Tag Archives: Startup

Michel de Montaigne, the original blogger

“There is nothing more notable in Socrates than that he found time, when he was an old man, to learn music and dancing, and thought it time well spent.” ― Michel de Montaigne

“One of the world’s greatest, oddest and most personal books” ― Alain de Botton

I recently began to reread Essays by Michel de Montaigne*, a book that reignited my curiosity when I first read it a few years ago. The Essays are a sixteenth century series of reflections across a range of subjects, a book whose iconic status lies at least as much in the style and approach of the author as its substance; Montaigne is often credited with inventing the essay form of writing, but the exciting thing about his work is how much you learn about Montaigne himself – the silhouette of his personality is sharply visible not only from the content of what he says but, more impressively, by his manner of articulation.

Let’s make one thing clear: His “essays” are not the typical sanitised, mark-seeking vessels currently spewed out by students all over the world (including myself back in the day). Montaigne considered the Essays as a form of introspection; a way to explore and test his deepest assumptions. By publishing them, he created a kind of autobiography that no longer exists: an autobiography which does not try to cover up flaws of personality; an autobiography which does not retrofit a desired caricature of oneself after the fact but ends up being a brutally honest account of who he was.

The Essays cover a broad range of subjects (a full list can be found here) including science, politics, philosophy and social convention amongst others but what makes Montaigne different is the personal and often intimate observations he scatters through his work. Almost nothing is free from introspection: interspersed with commentary on education, friendship and Seneca are comments on the regularity of his bowel movements, his lack of memory and his views on his penis to name but a few examples. However, let’s focus not on the content itself but the style of writing and the man himself for the lessons I take from this impressive work from one of my favourite writers.

Image for Montaigne post

These lessons are wide-ranging and I believe they apply as much to life as a whole as any specific area.  That said, I believe there is a lot for me to learn from the way that Montaigne writes for my own blogging and my approach to startup, specifically around how I build relationships with readers and customers respectively. Whilst I’ve tried to distil my learnings below, I strongly recommend you read the book and take the full class yourself!

Be personal and transparent…

Admittedly, it helps a little that he is a thoroughly likable dude but I believe it is the fact that we get to know Montaigne as a person through his words that really endears him to us, much like the great characters from literary fiction. Through the prose we get a feel for Montaigne’s opinions – we get see his likes (e.g. friendship: “of a perfect society friendship is the peak”) and dislikes (e.g. ego: “… to have a too good an opinion of our own worth… is an unthinking affection with which we flatter ourselves”).

Contrast this with corporate blogs today that are tasked with building a brand “personality” but often appear to forget that true character and a compelling story require more than a perfect version of what you want to be. The lack of vulnerability and quirks around this perfect set of core values result in these blogs often feeling stale, one dimensional and, at worst, unreadable in the long run.

Alas, all is not lost; often behind the sheen of “professionalism” is a real, living, breathing company that is actually interesting – so write about that! An (undeniably extreme) example of getting personal with a business blog is Buffer’s offering and, whilst it might get a touch more personal than where larger corporates can be, I think it provides some general sense of direction on where things could and should go.

The same applies to personal blogging. In the startup world there are more personal bloggers than you can shake a stick at, but the best blogs are those which share personal experiences alongside providing insight. A personal favourite of mine is Andy Dunn of Bonobos on medium.com – see his post on the risk not taken for a particularly great example.

Personality is of course also a key tool in marketing and building brands. But surely a strong brand personality isn’t one that needs to hide behind celebrity endorsements that have nothing to do with the business they are in (I’m looking at you Accenture / Woods or you Gillette / Federer + Henry + Woods**) or a “fun” but very false story about how the product is made (see Twix left bar / right bar for a recent example). A strong brand personality, I believe, is one that is a result of a personification of the product itself and the people / processes involved in its production, like that of Zappos or Patagonia.

I’m trying to keep true to myself. Before I published my post on Passion Capital I got some feedback that I should cut out the suggestions I put in for improvement to their approach lest it annoy them but I decided to keep them in. In general, however, a look back at my previous few posts clearly demonstrates to me how tentative my writing was – it could definitely do with a dose more of my personality and that’s something I’ll try to deliver going forward.

… but not egotistical

To paraphrase the man himself, “even on the highest throne in the world, we still sit only on our own bottom”.

Although Montaigne writes about himself, his motivations are not the narcissism or ego-fuelled endeavours of many of today’s selfies (lamentably something that I’m at least partially guilty of myself on Facebook – my traveling photos are up there to share with friends and family but also (at least at some level) because I want people to know I’m the kind of cool guy that goes traveling).

