The Exchanges

Q And what can non-technical individuals do in those cases when they can't build it, say in the software case?

A So for non-technical individuals, our advice is, um, become a domain expert. Um, so if you're looking to build a tech startup, but you don't come from a technical background, uh, you need to be bringing some sort of expertise to the startup. Uh, so often we find that this is domain expertise. To give you some examples from the current EF cohort, uh, we have, um, Karen, who spent 10 years working in the translation industry and has been, uh, Helping clients through agencies translate, um, uh, documents, websites for years and years, and she knew intimately the problems with the translation world as a whole, um, and she came on AF and partnered up with, uh, one of our guys who had a very strong technical background, um, and then are building a, a, a translation, um, focused tech startup, but she's using the industry expertise, the contacts, and the knowledge that she had from, from her work in that space, um, that means that she's a, she's the, the kind of Right founder to be building that. I suppose one of our frustrations with non-technical founders is that often we find people who have years of expertise in a particular industry, but they're not interested in using that, um, to build a startup, and I, I think that can be an error.

AI assessment note: “for non-technical individuals, our advice is, um, become a domain expert.”

Q And you obviously work with companies at their very earlier stages. So, um, Having witnessed company building entrepreneur first, how would you recommend is the best way to build a company from scratch?

A So I suppose there are a couple of, um, important ingredients to build a good company from scratch. Um, at EF, what we focus on, uh, primarily is co-founders. Um, so we, we don't, uh, select teams, pre-formed teams. We select individuals. Um, so if you get on EF, it's because we believe that you have exceptional talent, um, and predominantly exceptional technical talent. Um, so we think co-founders matter. Um, so finding great people and finding great people to co-found with really matters. Uh, I suppose the next ingredient that really matters is, uh, the idea. Uh, although I think often people approach this in the wrong way. They assume that unless they have the perfect idea, there's no point in even getting started. And they spend months, if not years, trying to craft the, the perfect idea, which just doesn't exist. Um, so the most important thing, uh, when starting from scratch is to come up with a idea, an idea, um, that, uh, that resonates with you, that you're, um, uniquely skilled and talented to, to start working on, um, and then just to get going. Um, and I suppose that's the final ingredient is just to get building, um, and to start building and getting your product out in front of customers as quickly as possible so you can understand whether you're actually building something that people even want.

AI assessment note: “there are a couple of, um, important ingredients to build a good company”

Q And what can non-technical individuals do in those cases when they can't build it, say in the software case?

A So for non-technical individuals, our advice is, um, become a domain expert. Um, so if you're looking to build a tech startup, but you don't come from a technical background, uh, you need to be bringing some sort of expertise to the startup. Uh, so often we find that this is domain expertise. To give you some examples from the current EF cohort, uh, we have, um, Karen, who spent 10 years working in the translation industry and has been, uh, Helping clients through agencies translate, um, uh, documents, websites for years and years, and she knew intimately the problems with the translation world as a whole, um, and she came on AF and partnered up with, uh, one of our guys who had a very strong technical background, um, and then are building a, a, a translation, um, focused tech startup, but she's using the industry expertise, the contacts, and the knowledge that she had from, from her work in that space, um, that means that she's a, she's the, the kind of Right founder to be building that. I suppose one of our frustrations with non-technical founders is that often we find people who have years of expertise in a particular industry, but they're not interested in using that, um, to build a startup, and I, I think that can be an error.

AI assessment note: “So for non-technical individuals, our advice is, um, become a domain expert.”

Q And with regards to the partnerships formed at EF, um, what would you recommend in terms of the partnership itself in terms of the deal and the equity stakes? Would you say they should always be fifty-fifty?

A So pretty much all of ours are fifty-fifty. Um, one of the important things to remember about equity is that it should be forward-looking, not backward-looking. So just because you started the company two months earlier or six months earlier or that it was your idea, um, in five, 10 years' time will mean very little. And if you want to build a big successful company, you're going to need to dedicate a significant proportion of your life to it, and you want to make sure that whoever you're co-founding with is incentivized in the same way that you are. Uh, we've seen, uh, not necessarily, not within EF, but outside of EF, uh, you know, acrimonious co-founding relationships based on, um, I suppose, unfair equity divisions or what becomes to be seen as an unfair division. Um, But I mean, at EF, we're, we're lucky because, you know, everyone's starting at the same time, and, and, uh, they're all companies built from scratch. Um, so I, I mean, our advice to our guys is it's, it's fifty-fifty, but I know that there are situations where sometimes, um, that, that doesn't, uh, isn't most suitable.

