All posts by Carlos Eduardo

The Fundraising Mindset

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Originally posted on Netocratic.com

Fundraising is not easy. It is one of the most frustrating and time draining activities you as a founder will have to do as part of your company’s growth strategy. Unless you are really lucky and investors come to you, it will likely involve taking many meetings with investors of all kinds, both good and bad before you ultimately succeed in finding someone who believes in you.

You will likely meet many types of investors along the process of fundraising, including:

  • Investors that doubt you as a founder/ceo, and your capabilities to execute.
  • Investors that are just meeting with you because they want to invest in your competitor.
  • Investors that don’t have the money to invest but want to be seen to be active by the ecosystem.
  • Investors that will want every inch of detail about what you will be doing for the next 5 years, when you both know your projections will be speculative at best and hogwash at worst.
  • Investors that don’t get what you do at all, but will have an opinion about your product because their child or spouse has a view on what you do.
  • Investors that are amazing and give you insanely relevant advice, but unfortunately say you aren’t far along enough traction-wise for their fund’s investment focus.
  • Investors that provide you with great feedback and would help you greatly if they were involved, but will only invest if someone else leads the round.

…And then… there is the one investor who ultimately believes in you and backs you. That’s all it takes. Just one.

The earlier the stage your company is in, the more that successful fundraising is about personal human connections and story telling. At the early stages of your business, as much as some investors will want to know your projected numbers (revenues, traction, etc), because there is so little to go on, it will always come back to your inherent abilities and vision as a founder. As such, fundraising meetings are mostly the way that founders can assess investors for value-add to their startup, but also for investors to see if they can work with the founders and to see how they think.
Because of this mutual assessment by both founders and investors during fundraising meetings, an analogy that people use frequently to describe the fundraising process is that of dating. As funny as it may seem, I do think the comparison works well…

Dating and fundraising

For example, in dating (as with fundraising):

  • You have to be willing to put yourself out there to meet anyone in the first place.
  • It’s a numbers game: you have to meet many people, this can be at in-person at networking events, parties, or online.
  • Connections usually happen in the least likely of places and are strongest when they come through a trusted 3rd party.
  • Being a good story teller gets people to laugh, open up, and remember you.
  • Chemistry matters.
  • Sometimes its just plain luck: being at the right place at the right time.
  • The better you prepare yourself, the better your odds get.
  • Being too eager to get back to someone or waiting too long can end things prematurely.
  • You have to go on several dates with several people before you ultimately feel someone is the right one for you.

Therefore, the fundraising mindset is really about four core things:

  1. Understanding that fundraising is a process and that it will take time. Only a very few are lucky to have it be quick and painless. 
  2. You have to embrace rejection as part of the process and not take it as a personal rejection.
  3. Treat every meeting as a form of practice that is merely making you better for the next meeting, rather than putting the full importance of any one meeting on your shoulders and beating yourself up if it goes badly.
  4. Analysing what was said during your meetings and learning how to improve on your mistakes is the most crucial aspect of reducing the time it takes until you find the right investor.

As you will likely never know where, when and how you will meet your future investor… as you go through this process, just remind yourself: Good news, Bad news – you never know…

How to build a tech ecosystem: The essential building blocks for your city

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Originally posted on TNW

I’m continuously excited when I hear about how many new ecosystems are evolving and growing across Europe and around the world. It truly is an exciting time in history for us to live in with many new innovations being generated by smaller companies rather than a concentrated few.

Aside from helping economies move forward through the creation of jobs and wealth, a thriving ecosystem allows startup founders to connect with other founders and share stories about how to overcome technical and commercial problems they may be facing.

Building anything new is hard, never mind alone and in a vacuum, thus sharing experiences with others should not be under-appreciated. Additionally, a growing ecosystem unlocked pools of capital be they private or public that are already existing in the local community and put them to work on improving and developing the community further.

Using London as an example, I’ve seen the local ecosystem evolve from its nascent stages, to where it is today, rivaling New York (according to Mayor Michael Bloomberg) at the global scale. This growth has been due to many factors, and I don’t want to seem to oversimplify what is arguable a very complex set of interplaying variables, but I do want to highlight some of the ones that stand out the most for me as drivers of a maturing ecosystem.

