be afraid of failure”
I fundamentally believe that persistence, resilience and your ability to learn are absolutely key to ‘making it’ as an entrepreneur.
You probably will not get it right the first time, or the second time, or the third for that matter.
You have to be able to dust yourself off, pick yourself up, really think about what you learned during the process, and apply those learnings to the next time round.
Don’t think that people are going to look down on you because of it. Every single person in the world has shipped something that they’re embarrassed by.
“Triage your fires”
I’ve lived this for the past decade. At any point in time there are 10-20 things that could kill your startup. It can easily make you a nervous wreck.
You shouldn’t spend your time worrying about every single one.
You need to approach it methodically. You need to understand the likelihood of each of them, and list them in priority order.
Working through them like this will give you a much better mindset and reduce your stress, to a certain extent.
Know which problems are fatal, and know which aren’t worth worrying about.
“Timing is vital”
You could have launched a VR startup 10 years ago, but you would have been too early. The ecosystem, the hardware, the investors, the consumers weren’t there to support.
You can have the vision and understand that one day it will be a huge market, but if you don’t take the entire ecosystem into consideration, you will spend a lot of time trying to launch a startup in a market which is premature.
I personally, have first hand experience of this when I launched my first online company, The Property Hut. In short, think Easy Property, Purple Bricks, and all the other PropTech startups taking on the estate agents. I spent 1-2 years (10 years ago), and invested 5-10k building the technology etc. for this, but it was simply too early.
“For someone senior, call at least 3-8 people for references”
Team is everything, and when you’re growing fast it’s tempting to just hire anyone to fill a roll.
Reid recommended leaving team to shortlist the candidates but have the founder or CEO do a final stage “culture fit” interview, in addition to phoning or reaching out to 3-8 people whom the candidate has worked alongside in the past.
Obviously this is a delicate area with employment laws and people being reluctant to give candid feedback via email, but you can call them, and you can tease out indicators in a non obvious way.
Not many people, myself included, phone 5+ references. This is something that I’m definitely implementing more of in the future.
In conclusion, great event by Entrepreneur First – check out their website if you’re an ambitious smart person who is “pre-idea” and wants to launch a startup. Do keep in mind that they prefer those with technical talent (I think they quoted 80% of accepted applicants are somewhat technical – e.g. an ability to throw together a rough prototype). What Matt and Alice have accomplished is very exciting and I can’t wait to see the company grow even larger than it already is.