Startups: tips on investor conversations

Every startup founder understands the importance of meeting with potential investors, and the need to make themselves memorable, drive home their startup’s product’s value and stand-out in the queue of other entrepreneurs seeking investment to kick-start their dream.

However, working out how to build a platform for the meeting, and trying to create and control a compelling conversation where you feel you’ve done yourself justice, is another matter altogether

With the medals and scars from my personal experience from over twenty years of fund raising, I’ve learned that having a step-by-step approach, scripting and structuring the content, enables you to deliver your key points in a coherent manner – and have a wash-rinse-repeat formula for other conversations too.

Without developing your script and style, each meeting can be ad-hoc and become messy and unstructured. Whilst you need to be spontaneous and fresh so not to become robotic, having a disciplined approach is essential.

Here’s my thoughts to speed dating investors on a first meeting, where every minute and moment counts.

1. Know your audience Like all good marketing and sales conversations, the startup pitch begins before you say a word. It starts with research of the firm and person you’re meeting, and crafting a personalised strategy.

Firstly, you have to understand their interests. Do they have knowledge of, or hold investments in the sector? Adjust your content according to their background knowledge.

What type of startups do they invest in – pre-revenue, early revenue, or at a revenue threshold? Have they had successes? If so, figure out their priorities and focus on addressing them.

2. Don’t jump in with both feet – break the ice When you start the conversation, your first instinct is to jump straight into your pitch, with a combination of enthusiasm and nerves. However, instead of launching into your opening statements, start by asking them one question: What is the most important thing you want to make sure I cover with you today?

This answer is really helpful in focusing your conversation. For example, if they ask about market size, you’ll know to spend time covering it. If they ask about your team, you’ll know where to take a deeper dive.

Find out what caught their eye. Investors see thousands of new ideas and sit through hundreds of pitches, they’ve heard and seen it all. The fact that you’re here in a face-to-face in-person meeting means that you are doing something new that has caught their interest.

I’d open the meeting with, something like before we get started, can I ask what specifically caught your eye? – because that becomes your hook for the rest of this meeting, and a point of reference for other future investor meetings.

Opening with this question also gets them engaged early in the process, before you’ve begun to really pitch. It helps to set a tone for a dialogue and a more intimate conversation, not simply an interview.

3. Be open, transparent and engaging – but get to the point Start by building rapport, let them get to know who you are and what you’re about outside of your business personna. Investors want to know your character. They’re looking to reduce risk and ultimately invest in you first, then your idea.

The first meeting shouldn’t just be about money, it’s important to make sure you get along on a personal level to begin to create mutual trust, the basis for an ongoing relationship and ultimately lead to an investment.

Beginning with a causal conversation engages them person-to-person, it’s not a speaker-listener mode. That connection can be persuasive by making both parties feel at ease with each other. My personal rule of thumb when meeting someone is to ask myself: Is this someone I could work for?”

However, don’t let the conversation prattle on. Keep the personal introduction to a few minutes tops, and then get into the meat of why you’re here.

4. Start with a simple and succinct tagline Get to your core with a strapline and short explanation about your product. Right out of the starting block you need investors to know what they’re looking at – and do the work for them, make it easy for them to understand. They want to understand why a customer would buy your product, so make it simple and clear.

Working with startups, I often use the metaphor of The North Star, used for navigation since man began sailing, and applying it to startups to get clarity about our purpose, and what we do for a living to provide customer value.

A good tagline should be ten words maximum and capture your company’s purpose in a memorable way. You need to explain what your company does in less than ten seconds, in simple, clear language anyone can understand.

For example, We make personal international money transfers easy, secure and cost effective is a clear, straightforward explanation of your service. As opposed to We enable mobile bitcoin monetisation transaction through international arbitrage using a distributed AWS hosted cloud-based solution with an asynchronous transaction engine written in Scala, which is a mess.

5. Take a step back – tell them the problem you are solving The temptation is now to unpack your product in detail, but my view is don’t talk about your solution, talk about the problem you are seeking to solve.

When you take this approach, you are showing investors that you understand the problem that customers face, and that why your product is the best solution to it.

You need to be able to describe the specific problem, and your product’s specific and differentiated value in a way that anyone on the street could understand. Think and talk from a customer’s perspective.

6. Tell your product’s story – show the customer value You’ll be tempted to show off all the features you’ve spent time developing but investors only care about the problem your product solves, and why it’s the best at solving it.

The most powerful way to explain your product’s value is with a story, how you, or a ideally a third party, experienced this real life pain point, and how you spotted this opportunity to build your product to fix it.

You want your story to be authentic and approachable. It should make your product’s value obvious, and it should engage investors on a personal level such that it gets them thinking ‘I get it’.

Its now appropriate to explain your product benefits for customers – not its features. The difference is this:

Benefits: what your product helps customers accomplish. e.g. The iPod puts 1000 songs in your pocket.

Features: What your product does. e.g. The iPod is a digital music player with 1 GB of storage.

These benefits are why customers will buy your product, generate revenue and grow your company, which is an investor’s primary concern.

7. Unpack your learning journey Stories without contrast are not interesting, and investors want to hear about your ups and downs. They want to hear how you struggled early on, what roadblocks you hit and how you overcame them, what customer conversations, pivot, iterations and learnings you’ve had along the way.

These contrasting points make your story memorable, identifying staging points in your entrepreneurial journey, which should be a primary focus in your pitch.

Being memorable alone is not enough, once you’ve engaged investors with your story, you need to convince them that your solution is gaining traction in the market – and again it’s not just about money.

8. Discuss your dashboard of metrics This has the potential to be a defining moment, a fork in the road. Do your metrics point the way to product-market fit and creating a revenue stream, or do they highlight some gaps or stumbles between your story and an underlying reality?

Start-ups are unique because of their ability to scale fast, and typically go through three stages – traction, transition and growth. Each of these stages requires different metrics.

Equally, when you talk about your metrics, you have to ensure they’re integrated into your company’s story. You can’t just say “We have 1000 downloads.” Without context, your metrics don’t make sense.

In general, the further down the customer traction journey a metric comes from, the more valuable it is. For example, having 20,000 downloads doesn’t mean you have 20,000 customers right now. Your active users, on the other hand, show how many top customers you have right now.

9. Highlight your potential growth and levers to become cash positive Being knowledgeable about the size of your addressable market is vital here, and then how you will gain market share to grow, scale and become cash positive. Explaining your product’s value is one thing, showing how that value becomes revenue is another.

Your startup needs one amazing thing that makes it a real winner, and this is your competitive advantage. More than that, you need a clear path to converting that advantage into profitable customers, and evidence that you have a plan to achieve this.

Investors aren’t just evaluating your product, they’re evaluating you. They need to have faith in your commercial skills to make this happen. Can you take a good idea and turn it into a scalable, sustainable business?

10. Focus on your team Investors will look beyond you to see that your story is more than a great person with potentially a great product, they want to know that you have a team with the skills and experience to make this happen. And it’s not all about the glory of growth and success, they want to see that when things looked like failing, your team has the grit, resilience and backbone to keep the thing going.

Investors are also particularly interested in teams because startups pivot all the time in search of opportunity, but the core team usually remains consistent.

11. Making a sharp exit – wrap up and walk out of the room Now that you’ve concluded the conversation, you need to make a clean exit. You’ll want to deliver a brief, succinct summary of the conversation in a few sentences. As a closing technique, use a memorable phrase, possibly reworking your opening line to include metrics. This can turn into a Ricky Gervais moment, so be sincere but clear. People remember the last thing you said.

There maybe some random questions as soon as you finish and walk out of the room. Stay confident, keep your body language and voice calm, and bring the conversation back to your company’s core customer value proposition. That value is what investors care about, not just the flair of your presentation.

12. Will we see each other again? Finally, you’ll want to have a strong call-to-action – what are the next steps to follow up from today, and make sure not to leave the room without understanding specifically what is going to happen next and on what timeline.

I had one investor say to a startup I was working with say I look forward to talking with you again in three months after you’ve secured those five more customers, because I know you’re going to make mistakes and learn from them. So call me again when you’ve experienced those mistakes.

This was invaluable, it gave us clarity as to our focus and priorities, set the rules for us to get that second meeting, and if we gained the five additional customers, we had a clear line of sight to securing the investment we sought. Sometimes the most useful parts of conversations with investors are not about the money.

Good luck in your next meeting.

Startups 1-2-3-4 Go!

The Clash, the eponymous self-titled debut album by The Clash, was released 40 years ago last week, on 8 April 1977. How time passes by. It is widely celebrated as one of the greatest punk albums of all time, and one of the best debut albums. It was a record that made you sit up and take notice. It set the template for punk with its sharp shock songs full of passion and angry lyrics that were snapshots of the UK’s decay at the time.

The songs are short and intense, the speed-freaked brain of punk set to the tinniest, most frantic guitars trapped on vinyl. Rich in social commentary, attacking the fraught political and economic climate at the time, the collection of fifteen songs was unusually musically varied for a punk band, with reggae and early rock and roll influences plainly evident.

Despite all the hoopla over the Queen’s Silver Jubilee, a generation of disenfranchised, angry youth faced a grim reality of a dystopian future. In the latter 1970s, punk was the soundtrack for this alienated rage, an anti-establishment outreach of raucous, haywire impulses. Yet it remains timelessly inspiring. If you’ve never listened to this album, put it on your 100 albums to listen to before I go to heaven list.

Like a business startup, the Clash had raw energy, raw ideas and an attitude to take everything and everyone on. The classic line up which emerged from the creative tension of forming a band – Strummer-Jones-Simonon-Headon – made their mark. Each member brought a different influence, whether it was Joe’s folk lyricism, Mick’s rock adulation, Paul’s Brixton-born reggae, or Topper’s driving percussion, what you got was a unique blend.

Most of the first album was conceived on the 18th floor of a council high rise on London’s Harrow Road, in a flat rented by co-founder Mick Jones’ grandmother, who frequently went to see their live concerts. The songs were written over a twelve-day period, three four-day sessions Thursday-to-Sunday, beginning 10 February 1977, and recorded over three consecutive weekends at a cost of £3k.

The cover artwork was designed by Polish artist Rosław Szaybo, the album’s front cover photo, shot by Kate Simon, taken in the alleyway opposite the front door of the band’s ‘Rehearsal Rehearsals’ building in Camden Market. The picture of the charging police on the rear cover, shot by Rocco Macauly, was taken during the August 1976 riot at the Notting Hill Carnival – the inspiration for the track White Riot, their debut single.

The Clash wanted a riot of their own, and so they created one, not in the streets with bricks and bottles but on stage and in the studio with guitars and words. It may be an old fashioned thought now that a record can change the world, but it did and still stands up to this day as a brilliant document of the turbulent times, a luminous and revolutionary record.

I bought the record (one of those shiny vinyl things) and still have it close to hand to this day. It’s battered and scratched, the sleeve torn and frayed, but it’s a key part of my personal social history, but history relevant to now some 40 years on.

It was a platform to challenge prejudice, both without and within, that we could dance to, or jump about to. The first thing I ever liked about The Clash before I had even heard a tune was their name. In those heady days of mid-teens at parties of school mates, The Clash’s debut album was played over and over again. I recall one in particular as we all pogoed in the front room, every word to every song was sung as if our lives depended on it. The neighbours called the police because of the noise. This was a band capturing the moment. So were we.

Today, The Clash, their story and output, remains one of the most important signposts of my formative years. For five years, their lyrics, politicised and bristling with social conscience, had a far-reaching and ultimately enduring influence. They caught my ear and imagination, their mixture of politics and music shaped my beliefs and tastes.

