Before sharing Daniel’s thoughts on culture itself, it’s likely worth sharing a little bit about his rationale behind focusing so strongly on culture within UIPath. In his own words, he admits having committed so many mistakes early in his career, that in some ways, UIPath today is simply the manifestation and implementation of lessons learned over those years; mistakes he wishes to avoid for himself and his team in the future. He felt that in order to work somewhere where others could also feel like they could develop, and for him to enjoy working there for his career, he’d have to place his company’s culture front and centre.
His first insight on company culture was that you can’t have too many values/culture KPIs in a company; you have to boil it down to just a few. Whilst it might be tempting to have many, by not focusing on a few, you run the risk of not only confusing your team, but likely not providing enough clarity for them to anchor core decisions around.
At UIPath, for example, he anchors their culture around a core value that works for them: Humility. This Humility is authentic and born out of their roots as founders. They put humility at their core because not only did they see an industry fraught with competitors that didn’t approach customers with humility and consideration, but also because in his words, and from experience: “Engineers can tend towards being prideful in their work, so we needed to encourage them to listen to our customers, thus we evangelise it internally.”
However, UIPath‘s implementation of ‘humility’ as a core value of their culture isn’t limited to just the obvious benefits stated above, but also it helps them hire better and weed-out potentially toxic employees who are only driven by money or other variables that are not relevant. It also helps them make better decisions because no one is trying to save face in meetings… “if you are constantly trying to be the smartest guy in the room, you’re likely not to want to hear when you are wrong”, but by creating an environment anchored around humility, you effectively encourage people to speak up and share+receive feedback.
Lastly, as with everything that is a goal, Daniel shared that they measure the impact of adhering to this cultural value with soft KPIs like the perceived “psychological safety” of employees. In effect, this KPI represents how comfortable employees are in speaking their mind with you as manager.
In conclusion, a strong, clear, and simple culture centered around core values can be be a huge win in many more ways than simply making your company a place you want to work in (although that should be reason enough)!
Ivan, thank you for reaching out, reading it, and providing feedback, always great to hear from a fellow alumni!
One risk of ‘going deeper’ on something that is more of a framework than ‘do this’ kind of advice, is that then it will border on the very thing I’m trying to avoid, which is being prescriptive. I’d rather the reader think of these rules as a framework upon which you can personalise a configuration that works for your community.
For example, you mention that a way to test this advice is to look at the opposites, but that doesn’t work when the advice is about nuanced permutations within a spectrum. It’s not about hiring a good vs bad team, rather, is it a relevant team vis-a-vis your stated culture. Also, it’s not about having a good or bad culture, rather what variant do you want for your community (eg. How is the Harley Davidson community different than say the GiffGaff community when it comes to attitudes, values, etc and how would you hire to address the community members genuinely?).
My hope is that these 5 rules, guidelines, or whatever you want to call it, allows you to engage in a conversation about not only how they are interrelated, but also how they ultimately face trade-offs.
When Seedcamp started back in 2007, there was a lack of great support networks for founders across Europe, and as such, we embarked on a mission to help connect those founders with the best people from across a network of founders, investors, operators, and functional experts.
That became the foundation of what we now call our platform, but our community and how we engage with it has not remained static over the years. Rather, it has been in constant evolution, and as more and more investors seek to build out their own networks or platforms, we are constantly learning, taking inspiration from various sources, and iterating on how we can best serve the needs of our founders.
In the same spirit of how the broader community has shared with us over the years, I’d like to share some insights about how we think about our network and how we have evolved to serve its needs. Perhaps a good place to start is in defining the key terms, and then laying out what I now consider to be the 5 golden rules of a platform from my personal experience and observing how others have approached things.
I see these terms (network, community, platform) used interchangeably, but to help provide some clarity, this is how I define them: a community is a group of people that has access to each other and can reach out to each other without necessarily needing much assistance from a node, a network is very similar to a community, but typically requires the assistance of relational nodes that can connect people together that don’t know each other in the community, and a platform is the structure upon which a community and a network can build, flourish, and interact.
Now, as the platform is the structure that ties a community and network together, I believe it can be a constructive structure if it follows 5 simple rules. Those rules are:
1) Know your customer — It’s hard to build a community & network for an abstract person or for too broad a group. Although you will naturally have outliers above and below, it’s good to get some conviction around what kind of person you’d like to focus on, what their skills are, what their needs are, and most importantly, what their time pressures are. Btw, ‘customers’ aren’t just limited to founders, they also include those that will contribute time to help founders, be they lawyers, bankers, investors, and friends.
Seedcamp’s role in the ecosystem has naturally changed over the years, from the early days we helped spread best practices with the help of our community that would share their learnings and thoughts via events we hosted (some of you might remember our mini-seedcamps!), to current day, where the ecosystem has matured so much that there is no lack of specialised events catering to every type of founder in most geographies. As such, our ‘customer’, both from our investor base, functional experts, and founders, has evolved along with that and what they want to get out of what we can bring together has changed as well.