Local concentration of founders and other ecosystem players

In Steve Johnson’s book  ”Where Good Ideas Come From,” he talks about the power of a network and how proximity of nodes aids the network’s speed of development. In the case of London, the emergence of TechHub and later on Campus and Tech City has, over the past seven years, truly helped bring together many would-be founders and growing companies.

If you visit local buzzing digs such as Ozone Coffee, it is quite common to see investors and well-known founders intermingling. It is through this intermingling, across cafes, pubs, bars, and restaurants, that creates the serendipity that is required to have more ideas and decisions  ”just happen.”

The local culture’s support tone towards founders and local entrepreneurial heroes

Whilst it’s never easy to start a company, the process can easily be made twice as hard if you don’t have the support of your friends, family, and community. If your family thinks you are insane for not taking that corporate job and your friends think so as well, there is social friction in the ecosystem which prevents the unlocking of innovation.

Tolerance for failure is another aspect that is important for a culture of entrepreneurial innovation to occur. Failure both in terms of the personal failure, but also the legal failure. In a culture where failure brands and stays with you for life financially and socially, risk taking will naturally be discouraged.

While these aspects of a community are hard to change quickly, this is something that local governments and schools can help change through targeted media campaigns (as can be seen, for example, in other forms of government intervention programs and their success rates in changing popular perceptions such national health issues).

Quality of local education and engineering training

In London, we have some amazing universities, and thus, every year, a new crop of recently graduated engineers and other majors interested in starting a business enter the workforce.

For the most part, most large cities has distinguished academic bodies, so rarely is it about capability, but sometimes about offering students a place to experiment new ideas and providing them with applied internships. Universities are increasingly  developing internal incubators to allow students to exercise a more applied version of their education, which either leads to new developments, or more experienced founders.

Additionally, programs that help teach entrepreneurship to students, such the NEF, or to the public at large, such as Startup Weekend can greatly lead to an increase in the quality of the workforce and entrepreneurial mindset of a community.

Availability of HR talent and immigration reform

Aside from students, other individuals with experience are needed in a growing ecosystem. One quick way of bridging a shortage in staff in an area is to create immigration policies that allow for talented and capable individuals to enter the county and its labor force without major hurdles.

This is an area that many countries struggle with, particularly when the local population starts taking a protectionist slant towards employment opportunities. Nothing helps accelerate an ecosystem’s growth as the importing of highly skilled migrant talent.

The UK has, in many ways, led innovation in this area, originally with the creation of the Highly Skilled Migrant Programme (no longer available unfortunately) and the Startup Visa for founders in startups that have received £50K in investment. Innovations likes these have made some great strides in solving this problem for the UK, and I’m surprised how few other countries have attempted to solve this.

Access to successful mentors or serial entrepreneurs

It goes without saying that there are plenty of smart and accomplished in Europe. Companies such as Soundcloud  Skype, Transferwise and more were born out Europe and there are plenty of new companies that are creating technologies in hardware, fin-tech, and other areas.

The challenge for any emerging ecosystem is identifying these individuals and finding an efficient way for these potential mentors to meet promising new companies and founders.

A strong and growing media presence

As the old adage goes, “If a tree falls in a forest and no one’s around to hear it, does it make a sound?” Likewise, a successful startup story without an amplifier doesn’t help inspire others to do the same.

Of course, the media isn’t only about highlighting success stories, but also helps keep the ecosystem honest by bringing to light causes, political initiatives, key players, and even the occasional startup post-mortem to help founders navigate the emerging local tech industry.

Access to infrastructure

Building a tech startup is near to impossible if you don’t have access to a reliable and fast internet connection and access to key services such as hosting companies, social networks, and search engines (some countries block these services for various reasons).

This does mean some countries really struggle, but these problems tend to be ones that local governments are almost always keen on resolving quickly – not just for the tech community, but also for other communities. If censoring is an issue in your local ecosystem, that can still make things more challenging.

Access to experienced capital

Capital comes in many forms, but experienced capital can really make a difference to new companies. Experienced capital is not just about having made money before, but rather understanding what early stage startups are like and that they don’t fit the return profile, regularity, forecastability, or structure of real estate or private equity investments.