Their musical experimentation and rebellious attitude was utterly inspirational and positive. For me, there remains a sense of urgency and anarchic inventiveness in their songs that roots them in the great musical moments of the late C20th. The songs more than stand the test of time, reminding you that music should speak to the politics, opinions and issues of society of the day.

So, I must admit, I still harbour a bit of attitude when it comes to Joe Strummer and company. A debut album like a stick of dynamite, it had heart and soul. I immediately got their vibe and saw their potential to speak to people. If you were lucky enough to see them, I don’t think you ever forgot it.

As I get older, it’s hard to separate songs from the memories we associate with them. People and places we used to know suddenly come rushing back with tremendous clarity after just a flurry of notes and words sung by a familiar voice you hear on the radio.

You don’t hear The Clash on the radio these days, but I can’t really tell you how much it meant to me back in 1977. I had a tear in my eye then, and I do now thinking about it. Everybody would sing along, loud. Those guys were a huge influence. It’s about appropriating anger. It’s what we should be doing. And suddenly (except for perhaps a bit of knew-joint pain and a few locks of grey hair) it’s as if no time has passed at all.

Fast forward, this first album remains an echo of the exhortation created more than 40 years ago. It speaks to entrepreneurs that you can write your own music, your own story, you can do it for yourself. On their record sleeves they printed: ‘Made by the Clash’. That says it all. Frustrated entrepreneurs, doing it for themselves.

Today, there is almost unlimited digitally fuelled competition for ears and pennies. For musicians, buskers or professionals, it has never been easy to turn tunes into cash and make a living. Social media enables direct-to-fan relationships, but the double-edged sword of technology is the mass-market digital noise reverberating from iTunes to Spotify to Soundcloud, where new bands can’t compete due to the social marketing voice and reach of the established artists.

You have to shout loud and spend lots to be heard. There are only so many iTunes/Starbucks ‘free track of the week’ cards to go around, so what are the strategy lessons from The Clash for startups today, to get yourself noticed as a new business in a crowded, market place as a newcomer?

Stand for something, be true to your purpose The Clash did whatever they wanted, great bands have that sense of purpose. They have a set of values and they remain true to them, quickly finding out that there are millions of people who share those same values. Like a band, put some voice in your content marketing and stamp it with your personality. When your earlier advocates realise that they could miss out on something unique and special, they won’t want to miss it, and will in fact share it.

Being different matters more than being better The Clash became successful because they were different. We had never seen anything like them before, they grabbed our attention. Rock stars have proven for years that being different – and getting noticed because of it – is more important than quality of music at the outset. It’s like building an MVP – be different, stand out from the crowd, offer something different. When opportunities don’t present themselves in a timely manner take calculated risks – pivot.

Be an experience A Clash concert wasn’t just about the music, it was the experience. Likewise great startups like Uber and Airbnb don’t simply sell products, they sell experiences which add value, and we buy into. Give your customers a really great, memorable experience instead of pitching them another me2 product. Social media is a force because it enables connectivity and community, conversations about experiences happen, creating word of mouth and referral marketing. Create opportunities for your customers to connect and share their experience.

Turn up the volume Can you hear us at the back? The Clash were loud. I mean loud, really loud. Their records were meant to be played so everyone down the street could hear it. Well, I thought so. Music sells the album, t-shirts and the concert tickets. Like music, your product content does not always have to ask for the order, just consistently keep everyone in a ready-to-act state. Be bold, and tell your followers and customers what you’re doing by delivering relevant content delivered in relevant ways.

Established customer know your history, new audiences want your hits Communicate your business legacy and future value through targeted channels and voices. New music keeps fans coming back for more. Always generate new and fresh products to keep people engaged with your brand, but treat existing and new customers differently. Don’t just deliver repeated content, engage your audience with innovation and create new reasons for people to come back to you.

Ensure your band has an inspired front man When your business leadership requires you to replace founding members with energetic new blood, put your business’s values in front for all to see. For The Clash, the focus was on Joe Strummer, a frontman with tremendous charisma but also, paradoxically, with a tremendous amount of humility. What do you stand for as a leader? Make it part of your brand.

Don’t just copy songs Even if it’s just a chord sequence or a riff, take it and make something else. Just copying something is no good, unless you want to just be in a tribute band. It’s vital to keep playing around and pushing yourself in business, create your own product. Don’t be afraid to build a business or revenue model that plays to your strengths, even if it’s non-conventional. Be an original, not a replica.

Be a brand, with an image. If you plan on getting noticed, establishing a brand promise, and creating an image is vital. John Pasche designed the ‘tongue and lips’ logo for The Rolling Stones in 1971, originally reproduced on the Sticky Fingers album. It is one of the first and most successful cases of rock brand marketing. Is your business logo iconic and noticeable?

Harness nostalgia with innovation Great music enshrines an artist with the amber glow of posterity. Today, vibrant retrospectives of digitally remastered content show the artist has transcended their time and that they can now be appreciated outside of the context of their era. Recordings from the past sit comfortably with tunes from the present. In business terms, it’s where your moments from the past meet today’s innovation, you have to leverage the past whilst also pushing the future to stay current.

So that was The Clash in 1977. A new generation raised its voice. Loud, clear, fast, innovative and straight in the face of the establishment. And forty years later this knockout record still sounds furious and roars mighty and still inspires. The restless heart and honest soul of one of the few bands that mattered will never vanish.

Make your startup like The Clash, with positive attitudes and energy, belief that you can achieve something new and spectacular. This mindset and behaviour enthuses and influences others around you as to the possibilities that you have envisaged.

Ensure your startup has the vitality, focus and aims to make a difference. Life’s too short to go unnoticed, be audacious. Life is all about progression from good to great. Push yourself to be there. Make some noise – 1-2-3-4 Go!

Apply Pareto’s Principle to move the needle of your start up

Vilfredo Pareto was a philosopher, economist and academic, fascinated by social and political statistics and trends. Legend has it that one day he noticed that 20% of the pea plants in his garden generated 80% of the healthy peapods.

He took this observation into a study about wealth and income, and discovered that 80% of the land in Italy was owned by 20% of the population. He investigated different industries and found that 80% of production typically came from just 20% of the companies, publishing a paper, Cours d’économie politique.

Sadly Pareto didn’t live to see the general appreciation and wide adoption of his principle, and it was left to Joseph Juran to suggest The Pareto Principle or the 80/20 rule, the law of the vital few, that states that for many events, roughly 80% of the effects come from 20% of the causes – a small minority will have a disproportionate impact, generating a disproportionate share of results.

Whilst there is nothing special about the number 80% mathematically, many natural phenomena have been shown empirically to exhibit such a distribution. I have 20 rooms in my house, but I spend about 80% of my time in just my bedroom, family room, kitchen and office (exactly 20%). On my iPhone, I have 30 different mobile apps pinned to the tiles, but 80% of the time I’m only using the six (20%) on my home screen.

When I go food shopping, I definitely spend the most time in the aisles that are around the edges of the store: fruit and veg, the fish stall, dairy, breads — and generally skip the aisles in the middle of the store (except for health and beauty, obviously). When I socialise, 80% of my time is spent with the same 20% of my friends. In perfect accordance with the Pareto Law, 80% of the people reading this blog will gloss over it and be on their way, but 20% will stop, reflect and take action.

Application of this universal rule also applies to the odds of success: your odds of winning go up to 80% when you achieve the 20% that give you the most results. That is great odds. Intuitively, we know this to be true, but very few people truly understand how far this principle extends into business, and it’s especially useful when launching a startup.

In research into the productivity habits of high achieving entrepreneurs, handling every task that gets thrown their way – or even every task that they would like to handle – is impossible. They use Pareto to help determine what is of vital importance, delegate the rest, or simply let go.

So how can you apply Pareto’s principle to gain more time in your startup life?

You’re faced with the constant challenge of limited resources. It’s not just your time you need to maximise, but your entire team’s capacity. Instead of trying to do the impossible, a Pareto approach is to truly understand which projects and activities are most important, and which specific tasks you need to focus on.

The temptation is always to try the new and exciting. There’s nothing inherently wrong with that, but a Pareto analysis and an 80/20 mindset helps you to stay focused on your strategic plan and execution, and spend less time chasing endless new opportunities, which can be distracting and are often the cause of entrepreneurs losing their way.

No matter what your situation, it’s important to remember that there are only so many minutes in an hour, hours in a day, and days in a week. Pareto can help you to see this is a good thing, otherwise, you’d be a slave to a never-ending list of things to do. It helps your efficiency knowing that 80% of the outputs are the result of 20% of the inputs.

The 80/20 rule is also divisible, meaning that it is also true that 20% of 20% of the inputs (4%) generate 80% of 80% of the outputs (64%), and so on. While the 80/20 dynamic is powerful enough, it only gets more lopsided as it progresses. Consider, for instance, that with only three steps you arrive at 0.16% of inputs being responsible for an astonishing 41% of output.

The simple takeaway is this: Stop beating your head against the wall on working harder and putting in longer hours. Most of what you’re spending time doing doesn’t matter. 

Startup ventures are a bit harder to accept this thinking, and the 80/20 can appear paradoxical. We are predicting the future not measuring the past, so our thinking is to do everything because we can’t really decide what is important. Often I see exhausted entrepreneurs walking around wearing burnout as a badge of startup life.

This needn’t be the reality. The opportunity cost of doing the 80% is often not doing the 20% of what really matters. Once you internalise this you’ll focus on predicting the 20% instead of trying to get everything done, and always feeling you’re living on a hamster wheel and constantly behind.

So, what 20% of your work drives 80% of your outcomes? For example,

  • 20% of my leads result in 80% of my sales
  • 20% of my social connections do 80% of the sharing
  • 20% of my referral sources refer 80% of my leads
  • 20% of customers account for 80% of total sales
  • 20% of the reported software bugs cause 80% of software crashes
  • 20% of my clients soak up 80% of my time – 80% of the people who are ‘interested’ never buy

It is time to set some priorities, a focused intensity on work that matters. Ignore the numbers for a moment and understand the concept: a minority of efforts lead to a majority of good results. The 80/20 rule supplants the long established ‘work more’ mindset mantra of a startup. We should stop the wasted effort and focus on investing in the paths yielding the most sizable returns.

Startups adopting the 80/20 principle work in a precise and predetermined manner, analysing their results at fixed intervals in a data driven approach to startup strategy execution. Focus intently on the work plan by limiting distractions. If the effort does not yield significant results, change the work plan.

Results should be viewed both in a short-term and long-term perspective. In this way, startups should work to first applying the 80/20 rule by initially focusing the majority of work towards accomplishing short-term immediate goals. Correspondingly, minimal work output should initially be allocated to long-term goals.

Often, startups are an all-or-nothing proposition. It either works out or it doesn’t. In my view, the Pareto Principle for startups is actually that 20% of the initial work input is responsible for 80% of the first steps of success, and in this way no single decision matters, it’s good decision-making overall over many decisions matter.

In a startup the rate of decision-making is high, and staying on plan may not be the right thing to do. Some structure helps, but it is easy for it to become stifling, so 20% work becomes about doing the right things, as opposed to doing a lot of things. Working more hours does not necessarily increase the likelihood that your startup will succeed.

In fact, it may decrease it if it makes your thinking narrow and cloud your judgment. You may be too focused on breadth of work and not depth of work. For example, consider a startup which persists in directing its activities equally across its entire product range when perhaps 80% of customer traction derives from just 20% of the products. By discovering these statistics, the decision-making would clearly signpost where to direct your efforts, and probably that some products that could be discontinued.

