What it means to put founders first
Following on from my post reflecting on our recent trip to Boulder and the TechStars mantra of #givefirst, I want to also share a lesson for the Australian startup ecosystem that I took away from another key TechStars mantra of “founders first”.
Also recited as “for the founders”, the “founders first” concept puts the individual founders — not their startups, investors, mentors or others — at the heart of the focus, activity and support. It also relates to another key concept in Brad Feld’s Boulder Thesis, that startup communities must be led by entrepreneurs.
This distinction and concept is both subtle and profound.
In the more subtle ways, it’s the difference between a meetup or panel event where the panelists spend the majority of the time talking about themselves, versus one where the majority of time is spent answering questions from the floor and delivering real value to the audience.
Similarly subtle, it’s the difference between a mentor that spends 10 minutes introducing themselves and their achievements, as opposed to one that instead spends that time understanding and listening to the mentee.
More substantially, it’s the difference between an accelerator program that kicks out a startup that fails, versus one like muru-d that allows the founders to stay in the program as they pivot to launch a new venture, because the program is invested in the founders, not just their current startup.
It’s also why, IMHO, entrepreneurs make the best mentors and advisors, because they know first-hand just how ridiculously hard it is to be a founder. They understand that mentoring is not about feeding one’s own ego or enhancing their personal resume. And nor is it just about sharing connections and imparting knowledge (today, knowledge is abundant and cheap). But rather, good mentoring is usually much more about listening than talking. It’s about relating and normalising founder emotions, re-building their confidence, debunking imposter syndrome, and generally lending a shoulder to cry on, by sharing with the founder that despite however much they may feel like a failure, the mentor has failed 10x worse.
Beyond these subtle nuances, the “founders first” attitude can be much more obvious and profound.
During an investor training session in Adelaide last year, Brad Feld was on a panel where he made a comment that has stuck with me. He said that as an investor, after he made an investment into a company, he then worked for the founder, not the other way around. Unfortunately I’ve seen some local investors with the exact opposite sentiment.
As MD of TechStars New York, Alex Iskold, said in his blog: “Prioritizing founders and their interests and their needs can’t be faked. You can’t just say you do it. You have to actually do it. And it is a ton and a ton and a ton of work.”
It is very clear when someone doesn’t have this “founders first” attitude.
Which leads me to my short rant….
There have been so many great initiatives by various Governments in Australia recently to support startups and entrepreneurship. But this support has unfortunately attracted a lot of new actors into our startup ecosystems, many of which I fear do not understand this #foundersfirst attitude.
It typically works like this: some Government department releases a new funding program for startup or entrepreneurship programs in whatever form. As a result, half a dozen individuals and organisations, who’ve often never previously operated in the startup ecosystem, and who are led by individuals who have never started a business (let alone understand the differences between an SME and a startup), suddenly appear on the scene and make submissions seeking funding for new programs and spaces to be established.
To quote some of the new funding applicants I’ve met recently: “there’s funding available, so why wouldn’t we have a crack at it?” or “we’ve got nothing to lose by applying for the funding”. <insert tears>. I just wish more people studied military decision making, where it is ingrained in you that the first available (and possibly the best) course of action in any situation is actually no action — i.e. to do nothing. Or as devs understand, it’s knowing when the use of a null response will give the best results for the system.
At first glance, this influx of new actors with new programs appears positive. But in my at-times jaded experience, when you dive deeper and speak to the parties to understand their “why”, there is no mention of addressing the needs of local founders, and there is little understanding of, and limited connectivity with, the existing landscape of providers already delivering value to founders in the ecosystem.
In essence, they are not being driven by an attitude of solving a gap in the ecosystem “for the founders”. But rather they appear motivated by self-interest: creating jobs for themselves, seeking funding for their own sustainability, creating a pipeline of startups as potential customers of their services, and worse, utilising it as a marketing exercise to position their brand to be seen as innovation leaders.