For us, though, what’s not changed, is our focus on early-stage founders and founding teams. Yes, we are open to pre-product ideas, but our main focus is around teams that have come together and built something, no matter how crude, that serves a clear customer, even if there is limited-to-no traction & revenue. It might not seem like much of a distinction, but it is, by focusing on founding teams + early product at the earliest and seed-stage, pre-series A founders at the latest, we can build a community of people around them that can best help and assist them on their journeys.
2) Define a culture for your platform- This seems like a funny one to add as typically ‘companies’ have a culture, not ‘platforms’ as such, but as sometimes funds or programmes have different teams for investment vs. support, it is critical to get the culture right across both. To help create some measure for platform culture, I’ve found that platform cultures can range from educational to peer-based on one axis, and from formal to hyper-informal/ad-hoc on another. The permutations within these axii are almost limitless, but what matters most is that they address the needs of your customer, otherwise the platform will have a poor connection with those it serves. The outcome of how you define your platform’s culture can have a massive impact on decisions such as: how often you communicate, what tone you use, what channels you use, whom you partner with, and are offerings unlimited or with restrictions based on certain attributes.
During Seedcamp’s evolution to date, we’ve migrated slightly on these two axii. When we started, we were likely heavily on the educational and hyper-informal end of the spectrum, but today we sit on a different intersection point. Rather than focusing on what founders need to learn to avoid mistakes, we are now more about helping founders better understand how other excellent founders have tackled similar issues, and the knock on effect of this has been that we’ve had to shift away from being hyper-informal to something more structured, but without losing our Seedcamp culture. In the end, we feel it is a right mix for where we are right now in our journey with our community.
3) Hire the right team — Hire a team that represents your culture so the experience feels genuine. There’s nothing worse than hiring one type of character (I won’t go into job stereotypes here about the previous roles of those you hire) to interface with your community if they won’t be able to represent your tone, personality, values, and spirit well. It will end in disaster. The great thing if you do hire the right team, is that they will be able to add value to the platform with their creative inputs as it will be clear what should be within it and what should not.
We’ve been very lucky with our hires within Seedcamp. I’ve had the pleasure of working with some of the greatest people I know, and no matter where they were in their careers when we first met, they all had attributes that resonated with our culture and how we communicated with our community.
4) Put Elbow Grease In — Running a platform, particularly one that is based on a community, is not a set-and-forget type thing. You can’t just hire a team, put a structure based on a hypothesis of what the platform should offer and then let it run. Rather you need to be putting some serious effort into expanding it, refreshing it, and catalysing it. Iterate it as often as you can afford to without being disruptive of the very value you’ve promised in advance.
At Seedcamp after every event we reflect what went right or what went wrong, it’s not always a super formal process that’s time consuming, but it’s important to do nevertheless. Every year we reflect on what formats are working and which aren’t working, and every two years, we do a sense check of how we are engaging with the community on the two axii and how we can best serve the community. On a more micro-level, as of about a year and a half ago, we also started rolling out a new format to catch things on a tighter time-frame which we call Seedcamp Essentials and which I covered here — https://medium.com/@cee/seedcamp-essentials-97d589eb6758
5) And the most important rule — Don’t overdo it — Just because you offer a platform to add value to your community doesn’t mean it should be a distraction for founders or other members of your community. It should be genuinely useful and have the needs of your ‘customer’ at heart. At Seedcamp, we make sure we keep this in mind as we come up with modifications and additions, and we integrate their feedback into this process. It is very tempting to constantly want to promote it as a basis of differentiation (as more and more investors want to offer something) and add more and more to it, but keep the number one rule in mind — is this what my customer truly needs?
As you compare our decisions on the above to your own, one last comment I want to add is that I don’t think there is one ‘right’ platform, just optimal configurations of the 5 golden rules as they apply to a set of ‘customers’. Any one platform format that is espoused by any one group runs the risk of failing to deliver the right engagement for the new ‘customer’ the platform is trying to engage.
As a final point about us, Seedcamp’s platform today is optimised around building and supporting Europe’s strongest founder network. To that end, today, we are an evolution from where we started back in 2007, but we took many of the learnings of those early days and applied the 5 golden rules to create a platform that starts with building connections quickly between founders, highlighting key areas of company failure and success early, having a reasonable pace of updates and support cycles for newly invested founders, providing structured access to functional experts in our community at the right times, and organising thought-leadership events that are apropos to the needs of our community in any given year. I hope the above helps you with any projects you are considering!
Nothing is ever transformed overnight, rather, it’s an iterative process of constant improvement.