So, here’s my Pareto Platform to you get started on a 20% focus:

* Develop a basic model of your key activities, the things you know that when combined and lined up, with focus, create success.

* Identify the pivots/conversion points within that model, the things you must get right at all costs

* Put in place metrics that give you a sense of what is happening right now

* Identify the levers within those conversion points you can influence to get to significantly better results

* Make small tweaks – pull the levers – and see what happens, and track results over time

These are the principles I adopt whenever facing overwhelming workload or a set of apparent priorities from different projects. It’s a return-to-basics call that gives clarity.

Taking a longer-term perspective, the Pareto Principle offers equally good insights to guide startup thinking and doing:

Focus on 20% of your market It is possible to have a successful business that either focuses on a niche market and mass sells into it, or just a segment of an overall market. Your target isn’t the market, but identify a demographic and define your addressable market with precision to ensure you have discipline, clarity and focus on your customer development.

Scale your pricing Is your pricing scalable? Many startups sell direct to end customers – by necessity – in their early stages, only to subsequently realise that margins can’t accommodate resellers and distributors when considering new channels. Test your assumptions and do your homework before setting pricing, look at 20% customer price bands and test elasticity of demand.

Less is more
Is a national market automatically better? No. Uncontrolled demand driven scaling leads to all manner of headaches and cost-bleeding, Price erosion to support volume customers is almost always irreversible. Avoid this scenario and consider partnering using exclusivity to negotiate better terms and focus on the 20% of customers available.

Hyperactivity vs. Productivity Being busy is not the same as being productive. Forget about the start-up overwork ethic that people wear as a badge of honour, you don’t scale! Get analytical and stay analytical, use 80/20 principles to stop putting out fires, duplicate your few strong areas instead of fixing all of your weaknesses

Work with ideal customers Not all customers are created equal. Apply the 80/20 principle to time consumption: what 20% of people are consuming 80% of your time? Put high-maintenance, low-profit customers on autopilot, process orders but don’t pursue them or check up on them, and exit high-maintenance, high-profit customers – the money isn’t worth the effort.

Get intimate Likelihood is that 80% of your new customers result from 20% of your offerings. Therefore identify which offerings produces most new customers, and then use the identified offerings more often (and use the less-effective offerings less often, or not at all). Get intimate with your offerings, and focus on the 20% that your customers want.

Everyone wears several hats in a startup, with overloaded schedules and too much to do. We think ‘I’m busy and therefore being productive’, but getting stuff done does not have a linear relationship to doing the stuff that makes a difference.

You already have all the time you’re going to get, and the law of diminishing returns applies – time is a bandit, and we often use extraordinary effort to keep things moving forward, but this is simply not sustainable. Management by crisis and fire fighting can become the norm, but are hugely unproductive and energy sapping. Urgency itself is not the problem.

The Pareto Principle enables a startup founder to work ‘on’ the business, not just ‘in’ the business, providing visibility for thinking time and space to focus on priorities, working with the team to do the stuff that makes a difference. The reality is most of what we do doesn’t matter, so we need to change this and focus on the 20% that moves the needle.

Startup metrics for customer traction

Start-ups are unique because of their ability to scale fast, and typically go through three stages – traction, transition and growth. Each of these stages requires different priorities that are reflected in different objectives, strategies, team etc.

In the early stages of your startup, you’ll have to manage so many tasks that you’ll often be overwhelmed with what needs to get done. But instead of being paralysed by what appears like an endless amount of work, know that you really only have one goal: traction.

The North Star has been used for navigation since man began sailing, and applying it as a metaphor to startups is useful to get clarity in the maelstrom of things to do. For me, your North Star is determined by answering the question:

How many people are getting authentic value from our product?

It’s a simple goal and easy to measure. I use ‘authentic value’ to avoid the ‘vanity metrics’ I’ll refer to later. The moment when a user gets authentic value means you are getting traction, and we can anticipate revenue, and when you have paying customers, you have a chance to turn your startup from an experiment into a business.

Simply, traction refers to the initial progress of a startup, seeking product-market fit, gaining market share and mind-share from its target audience.

You don’t necessarily need to be profitable to show traction, maintaining consistent growth in other metrics besides profit such as daily active users, monthly active users, monthly signups, or a decrease in churn rate are all indicators that your startup is gaining traction. Just as traction is important to you, it is important to potential investors too.

One of the first steps in generating traction is finding what the real drivers of your business growth are, which may take some time to discover, and developing processes to maximise each driver. When you have clearly defined processes, potential investors will also have a better picture of how your startup will progress in relation to the general landscape of the marketplace.

If you achieve success in the traction stage, you’ll have forward movement in the important metrics that drive your business. While being nimble allowed you to experiment during the early days of your startup – finding what moves the needle of your initial growth, testing different offerings, and nailing down your product-market fit – your aim is to maximise what makes you unique and what makes you valuable to customers.

Getting traction is hard. You’ll be working more ‘in’ your business than ‘on’ your business, and there is a dilemma: fundamentally, your focus has to be on customers, but the inclination is on product development.

What failed startups don’t have are enough customers, and it’s customers that investors are most focused on. When you’re talking to investors about your startup, it’s pretty much all about your traction, growth and velocity, and small numbers can have a big impact on their thinking. Is ‘20%’ enough for the big questions?

It’s important you’re on top of your numbers, and you can speak their language, so immerse yourself in your financial model and get as comfortable about churn, attraction, burn, runway, CAC and LTV, as you are your customer pitch. There are a lot of metrics and KPIs that startup founders are expected to have at the tips of their fingers, the vital signs that you live with day to day. These numbers show you have clear view of your key growth drivers.

In reality, the numbers should just confirm your instinct on performance and progress, but often they produce a reality check of where you are on the runway, offering a balance to the emotional ‘feel’ of what represents real progress on growth aspirations.

In my experience, startup founders can fall into the habit of innocently deceiving themselves with their own view on data, by only focusing on the KPIs and data that sounds positive and offers a positive outlook. We all have cognitive bias, tending to hone in on the metrics we know are improving over time, and ones that sound impressive without much context.

For example, I’ve seen startups ignore the hard stats of monthly active user numbers, but talk about the number of web site visits or downloads of white papers. Beware of ‘vanity metrics’ such as these, they don’t provide any meaningful indication regarding customer traction, pricing and cashflow – the metrics by which you should be making decisions. Focus on metrics and numbers that you can improve, and that inform you on your direction of travel in a meaningful, clear way.

To me, the indicators that matter most in the life of an embryonic startup are about customer development and attraction: customer acquisition, retention and conversion. If you don’t have a handle on these numbers, then you’re simply fiddling round the edges, and your actions will make far less of an impact on growth direction, velocity and scaling ambitions.

These measures, when combined, inform you about customer traction, offering data points to give a clear picture of the underlying growth: how many customers have found your product (acquisition), how long do your customers stay with your product (retention), and how many of these customers are willing to pay for the product (conversion)?

These data points define the sales funnel, starting with acquisition, a signpost indicator that there is customer value proposition in your offering. Acquisition doesn’t have to be expensive, it can be organic and relatively clunky and have some friction in the process, because at this stage it’s still about validated learning and building on your MVP.

Once you have initial users, your focus is on retention. What is the monthly churn rate – how many leave your product after the first month? If they stay a month, how much longer are they likely to stay? Your retention rate has a major impact on building your user base, and the scaling, and ultimately the width and depth of customer revenue.

If retention is low, then the work of acquiring new users will continually get more expensive in order to grow revenues as you’ll have to continually spend more and more to acquire new users. Investors want to see the opposite trend: as your customer base grows, unit cost of customer acquisition, on average, should decline.

Retaining more users obviously provides an ongoing growing population to convert to recurring annuity revenues or other monetisation strategies, and with opportunities to grow the business by broadcasting to, and engaging with, a wider audience, enabling more visibility on social media, and a range of use cases.

Once you have optimised user retention, you can start working on both ends of your sales funnel, bring more users in, and converting more of them to paying customers. But focusing on converting users, when your retention numbers are low, will yield few results, and over time, those results will diminish without strong retention numbers.

So recognising that whilst there are lots of moving parts in your startup, which you need to stay on top of, a focus on customers forms the core of a dashboard of basic metrics. Over time, new financially based metrics can be plugged-in as it’s important to put an emphasis on the numbers you need to actively improve profitability.

But that’s the key: don’t use numbers to measure a startup financially at the outset, use them to guide and drive growth ambitions and the direction of travel and development of your business model.

Equally there is a ‘lead’ and ‘lag’ orientation to metrics, some track was has happened, others can be used to look forward. Don’t start tracking things having made a change, start tracking before the change occurs. Progressions are far more important than numbers without any context: what was that number last month, compared to this month? How has it changed? What is the growth curve? Is it static? Is it dynamic?

Use your numbers to ask questions, the things you need to know to be sure that what you’re doing is having any effect at all. It is difficult to prioritise product and customer growth: Should we write a new feature? Remove a feature? Fix a bug? Redesign a user interface? Remove a step in the sign-up process? Write a blog post? Offer an e-book for a lead nurturing campaign? Change pricing? Hire a customer support person?

So having set your North Star and its associated metric, what are the key drivers to focus upon, the moving parts which will get you to where you want to be: How many people are getting authentic value from our product?

I’ve always liked the ‘startup metrics for pirates’ – AARRR metrics – developed by Dave McClure, which represent all of the behaviours of your customers which drive to your North Star:

  • Acquisition: the customer finds you
  • Activation: the user interacts with you
  • Retention: the user likes you
  • Referral: the user recommends you
  • Revenue: the user pays you

You need to break down these five metrics on your product and analyse them separately, so that you can optimise each of them. It’s important to understand AARRR, because only when you understand all the metrics, you will understand each of the moving parts in your startup, so you don’t guess and make the wrong assumptions.

The truth is that many startups make the same mistake of thinking if something doesn’t work, it must be everything, or they just guess the wrong reason why their business is not working. The truth is, any part of a customer’s experience can influence them. Here are some other metrics to consider, my own 5C Scorecard:

Customer Numbers A simple, binary index, set and measured for each period, provides visibility, clarity and simplicity of your North Star.

Conversion Rate to be a very telling KPI in that it reveals a combination of the company’s ability to sell its products to its customers and the customers’ desire for the product. It is particularly instructive to track and review Conversion Rate over time and regularly run experiments to improve.

Customer Acquisition Cost (‘CAC’) CAC is the unit cost of spend on sales and marketing, on average, to acquire a new customer. This tells us about the efficiency and effectiveness of our marketing efforts, although it’s more meaningful when combined with other metrics detailed below, and when measured over time.

Customer Retention Rate indicates the percentage of paying customers who remain paying customers during a given time period. The converse to retention rate is Churn (or Attrition), the percentage of customers you lose in a given period. When you see high retention rates over an indicative time period, you know you have a sticky product that is keeping customers happy. This is also an indicator of capital efficiency.

Customer Lifetime Value (‘CLTV’) is the measurement of the net value of an average customer over the estimated life of the relationship. Improving the ratio of CLTV/CAC is critical to building a sustainable company.

There is also one financial metric you need to keep a track on at this stage:

Cash Burn This is simply the net cashflow per month and is critical to the survival of any startup. Runway is the measure of the amount of time until have in terms of cash, expressed in terms of months.

Short Runways cause entrepreneurs to be myopic and removes the liberty to tweak and iterate when necessary. It also forces them to focus on the next fundraising round instead of on growing the business. It’s a separate discussion from this blog, but fund raising should be focused on milestones, not the runway.

