What do you want your legacy to be?
I’ve always thought it an absolute privilege to hear an entrepreneur talk about their journey and their business.
At Wayra, I get to hear a lot of presentations.
I’ve never been much of a hater. But in my ‘work-life’ there’s one thing that really irritates me: it’s when business people use too many quotations in their presentations.
It’s surprising how often a presenter, while in full-flow talking about their latest endeavor, will be overwhelmingly compelled to interrupt their broadcast to share with us a contrived quotation from some warlord or other.
But like all good generalizations, there’s always an exceptional exception.
And his name is Feilim Mackle, Sales and Service Director at O2 UK. Feilim also represents Wayra commercially on the O2 UK Board. He’s also Chief Judge for Wayra UK (as clearly shown in the photo).
In his first major speaking engagement on behalf of Wayra, what Feilim said was:
“It’s not what you say that is important. Nor even what you do. It’s how you make people feel, that really matters.”
Great people choose great words.
Although Feilim was quoting someone else (arguably more famous), I prefer inaccurately to quote him.
The above quote captures perfectly the significance of our actions. And it does so, powerfully.
The quote is especially important to me because I profoundly believe that leaving a positive human legacy is fundamentally important. For me, this has always been my second biggest driver. It’s a simple ambition really – however, achieving it can be immensely difficult to deliver.
If you possess a modicum of talent and choose to work hard, I believe that it is actually quite easy to be successful in business: just be a complete bastard. It’s an effective way to get things done.
Much harder to achieve the same success with human kindness.
I’ve detected one characteristic that guarantees the failure of a relationship (professional or personal) – and it is disrespect. It is something I endeavor to avoid, at all costs.
I absolutely believe in, and value, candor. I never shy away from difficult conversations. However, I think that care should always be taken to not only be honest but also to avoid any unnecessary brutality. It’s the ultimate form of disrespect.
Sadly, during my career, not only have I witnessed severe brutality in the workplace, I have also witnessed monsters who have enjoyed inflicting it. I am quite sure that I am not alone in having seen this.
Perhaps we need to learn how to do good business in the new digital economy. Perhaps we need more to learn how to make people feel good about doing business with us. Let’s make a commitment not to make the two things mutually exclusive.
If you’re following this train of thought, please ‘read more’.
The selection of Non-Exec’s and Board advisors may determine the success of your Start-up.
The first cohort of remarkable digital start-ups and exceptional entrepreneurs are soon to depart from Wayra London. One of the questions that this has provoked from more than one team is who to recruit on their Boards. How best to build their teams with the right support for the onward journey post-Wayra.
I believe that entrepreneurs cannot build brilliant businesses on their own - success depends on building great teams. And within the team, the quality and constructive guidance delivered to the Board by it’s Non-Exec’s and advisors is arguably the most vital input.
Why? Because the Non-Exec’s have the luxury and benefit of being ‘non-executing’ ie. not involved in the daily business and therefore they have a unique vantage point and perspective that is often blind to those engaged in the heart of the battle.
Hindsight is an exact science. Ideally, Non-execs have lots of it obtained during years of directly relevant previous experience. Hopefully they equally possess wisdom. What entrepreneurs value more than hindsight is foresight - which is much more elusive - Non-exec’s key responsibility is to help find it.
There are technical / legal differences in the accountabilities of official Non-Executive Directors, versus Board advisors, versus mentors. I’m not tackling the definitions of these roles in this post.
What follows is my personal advice and observations about the selection of people to help advise and steer your Board generically, based on my own experience.
- Formalize your Board quickly and diarise your Board meetings immediately.
- Importantly, don’t wait until leaving an incubator to make the step to recruit your Board, do it at the earliest opportunity.
- Taking One Water as an example, the Board was formed way before the product was developed.
Don’t delegate selection:
- I’ve been asked my opinion about the suitability of candidates - asking for references is a good thing; delegating the decision is quite different.
- The selection of Board advisors for a start-up is such an important decision, it’s one that can only be made by the founding entrepreneurs.
Trust your instinct:
- If you’re not overwhelmingly compelled to choose a specific applicant / candidate, defer the decision and meet more people. You may have to kiss a lot of frogs before you find the right one.