AI assessment note: “our advice to our guys is it's, it's fifty-fifty”

Q And you obviously work with companies at their very earlier stages. So, um, Having witnessed company building entrepreneur first, how would you recommend is the best way to build a company from scratch?

A So I suppose there are a couple of, um, important ingredients to build a good company from scratch. Um, at EF, what we focus on, uh, primarily is co-founders. Um, so we, we don't, uh, select teams, pre-formed teams. We select individuals. Um, so if you get on EF, it's because we believe that you have exceptional talent, um, and predominantly exceptional technical talent. Um, so we think co-founders matter. Um, so finding great people and finding great people to co-found with really matters. Uh, I suppose the next ingredient that really matters is, uh, the idea. Uh, although I think often people approach this in the wrong way. They assume that unless they have the perfect idea, there's no point in even getting started. And they spend months, if not years, trying to craft the, the perfect idea, which just doesn't exist. Um, so the most important thing, uh, when starting from scratch is to come up with a idea, an idea, um, that, uh, that resonates with you, that you're, um, uniquely skilled and talented to, to start working on, um, and then just to get going. Um, and I suppose that's the final ingredient is just to get building, um, and to start building and getting your product out in front of customers as quickly as possible so you can understand whether you're actually building something that people even want.

AI assessment note: “there are a couple of, um, important ingredients to build a good company from scratch”

Q And with regards to the partnerships formed at EF, um, what would you recommend in terms of the partnership itself in terms of the deal and the equity stakes? Would you say they should always be fifty-fifty?

A So pretty much all of ours are fifty-fifty. Um, one of the important things to remember about equity is that it should be forward-looking, not backward-looking. So just because you started the company two months earlier or six months earlier or that it was your idea, um, in five, 10 years' time will mean very little. And if you want to build a big successful company, you're going to need to dedicate a significant proportion of your life to it, and you want to make sure that whoever you're co-founding with is incentivized in the same way that you are. Uh, we've seen, uh, not necessarily, not within EF, but outside of EF, uh, you know, acrimonious co-founding relationships based on, um, I suppose, unfair equity divisions or what becomes to be seen as an unfair division. Um, But I mean, at EF, we're, we're lucky because, you know, everyone's starting at the same time, and, and, uh, they're all companies built from scratch. Um, so I, I mean, our advice to our guys is it's, it's fifty-fifty, but I know that there are situations where sometimes, um, that, that doesn't, uh, isn't most suitable.

AI assessment note: “So pretty much all of ours are fifty-fifty.”

Q Do you agree with the friends and families round?

A Um, I mean, it's horses for courses. I think that there are situations where friends and family around can be, um, can be useful, but I think that you need to make sure that you take money from investors who understand the way that early stage startup investing works. Um, so in particular, understanding the risk profile of investing in early stage startups. Um, so there's a, there's a high degree of chance that you won't get your money back, but even if you do get your money back, it may take Quite a while for any returns to come back. So if you're investing someone's, you're, you know, your parents' pension, or if you're investing a friend's house deposit, uh, it's, it's probably not the best, best thing to do. Uh, you know, as a, as a founder, you want to be taking money from people who understand how startup investing works, um, who understands the risk and how long it takes to get a return. Um, and often friends and family isn't, isn't the best place to find that.

AI assessment note: “there are situations where friends and family around can be, um, can be useful”

Q And how do you identify their talent then, and what do you think makes a great founder?

A So this is something that we've spent a lot of time thinking about over the last, uh, four years of running AF, um, we've had thousands and thousands of applications over the last couple of years, and we're beginning to see some really, um, strong traits, um, It's probably, in many ways, it's some of the things that you expect. So, uh, we like people that have very, um, strong technical backgrounds, um, and who are, who have been building things in the past, uh, people who have built companies in the past and tried startups in the past, but actually the biggest indicator of all, um, much more important than intelligence or, um, uh, even technical ability is mindset and how they approach building a startup.

AI assessment note: “the biggest indicator of all... is mindset and how they approach building a startup”

Q With regards to testing, sorry, I'm just interested. Do you like the, the kind of spray and pray method where you kind of give it to everyone and to kind of want mass feedback, or do you like a very targeted, very niche audience where you have a hundred people giving very precise feedback?