Experienced capital also knows how to coach and help founders along their journey rather than just auditing founders the way a public company analyst may.

Investors that understand how the global fundraising process works and know how to scale a company are hard to come by, so for sure any local ecosystem that has a few of these are very lucky, and the ecosystem as a whole can grow greatly by increasing the knowledge share between these individuals and the rest of the investment community.

Tax relief for investors investing in risky companies

Investing in startup companies can be lucrative if you do well and manage to back the minority of companies that do well. However, you will likely lose on most investments you make in the asset class because of its inherent risk.

This has always been the fundamentally difficult thing for new investors to digest when choosing to invest in startups versus, say, a well-structured financial product from a brokerage firm.

However, tax incentive schemes for investors led by the government, such as the SEIS program in the UK which allows investors to offset income tax and capital gains tax on positive returns on an investment, can greatly increase the attractiveness of high risk investments to investors.

Ecosystems who have government support to help investors invest more, generally manage to unlock stored pools of capital that can be repurposed to help stimulate the economy.

Tax relief for successful founders

In the same spirit as the above, ecosystems that offer founders some sort of tax relief on gains when exiting a company can effectively reduce the tax impact on them. This allows founders to have more available capital to invest in new startups. In the UK, this program is called Entrepreneur’s Relief.

Although not every exit will leave founders with a disposable net worth to invest in new startups, by creating the structure that encourages this, it merely becomes a numbers game of how many founders who are successful contribute back into the economy.

Couple with investor tax incentive schemas, you effectively create a virtuous circle of wealth creation that can be repurposed for further wealth creation.

Sure, not every founder will do this, but you just need a few to take this up, for it to be greatly effective.

Access to experienced legal counsel

Experienced lawyers can save a company a lot of time and money. I’ve seen deals go sour because someone’s counsel was not well-versed in standard terms or venture dynamics.

Lawyers are there to help you make things easier and protect you from things going wrong in the future, and not the other way around, but not all ecosystems have legal counsel that is well versed in venture law.

Initiatives such as the seedsummit termsheets, the series seed termsheets, and the BVCA documents - all available online – are good starting points for startups in emerging ecosystems to learn about what is normal and what is not. Then, if in the process of evaluating counsel for your company there is a mismatch between what you’ve seen and what they are familiar with, that is potentially a red flag.

Simplified local legal systems

Part of the legal challenge is not only just finding the right kind of lawyers to hire, but also in having the ecosystem have laws that help support Entrepreneurs. For example, laws that make it difficult to hire and fire employees make it hard for a startup to control cash burn as early founders will inevitably have to expand and contract as their companies go through natural peaks and troughs.

Simplification of the legal bureaucratic burden on the founder can make a huge difference: little things like allowing e-signatures can greatly speed up how quickly deals are completed vs having to have a notary sign or other more complicated structures which can slow things down.

And lastly, and considering how many successful startups come from after a founder has had at least one failure, a government’s treatment of company bankruptcy as either a black flag for the founder for ever more or as a state that does not tarnish one’s reputation from being able to try again.

To wrap it up…

In conclusion, whilst there are many variables to consider in how to help develop a local ecosystem, the above list are some that I see as almost very crucial to kick it off.

For example, note that I didn’t include things like interest rates or a thriving local M&A market… if an M&A market is present, for example, its great, but frankly, most foreign M&A markets pale in comparison with the global M&A market led by the top international corporations.

As such, a better place to start to try and influence change is to address the variables that are easier to adapt in the short term. In the longer term, as the ecosystem blossoms, the local corporates will take notice and will want to get involved.

If you like this post, please feel free to share with your local government officials to initiate a dialog about how to spur growth of your local community’s ecosystem.

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Be Nimble: Keeping Milestone Optionality

Identifying milestones for your company’s development is beneficial for an early stage startup for many reasons: the first is that planning milestones allow you to focus what you will be working on, secondly the process of identifying and planning them make you question when and in what order you and your team should try and execute something, and lastly, from a fundraising perspective (something I cover in more detail in my blog post on milestones) milestones are useful to tie together what you need to accomplish with how much money it will take to get there, and fundraise accordingly.