- I’d recommend you only select someone that you are so delighted to join your team you’d want to shout about it from the rooftops.
- If you’ve not got that vibe, don’t do it.
De-risk the decision - try before you buy:
- Whether you wish to appoint a formal Non-Exec Director, or informally a strategic advisor - it is possible to negotiate a good/long trial period to see how it works.
- Irrespective of the important issues of chemistry; strategic alignment; constructive support; lead generation etc etc - there is a more fundamental practical issue to be tested. The basic logistics of actual attendance. Good people tend to be hugely busy with challenging schedules. Whilst their pledge of commitment maybe absolutely genuine, their ability to actually attend meetings may be less robust and reliable.
- Absent Board advisors are not especially helpful.
Look for solid commitment:
The duration of a trial period is of itself a good test of commitment. The Non-Exec community are probably going to hate the following comments:
- I tend to only work with people that share my passion and therefore are totally prepared to commit to pitching-in for several months (eg. six to nine months) …
- … and do so free of charge.
- Avoid the remotest possibility of doubt; confusion; ambiguity, especially regarding pay.
- Put in writing the agreement between you.
- I believe that there are industries where Non-Exec’s must be paid (and also there are rules regarding disclosure) - make sure that you get appropriate Legal advice on these matters.
- My preference is to find Non-Exec’s and Board advisors that do not want a ‘salary’ as few start-ups can afford the impact this has on their burn-rate.
- Instead I recommend remunerating via equity - give the advisors a vested interest in the success of your business.
- Equity is a meaningful route to make pay ‘performance-related’.
- I recognise that there is a whole army of valuable non-exec’s who cannot financially afford to operate on this basis.
- Secure commitment for attendance to scheduled Board Meetings for the foreseeable future (at least for the next six months - more if possible).
- Book the meetings immediately.
If you’ve found the right person, then ‘play-to-keep’.
In two of my best gigs I’ve agreed to give my time in return for Share Options vesting over a three year period. This has worked brilliantly for both me and the Board(s) because:
- There’s no cash drain on the business. My contribution to the business did not contribute to the cash-burn.
- My on-going involvement was by mutual consent. If at any point either of us had chosen to stop the relationship (for whatever reason), then the share options would cease to vest.
- Three years is a meaningful time-span. It’s meaty enough to see substantial / material growth in the business. And as such, the accountabilities (on both sides) are tangibly evident. Frankly there is no hiding place from the passage of time.
For the Local Data Company, I am immensely proud to have been invited to fulfil a second three year Non-Executive Director term.
I am often asked by entrepreneurs what to look for in Board advisors and Non-Executive Directors. My thoughts are:
Shoot for the stars:
Think the unimaginable and draw-up a list of potential candidates that starts with either Bill Clinton or Bono. And work down from there.
Look for love:
- I have a simple rule. Now, I only work with people I love.
- I absolutely value and appreciate diversity and complementary skills - but not at all costs - I think poor chemistry is a recipe for a disaster.
- I have often said that one of the key things that investors look for in entrepreneurs is a demonstrable track-record of proven achievement. Guess-what - this is a fundamental criteria in your selection of Non-exec’s and Board advisors.
- Avoid corporate greyness; blue-chip prestige is not as important as finding someone who is able to move your business forward.
- Relevance of experience is important - but more important than that is fast-track access to the people and markets that will directly result in either sales or funding.
- Choose someone with a brilliant network who can quickly open doors for you and your business.
Find people who want to invest in your business. People willing to invest:
- Possibly money
- Their contacts
- Their experience
- And most importantly, their reputation.
It is understandable for people to want to share in the potential up-side of your business. It is helpful for you to find people who equally share your natural concern about the potential down-side too.
- Find people who emit positive energy - because this will be a source of energy for you.
- And above all - recruit people who are full of passion - especially passion for you; your cause; and your business.
I’ve used the word ‘find’ a lot in this post - that’s why I am so passionate about the importance of networking and making connections. You won’t ‘find’ these people from behind a desk.
Entrepreneurs – the inconvenient truth is: selling is what you need.