His motives are precisely the opposite: Montaigne writes because of how ordinary he believes he is and tells people not to bother reading his book (“I am the subject of the book… there is no reason you should waste your leisure on so frivolous and unrewarding a subject”)! Of course you could argue, perhaps with some justification, that there is some ulterior motive but his style throughout is humble – as JM Cohen put it in the introduction of Penguin translation, Montaigne comes across as “modest, truthful and unprejudiced… [with] a sound knowledge of his own limitations ”

The point is this – writing about oneself does not need to be an exercise in narcissism. It can be a reflection of the good and the bad of who you are. This is also important for corporate / startup blogs and marketing campaigns – again, a “look how great we are” exercise will inevitably turn customers off in the long run and likely lead you to over-promise and under-deliver rather than the other way round.

For me personally, taking the ego out of writing is bliss. It means I can write to learn. I can write to see how I can improve my thinking. I’m new to blogging (and to writing more generally) so I’m in the process of building my skills and style and, frankly, up until now I’ve been shit scared about what people think about how I write and what I choose to write about. The biggest lesson I draw from Montaigne is that as long as I write honestly and write for myself, what you people think is an ancillary benefit – the real reward should be what I learn about myself: “I do not care so much what I am to others as I care what I am to myself”.

Take time to reflect

In an age where the world moves as quickly as it does, many feel the need to share their thoughts as soon as they arrive in their heads, as if there’s some sort of one-in-one-out door policy on their brain – a process that, if we are honest, can often lead to banality. I believe that Montaigne effectively combines spontaneity with deep reflection in many areas and it is this that allows his thoughts to endure and remain relevant more than four hundred years on.

To put it into the context of writing, we live in a world where there are many things competing for the attention of readers which in turn makes (forces?) us try to be the first out there to respond and report, often with the most shocking headline. However, I believe a considered view delivered later can pack more of a punch, and is the mark of a heavyweight. Taking an example from my past, an equity analyst who races to be the first to report on results of a company may get a conversation with the hedge fund manager, but the analyst who will win more business over the longer term is the one who delivers the best insight. Admittedly, we also live in a world where short termism often trumps the long game, but this is a different post for a different day.

In life I’m as guilty as anyone (probably more so) of an instinctive reaction to a situation and, though this is fine, I’ve often found that with hindsight my initial action was not the correct course of action. At the moment I’ve not come into a situation with my writing where being fast is important but I hope that if and when I do, I can keep calm and take a step back to deliver the right message – something I will definitely be keeping in mind.

Treat your readers (customers) with respect

A good piece of writing takes you on a journey. A great piece of writing takes you on a journey and makes you feel like you’ve learnt things you never expected to learn. Montaigne’s style and deference to his readers means that you float along with his thought processes but there are often moments, turns of phrase, that make you stop and think. This works because he treats readers with respect – he assumes intelligence but does not make his language complex (ok, aside from the slew of Latin quotes) which makes you want to come back for more.

Where this point about respect gets really interesting for me is when you start looking at business models. There are many examples of businesses that either forget or intentionally ignore the intelligence of their customers. Some examples that spring to mind are:

  • Daily deals and other discounting businesses which show the percentage saved against some pie-in-the-sky rrp rather than the price on amazon or (even better) the cheapest available price for the same item on the web. People can do a quick google search!
  • The myriad of products making health claims that make a nice headline but ultimately don’t stack up.
  • Sofa and clothing companies that offer perpetual sales. First-time viewers of the advertising of these businesses may be amazed by prices but in the long run people will readjust the price point in their head.

Again a theme of long term vs. short term emerges, and I get the impression that the above businesses are playing more of a short term game.

I truly believe that the companies and organisations which treat their customers with respect will ultimately flourish over a longer period of time; some examples of great companies and organisation I’ve personally thought treat customers well include:

  • Zappos (in the US) (again). Admittedly not a revelatory example but a 365 day, no quibble returns policy means that customers are treated like adults rather than criminals. Add this to customer service well ahead of anything else typically seen and you get the unreal customer loyalty numbers that Zappos sees. Of course you and I know that there is more to the Zappos business model than this (e.g. top notch employee relationships and supply chain management) but customer respect is the heartbeat of the business
  • HUKD, a company that makes its money from affiliate links but still allows its members to mention quidco and other cashback sites. I always click on the links on HUKD and not the cashback links because I believe HUKD provides a valuable service. Blog post on this great business model to come soon.
  • The BBC, which publishes articles and programs critical of the BBC. At best they can be considered to maintain journalistic integrity, at worst it can be seen as a cynical act as they know that these criticisms will be published elsewhere in any case; either way they are better off being self-critical!