On this post, however, I’d like to address a very important concept that should be considered during this process of outlining and planning milestones. I call it, “keeping milestone optionality”.

The principle is very simple… even though you plan your company’s future growth and associated cash needs, you can’t lose sight of the fact that you’re a nimble startup.. not a large corporate that has to report to analysts and public market shareholders. Your nimbleness is your strength. A startup’s growth plan isn’t linear, it’s more like a series of zig zags. As such, whilst it is useful to forecast your milestones so that you have a plan, and understand your cash needs, it is also useful to look at that plan with one eye, while the other eye looks out for actions which might be more beneficial to your company than what you had originally envisaged or agreed with existing shareholders.

On my post on 7 reasons for founders to avoid tranched investments  I spoke about how a future tranche (a glorified milestone, if you will) could have a negative impact by dictating what a company should do, even if midway through its execution it turns out that it was a bad idea for the company to have that goal. For example, imagine if your plan had in place a monetization strategy (and associated revenue stream) kicking off in month 6 of your operations. Month 6 comes along and well, uptake is poor and your revenues are not coming in as expected. You have some chats with your customers and you find out that actually, the value they are getting from your product is mostly around the emerging network effect of your product, and because the network is still small, your early monetization is stifling the value they are getting because the barrier for new users to sign up is still high, and thus those that would be likely to pay are reluctant to pay.

Well, if you (or your investors) held you strictly to your original plan for the sake of ‘keeping to the plan’, you’d kill your company quite quickly, but by staying nimble and adapting your milestones to what you think should be the new direction, you might actually be better off than you would have been before. Naturally, this optionality comes at a cost, as your original plan will have changed and thus your cash burn will change and your goals (KPIs) will change as well… and that’s ok as long as you are aware how.

Good early stage investors (particularly those that invest in pre product-market fit companies) know that this kind of change mid-way through their funding is a possibility and they should be backing you in your ability to make these difficult calls even if it means a deviation from the plan they invested in. However, you should be mindful that there are many investors out there, that for some reason, still believe highly in the adherence to a stated plan. If you can, avoid taking money from them. At the very early stages in a company’s development, particularly during the pre product-market fit phase, investors should invest in you for your ability to adapt to changing and evolving circumstances, and not in your ability to predict the future 18 months in advance and stick to the plan when it clearly isn’t working.

Of course, this isn’t a recommendation to throw out all forms of planning, it still helps to create a milestone plan based around your hypothesis of growth (and relevant KPIs), cash needs, for you can’t be changing strategies every month and you need to keep an eye on cash burn. At the same time, however, you should constantly monitor whether there is another milestone optionality play coming up. If you do find, however, that you are constantly questioning your original hypothesis for growth, perhaps there is a bigger problem you are facing, but by keeping an eye open for milestone optionality events, you might fare better than if you exert uber discipline to a rigid plan that was built before you learned many new things.

In conclusion, as a founder, plan for the future, identify key milestones to grow towards, but always keep milestone optionality, particularly in pre product-market fit companies.

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Creating a Brand that Lasts a Lifetime

In my last post on “Understanding The Vision in a “Visionary Founder” I tried to tackle the softer side of what an investor looks for, and as a continuation of the thread, I want to try and tackle how that vision evolves into a brand and brand culture and brand positioning.

Last night, I had the chance to watch the movie ‘Bones Brigade: An Autobiography’, about the lives and histories of many of my childhood skateboarding heroes… including Steve Caballero, Tony Hawk, Mike McGill, Lance Mountain, Rodney Mullen, and several others who were all part of the Powell & Peralta skate team: the Bones Brigade.

As I relived those memories, I recalled how passionate I felt about the sport because of how these guys made it amazing and accessible at the same time. They invented tricks, such as the ollie, which democratized skateboarding for kids so they could enjoy skating on their streets rather than hoping to see a half-pipe pop-up in their neighborhood. On a personal note, I can remember as a kid wishing I could be part of the Bones Brigade and riding with cool pro-kit from my favorite skaters. All the skater kids in school had Powell-Peralta stickers and patches sewn on (typically by disapproving mothers) onto our backpacks. I even went as far as building my own quarter-pipe and ‘branding it’ Powell Peralta!