I’ve previously written two posts regarding the importance of pitching in order to achieve entrepreneurial success:
- The tools entrepreneurs need to make a great pitch to potential investors. 4th February 2013
- If you want your start-up to fly - cocoon yourself and perfect your pitch. 10th March 2013
However, I have good news for entrepreneurs who are traumatized by pitching – perhaps pitching is not as important as you think.
I’m compelled to write this post because I think that there is a growing trend in the land of incubators and start-ups that is worryingly obsessive about pitching. I am concerned that pitch obsession has grown to a point of being both misguided and unhelpful.
An over-emphasis on pitching can cause start-ups to overly focus on raising money. To teams who themselves are about to run out of cash, this observation will sound ridiculous. However, I’m starting to see an increasing dependency on cash that is not necessarily correlated to talent and opportunity. I’m starting to see entrepreneurs not sufficiently willing to compromise their own lifestyle in order to pursue their ambition and their venture. To which I urge great caution because, there is a quality that I find common in the best teams: they often don’t care about money – at all. They are often so over-whelming driven to do what they are doing that either: they have chosen to live on baked-beans; run-up personal debt; or they’ve convinced friends and family to invest; or they’ve been previously successful / frugal to have sufficient reserves.
So perhaps accelerators that are pitch-maniacs are likely to self-select teams that are money hungry. However, the irony is that inherently investors are often looking for the opposite of this need – not surprisingly investors like frugality; self-sufficiency; financial resilience.
As I have written previously, I think both pitching and pitch preparation are vitally important to the success of your business. Your pitch is a vital acid test of whether you have a viable business. However, beware acceleration / incubation programmes that focus too heavily on pitching because you will learning a skill that inherently you will rarely use. When I think back, in my whole career, across all six businesses that I have helped to create, I personally have only delivered one investor pitch. (Admittedly it was to successfully raise over £12 million).
Even if you are a prolific entrepreneur, you are unlikely to pitch more that half-a-dozen times in your career – so why over-index on learning how to do it?
Over-emphasis on pitching is dangerous because it sets the wrong expectations. Investment is dependent on rapport, not pitching. Rapport demands on-going communication, it is rarely the result of an individual act. If you are an entrepreneur I’d encourage you to secure help in building rapport not in delivering presentations beautifully.
I’d go further, Karl Aherne, the Director of Wayra Ireland (a hugely talented, and surprisingly likeable individual) shouts loudly about his loathing of PowerPoint. He argues powerfully that PowerPoint totally gets in the way of getting to know the entrepreneur and their business – which is why Karl sometimes demands the teams in Wayra Dublin not to use it. I think Karl is spot-on.
Context is such a powerful thing. Over emphasis on pitch training is unhelpful because:
If you are an entrepreneur please know that: the people that you are pitching to are not looking to out-fox and out-smart you – they are desperately hoping that “you are the one”. And inconveniently, experienced investors will probably know whether or not you are within moments of meeting you.
Also know that what investors want to hear, more than anything, is authenticity and integrity – not slickness. In-fact investors have told me that they are wary of overly fluent presenters because it can camouflage true talent (and weaknesses). Investors don’t expect you to be perfect; they expect you to be committed. If they invest in you, they literally have a vested interest in your success – they will want to help you.
Training pitch-technique and methodology can be unhelpful because it can lead to unnatural behaviour in presenters. Two notable examples that I see often:
- The use of contrived questions in order to feign audience participation. This is excruciating. Don’t do it.
- Distribution of the presentation across the team despite the inability of some individuals to present. Do not ask the ‘coding-guy’ or the ‘numbers-guy’ to speak unless they are equally gifted with words. In-fact, tell your investors that you have denied them the opportunity in order for each of you to play to your strengths. Your audience will thank and applaud you.
Finally prolonged pitch training is unhelpful because, it fundamentally teaches entrepreneurs the wrong skill. Entrepreneurs don’t need to learn how to pitch; I expect them to be able to talk passionately about their venture naturally.
Probably the most important skill entrepreneurs need to learn is how to sell. And there is a massive difference.
