How penguins on a melting iceberg can inform a startup’s change strategy

Charles Darwin, the English naturalist, biologist and geologist, is best known for his contributions to the science of evolution, a process that he called ‘natural selection’ in the struggle for existence. He is undoubtedly one of the most important and influential figures in human history.

As every schoolchild knows, Darwin spent five years living on the Galapagos Islands as part of his voyage on HMS Beagle, and studied the finches. He was intrigued that each island had its own distinct species, and worked out that they shared descent from a common ancestor and were a product of evolution.

Puzzled by the geographical distribution of wildlife and fossils he collected on the voyage, Darwin began detailed investigations and he conceived his theory of natural selection. Although he discussed his ideas with several naturalists, he needed time for extensive research, and his geological work had priority.

Two decades on from his HMS Beagle voyage, he was writing up his theory in 1858 when Alfred Wallace sent him an essay that described the same idea, prompting immediate joint publication of both of their theories. Darwin’s work established evolutionary descent with modification as the dominant scientific explanation of diversification in nature. Today, Darwin’s scientific discovery is the unifying theory of the life sciences explaining the diversity of life.

His hypothesis in The Origin of Species was that man had descended from chimpanzees. Nature, red in tooth and claw, had used the survival of the fittest to weed out the imperfect and weak. Homo Sapiens at the top of the evolutionary tree had achieved her desired end: they had evolved and responded to the changing environment, something that the dinosaurs patently had not.

Racked by guilt at replacing the doctrines of the Church with a vision of man as a shaven primate in an amoral universe, Darwin retired into obscurity. He repented his blasphemy on his deathbed. He is buried in Westminster Abbey, where he still lies, trampled by tourists.

There are, however, a number of inaccuracies in the montage of Darwin’s legacy. The word ‘evolution’ does not appear in The Origin of Species, and the phrase the survival of the fittest is not his, but was coined by the philosopher Herbert Spencer to summarise the notion of natural selection, the central tenet of Darwin’s evolutionary theory.

However, Darwin’s visionary thinking was truly ground breaking, as much as any disruptive tech startup today, and has application to thinking about startup strategy, where the dimensions of change – competition, economics and pace of tech innovation – exhibits similar characteristics and potential impact to those outlined in Darwin’s evolution theory based on finches and humans.

For example, startups can be grouped in to sets (species), revolving around solving one problem, where the basis of competition is providing a different value proposition to get ahead of others in the market. In doing this, it becomes survival of the fittest to win customers and market share in a changing environment, a fierce competition where sharp elbows and minds are needed.

There’s no grand theory of startups, nothing comparable to the theory of relativity for physics or the theory of evolution for biology. Neoclassical economic theory is the only real contender, where from a few simple assumptions about self-interested rational actors, you can derive equations for everything from employment, inflation and money supply. For Darwin read Malthus, Mill, Smith and Ricardo.

However, the science of economics has fallen upon hard times and lost credibility as a result of its lacklustre inconsistency in predicting economic trends or informing policy – in fairness the thinking was forged in C18th and C19th, and C21st tech has ripped up the rulebook of supply and demand, and market equilibrium. Today, it’s a laundry list of paradoxes and anomalies that are difficult to relate to C21st markets.

But you can apply Darwin’s fundamental postulates to startups quite rationally: the strong do crush the weak; startups exhibit incremental ascent with modification as new ideas evolve; semi-random innovation occurs via trial and error to find product-market fit; tech creates market disruption which drives selective survival, and other evolutionary Darwinian features.

It’s his statement that It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change where Darwin has the most resonance for startups, and brings me to a story about penguins to illustrate this.

On the face of it, Harvard’s John Kotter’s seminal book Our iceberg is melting is a simple tale of a group of penguins who are scared about losing their home and lifestyle because their current habitat – their iceberg – is melting, and yes, even more scared of the changes that could entail.

The book narrates how the penguins discovered the problem, which highlights a need for change, and how they then go through a process to secure survival, captured in Kotter’s eight principles of change. Through this simple allegory of their struggle for finding their new home, the story delivers a powerful message that is relevant for startups as they search for their isolated icebergs of opportunity that are sustainable.

In the story, Fred is an observant and curious penguin – maybe a data scientist in a penguin’s disguise? He observes that their iceberg home was melting. Not one to just wait for his daily quota of squid, he spoke to Alice.

Alice is one of the leaders of the colony, practical and mentally tough. Of course Alice initially wondered if Fred was suffering from a personal crisis or if he missed his morning fishmeal. But she gave him a patient hearing, which rapidly changed to alarm when she saw the cracks and fissures in their iceberg.