I’ve ignored the usual financial metrics – revenue growth, gross and net margin, as you must not be limited to the KPIs themselves, for they are merely measurements of outcomes. You must have an understanding of what levers can be pulled towards achievement of your North Star, which is then reflected in KPIs. The focus should not be on the KPIs themselves, but the meaning behind them and knowing what impacts each one.

Once we set our direction by the North Star and check-in on the underpinning metrics on a daily and weekly basis, you give yourself a mechanism for deciding where to focus your time to move your business forward, and for me, that’s all about how many customers see authentic value in your offering.

Lessons from sporting comebacks for business startups

Comebacks are possible. In fact, they happen all the time. Yet, if you have had a setback, a comeback may seem impossible to you. Life is full of stumbles, no matter who you are. Financial problems, health issues, loss of a loved one – they may visit all of us. The challenge is how you overcome your setback. How do you dig in and hit back?

It’s the same for a startup. Circumstances and events may have conspired to force you down into a number of cul-de-sacs on product development, customers may have changed their minds and backed out of a deal, whilst recruiting new folks into your team may be proving troublesome.

Of course, we all love those great sporting comebacks when a team or individual looks down-and-out on the ropes, the scoreboard showing the game is over yet somehow they claw their way back to win with the odds stacked against them.

What are the lessons startups can take from the great sporting comebacks in terms of resilience, mental toughness and handling pressure in the moment?  Let’s look at a few of the most memorable turnarounds in sport, and then the lessons to takeaway for startup thinking.

Recently, we’ve had Barcelona pulling off the biggest Champions League comeback ever to eliminate Paris Saint-Germain. Faced with a 0-4 deficit following the first leg in Paris, Barca won the second leg 6-1, with three of the goals coming from the 88th minute onwards.

The New England Patriots became Super Bowl champions again in February by fighting back from 25 points behind to defeat the Atlanta Falcons 34-28 in overtime. In an extraordinary finale to the most challenging season of his career, Tom Brady inspired the Patriots and confirmed he was the best quarterback the sport has ever seen with a fifth Super Bowl crown.

Back in 1981, Australia were on the verge of going 2-0 up against England in the Test series inside four days at Headingley when Ian Botham strode to the crease. His swashbuckling innings of 149 made the Aussies bat again and Bob Willis ripped through the tourists with 8-43 to seal a remarkable 18-run win. England became just the second Test team to win after following-on.

Further back, the result Charlton 7-6 Huddersfield, in Division 2, 1957 wasn’t an end-to-end ding-dong. Ten-man Charlton trailed Huddersfield 1-5 with less than 30 minutes on the clock. And just this weekend, Exeter were 0-3 to Yeovil with two minutes to go in League Three, but scored three goals in two minutes to earn an unexpected 3-3 draw.

All memorable and some with global attention, but for me, a local rugby game is the greatest sporting comeback of all time, and helped shape my thinking on startup recovery lessons.

Local rugby clubs capture the spirit of community, everyone coming together for something they love. The effort and commitment is there to be seen at the ‘grassroots’ of the game. It’s here in the junior teams youngsters get their first taste of the great game, teaching children the core skills of rugby whilst developing valuable life skills like teamwork, sportsmanship and respect.

Rossendale RUFC are based in Rawtenstall, just up the road from the market, with a club house and pitches nestling in the scenic hillside, with stunning views looking down the valley to Manchester. On March 4 the Rossendale First XV staged a memorable fightback from a 0-28 points deficit, against Kendal, in a National League 3 North game.

In a classic game of two halves, Rossendale came from a seemingly irrecoverable position to earn a dramatic win, and maintain second place in the division. Curtis Strong crossed over the line in time added on to make the score 31-28 and win the match after being 26-28 down in a frenetic stoppage time.

Rossendale started slowly against their Northern counterparts, going in at half-time with a 0-21 deficit, and it seemed all hope was lost when Kendal scored their fourth try of the game shortly after the break. However, Fraser Lyndsay scored Rossendale’s first try and his first of two in the final half hour giving his side a ray of hope. Alex Isherwood, Nick Flynn and Curtis Strong added three more tries, as well as three out of five conversions from Steve Nutt, ensured victory was snatched from certain defeat.

At 0-28 down, generally speaking there’s no coming back. But the belief in the team and never say die attitude, once they scored, kick started the most remarkable sporting comeback I’ve ever seen. It was an 18-man effort with the substitutes; there was no one player who made the win, it was all of them, together.

Rugby is a physical game – the former England hooker Brian Moore once said If you can’t take a punch, you should play table tennis – but it’s not all about bashing and brawn, there’s plenty of humour and camaraderie in a rugby team – Gareth Chilcott, on retiring in his last England game said I’m off for a quiet pint now, followed by 17 noisy ones! Just half a session then Gareth?

Comeback stories like this are inspiring and cause us to believe there is hope for our own comeback in the face of adversity. For me, the passion, team spirit, togetherness and winning mindsets in rugby rise above anything I’ve ever done and taught me more about teamwork, effort, humanity, drinking and tomfoolery than anything else I’ve experienced. If you meet someone else who’s played rugby, you’ll probably like them and get on with them. Like Frank Menduca from Adelaide.

I went to the World Cup 2007 tournament in France with my son James, the highlight being England 23 Australia 17 in the Quarter-Final in Marseille. Memories of raw French steak, ham & cheese toasties and fine Belgian lager for breakfast, Welsh fans with ‘Fiji’ taped over ‘Wales’ on their shirts supporting Fiji in the Quarter Final versus South Africa. And an encounter with Frank Menduca, an Aussie bear.

Resting for a beer after the game with our group amongst a noisy throng of England fans on one of the many street bars, a posse of Aussies hulked around the corner. Cue Waltzing Matilda from the England fans. Jubilation versus despondency. One of the Aussies, the leader of their pack and a huge man mountain caught my eye and pointed a finger at me. You’re for it now dad! said James, moving slowly so as to hide behind me like Simba behind Mufasa!

The Aussie man-mountain came up to me, at least six inches taller than me, something I’m not used to. He stared intently into my face. Then let out a wail and a cry We lost, I need a hug! and embraced me as a long lost relative. Mayhem broke out again, as around twenty grown up men embraced each other. Man love. You had to be there.

About three hours, ten pints, a giant hot dog eating competition (individual and relay – well done James, second place behind Frank’s son) and a raucous singing competition later, we parted. Ten yards down the road, the Englishmen broke into the apocryphal Rolf Harris anthem. Tie me Kangaroo down sport.

But back to comebacks, and Rossendale’s recent victory 31-28 from a 0-28 deficit. How did they find the physical resolve, the mental tenacity, the resilience to recover from a scoreboard of defeat to one illuminating victory, and how can we take this lessons into our startup thinking?

Hold a clear vision The Rossendale team has a clear purpose – to win the National League 3 North, which sets the direction for each game. Winning and losing in sport is very clear cut, but when you’re down in a game, the vision has to be clear enough that the team can pursue it as a focus to clear the mind.

Composure Nothing gives you more advantage over in the heat of the moment as to remain composed, focused and unruffled. Composure is the product of an ambitious mentality envisioning the outcome we would aspire for – what do I need to do? It requires persistence, vision, self-belief and patience.

Get a new plan You’re way off your original plan, so you need to reframe with agile thinking, developing a revised plan to accomplish your goals as the situation changes. An agile plan doesn’t require detailed steps, rather it guides our actions to ensure we are progressing forward. It wasn’t raining when Noah started building the ark.

Don’t doubt yourself Our mettle is tested as pressure-filled situations create doubt. Having doubt is a natural reaction, which we all experience. But being composed and having a plan we believe in is what helps us to endure and overcome. Dare to believe you can be the best.

It’s never over until it’s over Even when the position was seemingly hopeless at 0-28, and 26-28 in injury time, Rossendale believed. They didn’t give up. The moment you accepts defeat, it’s over. For another example of this – watch the you tube video of British athlete Christine Ohuruogu beating Amantle Monsho in the 2013 World Championships 400m final. With 100m left she was 10m adrift, with 10m left she was still behind, but on the line she caught her competitor and won gold.

Face reality You have to stand still, take in the moment and acknowledge that things aren’t working as intended and made changes. As Einstein said one definition of insanity is doing the same thing over and over again and expecting different results. Difficult as they can be, changes are sometimes necessary. The cumulative impact of several small improvements is usually greater than finding one big change – because often there isn’t a big thing to find.

Focus on yourself When the chips are down and the team needs to produce peak performance levels, it has to be automatic. Top sportspeople always report that the victory was earned through training and practice. When things are tough it’s tempting to focus on what the competition are doing to be ahead but instead it’s important to focus on yourself. Compete with others but focus on you.

Leadership The role of leadership in a crisis is to be the catalyst. Ground everyone emotionally, get heads cleared, and look everyone in the eye. Then go for it. Once the spark has been fired, everyone needs to join the movement so that the fire spreads and takes hold. There’s a point at which a critical mass is reached and the team as a whole mobilises. The power of the doubting Thomases is replaced by the power of believers that it can be done.

Play on the complacency of the opposition There’s something else worth remembering. Teams lose when they think they’re already won. When Manchester United won the European Champions League in 1999, scoring twice in the final two minutes to turn around a 1-0 deficit, the Bayern Munich players were already celebrating. When Christine Ohuruogu won her gold medal, Amantle Montsho thought she had won and eased up on the line. Complacency often kills victory.

So Rossendale’s First XV bounced back from likely defeat to an unlikely victory. For a startup, there are many lessons from this remarkable turnaround as outlined above. Hardship prepares ordinary people for an extraordinary effort. Standing over the precipice, the first step to getting somewhere different is to decide that you are not going to stay where you are. Live in the solution, not the problem.

Fail in originality rather than succeed in imitation.

Having spent three years at university living with two biochemistry students who were hell bent on teaching me all about Crick & Watson, molecular biosciences and the rudimentary principles of genetic engineering, I’ve subsequently followed their careers with interest as I’m filled with curiosity about genetics and cloning – but also originality and individuality.

Simon is now Professor of Cellular & Integrative Physiology at a highly respected US university. His enthusiasm on Skype for keeping me updated on his research programmes, investigating the pathways that control pituitary gland organogenes, and developing new diagnostic and genetic tools knows no bounds.

As a result, I can talk for a good twenty minutes on how the anterior pituitary gland secretes polypeptide hormones that are essential for human development and physiology parameters including metabolic homeostasis.

Geoff took a different route to his career, wandering around various world-class commercial labs in America, Germany and now in the UK, collecting knowledge. Currently he’s in a role as Head of Research and Director of Lab Sciences focused on the betterment of humanity, so he tells me, leading innovative new drug research and discovery programmes.

He plans to save the planet, so he can live to 150 along the way. Our last conversation was about how integration of radioactivity data with metabolite profiling is key in the characterisation of the disposition of drugs and chemicals. I’ll fetch my (white lab) coat.

Both had a passion for genetics, and we had heated debates about the ethical and scientific boundaries regarding the deliberate modification of the characteristics of an organism by manipulating its genetic material. Alas my knowledge ceiling was the Czech monk Gregor Mendel and experiments on plant hybridisation with the breeding of pea plants in his garden, and his principles of heredity and inheritance.

Simon and Geoff lauded him as the father of genetics and we once went to a Biochemistry Society fancy dress party with the three of us dressed as Mendel, although I recall we were more mad monks than abstemious monks and hit the mead heavily that evening.

It’s now over twenty years since the first adult genetic clone, a sheep called Dolly. In the summer of 1996 Karen Mycock, a cell biologist, was attending a wedding in the Scottish highlands. Returning to her hotel to change her hat, she found a fax pushed under her door. It said: She’s been born and she has a white face and furry legs. An unusual birth announcement, but it was an unusual birth.