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Yours truly (many moons ago & with hair) launching off of my home-made Powell-Peralta branded quarter-pipe. I made it in shop-class.. in case you’re wondering, I got a good grade in that class.

However, with more adult eyes, what really impresses me now is the visionary machine that was Stacy Peralta (one of the two co-founders of Powell & Peralta) in crafting the Powell-Peralta & Bones Brigade brands that captured the spirit of skating in a way that lured kids like myself and my friends in to want to connect with it and live it.

Great brand lasts a lifetime.

As an observer and appreciator of great branding (the way some appreciate art), It’s amazing to see how, to this day, even long after its death in 1991 (the company fell apart due to a founder dispute) and recent rebirth (the founders patched things up by request of the team) the Powell&Peralta / Bones Brigade story stands out as an inspiring tale of a visionary founder that created an awesome brand and culture, and positioned it to stand out above and beyond the crowd of the other me-too companies of its time. The fact the Bones Brigade autobiographical movie came out recently and the brands have been succesfully reborn almost 20 years on from their heyday,  is a testament to how much the whole brand, and what it stood for, stuck with many of my generation.

It starts with a vision.

Stacy Peralta, helped create a brand and culture upon which he positioned the company in a way that resonated with his customers and led to Powell & Peralta’s success both in attracting the kind of riders that lived this vision to join his team, but also in successfully selling many skateboard decks to kids wanting to live his vision themselves.

As a bit of background, Stacy himself was a champion skateboarder and member of the famous Z-Boys (arguably the first skateboarding team in the world), and in many ways that helped shape his vision about what a team should be like, having himself experienced the eventual falling out and disbanding of the Zephyr team.

Stacy’s vision of forming a better team without the attributes that broke apart the Z-Boys, drove the engine that would come to power the Bones Brigade brand from the very beginning. In the movie, you can hear Stacy himself share his vision (at minute 8:53) about how he wanted to make a team that would last, and (at minute 7:40), you can also hear how his co-founder George Powell narrates  Stacy approaching him on the idea of building a team with a specific ethos, which eventually became the Bones Brigade.

To dig deeper, the brand’s development and success wasn’t accidental (although there were likely many many many failed experiments along the way)…  rather, it was through meticulous work that Stacy Peralta and his team developed a culture, tone, and imagery to communicate the values and positioning he wanted to convey for the brand, both externally and internally.

It was this hard work, as well as Stacy’s ability to inspire his team, that can be attributed for keeping the Bones Brigade together for as long as they did. In one part of the movie, you can even hear several riders struggle with various aspects of their success, but ultimately staying with the team for Stacy.  If Stacy had simply been driven simply by money (or an ‘exit’) he wouldn’t have conveyed the genuine care necessary to merit the loyalty of his team.

To showcase the point about how Stacy chose how to communicate his vision through his brand, in the movie (starting at minute 29:40), Stacy Peralta shares how his marketing campaigns, ranging from the burning of a car while the guys posed for pictures, and the crazy advertising style choice over the typical ‘action shots’ of the industry’s advertising at time, were chosen to cement the new brand’s tone and voice as different from the rest of his competitors that were pushing out bland ads in the magazines of the day. I’m not sure they knew ‘for a fact’ that these crazy ideas would 100% represent what they wanted to convey and convert into sales, but I’m pretty sure they knew that if they did what everyone else was doing, they’d for sure NOT be able to be different in the eyes of their customer.

From the Bones Brigade website:

Stacy recruited the skaters and handled marketing along with his longtime creative cohort Craig Stecyk III. Rejecting the expected action shot marketing, they used their young team to create esoteric images conveying the culture’s sarcasm and disenfranchised dark humor. While spitballing about his stable of skaters, Stacy commented that he never wanted to call them a “team,” a label that invited all kinds of jock baggage. Craig shrugged and simply said, “Bones Brigade.”