Alice brought Fred’s concern to the rest of the leadership team, and eventually the colony waddled their way to a miraculous solution in the book, enjoying quite a few squids on the way, showing that in order to achieve change, you need a vision, a process and a team that can drive that change.

Let’s cut back to the reality of our startup world, where the tech market is the iceberg and is never solid, melting in a maelstrom of new, emerging paradigms, contradictions, red herrings (Alice’s second favourite food) and more twists and turns than a King Emperor swimming at 30mph in the Antarctic sea.

Facing a startup CEO is a plethora of data looming across channels from transaction information to marketing automation and digital marketing platforms. Then there are blogs, meet-ups and accelerators offering insights and ambiguities on trends, opinions and comments. Against this backdrop of constant change, she has to balance branding and positioning, innovation and selling, people and finance, to respond and grow both in the near and long term.

Let’s look at the eight steps for change outlined in Kotter’s book and the penguin’s situation, and see how they apply for a startup trying to survive, grow and evolve in a shifting, mutating market.

1. Set the scene

Create a sense of urgency – don’t wait until the iceberg starts to melt Fred discovered the iceberg where the colony lives is melting. He tells Alice, who is initially sceptical, but she sees how urgent the situation is. Alice tells the leading council of penguins, most of whom don’t believe her. But Fred shows the penguins the urgency of the situation.

For startups, it’s a combination of instinct, hunches and data. But the message from the iceberg is that difficult problems won’t go away, and you need to help others see the need for change and the importance of acting immediately.

Pull together the guiding team A team of five penguins is put together to deal with the situation, they immediately start brainstorming ideas. This team has to focus on driving a balance between creativity and data driven decisions. Unexpectedly, their inspiration for a solution comes from a passing seagull, which happened to land on their iceberg.

For startups, the lesson is to ensure there are problem solving skills, not just creative thinking skills in the team, and to maintain a sense of balance around domain expertise and outward looking curiosity of your immediate environment for potential disruptive ideas. Never get complacent that you have all the questions – let alone the answers.

2. Decide what to do

Develop the change vision and strategy The inspiration from the seagull led to a solution, which would change the way the penguins lived. They would become a nomadic colony that moved to locations suitable for living, rather than being static. This would be a big change to the penguins, who had lived in one location for years, and were used to their current way of life.

The business learning here is to keep an open mind, and be prepared to pivot – in essence to start again. To find a sensible version of a better future, hold you vision – keep all the penguins together – but have a strategy that responds to the changing environment, and one that isn’t constrained by previous thinking.

Communicate for understanding and collaboration Though the team had now found a potential solution, they needed to get the buy-in of other penguins. There were penguins that were very sceptical and thought either the whole thing about the melting iceberg was nonsense, or it was too dangerous to move.

In a startup, avoid hierarchies and promote open communication at all times, change makes people nervous, and uncertain times combined with gaps in communication makes this worse. Ensure frequent and open communication with regular and personal attention.

3. Make it happen

Empower others to act The team found ways to include other penguins to become part of the solution, and because others felt part of the solution, the opposition decreased.

Opposition to change arises because of a lack of engagement and inclusion, and creates a feeling of not being valued. Remove as many these barriers as possible – a change of direction in a startup, as a result of the iceberg melting, needs everyone to be engaged, empowered and together.

Produce short-term wins When other penguins got involved they started achieving short-term goals, which were necessary on the way to the end result. This encouraged and motivated the penguins to keep working towards the solution.

Create some visible, unambiguous successes as soon as possible. Short-term wins create a positive atmosphere that everything will be ok, even if there are some tougher challenges ahead.

Don’t let up The colony finally moved to a new iceberg, but they didn’t stay there. They found a better one and moved again. They were not giving up but kept looking for better living situations for the colony.

The lesson for startups is to remain restless and ambitious, never resting on your laurels, adopting a culture of continuous learning, pressing harder and faster after the first successes. Be relentless with initiating change until the vision is a reality.

4. Make it stick

Create a new culture Actions were taken to cement the new culture in place, there was no going back to old ways of living. This ensured that the changes would not be eroded by stubborn, hard-to-die traditions or a lack of focus on the future.

It’s an oxymoron for startups, but innovation starts with their own business model and behaviours, constantly looking forward to new horizons and not getting stuck in a way of being that is successful in the market of today. Nothing is new forever, like Darwin’s statement, it’s those that respond to change who are the most successful in the face of uncertain conditions.

