Shared values predict startup success? An interview with Saberr

Saberr

Introduction

As part of our ongoing research we have been looking at the best ways to go into entrepreneurship. When we talked to Matt Clifford, of Entrepreneur First about the question, he suggested talking to Saberr. Saberr are a small startup focussed on the question of predicting the success of teams in business settings, and they have already had some impressive successes.

We spoke to Alistair Shepherd by phone, one of the two original founders of Saberr, about their perspective on forming a successful entrepreneurial team. The following is a selection of highlights from the call, edited and reorganised for clarity.

Key points

According to research by Noam Wasserman most startups fail because of their team, suggesting team composition is important for entrepreneurial success.
While standard personality tests have not been shown to be very successful at predicting success in careers, Saberr have achieved some impressive, if small scale, predictive success using a model based on value alignment and behavioural diversity.

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Interview with Matt Gibb

Introduction

Matt Gibb has been involved with 80,000 Hours since its inception. Early on, he was influenced by the idea of earning to give and has been pursuing this for the last few years through entrepreneurship. When we spoke to him he was focussed on a company dropkic.kr at the startup incubator Betaspring. With dropkic.kr, Matt has tied himself and his co-founders to the mast by adding a legally binding agreement to the company charter to donate ? of any proceeds they from selling their stake to GiveWell or Giving What We Can recommended charities.

Charitable Contributions. Each Founder hereby agrees that, upon the earlier to occur of a Sale of the Company or a Transfer of all Company Securities held by such Founder (such time, the “Charitable Contribution Trigger”), such Founder shall contribute not less than one-third (1/3) of such Founder’s Aggregate Proceeds (measured as of, and after giving effect to any amounts received by such Founder as a result of, such Sale of the Company or Transfer) (such amount, the “Charitable Contribution Amount”), to one or more global health-related charities as may be recognized by givingwhatwecan.org and givewell.org or any similar or successor research organization; provided, however, that each Founder shall be entitled to deduct from such Charitable Contribution Amount, on a dollar-for-dollar basis, the amount of any and all global health-related charitable donations made by such Founder from and after the date hereof and prior to such Charitable Contribution Trigger. (emphasis added)

He has some experience as a successful entrepreneur, having co founded Promo Push Ltd. in 2010 an electronic dance music promotion company, now servicing 250,000 customers including Sony Music and a subsidiary of Universal music. We talked to him about his experience in tech entrepreneurship and his views on getting into it for those just starting out. What follows is a edited and reworked version of the interview.

Summary of Matt’s points

  • The best way to learn what you need in order to make a successful startup is by trying, so the best path into entrepreneurship is to aim to start as soon as possible.
  • For those interested in entrepreneurship web startups are a good option because they are the cheapest to start, but the startup costs of new businesses in physical products is dropping rapidly.
  • When starting out as an entrepreneur it is much more important to focus on execution than the idea, because it is unlikely the idea you end up with will be the same one you started with.
  • The demand for technical skills in backend or frontend development outsrips supply in the startup world, so they are very valuable skills to learn if you want to become an entrepreneur.

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The Value of a Degree

Introduction

Many of our readers are students, and some have come to us wondering whether they should start a university degree or complete one they have already started. One thing to consider in making this decision is what effect getting a degree will have on your lifetime earnings. So in this post we summarise our reading of some of the empirical literature on this question, mostly focused on the UK.

Summary

  • There appears to be a consensus in the empirical literature that getting a degree provides a large financial return on the costs in increased lifetime earnings (generally better than an investment with a 10% return and maybe closer to 15%).

  • The most common way of studying the question of economic returns is to use correlations in data containing information on education, earnings and other variables (performing “ordinary least square regression” on it).

  • The obvious worry with this method is that the same abilities that help earn a higher income might cause people to go to university rather than the other way around. This is called ability bias. The standard view in the literature, however, is that this issue only has as minor effect on estimates of the return to education.

  • The literature here supports the common sense position that an undergraduate degree is generally a good investment in your career.

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Interview with Matt Clifford

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In 2011 Matt Clifford and Alice Bentick, left their consulting jobs in McKinsey to found their own non-profit, Entrepreneur First. Their idea is to take about 30 talented and ambitious graduates each year and help them form teams and start companies, in order to promote entrepreneurship as a career path. They have already achieved some impressive results with their first cohort group of 32 graduates founding 11 companies which collectively achieved a market valuation of £22 milion In their first funding round.

As part of our research on the best routes into entrepreneurship we talked to Matt Clifford about this questions.

Summary

Key points Matt made in the interview:

  • A high level of technical skills seems to be the most important single attainment of someone interested in becoming a tech entrepreneur.

  • Startups inevitably involve failures and things going wrong, so determination is an important trait for entrepreneurs.

  • If you are interested in starting a startup consider developing domain expertise in a sector other than tech that is ripe for disruption.

  • It remains hard to find good data on indicators of success in entrepreneurship, current research is more qualitative and indicative.

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