A I think feedback is a really hard one. It's easy to get wrong, uh, because, um, If you try and get feedback from everyone, you will get a lot of disparate answers. Um, you need to get feedback from potential customers for the product. Uh, particularly if you're building a B to C product, it could be easy to assume, let's just give it to anyone who's ever been a consumer and see what their feedback is. Actually, that, that won't give you the right kind of, um, feedback. You need feedback from the people whose problem you are particularly trying to solve. Um, and then listening to and condensing their feedback, uh, it's much more likely that that will give you One clear direction or one, uh, or a strong indicator as to the direction you should be heading rather than getting a ton of random views from your friends, from your family, from well-wishers who don't actually, uh, who won't eventually be users of the product, but they just want to be kind and give you feedback. Um, friendship, um, friends being kind and families being kind and giving feedback can often be very dangerous.

AI assessment note: “You need feedback from the people whose problem you are particularly trying to solve.”

Q Do you agree with the friends and families round?

A Um, I mean, it's horses for courses. I think that there are situations where friends and family around can be, um, can be useful, but I think that you need to make sure that you take money from investors who understand the way that early stage startup investing works. Um, so in particular, understanding the risk profile of investing in early stage startups. Um, so there's a, there's a high degree of chance that you won't get your money back, but even if you do get your money back, it may take Quite a while for any returns to come back. So if you're investing someone's, you're, you know, your parents' pension, or if you're investing a friend's house deposit, uh, it's, it's probably not the best, best thing to do. Uh, you know, as a, as a founder, you want to be taking money from people who understand how startup investing works, um, who understands the risk and how long it takes to get a return. Um, and often friends and family isn't, isn't the best place to find that.

AI assessment note: “there are situations where friends and family around can be, um, can be useful”

Q With regards to testing, sorry, I'm just interested. Do you like the, the kind of spray and pray method where you kind of give it to everyone and to kind of want mass feedback, or do you like a very targeted, very niche audience where you have a hundred people giving very precise feedback?

A I think feedback is a really hard one. It's easy to get wrong, uh, because, um, If you try and get feedback from everyone, you will get a lot of disparate answers. Um, you need to get feedback from potential customers for the product. Uh, particularly if you're building a B to C product, it could be easy to assume, let's just give it to anyone who's ever been a consumer and see what their feedback is. Actually, that, that won't give you the right kind of, um, feedback. You need feedback from the people whose problem you are particularly trying to solve. Um, and then listening to and condensing their feedback, uh, it's much more likely that that will give you One clear direction or one, uh, or a strong indicator as to the direction you should be heading rather than getting a ton of random views from your friends, from your family, from well-wishers who don't actually, uh, who won't eventually be users of the product, but they just want to be kind and give you feedback. Um, friendship, um, friends being kind and families being kind and giving feedback can often be very dangerous.

AI assessment note: “You need feedback from the people whose problem you are particularly trying to solve.”

Q So how would you recommend that people network to find that perfect co-founder?

A So finding a co-founder is, is hard. Um, people talk about co-founder dating, or finding a co-founder is like having a shotgun marriage, uh, and I think that's, it's probably, probably the wrong way to think about it. Um, so it is hard to find a co-founder, and I think, you know, that's one of the really special things about Entrepreneur First, is that we do have a, uh, cohort of, I suppose, screened individuals who are all, um, determined and interested in doing, um, doing, uh, the same, same sort of thing. I suppose, uh, If you, if you are looking for a co-founder outside of Entrepreneur First, meeting as many people as possible, um, and in particular meeting people outside of your network, um, is really important. We often find, uh, particularly university students, um, coming up with what we call co-founders of convenience, um, which is largely just, I want to found a startup, you want to found a startup, we can't find anyone else that wants to found a startup, so let's just found, co-found together, and what happens then is, is you get idea and inertia, um, Where maybe one of the co-founders isn't that brought into the idea, or neither of them are, um, and they're just co-founding together because they couldn't find anyone else. So making sure that you expose yourself to a wide group of people, um, uh, who are interested in co-founding a startup and who have the right kind…

AI assessment note: “meeting as many people as possible, um, and in particular meeting people outside of your network”

Q So how would you recommend that people network to find that perfect co-founder?