In effect, Stacy understood his customers and how to position his brand within the  skateboarding competitive landscape of the time, and he recruited those that shared his vision, including the Bones Brigade team of skaters along with artists like Craig to help him evolve and communicate his vision and branding strategy to make it stand out from the crowd. Stacy & George worked hard to recruit the right riders, work with the artists that understood the brand, hire staff to help them build it, and attract customers that lived it.

As with most companies, that’s not to say that all was rosy within the Powell & Peralta company. In one segment of the movie, George talks about the disgruntlement that some of his more senior factory employees felt at the fact that his young team riders were making upwards of $20,000 a month from deck royalties.. however, it seems that George & Stacy were able to at least convey the importance of the Bones Brigade for the company’s success and managed to convince their factory employees to stay so that things could carry on for the brand. In effect, sometimes not everyone will agree with your vision, but sometimes you need to made difficult decisions.

And continues with Positioning and Branding.

Even if at times he was merely experimenting, Stacy Peralta intrinsically knew that what would make Powell & Peralta and the Bones Brigade successful, would be to have a strong positioning and branding strategy to help them differentiate from their competitors and to help bring the industry into the mainstream (for more on the difference between branding and positiong, read this article).

It was this solid company culture stemming from a strong founder vision around building a winning team, a clear positioning strategy of being different, and a strong brand values that powered Powell & Peralta and the Bones Brigade brands to success, and it was their consistency in execution, ranging from the art on the decks to the arguably kitsch videos they created (such as the classic “The Search for Animal Chin“),  that allowed Powell & Peralta to dominate the skate scene during this era and to cement itself in the hearts of many kids around the world for many years to come.

In conclusion, as you consider starting or evolving a startup, give thought to what really drives you.. determine what’s your vision, and once you know the ‘why’ and who your customer is, then communicate it and your brand’s values and positioning with your employees and partners so that your product or service is consistent with everything you say and do for your customers. Potential investors know that companies that nail down their branding and positioning strategy company-wide, are that much more likely to succeed in the sea of competitive startups out there.

In case you are wondering why I choose skateboarding as an analogy for this post, it’s because I believe there are many similarities between startups and skaters:

1) Entrepreneurs, like skaters get knocked down many many times before they succeed, but they keep on getting back up.
2) Startup life like skate life is very much its own culture, operating at a different speed and risk level than others.
3) By having a movie that highlights some of the key points, if you want to hear them from the founders directly, you can simply rent it.

 

Understanding The Vision in a “Visionary Founder”

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Originally published by TheNextWeb on Feb 19th, 2014

“If you have visions, you should go see a doctor” - Helmut Schmidt, one of the most admired German chancellors

Because I know how confusing and frustrating the fund-raising process can be for a founder, one of the topics I like exploring is ‘how to get into the mind of an investor’ when an investor is evaluating you for an investment. And whilst the easier topics to tackle tend to be quantitative in nature, the harder ones tend to be the ‘fuzzier’ qualitative ones…

In that spirit, I think we’ve all heard how investors want to invest in a solid team and how they want to invest in founders with a ‘strong vision’.. but what does that mean exactly? With visions, mission statements, and all that kind of fuzzy talk being part of many self-help books that are often dismissed as snake-oil, do they really have any place in the fast-moving, cold & hard world of startups? In the context of the early stage high growth startup world, what does having “vision” really mean?

Let’s start by defining what a founder’s vision* is not… *(feel free to replace a ‘founder’s vision’ with a ‘leaders’ vision’)

Vision does not equal power

A founder’s vision is not about how much money you want to make once you exit, nor is it about obtaining power or prestige. It isn’t about knowing exactly what the future will bring, nor is it about doing something no one else has ever done before. Rather, a founder’s vision is about how you communicate and put into action your values, beliefs, and ideals in producing & creating something of value for yourself, your founding team, your employees, your investors, and your customers. A founder’s vision is the foundation of a company’s culture and brand.

In the words of James Kouzes and Barry Posner, authors of The Leadership Challenge – ”There’s nothing more demoralizing than a leader who can’t clearly articulate why we’re doing what we’re doing.

