I recently interviewed Matt Clifford (left), the Co-founder & Chief Executive at Entrepreneur First, which describes itself as “Europe’s leading pre-seed investment programme for technical founders who want to work on hard problems.” It’s a follow on from our 2013 interview. You can read a summary below.
Summary of the interview
It’s hard to predict who’ll succeed as a founder, but it’s a great option if you’re well suited to it, so if you think you might succeed, it’s valuable to try it out. (Read more).
If you found a technology startup in a major hub and build your network (especially the Bay Area, but also London, Boston and Berlin), there are a lot of good exit opportunities if your company fails, because there are many people in the hub who value the skill set. So, the cost of trying isn’t that high. If you do a startup outside of a major hub in a culture where failure is less acceptable, the cost of trying is much higher. Entrepreneur First graduates normally find it easy to get another job in the technology sector if their startup fails.
If you’re trying to decide whether to do a startup, first try to lower the costs of testing out the path as much as possible. This is the aim of Entrepreneur First.
Then, ask yourself why you expect to be above average. The median founder makes nothing, so you need to have reason to expect you’re above average. Being smart and hard working isn’t good enough, since most people in the path are.
Entrepreneur First looks for people who have some kind of “edge” – usually either a valuable technical skill set, or in-depth knowledge of a customer problem. Few people are a good founder for a wide range of possible companies – rather they are a good founder for a particular product they want to create, ‘founder-problem fit’. In this, they agree with Y Combinator that you shouldn’t normally set out to start a startup, rather you should care about a problem then realise that starting a startup is the best way to solve that problem. There are successful cases of people who try out lots of ideas with the hope of starting a startup, but it’s comparatively rare among big successes.
Determination and grit are probably some of the most important characteristics of founders, because almost all will go through periods where quitting is a highly appealing option.
Accelerators may accept you even if you have a very low chance of success because they get to make many bets, so although being accepted by an accelerator is a good sign, it doesn’t imply it’s a good option for you personally. The same is true of venture capital funding.
If you’re unsure whether you should continue with your startup, that may already be a negative sign. The most successful founders are confident and so passionate about their company that they don’t spend much time thinking about failure.
It’s hard to know how best to prepare for doing a startup. In London, lots of founders used to work in finance, but that may just be because finance used to be the sector that attracted the most ambitious people, whereas today the most ambitious people going into tech. One good step, however, it learning a technical skill – programming is the most widely applicable, but there are other options, like engineering if you want to do a hardware startup. Being able to work closely with a great entrepreneur is also really valuable (though these jobs are hard to identify ahead of time). Be careful about being a ‘badge collector’.
Compared to our last interview in 2013, Matt now weighs ‘founder-problem fit’ more highly over being a ‘smart generalist’.