Don’t get me wrong, you can no doubt make great money by building a customer relationship without respect at the core, but you cannot build a great business. The time constrained world we live in means that there will always be consumers that cannot test the voracity of your claims and therefore deliver opportunities – it’s just they won’t come back when they feel the lack of respect. This may be fine for you if you aren’t expecting repeat business, for example street hawkers who target tourists.

What treating customers with respect delivers is a great business;  you build a real relationship with your customers where you look for repeat custom and, ultimately, brand evangelism! To do this one needs to take a longer term perspective on the economics, but I believe the result is a more robust business in the long run.

In terms of my personal writing style, I know it needs a lot of work and I really welcome any feedback on this. I think my audience needs to judge whether I get anywhere close to the lofty standards of balancing intelligence with complexity like Montaigne (I suspect I’ve got a long way to go). When I decide on which startup idea to pursue I hope I do build a model that is built on mutual respect with my customers.

 

I’m about 100 pages in on my re-read of Essays and am thoroughly enjoying it and picking up on things I never did the first time. I discovered Montaigne via Consolations of Philosophy by Alain de Botton, which is also a great book and worth a read. Finally, thanks to GoodReads for helping me with some of the Montaigne quotes in this piece.

As ever, please let me know your thoughts. What are your thoughts on the Essays? Are there other similar writers you think I’d enjoy?

* Full disclosure: this is an amazon affiliate link so if you click on it and purchase the book I’ll make about 15 pence – affiliate links were something that I needed to test for a recent course completed on Digital Marketing – I hope @howardvk will give me some much needed bonus points for this! The book is actually available for free online so I don’t advise you to buy it in any case

** Just two particularly memorable drops in an ocean of marketing mediocrity. Sorry to pick on you specifically.

Advertisements

A real Passion? I think so

Over the years I’ve met a number of the VC players in Europe and most of the meetings had one of two “vibes”: either wannabe private equity (suits, ties etc) or wannabe startup but generally without any startup experience. Last week I was lucky enough to meet Passion Capital and the “vibe” felt different – a shift in approach looking to better align the interests of founders and investors, with all the founders having operational experience. If you are a startup founder looking for early-stage funding then, in my opinion, these guys should be close to the top of your list.

Some facts

Passion Capital raised £37.5M in 2011, with £25M coming from the UK government (conceptually I like this – I might write a full post on this at some point). It has made 34 relatively early-stage investments to date, and aim to make roughly one investment a month for the next 18-24 months. That makes about 50 investments for the whole fund which, at an average of about £200k per investment, means a total of about £10M first round investments will be made (by my calculations) – which leaves a nice sized pot for follow-ons in the more successful ventures. For further details about the fund click here.

The range of investments so far is mind boggling: real-time analytics; an online car magazine; a wannabe PayPal killer; a Facebook-integrated app that lets women rate men; cameras that let you record your life; business due diligence tools; I could go on, but I won’t and the full list is available here, but I  hope you get the picture – what Passion Capital say they all have in common is a high quality team.

The three founders have entrepreneurial experience (for further details click here), which seems to have made sure that they have founder interests in mind and have put in place a model that minimises potential conflict of interest.

What makes Passion Capital different?

In a previous post I looked at some of the recent discussion around what makes a great VC investor – let’s see how Passion Capital stacks up:

What a good VC provides How Passion Capital stack up
Access to game-changing contacts and opportunities
  • The fact that the fund is so new as well as me being an outsider makes this hard to judge. A CEO of one of the Passion-backed companies told me that he “was able to scale in a way he never thought possible”, which is a positive sign.
Willingness to help (sleeves rolled up etc) when you need it, but standing back and letting you do your thing in the main
  • Bringing many of the companies under one roof in White Bear Yard (WBY) can only be a good thing as it allows startups to collaborate. The full-time associate and constant stream of interns also rove between companies as and when they are required by the teams, which teams have found useful.
  • In addition to this I like that Passion capital does not indulge in PR , letting the effort of partners and portfolio companies speak for itself. In a world where image is becoming centre-stage to the detriment of real content this is refreshing and, as a trend, let us hope it continues.
Fast decision making, but knowing you and your product
  • Decision making is seriously fast at Passion Capital, who have recognised this issue and aim to take less than six weeks from meeting founders to cash being  wired – the shortest time has been two weeks (I’ve known VC guys who take longer than that to decide on what to have for lunch!).
  • One small concern here is around the sheer number of investments made to date – which is many more than typical – might have some impact on the long term attention that can be paid to any one investment. This could be a concern, particularly for LPs.
  • That said, Passion Capital appear switched on – a portfolio company founder said that “Eileen had been tracking his company over a number of months” before he was approached by her – and she understood the product inside out.
Treating you and your team with respect
  • One thing I like about Passion Capital here is the high level of transparency in the way they work – which other VC fund publishes founder salaries? Which other VC publishes it’s term sheet?
  • In addition to this, all the partners have founded (successful) businesses before so really understand the pains of being an entrepreneur and how it all works.
  • Most importantly – everyone is so approachable. No airs or graces and open plan working makes for a great atmosphere at WBY.
  • One of the founders said that Passion Capital didn’t “oversell” during the onboarding process; like all great businesses they undersold and over-delivered.
Track record of performance (to some extent
  • That all the partners have strong records as tech investors and, first and foremost, as entrepreneurs meant Passion Capital quickly established itself as an influential player.
  • The office hours concept instigated by Passion Capital and the sheer volume of VC attendance points to a fund that is well-connected and has all the potential to deliver in the coming years – though the model is new and there is definitely some risk.