The immensely talented Claire Darley, Sales Director of O2 Business, vividly brought this to life for me recently. The entrepreneurs at Wayra are lucky; invariably they are able to open doors that ordinarily are unimaginably difficult to open. As Claire observed, “they have sales pipelines to die for”. But the biggest thing to kill these opportunities is to pitch at them. Selling has become a sophisticated art – what buyers want today is a consultative conversation – and being pitched at is often the antithesis of this.
Which is another reason why the entrepreneurs at Wayra are so lucky, because, we have a Darley. In-fact we have one in every country that Telefonica and Wayra operates in. And by virtue of their accountability in driving the sales of Telefonica, one of the biggest companies on earth, they are the David Beckhams of their craft.
Which is why Wayra is the best business accelerator on earth.
Enabling entrepreneurs to pitch perfectly may be an accelerators biggest legacy - but pitching is not their biggest lesson. Entrepreneurs require a balanced diet for healthy growth. Beware obsessive pitch training. Sales, and the ability to generate them, are what you need.
If you want your start-up to fly - cocoon yourself and perfect your pitch.
Following Wayra’s recent global-call for entrepreneurs we are currently in a period of pitching and selection. I’ve just returned from Munich where our esteemed Judges selected three new brilliant Projects.
Business accelerators and incubators take great care in selecting the start-ups they choose to work with.
Invariably, the selection process is ultimately determined by the quality of ‘the pitch’ delivered by the entrepreneurs.
And so, entrepreneurs pitch in order to get in to an accelerator - interestingly few entrepreneurs realise that when it’s their time to leave the accelerator, they’ll be pitching on their way out too - because most teams will need follow-on funding, and pitching is perceived to be the route to get it.
Inherently pitching is seen as fundamental to the survival of the fledgling business. Perhaps this is why most accelerators spend so much time on pitch training, preparation and practice.
I absolutely appreciate the importance of funding from the start-ups’ perspective. However I believe that currently in the entrepreneurial eco-system there is so much emphasis on raising funding that the true benefits of mastering ‘the perfect pitch’ are in danger of being lost - benefits that are not to be underestimated:
- The pitch is a momentous acid test for the entrepreneur. It drives out the definition of exactly what their business is (which for many is frustratingly elusive). What they stand for and what their point of differentiation is.
- Pitch perfection forces the start-up to articulate their business proposition in a clear, concise and compelling way. Getting to this point of distillation is often the most intensely challenging thing entrepreneurs undertake.
- I have witnessed start-ups move more in three days intensive pitch preparation than they did in the three months previously. Which is not to say that the previous three months were wasted - it’s often the pitch preparation that forces out the yield from all the prior work.
- The pitch is a catalyst through which the start-ups forthcoming priorities become crystal clear. And so it’s common to see start-ups accelerate as though they are on rocket-fuel in the months immediately post-pitch.
So, intensive pitch preparation can:
- Define the business
- Consolidate the effort invested thus far
- Provide a clear focus of the priorities ahead
… and that’s why I believe pitch preparation is vitally important. Unfortunately, for the entrepreneur these benefits sometimes demand the potential jeopardy inherent in pitching in order to drive out this result. It’s human nature.
The benefits are often of greater value than the funding that is more commonly associated with ‘pitching’. I recognise that without the funding perhaps the business wouldn’t exist - however we often hear feedback from investors that they are suffering from ‘pitch-fatigue’, which is why at Wayra we have many approaches to investor engagement.
Depending on the commitment of the entrepreneur, pitch preparation is the most powerful force of positive acceleration that a start-up can experience. It is the cocoon moment from which their business is set to fly.
At Wayra, we take great pride in the pitching ability of the teams that we accelerate. For us, it is massively important that when the start-ups leave Wayra, that they do so able to deliver a world-class pitch. I think we are good at delivering this.
Pitching, and the preparation necessary to do it well, are arguably an accelerator’s most important legacy.
And yet, despite this, I passionately believe pitch training is not the most important lesson that accelerators deliver - and I’ll post a blog about that soon.
I previously wrote about what makes a perfect pitch (4th Feb 2012) click here. And if you are soon to deliver your pitch - you have my very best wishes.
Regarding the competition, fight on your own terms, not theirs.
My work with Telefonica has brought me in to direct contact with thousands of businesses, and with Wayra I’ve also met hundreds of brilliant start-ups.