Karen worked at the Roslin Institute, an animal-research centre near Edinburgh. She had passed a tiny jolt of electricity through two sheep cells in a dish. One was an egg cell which had its nucleus removed, the bit of the cell which contains almost all its genes. The other, its gene-bearing nucleus intact, was from the udder of another ewe. The electric jolt had caused the two cells to fuse, forming an embryo. The ‘nuclear transfer’ she had overseen had worked. An adult sheep had been cloned.

The egg donor was a Scottish Blackface sheep who was the surrogate mother that took the embryo to term. The other cell came from a white-faced Finn Dorset. The fax had been kept brief and cryptic because the genetic breakthrough was hush-hush. When a scientific paper was published in Nature, a right furore broke out that went far beyond the scientific world.

The fuss among scientists was due to the fact that many believed cloning animals was impossible. John Gurdon of Oxford University had cloned frogs by nuclear transfer in 1958, but his creations never developed beyond the tadpole stage. All efforts to do the same in mammals had failed.

This had led biologists to believe that although all cells in a body shared the same genetic material, they were not equally capable of the same reproductive feats. Stem cells, found in early embryos, could develop into the various sorts of specialist cells found in skin, muscle or nerves, but development was way off.

The research at the Roslin Institute showed that this need not be the case. The key advance was made by Keith Campbell, who realised the importance of synchronised cell cycles, the rhythms according to which cells grow and divide. By starving the donor cells in a way that forced them to stop dividing, Campbell matched them to the eggs’ cycle.

Dolly opened up two new possibilities. Firstly reproductive cloning, the copying of individual animals, secondly, the creation of stem cells capable of forming other cells, something which came to be known as therapeutic cloning. The media and public became obsessed with the idea that human clones were just around the corner from the Frankenstein frisson of sparks of electricity.

However, from Dolly, 277 successful nuclear transfers produced just twenty-nine normal embryos, which were implanted into thirteen surrogate mothers. Only one survived. Alas Dolly developed osteoarthritis and a lung infection at an early age, and she died prematurely. That said, four clones of Dolly herself are currently enjoying a healthy old age at the University of Nottingham.

Beyond the lab, cloning has made slow but steady progress, successfully used on more than twenty species with the technique proving particularly fruitful in cattle and dairy farming, allowing multiple copies of elite animals. In New Zealand and America it is regarded as a normal animal-breeding procedure and clones are part of the pedigree market. Meat and milk from cloned animals is routinely farmed and sold in America. In Europe, though, it is banned on grounds of animal wellbeing.

Cloning produces replicas, not originals. Originality. What does it mean to you? Originality results from the power of imagination, like Picasso and Einstein. It’s up to the individual to take advantage of that imagination and turn it into something great. Imagination leads us to accomplish our greatest achievements. When you dare to be an original, you are in essence daring to be yourself and who you really are.

It’s true. Life is too short to live it trying to be anything other than your true original self. Be who you are, and be it the best way you know how. So how do you do this? Here are some thoughts.

Listen to the voices in your head – what do you mean, you don’t hear voices inside your head, is it just me then? Whatever the voices tell you, trust them and your instinct, and go for it. Trust yourself and your intuition.

Expect a lot from yourself, believe in yourself Don’t let someone else define your agenda, you decide what is possible for you. Dare to believe you can be the best, and make it happen. Embrace challenges and setbacks as defining moments, learn from them, use them as springboards.

Don’t care about being right, care about succeeding Steve Jobs used this line in an interview after he was fired by Apple, and I think it’s a great guiding principle for anyone, as a person or business leader.

Chose your attitude Regardless of appearances, no one escapes life without enduring tough moments and cul-de-sacs. The truth is, life is messy and unpredictable. The difference between those who overcome challenges and those who succumb to them is largely one of attitude.

JRR Tolkien’s words in The Hobbit are inspiring about your choosing your attitude for personal or business growth:

The greatest adventure is what lies ahead, today and tomorrow are yet to be said, the chances, the changes are all yours to make, the mold of your life is in your hands to break.

Be Unique Our world today is full of Dollys, replicas, clones and imitations, so craft a life of novelty and innovation. Conformity to the norm will merely sentence you to mediocrity, who wants to be average, surely that’s just a blank face in the crowd of irrelevance – be your own voice.

Life’s too short to go unnoticed Be audacious, but with humility. Life is all about progression from good to great. Push yourself to be there, at the top table, but never be afraid to wash the pots too. Leaning back, or leaning forwards, which do you think is the best stance to take?

Reach beyond your expectations A Shackleton quote. Success means different things to different people, and that’s okay, but it’s not other’s opinions you should be concerned with, but your own expectations. It’s my hope your sights will shift from the modest pursuit of success to the passionate pursuit of significance.

Live at your Personal Best Following on from the above, look into the minds of Olympians such as Beamon, Owens, Lewis, Fosbury, Redgrave and Liddell. Push yourself at every moment, seize the day. Today’s laurels are tomorrow’s compost.

Be a lifelong learner Graduation isn’t the end of learning, just the start. Learning defines the person and is a lifelong endeavour of discovery, improvement and fulfilment. The minute you stop learning is the minute you cede your future and check out on the race with yourself to realise your potential.

Be mindful Be conscious of living in the moment. Pay attention to the moment, and make it happen. Fantasy of ‘what will be’ is a necessary ingredient in living, it’s a way of looking at life through the wrong end of a telescope, but don’t take life too seriously, be happy.

Stay hungry, stay foolish The closing lines from Steve Jobs’ 2005 Stanford University speech captures a sentiment that seems on the face of it somewhat flippant, however, when you reflect, it’s a statement about keeping your ambition and being adventurous, never taking yourself too seriously, keeping the zest and attitude of youth.

In addition, Jobs made three other points to the Stanford class, which are relevant to all entrepreneurs:

  • You can’t connect the dots looking forward; you can only connect them looking backwards. You have to trust that the dots will somehow connect in your future, so follow your curiosity, intuition and your heart.
  • Sometimes life hits you in the head with a brick, but keep going doing the thing you love, that is great work. If you haven’t found it, keep searching until you find it. Keeping looking don’t settle.
  • Live each day as if it is your last, because one day you will be right. Your time is limited, so don’t waste it by living someone else’s life, don’t be trapped by dogma of other people’s thinking, don’t let your own voice be drowned out by other people’s noise. Have the courage to follow your heart and intuition. Everything else is secondary

Check out Job’s inspirational speech here: https://www.youtube.com/watch?v=D1R-jKKp3NA

There is a light that never goes out from our youth, keep it alive as the years clock on. Individualism is a human thing. Don’t waste your time trying to be a copycat. Be yourself, stand out from the crowd, because those who mind don’t matter, and those who matter don’t mind. Champion novel ideas and values that go against the grain, battle conformity, and buck outdated traditions.

Don’t be a sheep in wolf’s clothing, or another sheep’s clothing. It’s better to fail in originality than succeed in imitation.

Startup leadership lessons from the Charge of the Light Brigade

I’ve long held an interest in British military history, taking leadership lessons into my business thinking. One of the harshest examples is the Charge of the Light Brigade in the Crimean War. It highlights for entrepreneurs on how shortfalls in planning, poor working relationships and ineffective communication can have a hugely negative impact on decision-making and consequently, outcomes.

It is one of the least edifying episodes in British military history. On October 25th, 1854, at the Battle of Balaclava, the elite of the British army, The Light Brigade, charged suicidally into a phalanx of Russian heavy guns. The result was a tragedy: 673 men and officers engaged in the charge – fewer than one hundred survived. The Charge of The Light Brigade is one of the most compelling examples of incompetent British military leadership.

One reason startups plunge headlong into failure is by ignoring the rules of good decision-making and effective communication. The causes have an echo from the Crimea – entrenched attitudes, blinkered leadership, weak planning, clear thinking overcome by emotion. The results are familiar – great passion and effort but wasted energy and missed opportunities.

The story starts in 1853, when Russia invaded the Balkans. Britain and France had Treaty obligations, which they decided to fulfill because they did not want Russia with access to a warm water port and potentially greater political and commercial influence.

 The first problem they had to face was one of leadership. Who would lead the British Forces? Choice was limited. There hadn’t been a major war since the defeat of Napoleon forty years before and there was a lack of experience in the senior ranks.

The choice for leader eventually fell upon Lord Raglan, Wellington’s son-in-law, who had held a desk job as a military secretary for 40 years. There was hope that Wellington’s genius might have rubbed off on him. He was affable, likeable, well mannered – the perfect English gentleman. But he had no experience of leadership in the field.

The Cavalry Division was made up of the Light and Heavy Brigades. Lord Lucan was in charge of the Cavalry Division, a disciplinarian not respected by his troops. He was a hard worker and up before dawn each day. Lord Cardigan was in charge of the Light Brigade. He had a fiery temper. He was dismissed as Colonel of the 15th Hussars for his vindictive and tyrannical rule.

During the Crimean campaign, Cardigan lived on his boat, away from the troops, unlike Lucan who chose to stay with his men and experience the same conditions. Cardigan and Lucan were brothers-in-law and disliked each other intensely.

The lack of a warm relationship between the brothers-in-law impacted the chain of command, and was ultimately one of the factors that created a dysfunctional leadership culture. Raglan was the Head of the Army and Lucan reported to him; Lucan was Cardigan’s boss but Cardigan did not want to report to Lucan and tried to bypass him whenever he could by going direct to Raglan.

When Lucan complained to Raglan, Cardigan complained of Lucan’s interference. Raglan’s natural reaction when faced with interpersonal conflict was to avoid it and not resolve it. His tactic was simply to ask both men to get on with each other. Cardigan and Lucan’s relationship never improved, the pattern of behaviour was set from the outset.

By October 1854, the Allied armies were besieging Sevastopol. On the morning of 25th October, there were large movements of Russian forces threatening the British supply lines at Balaclava. Raglan sent messages for reinforcements to come down to the valley to help defend the base. One of these messages went to Sir George Cathcart, in charge of the Fourth Division, but Cathcart failed to see the urgency. He saw it as one of many urgent requests and considered this to be yet another false alarm.

As it was, history meant that everybody’s expectations were different and unaligned. Raglan thought Cathcart would support Lucan; Lucan thought Cathcart would appear and waited; Cathcart thought it was another false alarm and didn’t move instantly. This had fatal consequences.

On top of the hill, watching the events at Balaclava unfold, were Raglan and his officers. One of them noticed that the Russians were preparing to take away some British guns, captured earlier in the day, which would have been an embarrassment, but of little military impact. Raglan decided to try to stop them – a decision that was emotionally and culturally driven.

Raglan sent down a series of four separate orders to Lucan, telling him to use cavalry to stop the Russians taking away the guns. However, they had totally different physical perspectives on the theatre, and what the key actions and focus were for the next stages of the battle. So the schism was formed. Lucan literally couldn’t see the same guns as Raglan, but he could see guns. Because he could only see one set of guns, he assumed Raglan meant those.

They weren’t the British guns Raglan didn’t want the Russians capturing and enjoying a political and psychological victory, they were Russian guns at the far end of the valley, heavily protected on three sides by Russian infantry and cavalry. Lucan didn’t understand the orders from Raglan; he was confused. However, there were enormous pressures on him to do something.

One of the observers on the hill with Raglan was a young cavalry officer, Captain Louis Nolan. Nolan was experienced and knowledgeable, but, he was a junior officer and not from the right class, so senior officers didn’t take much notice of him. When he saw opportunities for victory being thrown away he was beside himself. Remember, he was seeing what Raglan saw – but he had little respect for the abilities of the cavalry commanders and, watching the activities below, his opinion was being confirmed.