Ask yourself whether you are living on a potentially melting iceberg. Melting icebergs for startups come in many forms: aging products becoming irrelevant for new market needs; new, alternative offerings disrupting your market space; a growth strategy implementation that is slowing and getting stuck in pack ice.

The reality is that tech startups encounter constant changes as the pace of innovation quickens at a macro level, and scaling yields internal challenges. You maybe fit for purpose today but it is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.

Be resilient: avoid the path of least resistance

The path to entrepreneurial success is forged via breakthroughs, small steps and iterations, each possible because you have your eyes and ears wide open and you’re able to reflect and adjust time after time, with the resilient mindset to keep going.

Resilience is the virtue that enables entrepreneurs to move through hardship and achieve success. No one escapes heartache, uncertainty and disappointment, yet from these setbacks comes wisdom, if we have the virtue of resilience.

Many misunderstand what’s at work in resilience. For me, it’s not about ‘bouncing back’, rather its about the ability to integrate harsh experiences into your entrepreneurial thinking, learn and apply the lessons, and then be motivated to go again, and expecting to go one better.

Entrepreneurs choose this life of challenge and hardship, gambling for achievement, seeking success with joy and humour, but also inevitably encountering times marked by confusion, chaos and disappointment. This is true of everyone’s lives, of course, but the entrepreneur consciously chooses a life in which they are likely to have higher highs and lower lows, in which the peaks and troughs are more vivid than if safer choices made.

Entrepreneurs jump on the roller coaster ride where the tracks haven’t yet been fully built. They’d have it no other way, happy with the wind in their faces and going round blind corners and crazy inclines. A good part of it is fighting the urge to revert back to their comfort zone, and fall back into old habits.

Please make yourself uncomfortable. Becoming a successful entrepreneur is never a straight line. There are lots of ups and downs and zigzags along the way. As it turns out, how you emotionally handle the downs is key. Resilience means not giving up, and being energised by what you have learned, experiencing multiple setbacks along the way, but persevering. As Thomas Edison said, I have not failed. I have just found ten thousand ways that won’t work.

It is not all bad, but it is not all good, it is not all ugly, but it is not all beautiful, it is life, life, life – the only thing that matters, a quote from Thomas Wolfe, which summarises the entrepreneur’s attitude. So stop trying to be realistic, and be resilient.

And that enables you to fight back. It can’t be done. What? You want to build an airplane? You’re crazy. You’ll never make it. Everyone fails and so will you. 1,000 songs in your pocket? You must be kidding, right? An electrical car with a range of 300 miles? You want to be an artist? It’s safer to get a job.

You don’t need guts to get a normal job, and do the usual stuff. Most people are realistic. It’s not realistic to be the first one to build an airplane. It’s not realistic to build an electric car.

But what’s the fun of living a life when you know the outcome already and it’s steady away? Ok, if you never try, you never have to deal with the pain and hurt of failure I’ll give you that. But most of that is self-inflicted. But is that a reason to not do something? Life is also not a contest of ‘my problems are worse than yours’. If it’s attention that you want, get a dog.

The truth is this: you’re trying to be realistic, and I’m telling you stop thinking that way. Think outside the box. Think of flying cars. Unconventional being. Do extraordinary things. People do not decide to become extraordinary. They decide to accomplish extraordinary things said Sir Edmund Hillary, and he should know.

Being resilient means your life doesn’t have to play out like a video on demand that is looping, you’ve seen a dozen times. Is it still worth it to sit through it? Yeah, sure. But it’s not extraordinary. You know the plot, you know the dialogue and you know the we-all-live-happy-ever-after. The End.

So rather than being realistic, think Go. Go. Go, and be resilient. Ryan Holiday, in his book The Obstacle Is The Way, draws lessons from philosophy and history and says if you want to achieve anything in life, you have to do the work, be prepared for knockbacks – but most of all, be resilient.

The Obstacle Is The Way was the first book that I read back to back for some time. Yes, I read the book, thought it was so good that I flipped back to page one and started reading it again. This is a book that gets better every time you read it.

If everyone used the advice from the book, we would all be a lot bolder and mentally able to handle the pressure of running a startup. Here are some quotes from the book, which I think say a lot about building your resilient mindset.

Where the head goes, the body follows. Perception precedes action. Right action follows the right perspective. When something happens, you decide what it means. Is it the end? Or the time for a new start? Is it the worst thing that has ever happened to you? Or is it just a setback? You have the decision to choose how you perceive every situation in life.

No thank you, I can’t afford to panic. Some things make us emotional, but you have to practice to keep your emotions in check and balanced. In every situation, no matter how bad it is, keep calm and try to find a solution. Sometimes the best solution is walking away. Entrepreneurs find it hard to say no, but that can be the best solution at times.