It often surprises me is the extent to which businesses worry about ‘the competition’, and the anxiety this can cause founders and CEOs.
To those worried leaders, I am compelled to assert my advice: ignore the competition.
I am not advocating total ignorance; it would be irresponsible to ignore all external market forces on your business - none of us has the luxury of operating in a vacuum. But leave it to your team to bring to your attention any significant competitor developments. And even then, mull on this insight before reacting.
What I am strongly recommending is that business leaders define and stick to their own path.
- Don’t: waste valuable and scarce resource spectating and imitating the competition.
- Do: compel every member of your team to give their very best performance.
- Do: build new products and propositions that differentiate your Company and tangibly demonstrable what you stand for.
And this last point requires creativity. It is my belief that it is not possible to invent truly original ideas if you absorb too much of that that you wish to differentiate yourself from.
As I said, don’t overly study the competition.
Study instead the behaviours, needs and frustrations belonging to your customers. Build a culture and environment that nurtures creativity and problem solving. (Which is why the elimination of fear is so important to the development of competitive advantage - as per my earlier post).
It’s worth asking yourself: “Are you driven by the avoidance of risk, or the pursuit of opportunity?” - Michael Hayman at OxfordInspires lecture at Oxford University yesterday.
As a leader, make it your business to evolve your Company in order to launch some form of product / propositional enhancement that you are proud to tell everyone about. When you launch it, make sure that you do tell everyone about it.
Don’t be disheartened if no-one pays any attention.
Then, get-on and build the next enhancement. Urgently. And so on. Make innovation and improvement a constant and iterative process.
Eventually your customers and prospects will feel that there is something special about your business. They will remark about it to their friends / relatives / peers. The future success of your business depends on this positive word-of-mouth advocacy. So give people permission to market your business on your behalf - give them something positive to talk about.
It doesn’t matter how big or small each of these enhancements is. Cumulatively they will add-up synergistically.
At some point your progress will be noticed by your competitors. And then they will face a horrible decision: whether or not to respond and counter your innovation. Damned if they do, and damned if they don’t.
If the competition choose to copy your innovation, invariably it will take them six months (or more) to do so. Such a decision will probably completely de-rail the development road-map that they were previously committed to, thereby disrupting their launch / marketing programme. Importantly, by the time they’ve launched their ‘me-too’ version, you will have moved forward again. Which if they also copy, means that it’s not long before you gap them substantially, (ie. 12 months plus). Thereafter your competitors are in a constant catch-up-and-copy cycle.
If your competitors choose not to counter / copy your initiatives then they risk the possibility that you might leave them behind altogether. In my experience few are brave enough to do so.
Avoid the temptation to fight your competitors on their terms. Resist being provoked to leap to match or better their offers. Stick instead to delivering brilliantly what it is that you do. And pioneer your own innovation. Remember, tactical offers are just that: tactical. They are rarely financially sustainable, and often soon forgotten. The strategic direction of travel is infinitely more important - make that your destination.
I’m sure we are all familiar with famous Indiana Jones fight scene that best demonstrates fighting on your own terms: click here for the clip.
Entrepreneurs are like musicians - rockstars even. A ‘pop-pickers’ guide on how investors spot future chart-toppers.
Those that know me know that music is one of my biggest passions. And so I was thrilled to be invited to go to The Brits2013 last week - the UK’s gala award evening to celebrate its best music artists and performers. What I hadn’t expected is that the evening would combine my passion for entrepreneurialism too.
“The Brits” not only celebrates musical talent - it recognises the international commercial impact the music industry can also have, despite the apparent revolution that is happening within it.
Talent and commercial success - my two favouritist things. Which is why I love working at Wayra, the business accelerator that belongs to Telefonica. Our job is equally all about the celebration of talent: entrepreneurial digital talent.
At Wayra, we’re looking for the superstars that are driving the explosive emergence of a new era: the birth of the digital economy.
People often ask me, “what start-ups is Wayra looking for?”. To be clear, it is not me that chooses - the judges are an expert independent panel.
But if I were to try to define what we are looking for, in my view, in a word it’s: TALENT.