Nolan was chosen to take the fourth and last order to Lucan. It was a disastrous decision considering Nolan’s perspective of the immediate event and his opinions of his superiors, which drove his behaviour. Nolan’s instructions to Lucan were unequivocal – attack the guns. His tone in delivering the order carried the full force of his anger and frustration. He didn’t explain. Lucan had to obey.

Paradoxically, the one time Lucan ought to have delayed and asked for clarity, he didn’t. Lucan ordered Cardigan and the Light Brigade down the valley to attack the (wrong) guns. When Cardigan received the order from Lucan he said I shall never be able to bring a man back but didn’t want his brother-in-law to have the satisfaction of seeing him appear to be cowardly. So he led the charge with 673 men straight at the firing enemy. Everybody knew the order was insane, but everybody followed it.

So what business lessons can we take from this catastrophic failure of leadership? A pointless effort due to muddled orders, especially when compared to the entirely successful and equally gallant charge of the Heavy Brigade earlier on the same day is generally forgotten?

Create a unified leadership culture At one level, the battle is a story of personal ambition, animosity and prejudice. Lucan and Cardigan detested each other and went out of their way to undermine each other. Leaders must put personal differences aside to create a shared consensus and collaborative culture, the adverse impact of personal vendettas is clear to see.

An entrepreneurial leader helps their people achieve greatness, even during hardship. It’s important to push your folks to meet their goals and advance their development and personal growth – it’s about their journey too. Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.

Leadership is about people Raglan had never commanded an army in the field before. Politically adept but lacking emotional intelligence, he simply didn’t know the job of leading people, above or below his command.

As an early-stage entrepreneur, your team will be small, but with trustworthy people in place and proper coaching, you can better compete with the big guys. Be courteous to all, and intimate with a trusted few.

Leadership means listening The individual who ended up taking the blame for the fiasco of the Charge, Captain Nolan, was intelligent and motivated, eaten up with frustration at being ignored by a prejudiced class system that refused to acknowledge ability. No one listened to him. The arrogance of leaders means they often ignore others who are younger, more intelligent and from a different background to themselves.

Building a startup team is key, an entrepreneur can’t do it on their own. Assemble a core team of trustworthy people, create an open style of communicating, and listen to them. Consider different viewpoints and figure out the best approach.

Agility over hierarchy in decision making For his part, Cardigan’s pride prevented him from directly challenging an order from his superior. Why did Lucan, against his better judgement, obey Raglan’s order as transmitted by Nolan? Was it obedience to his superior, and the personal authority implied, or a desire not to be bested by his despised brother-in-law?

Under pressure, it is the quality of relationships that matter most. As an entrepreneur, you will make mistakes, but it’s how you learn from them and share this learning that will define your success as a leader.

Focus on clarity of communication From an organisational perspective, the Charge is a catalogue of inadequate channels and clarity of communication. Raglan`s last ‘urgent request’ for reinforcements was dismissed as scaremongering by its recipient. Nolan was responsible for transmitting Raglan’s final order to Lucan to charge, and it is possible that his repetition of Raglan’s order built upon the vagueness of the original message with his own bitterness and anger, resulted in Lucan’s reckless interpretation.

Leadership is about respect and humility As The Light Brigade blundered into a battle in the wrong place at the wrong time, the entire campaign narrowly avoided total disaster due to the heroic independent action of General Colin Campbell of the Sutherland Highlanders 93rd Black Watch Regiment, in forming what became immortalised as The Thin Red Line.

In this incident, the 93rd routed a Russian cavalry charge, which if successful would have signaled total defeat. Convention dictated that the line should be four-men deep. The Times correspondent, William H. Russell, wrote that he could see nothing between the charging Russians and the British regiment’s base of operations at Balaklava but the “thin red streak tipped with a line of steel” of the 93rd.

The line was two-men deep. This scared the Russians into thinking it was a trap, and they pulled away. Campbell’s relationship with his men was unconventional, he treated them like sons, as individuals, with warmth, compassion and humility.

We can condense this event into a symbol of how personalised leadership and personal connectivity is key to creating composure in battle, and this in business. Treat people as individuals, not resources.

Leadership is personal Asking future leaders to re-interpret their present reality through the lens of past examples is simply indoctrination, instead embody their learning experientially and facilitate an understanding of personal perspective and relevance in the current context. Helping develop essential skills, such as empathy, personal vision and personal presence is vital.

When you respect your folks, they will respect you, and when people believe in their leader, they’ll go to far for her. The forbearing use of power forms a touchstone for respect.

The paradox of leadership is shown clearly between Lucan and Cardigan, and Campbell. The difference is largely down to Campbell’s personal leadership skills. Campbell had that capacity for peripheral vision that enabled him to see what was at stake, and the single-mindedness to do something about it. It is a wonderful contrast with the blinkered myopic response of Lucan and Cardigan, unable to step outside a fixed behaviour.

Leadership is about calmness, not bravado Lieutenant Lewis B. Puller is the most decorated US marine in history, his service spanned four decades. He led marines in nineteen campaigns and some of the most critical battles of the C20th. Puller is most remembered by his fellow marines for his quick-witted encouragement in the midst of combat.

In the face of adversity, you have to stay calm and positive. If you lose it, your team will follow suit: All right, they’re on our left, they’re on our right, they’re in front of us, they’re behind us…they can’t get away this time.

One valorously tragic incident, immortalised by Tennyson’s epic poem, is a story of a tragic defeat, commanded by officers without a clear view of the battlefield, distracted by personal agendas and plagued by communication problems. Someone had blunder’d. Into the valley of Death rode the six hundred. Was there a man dismayed? It truly was the valley of Death.

The story of the Charge of The Light Brigade is where 673 men charged down the wrong valley after the wrong target. Are you charging down the wrong valleys after the wrong targets in your startup? Ask yourself the question about your direction and purpose, your strategy and tactics. But most of all, reflect on your leadership culture, style and communication.

Crafting your startup value proposition

I’m currently working with a retired farmer who had taken up creating his own brand of home made wine on an industrial scale from his farm in Rossendale. When I visited his farm for our first meeting I knocked on his door, to be greeted by a friendly, warm, physical handshake and a beaming smile: Come on in, would you like a drink of my wine? Was the first thing he said.

He’s always looking for a victim said his wife. Right I’ll be back in a minute. He disappeared into a large pantry at the end of the kitchen and came back with a bottle of amber liquid and two glasses.

This is my rhubarb he said, tipping out two good measures. I took a sip and then a good swallow, and gasped as the liquid blazed a fiery trail down to my stomach. It’s strong stuff I said breathlessly, but the taste was very pleasant indeed. He watched approvingly as I took another sip. Yes, nearly two years old.

I drained the glass and this time the wine didn’t burn so much on its way down, but seemed to wash around the walls of my empty stomach and send glowing tendril creeping along my limbs. Delicious. He refilled the glasses and watched with rapt attention as I drank. When we had finished the second glass he jumped to his feet and trotted to the pantry to emerge with another bottle, this time of a clear, colourless liquid.

Elderflower, he said smiling. When I tasted it, I was amazed at the delicate flavour, the bubble sparkling and dancing on my tongue. Terrific, just like champagne. I never thought home made Lancashire country wines could taste like this. I sipped appreciatively at my second glass, and I hadn’t got more than half way through it before my host was clattering and chinking inside his pantry again, emerging with a bottle of a blood red wine.

You try that! he gasped. I was being beginning to feel like a professional taster and rolled the first mouthful around my mouth with eyes half closed. Wow, just like an excellent port, but there’s something else here, a fruitiness in the background. Blackberry, one of the best I’ve done, made it two backends since.

Leaning back in the chair, I took another drink of the rich dark wine. It was round flavoured, warming and behind it an elusive hint of brambles. I could almost see the heavy-hanging clusters of berries glistening black and succulent in the autumn sunshine. The mellowness of the image matched my mood which becoming expansive by the minute.

I couldn’t make my mind up which had been the best. But you haven’t started yet, he said, I’ve got dozens of bottles in there, all different, and he shambled over again to the pantry and this time when he reappeared he was weighed down by an armful of bottles, different shapes and colours.

What a charming man! Wide eyed and impassioned, he rambled at length over the niceties of fermentation and sedimentation, of flavour and bouquet. He dealt learnedly with the relative merits of each and his plans for his startup online business. I sat spell bound listening to him. And drinking.

He poured endless samples of his craft in front of me, mixing and with a meticulous attention of his bottles, their date, origin and fruit. We tried parsnip and dandelion, cowslip and parsley, clover, gooseberry, beetroot and crab apples. Incredibly he had some stuff made from turnips, which was exquisite.

Everything gradually slowed as we sat there, time slowed and eventually became meaningless. Frank’s visits to his pantry became laboured, unsteady affairs, sometimes he took a roundabout route across the kitchen. Eventually it was time to go, and I left with a bottle in each pocket – trousers and coat – including elderflower, of course.

So a great experience with my retired farmer friend, and his aspiration to build on an on-line wine merchant business from his range of home made Lancashire wines from the vast acres of his fields. We’re now just a few weeks away from launch and I promise we’ve been talking and planning and crafting his business thinking, not just drinking.

But how do you start to put his idea of Lancashire Farm Wines to launch a business? Any startup business idea has to start with thinking about its potential customers – not its product – at the core of its business model: what are the pains and aspirations of your customer? Does your product truly solve your customers problems, or does it fulfil its promise of doing something in a better way? What does it do differently?

Most startups wrestle with these questions at their outset, when they are in the customer discovery and customer validation phases, seeking to determine their value proposition and building what their offer is for their target market, seeking product-market fit.

For a startup to attain product-market-fit, its value proposition should neatly map to three needs:

  • The product should eliminate the customer’s pain or problems
  • The product must meet the majority of the target customer’s needs
  • The product has to provide more value than other alternatives

It might sound basic, but these core ideas can get lost in the fray of rapid iteration of a product, particularly during the early phases of development, when you’re generating a huge number of ideas and your passion for what you’re doing can often cloud your judgement of why would a customer buy from you?

Whatever stage a company may be in, the business needs a mechanism to communicate how the product meets the needs of the customer. There are many ways to define your value proposition, but one approach I’ve favoured is a process referred to as The Three Legs of the Value Proposition Stool.

The collection of reasons why people buy typically fall into three major buckets that, in sum, form the three rules of winning value propositions:

  • Buyers have to want and need what you’re selling. You have to resonate.
  • Buyers have to see why you stand out from the other available options. You have to differentiate.
  • Buyers have to believe that you can deliver on your promises. You have to substantiate.

This applies to Lancashire Farm Wines as to any consumer tech product or digital service. What you have to do is ask the right questions so you focus on the customer and the market, not your product:

Where is the white space? It’s obvious, but it needs to be asked: is there a real and unmet market need that your startup can address? For example, Frank’s farm venture is aiming at the wine enthusiast, not the connoisseur, who has an appetite and sense of adventure for a range of traditional English home made country wines.

Is there another supplier in this market? What is their proposition? Is there an online model? Envision the market years down the road and use that as inspiration.

What do my (potential) customers want? Get out of the building, do the research yourself and take the time to interact with your potential customers personally. You’ll receive the best feedback from those who would pay for your product (or are already paying you, if you’re in beta.)

You obviously don’t always have the same read on buyer needs as the buyers themselves, so it’s worth your time to explore every angle and have the research to hand.

Is my product vastly superior to my competitors? If someone else is already doing what you intend to do, or something substantially similar, fear not, there are still ways to show that you have an edge, and they all have to do with creating unique points of difference – for Frank, this could be product range, price points/offers, or customer experience – things you know you can do better than existing products and make genuinely standout.