A So finding a co-founder is, is hard. Um, people talk about co-founder dating, or finding a co-founder is like having a shotgun marriage, uh, and I think that's, it's probably, probably the wrong way to think about it. Um, so it is hard to find a co-founder, and I think, you know, that's one of the really special things about Entrepreneur First, is that we do have a, uh, cohort of, I suppose, screened individuals who are all, um, determined and interested in doing, um, doing, uh, the same, same sort of thing. I suppose, uh, If you, if you are looking for a co-founder outside of Entrepreneur First, meeting as many people as possible, um, and in particular meeting people outside of your network, um, is really important. We often find, uh, particularly university students, um, coming up with what we call co-founders of convenience, um, which is largely just, I want to found a startup, you want to found a startup, we can't find anyone else that wants to found a startup, so let's just found, co-found together, and what happens then is, is you get idea and inertia, um, Where maybe one of the co-founders isn't that brought into the idea, or neither of them are, um, and they're just co-founding together because they couldn't find anyone else. So making sure that you expose yourself to a wide group of people, um, uh, who are interested in co-founding a startup and who have the right kind…

AI assessment note: “meeting as many people as possible, um, and in particular meeting people outside of your network”

Q And then, moving back to your own founder's journey now, and looking at the amazing journey you've had, what's been the hardest aspect of growing the business, and how did you overcome it?

A Oh, I, this is, this is a really tough question. Um, the, Something that Matt, uh, my co-founder and I always agree on is that when you found a startup, your job changes pretty dramatically every six months. Um, you're always learning something new. There's always different problems to be solved. I mean, the problems that we had in the early days, which was, uh, I think a lot of people thought that what we were doing was pretty, pretty stupid when we first started out. Um, investing in, in people pre-team and pre-idea was not, was not the way it was done. Um, and we were told many times to do Do other things and stop wasting our time. Um, so I suppose that was one of the big challenges at the beginning and, and, uh, because of what we were hearing from our customers, so from potential founders, um, Uh, we, we kept going on this path, which, which in hindsight was the right cause. Um, and now, you know, the problems of scaling and, um, the, uh, I suppose the excitement of scaling and making sure that we build out the team, um, that we have the right support for startups in place. Um, so there's always, there's always new challenges. It's never, it's never easy, but I think that's one of the reasons why it's such a fun job, I suppose, as a founder. Um, because it's a constant stream of different problems. Um, it's, it's, High, high octane problem solving.

AI assessment note: “investing in, in people pre-team and pre-idea was not, was not the way it was done”

Q And then, moving back to your own founder's journey now, and looking at the amazing journey you've had, what's been the hardest aspect of growing the business, and how did you overcome it?

A Oh, I, this is, this is a really tough question. Um, the, Something that Matt, uh, my co-founder and I always agree on is that when you found a startup, your job changes pretty dramatically every six months. Um, you're always learning something new. There's always different problems to be solved. I mean, the problems that we had in the early days, which was, uh, I think a lot of people thought that what we were doing was pretty, pretty stupid when we first started out. Um, investing in, in people pre-team and pre-idea was not, was not the way it was done. Um, and we were told many times to do Do other things and stop wasting our time. Um, so I suppose that was one of the big challenges at the beginning and, and, uh, because of what we were hearing from our customers, so from potential founders, um, Uh, we, we kept going on this path, which, which in hindsight was the right cause. Um, and now, you know, the problems of scaling and, um, the, uh, I suppose the excitement of scaling and making sure that we build out the team, um, that we have the right support for startups in place. Um, so there's always, there's always new challenges. It's never, it's never easy, but I think that's one of the reasons why it's such a fun job, I suppose, as a founder. Um, because it's a constant stream of different problems. Um, it's, it's, High, high octane problem solving.

AI assessment note: “because of what we were hearing from our customers... we kept going on this path”

Q And how do you identify their talent then, and what do you think makes a great founder?

A So this is something that we've spent a lot of time thinking about over the last, uh, four years of running AF, um, we've had thousands and thousands of applications over the last couple of years, and we're beginning to see some really, um, strong traits, um, It's probably, in many ways, it's some of the things that you expect. So, uh, we like people that have very, um, strong technical backgrounds, um, and who are, who have been building things in the past, uh, people who have built companies in the past and tried startups in the past, but actually the biggest indicator of all, um, much more important than intelligence or, um, uh, even technical ability is mindset and how they approach building a startup.

AI assessment note: “the biggest indicator of all, um, much more important than intelligence or, um, uh, even technical ability is mindset”