And having spoken to many investors (large and small), I’m sure that Wayra is not alone in this criteria.
If you are an entrepreneur, it’s not your idea that we’re tuned in to, it’s you. As Gonzalo (the global CEO of Wayra) says: “We can help great people with their ideas. The other way round is more difficult”.
I have always thought that (metaphorically speaking), there are BIG similarities between entrepreneurs and musicians. Both are gripped by:
- An uncompromising and overwhelming motivation to pursue their goal. Like a teenage ‘wanna-be’ sacrificing their education in order to ‘join a band’, there is no point in trying to discourage a true entrepreneur from the risk of resigning a safe corporate career. There is no stopping them. What they need is your help, not your dissuassion.
- An inherent love of the creative process in their work. A love of invention, discovery, iteration.
- An absolute requirement for tons of practice in order to get any good. No matter how good the natural talent, a perfect performance always requires lots of practice.
However, as investors we’re not listening to your musicianship. What investors look for is a solid track-record of proven demonstrable achievement.
And this, inconveniently, is something that no-one can fake. You’ve either been banging-in hit after hit, after hit, or you haven’t. And if you haven’t, that’s OK - there’s nothing to say that you are not able to do so. It’s just that in my experience it is hard to suddenly ‘start achieving’. I suspect over-achievement is pre-conditioned.
Perhaps this is why there is so much debate about whether true entrepreneurialism can be taught or learnt - whether entrepreneurs are born or can be made. And this is where I think the cross-over between entrepreneurs and musicians really lies - I think anyone can learn to play the guitar well if they practice enough. But some people are inherently better at it, learn faster, and play more naturally than others.
Equally, I think good investors develop a good ear, and therefore are able to quickly spot which entrepreneurs have the potential to be rockstars that will ‘go-platinum’ fastest. For certain, investment is as much an art as it is a science.
Here are some rules of engagement to help small businesses avoid being burned by big corporates.
I’ve worked for two massive B2B corporates, O2 and Yellow Pages. This experience has given me direct exposure to more than a million small businesses in the UK.
My observation is that businesses are a bit like boxers, they tend to be fundamentally engineered to do business with other companies that are of the same size.
Often it’s not the intention for big corporates to do bad things to their smaller relatives, it’s just that they don’t necessarily understand the consequence that their actions can have - they don’t appreciate the power of their own strength, the power of their punch. Imagine a heavy-weight boxer versus a feather-weight.
Equally, often small businesses can be unaware of the potential dangers of that lurk within corporate corridors; the dramatic changes that can occur as a result of a management restructure; a merger; a de-merger etc etc. Developments within a big company are often not just beyond the control of a corporate buyer, they can be beyond their visibility.
Small businesses can find themselves in a situation where they discover that the person whose commitment they thought they had secured, actually no longer has the necessary authority to ‘do-the-deal’.
I do not advocate that small businesses avoid doing business with corporates. In-fact, quite the opposite, I think that the opportunities that big businesses can create for start-ups can totally transform their destiny. However, both parties need to take care.
My recommendations to small businesses are:
- Find a guardian angel. When a small business receives an order from a big corporate, my advice is to find a champion who can represent them. Ideally someone in a position of authority. Think of your champion as a fire-officer. In the event of disaster, what you need is someone who can shout really loudly. It does not provide total protection against corporate wrong-doings, but it can make a massive difference to survival rates.
- Avoid having too many eggs in one basket. Always remember that winning business is a two-sided decision, (yours as well as your customers). Take care not to become overly dependent on any one customer. You are accountable for managing the risk and vulnerability of your business - this is not the responsibility of your corporate customers. Consider extending the length of contract as one effective option with which to de-risk a deal - but you may have to provide compelling compromise in order to obtain such security.
Equally, big businesses should only engage with small businesses if they are:
- Able to raise a Purchase Order. All too often good intentions are completely misplaced in pursuit of ideas and ventures that do not yet have the necessary clearance to be officially Purchase Ordered. Corporate citizens should make sure that they are in possession of the necessary authority / permission / approval / budget with which to do business before they engage externally.