One experiment in this direction, which we implemented almost a year ago to date, is what we internally call “Seedcamp Essentials”.
Whilst we don’t have the format 100% down (as we are always iterating on it), the general premise is how do we improve what we do by 1% every week within the scope of our organisation’s goals/KPIs?
If it helps you in trying to implement something like this within your company, here are the core questions that make up the foundation for the exercise:
What is success for us? Alternatively, what is most critical for us? — these questions go to the core of what drives your value but also what can compromise that value.
What do we need to focus on more or less to make this happen? Alternatively, What will make the biggest impact to our bottom line? — these questions are about weeding out those niggles the team might have about things that aren’t going well or we could do more of.
What can we do about it this week to make Seedcamp better? — This question is about taking those niggles and doing something about them tangiably this week. Sometimes there are weeks where we can’t think of anything, but generally there is at least one thing that’s come up and it helps to identify it. We use Trello internally to create a Kanban board to help manage what we identify from start to closure by the following weeks.
Now in order to achieve the above, we set up a few rules:
This meeting cannot generate more meetings — The meeting itself is about 30min on average, sometimes shorter sometimes longer, but generally compact. Basically this time gives us space to brainstorm on tangible small actionable things we can do to improve how we operate internally.
We can’t talk about investment deals (eg. things that are discussed in other meetings)
The meeting has to have one action item for this week (and never more than 3) — The meeting shouldn’t generate more than 3 action items for the week, the goal isn’t to generate a massive to do list, but rather, just focus on the most immediately impactful things we can do to move things along towards the stated goal.
No action should be so hefty that you can’t do it alone or with the support of another team member, and no delegation of action outside of this group
If you’re not present, email something and others will incorporate and distribute a summary item if relevant.
Lastly, the meeting format is:
Review progress from last week’s action items
Review the questions (if necessary)
Discuss the output of what comes up during the questions (if done)
Define ideally one but no more than three actions for the week
If you are consider doing something similar in your organisation, hopefully the above framework helps you put some structure around your own version of Essentials. Just set the general goals of the organisation into play, have the key people you need to contribute involved, and then set the ‘rules’ of the meeting that work for you. In the words of one of my colleagues, Miguel Pinho: “one additional benefit of Essentials is that it also allows us to simply sync with other team members on things that might impact you, in effect, a micro-team meeting.” Hopefully the format can work for you.
How do you know if you and your team have what it takes to raise capital from investors that aren’t family or friends?
As a founder, one of the most “black box” parts of speaking to an investor is determining what they’ll think of you and your team, after all, its the one variable of your company that’s the most frightening ‘judgement’ to come to terms with, as you can generally deflect any concerned opinions about product, business model, go-to-market, etc because you might have more insight than the investor, but on the completeness and capability of your team? That’s much harder to do.
From an investor’s point of view, however, it’s understandable why the ‘focus’ on teams. So many companies fail not because of the product, but because the team wasn’t able to pull together and deliver the right product, to the right customer at the right time. With a strong team, factors such as market timing can many times be overcome with a quality team that is nimble and reacts quickly to market changes. In some cases, Teams can also generate new ways of looking at heavily competed markets which seem impenetrable at first. Think about how a company like Tom’s Shoes shifted everyone into thinking about how a company can give back charitably whilst also generating profit and thus created a whole new brand/business-model category in highly competed sector that many to this day are trying to replicate. Therefore, the founding team is arguably the most important factor to consider when looking at either investing or joining a startup, as it’s this team that creates the ’nimbleness’ required to overcome the onslaught of ever-shifting market variables.
I think this depends on the type of business. I invest in a lot of vertical software companies where deep industry experience is an absolute must-have: selling software to slow-moving traditional customers needs the kind of insights that three smart grads from **pick a top tier university** simply won’t have. That’s one of the reasons I like these kinds of businesses — founder background can provide real defensibility. Given I also invest in developer tools and horizontal software platforms (think operational infrastructure, security, productivity, collaboration, future of work etc) where the product is the business, I need to be comfortable that the founding team can get a product to market without needing to hire a huge engineering team. This means at least one technical founder (more is always better) and someone with experience of taking a product to market. More than four founders becomes tricky though as their terminal ownership can become tiny to the point of not being interesting any more.
Rebecca Kaden — (Union Square Ventures — US)
I back founding team with a Product-first mindset, a Bias toward action/testing/doing, and a Hunger/passion/perseverance — you get the gut feeling they just wont quit until it happens. Typically this requires an all star recruiter/talent magnet.This combo gives credibility to the reason they are best positioned to win the market they're tackling (past category expertise/experience directly is one but there could be others in addition or instead).Also very interested in teams that have a consumer/customer-centric approach
General industry + startup experience, and complementary skillsets amongst the founders (tech, ops, + sales) is always attractive. But what fundamentally gets me excited are founders with 2 specific abilities. First, the ability to articulate a unique insight or perspective about the opportunity they are pursuing, and how that insights or perspective will give them an unfair advantage to build their business. Sometimes these insights comes from working experience but sometimes it simply originates from a visionary mindset.
