What EF is really good at
I think a lot of people sometimes see investors as a bit mystical. There are thousands of companies created every year and very few of them are ever worth over a billion. The general consensus is that per year only about 15 companies will make it to unicorn status. The odds of picking one of these are really low. Yet the very best investors often pick multiple unicorns.
Because of this impressive skill I think investors get a reputation of being wise sages staring into a crystal ball. But at EF, whilst we do like fantasy metaphors, we are definitely not wizards. If we are really honest we don’t know what companies will go on to be unicorns. We don’t have a crystal ball or any mystical powers. But we do have something that we are good at.
At EF, we are pretty confident we can build amazing companies. But what we know for certain, is that we can stop great people from building bad ones.
The most important companies in the world rarely look like others that came before them. It’s really hard (or maybe impossible) to pattern match what truly revolutionary companies look like by comparing them to their predecessors. Our data set of working with hundreds of ideas, projects and companies will be limited in how much value it can offer. The most significant companies are unique and accurately spotting them in the embryonic stages is really difficult.
But bad companies often look like other bad companies. They are normally bad for a reasonably repetitive reasons. And because bad ideas aren’t unique, our data set of ideas that failed and dismissed and pivoted away from is useful. We can spot those and every cohort we run we stop brilliant people working on ideas that aren’t good enough for them.
Not building a bad company is really important. A bad company doesn’t always die straight away. Some bad companies make quite a lot of money. They might make their founders really wealthy. But they will never be the highest impact use of the founder’s time. If a founder is able to make a lot of money or impact from a bad company, just think how much they could have made from a good company. For the most talented individuals the opportunity cost of working on a bad company is devastatingly large.
At EF we consistently see the most ambitious people are allergic to mediocrity. For them EF acts as a way to meet other outliers and make sure they can avoid the trap of building something less than their potential.
Don’t build a bad company.
Jack Owen is talent associate at Entrepreneur First (EF.) EF runs full-time programmes that fund the most talented scientists, engineers, developers and industry experts to find a co-founder, then helps those teams grow their businesses and raise funding. We’ve built >100 companies worth >$1B so far.
We currently run programmes in Berlin, Singapore and London, you can apply here or sign up below to get advice from the EF team on your startup journey.