The Passion Capital model is, I believe, paving a way for a new approach to VC which many rejuvenate what many think is a tired, broken industry. Many others (for example, Connect Ventures) are treading a similar path and this can only be a good thing for the state of early stage funding in London and Europe.

Great, really great… but always room for improvement: what I would change if I ran Passion Capital

Let me make this clear up front: this is my opinion only, based on my limited knowledge and my own twisted set of values – and indeed it is highly likely that Passion Capital has made considered decisions across each of these areas that I have no idea about – they have what they have in place because it makes sense for them.

That said, the things that I would change about the business as it stands today are to:

  • Make values you clear as they are awesome. Passion Capital is a clear step away from the old model of VC funds. Many people on the inside know this, and more and more are discovering it (like me). However, for those fresh to the industry the distinct proposition is only hinted at on the website. I know you are aiming to let your results speak for themselves but I don’t think a radical shift in approach or bragging is required – simply state what you do because what you do is great
  • Think about hiring another associate – your success will bring more and more work! From what I can tell Passion Capital’s workload is large and, though the quality of the team is great, the high-touch approach to supporting the portfolio means that people’s time can be relatively stretched. This may mean that the firm misses out on potential opportunities and also could add to the great support it gives entrepreneurs
  • Keep building centres of excellence. The founders I have spoken to say one of the real value-adds in London is White Bear Yard; this VC fund “accelerator-style” type proposition is very exciting and much appreciated by those lucky enough to be based there, fostering collaboration and helping all the companies involved to grow. This model could be replicated in other markets, particularly where Passion Capital might have clusters of investments – something to think about over the longer term.
  • Build a backbone of startup shared services for your portfolio (which then could be leveraged as a business in its own right?!). All startups need lawyers, accountants and other such services to get going. The community at White Bear Yard (WBY) and is provided with ad hoc help with a lot of this stuff (which of course needs to be done but doesn’t add real value to the product) by the Passion Capital team. It feels like there might be an opportunity to put in place a suite of services that portfolios companies can access at relatively low cost to put the right foundations in place and allow the teams to do what they do best – building products and businesses. This will be hard to do but, you never know, this “startup toolkit” model may become a business in its own right (this may exist already; admittedly I haven’t looked hard enough for it)!
  • Consider the social values of portfolio companies. I know Passion Capital back people and not ideas but, in my humble opinion, some weight could be given to the “social” value of the idea of the business – Passion Capital does not need to save the world but it should not invest in companies with a potentially negative social impact. Let’s be clear: this is not an issue with the vast majority of the portfolio; there is, however, one idea that I believe sits in a moral grey area. This is as much a business point around long term reputational risk as it is an ethical one, which I believe especially important for a VC fund not engaging PR firms and that has a large share of its backing from the UK government.

These are all very small and very manageable changes to a very strong approach – and as I mentioned previously Passion Capital no doubt have good reasons for doing what they already do or they may even be implementing some of these changes.

All in all, Passion Capital is without doubt the one of most exciting VC investors I have met in Europe, and I hope that they succeed in bringing a new way of working across the industry.

This post was written after speaking to key members of the Passion Capital team (not the partners) and several founders of Passion Capital companies. As I get more au fait with startup world I’m beginning to see more and more nuance and that’s what I hope to share with you.

Thanks for reading and please let me know your thoughts. Are there any other VC funds in Europe with a novel approach? Are there any you believe are better than Passion Capital? 