A founder’s vision, therefore, creates a company’s culture. This culture may not always be visible to outsiders of the company (nor is it generally communicated to potential investors specifically as such), but it is visible through the company’s culture, the brand and brand values of your company are ultimately determined. It is the brand of your company which is the outward-facing aspect to your company that customers and potential investors engage with. It is this brand that allows you to attract potential employees, customers, investors and partners. Thus, I believe that vision determines culture and culture determines brand. Think of many brands you love and respect and you will likely be able to trace their authenticity to one or several individuals (even if they are no longer there) who created the vision of the company and set the culture for all the employees to guide them through the creation of the products and services you love. Think of the ones that you liked at one point but no longer do, and you’ll likely be able to trace why to a point in time where there was a break-away or ‘sell-out’ from the original vision that started it.

How is a founder’s vision applied?

In some startups, a founder identifies a need they personally have (they are the customer), and thus, builds a company around a product or service to satisfy that need. Alternatively, there are other founders that find ideas within markets that didn’t previously exist (they intuit a need for a customer)… in some cases this happens by design and research and in some cases by accident, as was the case with the 3M Post It note.

Whichever way it may come, founders that have a strong vision that is synthesised, communicated and articulated to their team (and their customers) allows them to capture these opportunities and evolve them to become successful businesses. Effectively, a founder’s vision which is synthesized into a company’s culture and brand, facilitates the decision making process you and your team use to create your company’s products and services. It is through the clarity of a founder’s vision that  focus is brought to the planning and decision making process within a company, and as a consequence the company can function efficiently and increase its probability of success.

Authentically connecting with your clients

In a world were new products are constantly popping up and many being copied by unfair competitors, it is the strong adherence to your vision and the culture & brand it creates, that ultimately engages your customers to become loyal supporters and fervent defenders of your company. Unfortunately, if you betray your customer’s trust by deviating from your brand’s values, they will likely throw you and your products under the proverbial bus, so to speak.

In his TED talk about how great leaders inspire action, Simon Sinek, shares his golden circle of ‘why, how, and what’… and whilst I won’t go into summarising his talk here, the key point is that it all begins with the ‘why’ a leader must articulate to be effective… the “why” determines culture and the “why” determines ultimate “how” you do things and “what” you ultimately make.

A talented designer and good friend of mine, Gearoid O’Rourke  shared a thought in one of his talks that I really think captures why it is important to take the creation of a founder’s vision and company culture seriously, in his words: “Products can be copied, but culture cannot…” “Even if your products are copied, you will always be ahead of your competitors because they can’t copy your culture [and culture is what lets you innovate].”

Once determined, the culture of your company will help you make decisions about how to engage and communicate with your customers, whom to hire, what to prioritise, and whom to partner with. In effect, you vision, your culture, and your brand will become the foundation and focus of all you do.

Where to find your vision

Your ability as a founder to set this vision and culture is the attribute that investors look for. If you are unable to determine and set a vision and culture for your company, unfortunately, you are likely to have others, such as influential mentors and perhaps even your investors set it for you, and as we all know, we can’t be someone we are not, and ultimately, this will likely lead to failure.

Once you have determined your culture and then you want to communicate it externally, authenticity is the key to retaining trust. In the words of Gabbi Cahane  “if it’s just words on the wall, then it’s meaningless. Your culture is what you believe in and how you behave. Codify it, live it, recognise it and reward it. And do that every single day.” “Early stage investors are looking for the signs that you instinctively get this.”

If you are in the early early stages of starting a company and you’re really more just thinking of starting a company, I’d highly recommend you spend some time trying to understand what drives you and why, for if you want to embark on the difficult journey that is to become a founder and leader of future employees and future shareholders, it would really help you and them for you to be able to share ‘the why’ of why you do things.

And in case you are reading this and thinking to yourself, ‘but investors only care about traction’, I’ve seen several cases of where an investor is willing to take a huge leap of faith on a founder, even before any visible traction, but only when the investor feels there is a strong vision behind the company. Therefore, I leave you with this thought: Traction comes from happy and loyal customers, happy and loyal customers come from a great product or service that does what you say it does, a great product or service that does what you say it does comes from a team that has a coherent culture that allows them to know what to do, and a coherent culture comes from a strong and clear vision from the company’s leadership team.

Image credit: Shutterstock/Skylines