- Keep the conversation to a minimum. It’s hugely flattering to a small business when a prestigious big corporate expresses an interest - but the sense of expectation and anticipation in the small business will multiply with every additional minute spent in dialogue. So don’t extend the conversation unless the chances of the small business closing the deal are appropriately correlated.
Finally, something that is equally relevant to both sides of the equation, that all businesses can learn: small and big businesses should celebrate more the business that they do together.
It never fails to amaze me that small businesses do not make more noise about the contracts that they win from big companies. Equally, it is such a missed opportunity that big companies do not shout about the number of small businesses that they do business with.
If you are passionate about the success of small businesses and are interested to explore ideas on how you can more actively support them, click Read More for some additional thoughts and insights.
Control versus chaos - what can big companies really learn from entrepreneurs (and vice-versa)?
Last week The Foundation held one of their Forum events in the London Wayra Academy and I was asked to participate in a discussion titled: “Control versus Chaos - what can big companies really learn from entrepreneurs?”.
As a Director of Wayra, I’m lucky to have a unique perspective on this conversation: Wayra is the start-up accelerator that belongs to Telefonica - to-date Wayra has actively invested in more than 180 start-ups; Telefonica has over 300 million customers which makes it one of the biggest corporates on earth. And so I am immersed in both the world of start-ups (and their learnings), whilst simultaneously being employed by a big corporate (whose challenges are often proportionate).
So, what I said was:
Firstly, like all good entrepreneur/marketeers, I took the opportunity to promote the business I’m committed to: Wayra. I explained how Wayra works; what we’re looking for; why the physical space is important; and to share some of our results. To-date:
- Wayra has built 12 Academies in 11 countries;
- That’s more than 10,000 square metres (two football pitches) dedicated to the acceleration of digital entrepreneurs;
- Wayra receives a new application to join its acceleration programme every hour;
- Wayra invests in one new start-up every three days;
- Wayra projects create about three new jobs every day
In terms of the potential reciprocal learning exchange between big companies and start-ups, the most immediately obvious observation is that corporates need to be more agile. Except, from my perspective, it is not true that agility exclusively belongs to entrepreneurs. Wayra is perhaps the best example of just how dynamically agile a corporate can be: against all odds Telefonica built and launched Wayra London in 100 days.
In my view, corporates have never been more lean. Telefonica especially so.
I think the opposite question: what can entrepreneurs learn from big companies, is much more tricky. Three observations:
- Discipline is perhaps the biggest lesson for start-ups. Entrepreneurs need to avoid ‘avoidance’ and the self-indulgence of doing what pleases them most. Stop avoiding the difficult (but vital) thing. It’s amazing how ingenious and elaborate entrepreneurs’ avoidance-strategies can be. Nothing top-trumps an emergency trip to PC World. Corporates do not have this luxury - they have all sorts of legal and fiduciary responsibilities that cannot be avoided - and so they face-up to them and get on with it.
- Industrialisation. Corporates are really good at mass-production and systemisation. I think this is especially evident in their marketing capability: they can be really good at data-analysis and targeting. Entrepreneurs have a tendency to market in their own self image - which invariable is a market of one person.
- Comprehensiveness. Big companies are often very effective in mining every aspect of an opportunity - end-to-end thinking and execution. I’ll write a separate post about the opposite example I gave of an entrepreneur who had created a specialist retail business without considering all the immediately adjacent opportunities that this could create. Watch-out for a future post regarding my chance meeting with the founder of “Scrabblespares.com”.
In terms of what big companies can learn from entrepreneurs (aside from acquiring more agility), my thoughts are:
- Discretionary effort. Success in business has many dependancies. I believe discretionary effort is the most vital ingredient of commercial success. The entrepreneurs in Wayra operate 24/7, literally. People in start-ups can’t wait to log-on. Employees of corporates often can’t wait to log-off. Sales orientated corporates think that they can buy discretionary effort with bonuses and commission. But ‘carrot and stick’ is never going to be as effective as people with conviction in their hearts.
- Innovation on a shoe-string.
- Marketing without marketing. Many corporates just don’t get the power of social media. See ‘£1 fish man’ - which to-date has received 10.5m hits.