Why VC is like marriage: Five things to consider when bringing a VC investor on board

You’re a founder of a startup. You’ve built a crazy product and are now ready for some funding – time to schmooze the VCs, but which ones do you pick? Easy – the same things you look for when you look for someone to marry. Of course the relationship doesn’t last as long, but the long term nature means the same nurturing is important.

What do you want from that life partner? Being pretty and having money is great, but the relationship needs to go deeper for real success and the same is true of your VC investor.

Image for VC post

Not all VC firms are created equal, especially on what they offer in addition to money and a pretty face. In his open letter to Dumb VCs, Andy Dunn provided a sort of checklist of issues startup founders should look out for. This initial list has been subject to both praise and rebuttals  across the blogosphere – and by analysing this (very interesting) discussion I have come to the conclusion that a good VC investor combines the following five things:

1. Access to game-changing contacts and opportunities

The world is fast evolving, with more new business launches as the cost of set up falls, entrepreneurship spreads through the world and clone factories quickly exploit new opportunities, building a viable (tech) business with long term trajectory is getting harder than ever.

This means that the most important reason to choose a VC is the network they have and the ability to make the right connections for your business – and get you to scale quickly. This ability varies significantly across VCs, and you should give up more equity if you believe there is greater growth potential.

[Life partner analogy – someone who helps you grow spiritually]

2. Willingness to help (sleeves rolled up etc) when you need it, but standing back and letting you do your thing in the main

Andy asserts that “good VCs” stand back and let startups get on with their thing. I generally buy this, but the best VC funds realise when you need help and are available to give you the right level of support. The founder of any startup is not going to be all knowing, and the best VCs will provide coaching, guidance and hands on deck as and when required.

Mark Suster provides some prominent examples of help received by famous founders. Speaking to various startup founders in London I know generally like their VC investors and many provide a range of support that they have found useful:

  • Roving interns that work across the portfolio to pick up slack
  • A “sounding board” for product ideas
  • Recruiting key team members

See FFVC’s TOPSCAN list and others who have built on this for more comprehensive thoughts on the kinds of help you can and should expect from your VC (including the network mentioned in point 1 above).

[Life partner analogy – someone who is laid back most of the time back has your back when times get tough]

3. Fast decision making, but knowing you and your product

One of the biggest problems that many entrepreneurs have with the investment process is how long it takes – days can quickly turn into weeks, weeks into months. This is a big deal – startup founders often have pressing cash flow needs and a longer decision making process means these issues only get worse.

Given the skew of startup returns (see halfway down the page), a longer due diligence process may be understandable, but as a startup founder make sure that you are not led down the garden path for too long and understand any reasons for delays.

On the other hand, you want a startup founder that understands you, your team and your product. Early on, your VC investor should know what you do and understand your product – I’m fully with Andy on this one.

[Life partner analogy – someone who doesn’t leave you hanging]

4. Treating you and your team with respect

Arrogance isn’t attractive. Don’t get me wrong, arrogance can lead to short term infatuation, but it is humility that results in love and marriage!

Your VC investor should respect you (not least because you will hopefully be making them a lot of money).

Your VC investor should be straight with you about what they can and can’t give you and about what they think of you. Transparency and trust is critical to a long and fruitful working relationship

Most of all, your VC investor should want to work with you no matter how active a relationship you choose to have with them.

[Life partner analogy – pretty obvious: trust, respect, honesty]

5. Track record of performance (to some extent)

Duh, of course you should work with VCs who have had successful exits right? Generally right, but with nuance.

As with any other industry, there are brand names out there in the VC space. You know the names,  the so-called “2%” who have been there and done that and just the cachet of their name being associated with your company can open up doors (in terms of talent, exits and a whole host of other things).

However, it should be noted in general that bigger VC funds typically have weaker performance  and the old adage from financial markets holds true: past performance is no guarantee of future performance.

Andy refers to successful exits and this is where I think it’s a bit murkier. The world is moving quickly (especially here in London) with new VC and angel funds popping up on a regular basis and, putting it simply, everyone needs to start somewhere.  When picking a VC look at the track record of the fund but also pay careful attention to the track record of the individuals, and not only from an investment perspective but also what else they have done that could aid your cause.

[Life partner analogy –someone whose previous partners you admire…  ok, it wears a little thin here but you get the picture!]

 

I’ve chosen to write about VC as I’ve met a few VC investors recently as well as guys who have just closed funding, and at the same time I read Andy Dunn’s post – it really got me thinking about what I’d want from any investor interested in my startup.

I’d love to hear your thoughts and I’m here to learn. If you’re a venture-backed startup founder, what did you look for before you took on the money? If you’re a VC guy, what else do you offer in addition to the above?