Exactly this has happened recently in Queensland with certain aspects of the regional incubator support program — a program that I strongly advocated for during my time working both within the department and on the Startup Working Group that advises the Minister, after we studied the success of a some-what similar program in Israel over a decade ago. But I believe something has gone wrong between the program intent and the reality of its implementation (particularly through a requirement for forced collaboration in regions where they lack any depth of relevant potential collaborators).
I hope I am wrong, and I can’t emphasise enough that despite the paragraph above, I think the Queensland Government is doing amazing work in the startup ecosystem, and is a role model for any other level of Government in Australia, who should openly learn from and copy the great work being done here under Advance Queensland.
But while in Boulder in January we talked about this type of Government program with the co-founder of TechStars, David Cohen. David mention that the US Government had once proposed a similar program, albeit on a much bigger scale, to fund a huge number of new accelerators across the USA (unfortunately I couldn’t quickly find any info online for a link). When David heard of the proposed initiative, he and other startup community leaders advised the US Government not to proceed, talking them out of the funding program for exactly the reasons we are now living through in Australia.
The cynics will say that the existing operators were just lobbying to protect themselves and secure their share of the market. I don’t believe this at all.
While in San Francisco a few weeks ago with Startup Catalyst, we caught up with RocketSpace, a very successful co-working space that integrates with a large number of corporate partners, and now delivers corporate-backed accelerator programs. After several years of operation, RocketSpace has supported over 1000 startup alumni, including 17 of which are now unicorns.
They shared their plans to launch in Sydney, Melbourne and Brisbane in 2018. This comes on the back of WeWork opening two locations in Sydney last year, with significant national expansion plans for 2017 and beyond, plus TechStars launching in Adelaide, with other Australian cities due to be announced later this year.
The fact that these successful international giants of the startup world are launching and expanding into Australia can only be a positive sign of the growth of our domestic ecosystem. It’s a signal of our ecosystem’s health.
But many startup ecosystem leaders — particularly those running co-working space models — naturally fear the entrance of these successful international operators, as they could decimate the funding models of some of the existing Australian startup hubs and programs, by attracting away corporate partners and startup deal-flow. At times, I’ve been very, very guilty of this type of thinking too.
But here is my takeaway from our time in Boulder: we need to remember the “founders first” mantra, and when assessing anything, we always need revert to asking the question that matters most: “is this in the best interest of founders?”.
Will the entrance of experienced, globally-connected operators like WeWork, RocketSpace and TechStars in Australia help our founders? Absolutely yes.
Whereas, will the establishment of new startup programs and hubs by local operators with no startup experience and with no international connectivity, actually help our founders? Possibly, but in my view, it’s much, much more unlikely.
As the CEO of a not-for-profit that relies on corporate, University, and Government funding (yes, please contact me), I am always conscious of how new entrants in the market could divert away our funding sources — either directly, or by poisoning the well with bad outcomes and poor ROIs.
But I honestly believe that if we remain true to our mission and vision, stick to our niche role as one actor amongst many in the ecosystem, and continue to deliver real value to a significant problem faced by founders and our economy, then we will always continue to attract and retain partners and supporters. And if someone comes along and does it better, then we close up shop and support them instead (but take note, I am that guy at the gym that has to run faster and lift more than anyone around me, so the competitive spirit is real).
Fundamentally though, what we are talking about is the difference between the ecosystem operators competing over slices of the pie, versus being in the business of building pie factories (which is the topic for a future blog post).
For these reasons, anytime I meet a new actor in the startup ecosystem, I try to understand their why, and I quickly disengage from anyone who is motivated by self-interest (and no, I don’t waste time trying to convince them of why they are wrong).
At any rate, in case you missed the point I am trying to make, it’s this: if you operate in a startup community, then all of your decisions should map to the philosophy of “founders first” — both in everything you personally do in the startup ecosystem, and also in any measure you make of the other actors in the ecosystem. Make your decisions based on putting the interests of founders first, and instead of duplicating and replicating existing support, simply collaborate with those who are already working “for the founders”.