Beyond Hackers, Hipsters and Hustlers: What Startup Teams are Made of
Just over a year ago my colleague Toby Heap, Founding Partner of H2 Ventures, wrote this piece on the kinds of technologies we love to invest in. It’s a diverse range and true to it, we continue to back great examples of how these innovations can be applied to big, juicy problems.
Technology is critical to what we do at H2. It’s what our founders use to create the solutions and experiences that impact; how we earn and spend money, interact and connect with each other, and how businesses make better decisions.
But paramount to the technology is the team.
If you google “what investors look for in founders” the list is long and seems to be getting longer with every multi-million dollar raise. Let’s take a look:
Grit, disciplined, resilient, intelligent, rebellious, charismatic, empathetic, passionate, driven, hungry to win, a good person, soft skills, lifelong learner, resourceful, industry expert, proven track record, serial entrepreneur, ability to articulate the idea, visionary, storyteller, total and unwavering commitment to the business, ability to attract world class talent. Woah.
These are the characteristics that make for great founders, and the best founders are often in teams. Most early stage investors I meet describe their ideal startup founding team as something like this:
A well-coordinated, deliberately curated team of individuals each with their own personality, skills and backgrounds, united by a joint passion to solve a global problem (and save the Zeo Crystal). And sure, startup power rangers are out there.
But in reality, even if they are experts, totally capable of execution, most early-stage startup teams come across more like this:
A naive (albeit awesome) band of misfits, fighting against something they’ve barely begun to understand. Ravi Gururaj, Indian Founder & Investor was spot on when he described it as a ‘random coalition of the willing and available’.
It can be even trickier for solo founders who often give off these kinds of vibes:
We get it! Trying to validate the problem, come up with a solution and articulate it all in a one-minute application video, on your own (whilst referring to yourself as “we”), can put even the most confident founders on edge.
The people we’ve invested in are impressive women and men who now quite clearly possess all the right characteristics needed to build great companies. But none of them showed up at our door with a billion-dollar idea, the perfect pitch and the kind of confidence that (let’s be honest) only post exit founders possess. That’s because startup founders aren’t born with that crazy long list of skills. They learn them on the job. It’s our job to recognise something in them at the time and bet on their ability to figure out the exact market opportunity and business model, execute on that and bring great people with them along the way.
More than a rallying cry to founders, our “people first” approach is a necessity, without which we would probably end up making some pretty bad investment decisions. As we’re often the first investor on a startups journey, the majority of founders who make it into the program do so with little more than an idea and the conviction that they are the right people to bring it to life. Even those who come in with an MVP will end up pivoting a little or a lot as they pressure test their own assumptions.
So early stage investing is as much about heart as it is about head. As much gut as good sense. For all the founders out there trying to navigate and assess the hundreds of opportunities from angels, VCs, accelerators, incubators and dreaded startup consultants, simply saying “we invest in people” is about as helpful as a waterproof towel. I mean have you ever met a founder who doesn’t see themselves as a passionate, driven rule breaker? Of course not.
It takes time and experience to look beyond the hackers, hustlers and hispters and spot critical traits and qualities early on. So, with that in mind I thought I’d talk to some of the team dynamics we pay close attention to and how our application process helps us recognise them.
#1 Do they genuinely like and respect each other?
Our own core team is made up of Ben and Toby Heap (brothers and founding partners), Melissa Hurwitz (Community Manager), myself (Accelerator Manager) and our amazing interns Lily Wu and Audrey Thehamihardja. We’re a diverse, close knit team who genuinely enjoy each other’s company, value each other’s opinions and different approaches to life, our work and it’s inevitable challenges. So naturally we look for similar dynamics in the founders we invest in.
There is nothing more awkward than co-founders who cut in and talk over each other, dismiss each other’s opinions and don’t speak highly of each other’s achievements. In startup land the only sure thing is that the going IS going to get tough. You had better respect, and you may as well enjoy, the people you’re toughing it out with. And in the absence of co-founders we assess solo founders carefully on how they interact with all the members of our team, especially the more junior ones.
#2 Is it all about the money?
No doubt about it, founders need dollar bills and their feet in the right doors. But like any good relationship, everyone’s gotta be clear on what they’re giving and what they’re getting, and understand that it’s a process in and of itself.
So we dig into not only what you’re looking to get out of the experience but what you feel you would bring to it. Each cohort is it’s own mini sharing-economy of founders who share ideas, skills and more. We’re really proud of our community of nearly 100 founders who have been through the program and continue to participate by reaching out their hands to those who come after them.
#3 Will they carry on?
Like I said, the going IS going to get tough. And it will be a different kind of tough for every founder. Therefore, the best startup teams are able to survive both the everyday ups and downs as well as the massive pivots often needed to get onto the right path to success. If you’re lucky enough to have witnessed a founder throw out two months’ worth of code and start again, without losing the will to live, then you my friend have seen perseverance in the wild.
So we make sure to ask all kinds of questions, especially about your life before startup land, to understand where you’ve been and what you’ve seen. There’s no perfect answer, but it will give us an idea of how you’ve dealt with life’s curve balls. This way we can start to understand what motivates and drives you, which will help us to support you when you just don’t want to carry on.
#4 Do they only want to be around people like them?
Our alumni are (in no particular order), students, scientists, bankers, consultants, engineers, designers, volunteers, teachers and academics. For some this startup is their first job and for some it will be their last. They’re into turtles, anime, bikes, solar systems, cold brew coffee and the NBA. Some are introverts who can’t easily express their emotions while others wear it all on their sleeves. They are Australian, Argentinian, Italian, Vietnamese, Brazillian, American, Chilean, Mexican, New Zealanders, French, the list goes on! They are old friends, new friends, colleagues, life partners and parents. They’re all pretty weird until you get to know them, and when you do you realise you’ve got more in common than you ever imagined.
We look for people who appreciate those who aren’t like them, because we’ve seen how diversity can nudge you out of your comfort zone, and provoke the kinds of discussions and debates that are critical in the validation phase. It also makes it way easier to resist the kind of groupthink that can slow a young business down.
So founders, if any of that hits home for you and you’re playing in the fintech, data, AI or machine learning space, we would love to hear from you.
Accelerator Details & Logistics:
# We run two programs per year starting on 1st February and 1st August.
# We keep applications open all year long and officially begin reviewing in late November and June respectively.
# The majority of teams who get into the program will spend the 6 months with us at our office in the new Sydney Startup Hub. We do however make exceptions for founders operating businesses in other countries or those who have family commitments.
What you can do now:
# Ask around about us. We’ve got 56 portfolio companies with over 100+ founders. That’s a lot of people who can tell you what the H2 experience is like.
*And on that note, we love referrals from our alumni and mentor network; we reckon they know who will make a great fit.
# Once you apply, feel free to keep in touch with us. Sometimes teams will send us updates over the course of weeks or months before we start officially assessing applications. We love this as it gives us more insight into who you are and where you’re at.
# APPLY HERE and remember, you don’t need a fully functioning MVP with crazy traction to apply. We just want to hear about you, your team and what you’re working on.
Happy week founders!
