Testing, Testing...
#CapitalAtRisk
Above: My son’s homework jotter.
Testing Founders
In the fast moving world of startups — the moonshots, the FOMO, the exponential growth curves — is it possible or advisable to spend time testing founders? Things move super-fast so surely, as an angel investor, if you see an opportunity then you have decide fast and not waste time somehow testing the founder and reflecting on what you learnt?
Only things don’t move that quickly. Uber was turned down by several very smart VCs, the Airbnb founders turned to selling breakfast cereal to make ends meet (there are some published knock-backs for Airbnb here and here) and I have some cracking rejection emails sent to me by some very smart people when I was helping what3words back in 2013.
So what do I mean by testing founders? The whole point of a test is to show how someone measures up against others. Tests can be pass/fail (like your driving test) or graded (like your A-levels). Some people have told me that you can’t test whether a founder will be a good one or not. I think you can. You can certainly grade them against others and give a mark out of ten in various areas as to their probability of success. And the pass/fail part of the test I’m conducting is to find out if the founder and I will be a good fit for each other. Is there trust? Can we challenge each other? If we disagree can we still move forward for the good of the company?
Setting homework
So I test. I set homework. ‘Homework’ isn’t actually my term but it’s a good one. That term was given to my testing process a few years back during a walk in the park with Tim Jackson (he of Q&A Podcast Episode 1 here).
“Let’s meet for coffee at 7am”
There is no such thing as being on time; you are either early or you are late. My first 7am coffee meeting was with Mark Pearson in a grotty Costa Coffee inside Waterloo Station in 2012. I remember it well — over email beforehand I said I was keen to meet and could do so at anytime, even early. He replied, “What level of early..? 7am?”. I’d never had an external work meeting at 7am before and I really wanted to meet Mark so I got there at 6:45am and that’s been the benchmark and inspiration ever since. (I even scootered all the way to central London from Hertfordshire on my Vespa to avoid any train issues).
The 7am starts also came from meeting my 9others co-founder, Katie, at 7am since the beginning of 9others in Dec 2011. We both had day-jobs so the only time to think about venues, guests and how to help those people was before the normal working day. (With special thanks to Dan Land for always having the doors open and the heating on in Coco di Mama #1 on Fleet Street at 6:50am).
What’s the point of the 7am meeting? It’s not always about turning up to a freezing cold station at 6:45am. One variant of the 7am coffee meeting now is whether the founder is in my Zoom waiting room 2 minutes before the meeting is due to start.
It’s about finding the right fit. When I was a Teaching Assistant at UCL I volunteered to mentor some aspiring entrepreneurs. I still had a day job so when six teams said they wanted to meet up and chat I said that we could only meet at Pret a Manger on Tottenham Court Road (right by UCL — handy I thought) at 7am. Three groups flat refused. One said that they didn’t get up until 10am and worked through until the early hours, so no. One who did show up (early) was Alex. I’ve ended up advising and helping him where I can and he’s become a good friend of myself, Katie, 9others and many others he’s met through us since.
I’m not saying that someone who doesn’t come to a 7am is not going to be successful but if a founder can’t be bothered to set there alarm a bit earlier on the day they want to meet me then the probability is very high that it’s not going to be a good fit for either of us going forward.
Other bits of homework can be related to pace, work ethic, doing what they said they’d do, challenging me and pushing back, sticking to stated principles (or not) and a number of other things that test character and discipline.
It goes both ways
And by the way, I hope the founder is testing me too — the objective is to test, probe and ponder on who each other are, what makes us tick and what the probability is of us having fun, being successful and making money together.
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“Access” With so many investment opportunities where can an angel investor find the best ones? Well, just like getting to Carnegie Hall, it takes practice.