- The power of the corporate punch. Businesses are like boxers: corporates are the ‘super-heavy-weights’; start-ups are the ‘feather-weights’. Many corporates are not aware of the power of their punch. They may have no intention of annihilating their smaller cousins, but frankly one cancelled order can be the cause of bankruptcy. Taking greater care requires active consideration.
I believe that there is a significant business issue that represents a massive learning opportunity for both start-ups and big companies, and it is that the evolution of the founder’s role in not yet properly understood.
In start-ups, the founder may be the right person to take the business from A-to-B, but not necessarily C-to-D. In corporates, many lose not only their soul but also their success when the founders depart. Some of the world’s greatest and most dazzling corporates are those where the founder’s presence is still very much present.
The tools entrepreneurs need to make a great pitch to potential investors.
Last week was a momentous week for the whole team in the London Wayra Academy - it was our Demo Day on Wednesday.
I am hugely proud that all the teams did a brilliant job of pitching their unique businesses to an amazing group of over 100 investors with the objective of securing future funding.
A while ago I started drafting a brief post on what makes a great pitch - initially I felt really strongly that two important ingredients are fundamental to a good investor pitch:
Passion, because the challenge of being a successful entrepreneur is nuts - it’s like waking up and saying you’re going to climb Everest. And so if anyone is equally nuts enough to invest their hard cash into your endeavour, they’ve got to believe that you’ve got what it takes to reach the summit.
Practice, because, one of the privileges of working at Wayra is that I get to hear pitches from entrepreneurs from all over the world. While some of the newest teams pitch brilliantly, it is an indisputable fact that the teams that joined Wayra at the beginning present more powerfully as direct consequence of literally having pitched many more times. There is no short-cut to pitching 1,000 times.
Two vital ingredients, both more important than the microphone and a clicker suggested by my photo. But now the presentations are completed, I think that success in pitching for investment requires much more. My broader thoughts are:
Preparation. It is so important that entrepreneurs obtain quality input from experts into crafting their pitch-deck. For example, feedback from experienced entrepreneurs and investors. And most importantly, entrepreneurs should actively seek and exchange constructive feedback with their peers. Which is why I believe the ‘Wayra-family’ is arguably the most valuable component of the acceleration programme. And why I’m also a fan of ‘Don’t Pitch Me Bro’.
Talent. Sounds obvious really - it also sounds uninfluenceable - but it is: practice helps; but more effective is who you choose to pitch. I find it remarkable that entrepreneurs often feel it is both their right and privilege to lead the pitch whether or not they are the best presenter. It is not incumbent on the founder to pitch, it is incumbent on the founder to ensure that the best pitch is delivered.
Authenticity. Never confuse talent with ‘slickness’ - slickness can actually camouflage talent. What investors want to see and hear is authenticity.
A good story. Your pitch needs a clear ‘beginning’, ‘middle’ and ‘end’. Fundamentally, the context - why are you doing this. It’s about demonstrating why your business is a good idea, and why you are overwhelmingly driven to pursue it. The combination of which needs to leave the unmistakable confidence that despite your ambition being (possibly) ridiculously impossible, there is real belief that you are actually going to conquer this mountain.
Evidence that you will harness the power of digital:
- To acquire customers in volume, and at pace - contagiously via viral marketing; effective use of social-media; and/or search/SEO compatability
- To use the accumulation of customer data effectively for the customers’ advantage
A willing audience. Take responsibility for driving attendees. And your behaviour will determine how ‘willing’ they are. Smile; use humour appropriately; establish rapport.
Know your numbers. Opinion is divided on the validity of financial projections in pitches. However, know your numbers (inside out and backwards).
“Up-and-to-the-right-graph” - feedback from one of the investors advised that this is currently hot in the US - a slide/graph that evidences demonstrable quantifiable momentum - whether that is financial; registrations; downloads etc etc. It not only evidences traction, it also clearly illustrates the key focus of the CEO. It doesn’t matter if the stats are ‘usage’ related (and not financial) - if there is traction then investors will believe the revenue will follow.
Talk about your team, but not for too long. In one sentence, what makes you special.
Make the right request - especially if you’re asking for investment. The amount of money that you are looking to raise is an especially important issue - and so I will write a separate post on this specifically.