In short, what can you create that is ten times better than your competitor’s product, and thus create a compelling and sustainable advantage?

Let’s look at some of the best unique value proposition examples we see in some of tech businesses today – where the focus is on the user experience, not the insanely smart technology.

Apple iPhone – the experience is the product The smartphone revolution has been led by Apple, its value proposition becoming the brand in a saturated consumer electronics marketplace such that it is the iconic product. So what sets the iPhone apart from the plethora of competing devices, especially given Apple’s consistent premium pricing policy?

Apple’s strategy is as much about a commitment to sleek, elegant product design as its actual product functionality. Its focus is on the user experience. Apple reiterates its value proposition includes the simplicity in terms of ease of use that has been a cornerstone of Apple’s design aesthetic since the launch of OS X, and the aspirational qualities that an iPhone offers the user. This aspirational messaging is Apple’s value proposition.

We could sit here and poke fun at Apple’s lofty design aesthetic, but it’s design focus has been a remarkably effective marketing approach that has helped Apple remain at the front of a brutally competitive market for almost a decade.

Rather than focus on a specific user feature or the technology – virtually none of which are unique to the iPhone or iOS – Apple’s focus is on the experience of using an iPhone device, and creating a brand identity as ‘an Apple user’. Take, for example, Apple’s commitment to personal data security and privacy. This is a clever strategy in terms of creating a brand identity based on appealing to the personal principles and beliefs of Apple customers.

Recall the disastrous FBI San Bernardino iPhone unlocking lawsuit, where Tim Cook’s stance was clear and championed the cause of privacy and personal data, an issue most of us are concerned about. He managed to simplify the complex topic of encryption into easily understandable language based on a set of personal principles, which users felt good about.

Apple do respect and protect my privacy as a company, and this shows through their products. Nothing to do with the core underlying functionality of the phone, but the values of the company are part of the value proposition to customers.

Apple understands that even focusing on the unique features of iPhone wouldn’t be enough to distinguish the device in such a crowded market. By emphasising the overall experience of using the device and aligning the brand to the identity of the customer, Apple’s value proposition is as unique as its approach to product design and aesthetics.

Slack – be more productive at work Slack is a workplace team communication instant messaging app that is deceptively simple to use, yet robust enough for large distributed teams working on complex projects. Slack use case on their homepage is the NASA Jet Propulsion Lab as an example of how it can be used. But what is, so what sets Slack’s value proposition apart from other messaging and productivity apps?

Essentially, Slack distils its value proposition as to ‘it makes users’ working lives simpler, more pleasant, and more productive’. The NASA JPL example is smart in that it subtly implies that if it’s good enough for large teams of scientists at NASA – the kind of people who put robots on other planets – then it’s good enough for anyone’s more mundane projects.

However, while this might seem like the identical value proposition of virtually every productivity app, Slack has several advantages that support its core proposition of not just enabling project management, but making team collaboration simpler.

No other productivity apps boast as many integrations as Slack. This means that it is highly likely to be compatible with a company’s existing communications and workflow tools. It’s this diversity of supported apps that has helped Slack dominate the workplace productivity space. It’s the ubiquity and integration of the app that unlocks synergistic value from information and investment in other tools, not the functionality of Slack itself.

Like Apple, simplicity is also a core theme of Slack’s value proposition. The premise of ‘find anything, anywhere, anytime, from any device’ is a catchy and compelling reason to adopt Slack. Slack essentially addresses every common pain point you can think of about collaborating with others at work, then simplifies it in an almost irresistible way.

Slack’s mantra of ‘Be Less Busy’ isn’t just a catchy slogan – underpinned by ‘all tools in one place’, ‘search your entire archive’ and ‘everywhere you go’ – capture the company’s value proposition neatly summarised into three beautifully simple words.

I’m sure Frank will appreciate my ramblings on the value proposition of these two tech behemoths that have created their own market space with their own unique value propositions based on great product features and benefits, but also a focus on the user experience.

Sitting the customer’s side of the table and imagining their journey is the way to craft your value proposition. So Frank and I will spend more time sat the table quaffing his fine wines and thinking customer not product. After all, life’s too short to drink bad wine, as it is not to have developed an innovative value proposition, so, whatever you do, pour yourself into it.

Curiosity, sheep and unknown unknowns

Habits can be a good and bad thing for an entrepreneur, giving a clear sense of focus, a rhythm and guidance to keep heading for the north star to make stuff happen, and yet paradoxically, the wrong habits end up ultimately in addiction to doing the wrong things repeatedly.

We’ve all got an addiction, which stops us from doing more productive things. As a youngster, I remember visiting the various seaside piers in the north-west of England where the capacity of slot machines to keep people transfixed was the engine of the gambling tourist economy. It was only a bit of fun, but feeding those 10p coins into the slots at a pace, well, they were never to be seen again.

But despite this, you went back and fed them time and time again. The slot machines were in an environment designed to keep people playing until they had spent up. Of course, these days we’re all captive to a smartphone screen explicitly designed to exploit our psychology and maximise ‘time-on-device’ every waking moment, everywhere we go.

The average person checks their phone 150 times a day, and each compulsive tug on our own private slot machine is not the result of conscious choice or weak willpower, it’s engineered. A Harvard math genius named Jeff Hammerbacher took the job as first research scientist at a startup called Facebook. Hammerbacher states: the best minds of my generation are thinking about how to keep people clicking through.

Digital addiction is quiet subtle because it’s an immersive user experience, but habit forming. When you get to the end of an episode of Blue Planet on Netflix, the next episode plays automatically. It is harder to stop than to carry on, and this tech driven addiction is everywhere. Facebook works on the premise you are vulnerable to social approval, and that ‘likes’ will draw you in repeatedly. The habit of ‘second-screen’ simply feeds and cultivates this dislocated dance.

Similarly, LinkedIn sends you an invitation to connect, which gives you a little rush of dopamine  – somebody wants to know me – even though that person probably clicked unthinkingly on a an auto-menu of suggested contacts – or simply a recruiter trolling you. Unconscious impulses are transformed into social obligations, which compel attention, which is sold for cash.

What concerns me most about this growing trend is it’s turning us all into sheep. I live in the East Lancashire hills surrounded by them. Sometimes I get so angry with the simple life they lead. They just stand there, looking like they’ve never questioned anything, never disagreed. Sometimes I think they must have wool in their ears.

We laugh at sheep because sheep just follow the one in front. We humans have out-sheeped the sheep, because at least the sheep need a sheep dog to keep them in line, whilst humans keep each other in line.

Sheep are not curious, but contrary to what you may have heard or even expressed yourself, sheep are not stupid. They rank just below the pig in intelligence among farm animals. Simply, sheep react to the domestication that has decreased their instinctive behaviour and increased their docile nature, and being ‘one of the herd’ is what they’re all about.

But we need to build an ability to just be ourselves and be thinking and not be doing something banal like smartphone addition – it’s the sheep equivalent of simply standing there for following the herd. That’s what the smartphones are taking away. Underneath in your life there’s that thing, that forever empty, that knowledge that it’s all for nothing and you’re alone. That’s why I think that people text and drive because they don’t want to be alone for a second and be thinking for themselves.

In this vision we are all trapped in a Mobius loop of technological determinism. Product creators are powerless to do anything but give people what they want, and paradoxically users are helpless to resist coercion into what they’re given and all of us are slaves to whatever technology wants. No one is accountable while everyone loses dignity.

Bottom line, we’re not asking enough questions, working around issues to be more curious, more cognisant of what we don’t know, and more inquisitive about everything, to organise our thinking around what we don’t know. It’s becoming a bad habit to simply spend time on our smartphones browsing without purpose. We need to be less curious about people’s social habits and their photos and more curious about new ideas and learning.

Asking questions can help spark the innovative ideas that many startups bring to market. In my research, I track business breakthroughs, and from the Polaroid instant camera to the Nest thermostat and the recent startups like Netflix, Square and Airbnb you find that some curious soul looked at an existing problem and asked insightful questions about why that problem existed, and how it might be tackled, and came up with a solution.

The Polaroid story is my favourite. The inspiration for the instant camera sprang from a question asked in the mid-1940s by the three-year-old daughter of its inventor, Edwin Land. She was impatient to see a photo her father had just snapped, and when he tried to explain that the film had to be processed first, she asked: Why do we have to wait for the picture?

When we open ourselves fully to our curious natures, we are able to ponder without limits. Curiosity isn’t about solving problems, it’s about exploration and expansion. Curiosity can start and lead anywhere, and that’s precisely the sort of broader mindset startups need. So how should we go about promoting a culture of curiosity within a startup as part of its business model? It’s essential to be curious about several things:

Be curious about your people Many startups work hard to attract people with inquisitive mindsets and then stick them in an environment in which curiosity is discouraged as they pivot to ‘business as usual’. Hire people with a diverse range of backgrounds, experiences and aptitudes and then enable those differences to spark off each other as they work to create a cohesive but flexible unit. Building a culture of curiosity starts with seeing the individuals behind the job role.

Be curious about customers Don’t see customers simply as a transaction or an opportunity for a future revenue stream, understand why they buy from you and their business model, and the mechanics of their businesses. You need an external focus beyond nice words, mastering the ‘seeing and feeling’ of the customer, be curious about your customers: ‘what would the customer say to this?’ An enquiring mentality, asking ‘is this the best we can do?’ will bring success.

You work harder on what you’re curious about When was the last time you lost track of time working on something? If you’re curious about something, you’ll worker harder than the next person, who is just trying to maximise some other metric. If you follow your curiosity, you’ll end up somewhere nobody else is. Meanwhile, people who aren’t curious are trying to figure out who they should catch up with. They create a whole universe of the uncurious, parroting something someone else told them.

Be curious about the outside world We all need to take our focus off our immediate surroundings and get curious about people, about trends taking hold, about other cultures and points of view. About anything and everything beyond our too often insular worlds. Ideas know no hierarchy. We need to get better about responding to ‘What if?’ with ‘let’s find out’ rather than ‘let’s wait until someone else tries’.

Curiosity makes your mind active instead of passive Curious people always ask questions and search for answers. Their minds are always active. The mental exercise caused by curiosity makes your mind stronger, and it makes you observant of new ideas. Without curiosity, new ideas may pass right in front of you and yet you miss them because your mind is not prepared to recognise them. Just think, how many great ideas may have lost due to lack of curiosity?

Curiosity will conquer fear and uncertainty even more than bravery will. And that’s the point: A culture of curiosity inspires courage. The courage to challenge all those assumptions and hesitations that for too long have held us back, and those unknowns.

It was this belief in following his curiosity that shaped the philosophy of Andy Warhol. I read that Warhol would just walk around New York City on rainy Sundays. That was one of his favourite things to do, and that gave him ideas and inspiration. He called it From A to B and Back Again.

Of course, curiosity is the key trait for finding out what we don’t know. I’m always minded of former US Defence Secretary Donald Rumsfeld who made semantic history on 12 February 2002 when he gave the profoundly perplexing explanation about ‘known knowns’,’known unknowns’ and ‘unknown unknowns’ in relation to Iraq.

As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.

Those four sets of simple word pairs, used by Rumsfeld to describe military strategy, also convey powerful conceptual ideas with relevance to developing your startup thinking. Satisfying your curiosity and making entrepreneurial decisions based on knowns – truth, facts, and evidence – are far more likely to succeed than those based on hopes, wishes, and mythology. Let’s take a look at these four sets of word pairs as they relate to curiosity.

Known Knowns In a perfect world, known knowns would be facts based on lean startup experiments, customer development, product testing etc. Known knowns would provide reliable and valid facts and evidence on which decisions could be based. However, most known knowns are not really known knowns, they are a small category of knowledge.