Secondly, the ability of fantastic storytelling. Any company changing the world needs to be known to the world, and founders ultimately needs to be able to sell the opportunity of their startup to employees, customers, investors, press, and everyone else.
I’d say we optimize for founder market fit first followed team completeness. Founder market fit can come from a number of areas but most commonly it stems from deep expertise in a particular area. This could be functional or verticle. Team ‘completeness’ is also very important, but a complete team that isn’t well suited for their market is not interesting to us. We tend to put less emphasis on founders’ external relationships since that is an area where we’re especially helpful.
Andy Chung — (AngelList-EU/US)
As an early stage investor, my preferred founding team is one that has worked together and built something before in a relevant market. The Centrifuge.io team are an example of this — Maex, Philip and Martin — previously co-founded Taulia together. The only thing to watch out for is survival bias — where one thinks the thing that worked before will work again, but I try to screen for this separately.
One thing that we look for at Seedcamp is the maturity of founder relationships. I recently wrote a post about the nature of co-founder relationships and find that teams where the relationship is strong and long-lived, there is better speed of overcoming difficulties and fighting fires, so to speak. Furthermore, a strong founder-market-fit is something we also look for, meaning that founding teams that tackle industries they have experience in are more likely to succeed.
If a team is not based in your home geography, what additional elements do you look for in order to consider the investment opportunity?
Andy McLoughlin -
We primarily invest in North American (US and Canada) but have teams who come from all over the world, many of whom build a secondary centre in their home countries. We really like having a co-investor based in that geo as we know that on-the-ground support is so important at the early stages. We haven’t invested in an internationally headquartered company yet and never say never but the bar would need to be extremely high in terms of team, product and market opportunity. My gut is that they would most likely be working on a B2B software opportunity where North America is the key market, and they have a plan to move HQ to the US in the coming year or so.
Rebecca Kaden -
I don’t think my bar or filter is really different because of geography — likely unless I feel like I don’t know the market they are playing in/their customer base is in enough to have a good sense of their advantage and/or opportunity, in which case I need to be passionate enough about the potential to do a lot of work to figure that out (ie outside of the US.)
Carl Fritjofsson -
With 3 offices but investing across all of Europe and the US we constantly evaluate investment opportunities outside of our “home geography”. We have no different filter when evaluating these companies but instead as a firm we believe we need to travel to the places where the best founders are rather than wait for them to come to us.
Hadley Harris -
We generally only invest outside of our home geography when the opportunity tightly aligns with one of our theses. For example, we recently led a seed round in London based on a thesis we have around AI driven developer tools. Interestingly, now that we have one company in London, it makes more sense for us to consider it part of our core addressable geography.
Andy Chung —
“We always try to co-invest with a “local” investor we trust. Local for me means closeness to the founder or team. This could be economic closeness (ownership), physical proximity (geography), or where they have a strong prior relationship (advisor / mentor). A simple data point is how often this investor is talking to or meeting with the founder or team. “
How do you decide when an opportunity justifies going off-thesis? (generally investors have a thesis they state when they go fundraising for their own funds and thus going off-thesis means they are pursuing a deal that is likely too big, too small, in a different area than their expertise or something unorthodox about it that is deviating from their stated strategy).
Andy McLoughlin -
It’s hard to know when you’ll fall in love but when you do you definitely know it :) There will be the occasional deal that doesn’t fit our stated strategy in terms of geography (we just did our first deal in Austin, for example), stage, or sector but we are so excited about the team and product that we’ll bend our rules. It probably boils down to being excited enough to convince your partners it’s worth dealing with the extra diligence work and convincing yourself that you can get your LPs on board with the decision too!
Rebecca Kaden -
We don’t often do this since we are really thesis driven in where we spend our time but the most likely reason we’d go off thesis is because a team we know and have high conviction in is starting something new.
Carl Fritjofsson -
The most important factors when evaluating a company is market, traction and team. Going off thesis would require at least 2 out of those 3 elements to be off the charts.
Hadley Harris -
Based on our experience investing for 8 years, we’re very hesitant to go off thesis. We’ve set the bar for going off thesis to a level where all four partners would need to have extremely high conviction.
Andy Chung —
“We adapt our thesis based on new data points. Each investment and non-investment gives us more data to make better investment decisions.”
Hopefully the answers to these questions give you some insight into how investors think about investing in teams across geographies and in different sectors than their specialty, but in the end, it comes down to chemistry. One thing I’ve noticed over the years, is that no matter which way you slice and dice it, investing in startups and/or taking money from an investor is ultimately a relationship business.