Known Unknowns These are variables we are fully aware of but have no reliable data to accurately describe. This is a large category, especially if we are completely honest with ourselves about what we really know and do not know. Therefore, we are very likely to underestimate the number of unknowns that surround us. Do we truly understand the variables that drive the success of our brands?

Unknown Unknowns These are the blind spots—the problems, issues, and variables of which we have no awareness, information of knowledge. These are often the most dangerous variables and situations we ever face because they can catch us completely by surprise. Strong emotions and rigid opinions can blind us to obvious truths. We need to listen, accept, and learn find that such research can reveal many of the unknown unknowns.

Unknown Knowns There are things we know but don’t know we know. This is a strange category, and one might argue is an impossible category, a contradiction. When someone points it out to us, we say, “Of course. I know that. This relates back to an earlier assertion that people think they know more than they actually know. Once facts are presented, we easily can delude ourselves into thinking we already knew the information.

We can know things but not realise how important they are. We can know things but not understand how the pieces fit together or know what is causing what. We can be blind to the obvious or blind to the implications of the obvious. It’s curiosity that brings us an awareness of how things connect. What this conveys is that ‘knowns’ are fewer and rarer than people believe, and ‘unknowns’ are ubiquitous. They surround us on all sides.

I’ve learned that following my curiosity is the best thing to do. I’ve doubled down on curiosity. I read books I’m curious about. The best example is Steve Jobs, and how he dropped in on that calligraphy class, and how he was captivated by the letterforms. It had no practical application at the time, but he was curious, and then he built in all of that typography into the first Mac. You can’t connect the dots moving forward.

To know whether something is worth doing, or to know whether something was worth having been done, you need a metric for success. Next time you’re deciding what’s worth doing, try this metric. Ask yourself: What am I most curious about? I’m curious that sheep only sleep 3.8 hours in a day, meaning they are active 20.2 hours a day. What do they think about for all that time?

The probability of startup success

School reunions are funny things, you quickly rewind back to when you were 18 and awkward and gangly and clumsy, not that I’ve changed that much since then anyway. However, my recent reunion was really quite poignant, former teachers who had such an influencing and formative impact on me are now of an age that each year fewer of them remain alive or are well enough to attend.

My most recent reunion saw the absence of Mr Evans, my former maths teacher. I did four ‘A’ levels at maths, I saw as much of him almost as my mum and dad in those two years. He was my John Keating, the Robin Williams character from Dead Poets Society. Not quite the O Captain, My Captain moment from the Walt Whitman poem, but Pure mathematics is, in its way, the poetry of logical ideas. Well, that’s what he used to say, starting my life-long hobby of collecting Albert Einstein quotes.

I still remember the main school entrance and the huge columns by the door, wooden floors and marble fireplaces in the classrooms. The grounds were amazing, with over ten rugby pitches, lots of trees and rhododendrons all over the place. A vivid memory is of lying under a tree one-summer dinnertime, looking up through its branches into the bright blue sky.

The sunlight is catching the leaves at different angles so that my eyes flicker from open patch of colour to the next, the verdant foliage displaying a host of verdant hues. (I thought I would try to get ‘verdant’ into this paragraph, as my English teachers always believed there were no signs of creative talent. Though I probably shouldn’t have used ‘verdant’ twice).

As far as schoolwork was concerned I was unexceptional until I completed my ‘O’ levels, then Boom! Learning became a serious business.  I ditched the foreign languages – declining nouns and adjectives and conjugating verbs. English had been fine, I enjoyed the class time reading, Jerome K Jerome Three Men in a Boat has stuck with me forever, but French was bewildering, you had to make strange noises I’d never heard before and twist your mouth into a new shapes. The sounds seem to bear no relation to the words on the page to me.

History? What’s the point? Why was I being told King Alfred burned the cakes? Why, if he was king, was he doing the cooking for goodness sake? And King Canute, what was he up to, chatting away to the sea? None of it made sense to me. Worst of all was Scripture. It actually frightened me. It seemed to be filled with random politeness. Thou shalt no covert thy neighbour’s ox. Are you joking?

I was always able to do long division in my head, a four-digit number dividend by a three-digit number was easy, I could see the numbers and the workings out. I enjoyed the step up from ‘O’ level to ‘A’ level maths and the need to be able to learn and reproduce mathematical proofs. Truth is I was a bit of a geek but masked it well.

In maths, a proof is a deductive argument for a mathematical statement. In the argument, other previously established statements, such as theorems, can be used. In principle, a proof can be traced back to self-evident or assumed statements, known as axioms, along with accepted rules of inference. So there.

I recall one late, Friday afternoon in December, 1980. The lesson was about Pythagorean theorem and Euclid’s proof. Mr Evans had issued the homework earlier the week to come prepared to stand up in front of the class and write the proof on the blackboard. But no, I’d been distracted and not done it.

True to form, he walked into the classroom, threw the chalk casually over to me and asked me to parade my knowledge on Pythagoras, and sat down with his back to the blackboard. Silence. No hurried scuffing of chalk on said blackboard as I unpacked my thinking. Within twenty seconds he knew I hadn’t done the work. Tumbleweed passed gently through the room.

And then something magical happened: Brookes, if you care to go to the bookcase on the far wall, second shelf up, take the sixth book from the left, the one with the red cover, and turn to page 134, the fourth paragraph onwards will help you. So off I went, found the book as described and there, page 134, was a perfect recount of Euclid’s Proof.

I stood there and copied out the proof onto the blackboard. It was one of the most stressful episodes in my life since my journey in my mother’s birth canal. To this date, I still carry round a scruffy bit of paper, now fading and in tatters, with the Euclid’s proof. But it was the moment the appetite for learning, curiosity and being mentally agile was borne in me, that day has lived with me ever since. Evans’s passion for knowledge, knowing where the book was, the shelf, the page, the paragraph was inspirational.

So I left school with a head full of numbers, and there is one further learning from school that has really stuck in my mind that involves maths, but is history really. During the English Civil War, Cromwell’s own troops often fell out amongst themselves, and they were never more troublesome than on 15 December 1647, at the first rendezvous of the New Model Army where there was a mutiny leading to the formation of the Levellers.

Now, like any leader facing a mutiny, Cromwell was in a difficult situation. Cromwell’s answer was to arrest and try the ringleaders in a hastily convened court martial and then let fate play a role. There were three identified instigators, and each was summarily convicted and sentenced to death.

Cromwell needed to make only one example, so he made the three men play a deadly game. Each in turn threw dice to see who would live and who would die. The lowest score fell to Private Richard Arnold. He was shot on the spot.

What an outcome from the roll of the dice! Whilst the situation wasn’t one in which he had much time to consider the probability of certain scores, I’ve always wished I was there in a Blackadder sort of way, as surely it would have been helpful for Private Arnold to know the odds of success or otherwise as he stepped up to throw the dice in the ultimate game of chance? I could have told him his chances as he held the dice, and his life, in his hands.

We don’t know Private Arnold’s score, but seven (17%) is the most common combined result when you roll two dice, and two and twelve (3%) are the least probable, and you will likely roll a pair of doubles one out of every six rolls. I suspect Private Arnold rolled the dice and hoped for the best.

Unfortunately some business owners just roll the dice and hope for the best too, not evaluating risk or assessing uncertainty, they simply ignore the odds. Decisions are either made at random, or left to chance. Often they get the same outcome as Private Arnold.

What are the odds that your new idea will succeed? If it does, what will the returns be? One of the problems that we have in startups is that we simply don’t know the answers to questions like this, which means that if we want to innovate successfully, you not only have to deal with uncertainty, you must seek it out. We can’t use not knowing as an excuse to not act – because we never know.

Although luck is involved and factors into the outcome, strategy plays a more important role in the long-term managing the odds from the roll of the dice. In a changing world, the only strategy that is guaranteed to fail is not taking risks. So take calculated risks, be a wizard of odds. That is quite different from being rash and just rolling the dice and leaving everything left to chance.

Having a head full of numbers means I’ve always toyed with probability, and startup life is about making a choice between things that are within your control versus the things that you feel are outside your control, and those things that just happen, against the odds.

But what are the odds of success in a business start-up? Everyone knows that launching and living in a start-up is risky, but few appreciate just how the odds of success are stacked against you, so how do you increase the odds of your start-up success? Here are a few thoughts.

Ensure that your passion adds up Passionate entrepreneurs can have rose-coloured world-views, over-estimating sales and underestimating costs. To convert your passion into a tangible business, emphasise a business strategy that makes financial sense based on a compelling story, covering how the elements of your business will come together in a way that is cashflow positive. It’s all about the clarity of your thinking and your assumptions – the numbers fall out from this.

Attach to the market, not your idea Passion is an inner phenomenon, but a successful start-up is rooted outside the founder, in the market and with customers. To turn your passion into customers, emphasise the addressable market, always think about your business from the perspective of the customer, and execute on your market opportunity by placing a priority on your customer’s perception of value. Why would they buy from you? What problem are you solving? What is compelling about your value proposition?

Develop an MVP A core component in a start-up journey is the build-measure-learn feedback loop. The first step is figuring out the problem that needs to be solved and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible. Once the MVP is established, you can work on tuning the engine. Use your MVP as a process for engaging customers in dialogue, focus on conversations not revenue.

Be agile The most important feature of your startup is your open-mindedness to learning and being agile, be prepared to iterate based on the MVP. To succeed, a new venture needs both iteration and agility. Establish an ongoing process for translating ideas into actions and results, followed by evaluation. Test and adapt your concept as early as possible. Work on continually improving the fit between your big idea and the marketplace.

Develop a sense of timing Waiting for the right moment to take a decision often makes the difference between success and failure. Adopt a ‘So What?’ mind-set, and map out implications of alternative options. It’s a marathon not a sprint, reflection and consistency are as important as innovation in getting to a ‘business as usual’ model. You need to say ‘no’ sometimes, and make some bets.

Don’t micromanage Getting deep in the weeds gives you little time to get that 20,000ft perspective, you should work ‘on’ the business not ‘in’ the business, you’ll find your greatest contributions come when you pull yourself back. But more than that, delegation empowers the team, accountability creates a team that rises to the occasion and often thinks of solutions you would not have considered.

You can’t beat the odds The ability to scale a start-up is about timing. The are many challenges. Individually, they may seem manageable, but collectively, they represent a test for any startup business model.

For example, suppose you identify five key risks, and you think you’ve eliminated 90% of the risk in each category:

  • A 90% chance there is a real market need
  • A 90% chance that you’ve sized your addressable market
  • A 90% chance that you can implement your innovation
  • A 90% chance that you can sell it for more than it costs you to make it
  • A 90% chance that you have assembled the right team

You might take comfort that any one of these risk factors presents just a 20% chance of adversity, however, the probability of surviving all five risk factors is 90% × 90% × 90% × 90% × 90% = 59%

Surprising, isn’t it, five factors, each mitigated by 90%, but an outcome of just 60% of success? Just a notch above 50:50. However, if there are another five key risk factors, again each mitigated by 90%, then the chance of success is just 35%.

The key, yet stark insight here is that a start-up that is good at managing individual risks has a marginal chance of survival. The probability shows the underlying challenge. The odds are stacked heavily against a start-up, which is why the rate of failure is startlingly high – 75% according to some surveys.

There are strategies and tactics you can follow to increase the chances of success as outlined above, but alas, being able to recount Euclid’s proof of Pythagoras theorem isn’t one of them, so I’d best pack that 1980 maths lesson away in the file marked ‘nostalgia’.