No one is asking you to look at the world through rose-coloured glasses. See the world for what it is. Not what you want it to be or what it should be. Hey, we’re back to being realistic – but it’s also about optimism, the mindset to expect the best outcome from every situation – and that’s resilience to make it happen. This gives entrepreneurs the capacity to pivot from a failing tactic, and implement actions to increase success.

If you want momentum, you’ll have to create it yourself, right now, by getting up and getting started. If you want anything from life, you have to start moving towards it. Only action will bring you closer. Start now, not tomorrow. Maintain active optimism, observing how others were successful in similar situations, and believing you can do the same.

Ask not that events should happen as you will, but let your will be that events should happen as they do, and you shall have peace, Epictetus, a Greek Philosopher said. It’s not what happens to you, but how you react to it that matters.

It’s okay to be discouraged. It’s not okay to quit. Entrepreneurial life is competitive, and if you want to achieve anything, you have to work hard for it. When you think life is hard know that it’s supposed to be hard. If you get discouraged, try another angle until you succeed. Every attempt brings you one step closer. Don’t have a victim’s mindset, have courage to take decisive action.

Show relentless tenacity and determination. Remember, giving up is simply not an option. Learn that tenacity is self-sustaining when persevering actions are rewarded. Find tenacious role models, and garner the support of peers and friends. Great entrepreneurs become tenaciously defiant when told they cannot succeed. Then they get it done.

We must be willing to roll the dice and lose. Prepare, at the end of the day, for none of it to work. We get disappointed too quickly. The main cause? We often expect things will turn out fine, we have too high expectations. No one can guarantee your success so why not expect to lose? You try with all your effort, it doesn’t work out, you accept it, and move on.

Decisiveness mitigates adversity, helps you rebound, take responsibility, and promotes growth. Building decisiveness requires eliminating fear, procrastination, and the urge to please everyone. Practice making decisions as a positive learning experience. Understand that any decision is usually better than no decision.

The path of least resistance is a terrible teacher. Don’t shy away from difficulty. Don’t do things just because they’re easy. How do you expect to grow? Nurture yourself: gain strength from the unrealistic achievements of others. Surround yourself with high achievers. Avoid toxic people like the plague.

The world might call you a pessimist. Who cares? It’s far better to seem like a downer than to be blindsided or caught off guard. Just doubting yourself just doesn’t work, expecting things not to turn out and to lose is not good enough if you want to accomplish something remarkable. If you rehearse everything that can go wrong in your mind, you will not be caught by surprise when things actually go wrong. The Stoics called this Premeditatio malorum, the premeditation of evils. To be remarkable, you have to expect unreasonable things of yourself.

Don’t waste a second looking back at your expectations. Face forward, and face it with a smug little grin. We can’t choose what happens to us, but we decide how to respond. Successful, resilient entrepreneurs don’t just accept what happens to them. Everything happens for a reason. It’s all fuel that you can use to move forward. It defines you.

The great law of nature is that it never stops. There is no end. When you overcome one obstacle, another one waits in the shadows. Entrepreneurial life is a process of overcoming obstacles, one after the other. The obstacle becomes the way so you might as well enjoy it.

We all need a guiding light when adversity strikes. I’m pretty sure that if you reflect upon and apply one of the above quotes, you’ll top up your own entrepreneurial resilience. You don’t have to use every message from Ryan Holiday, just pick one quote, apply it, and see what happens. For me, it changed everything when I shared this with a number of my startup clients.

Resilience means rebounding back and getting right back in the game, remaining optimistic in the face of adversity. Resilience is accepting your new reality, but being able to take a step back to take a step forward. If you quit in the face of adversity, you’ll spend the rest of your life wondering about it. It’s never to late to be the person you could have been. The goal of resilience is to thrive in adversity.

I’m often struck by the ability of a single individual entrepreneur to change the world. Think Thomas Edison, Elon Musk and Anne Wojcicki, to name a few. They each started with no money and no technology, just their passion and perseverance.

Ultimately, three things make anything possible: People, technology and money. But money and technology alone, without the persistent and passionate human mind driving things forward, are useless.

If I had to name my superpower, it would be my persistence, resilience and mental toughness – maybe it’s my Northern grit – not giving up, even when everyone tells me it isn’t going to work. Had I given up in the face of the criticism or adversity, you wouldn’t be reading this blog post.

The only thing that I see that is distinctly different about me is I’m not afraid to be the last man standing when something needs to be done. I will not be outworked, period. You might have more talent than me, you might be smarter than me, you might be sexier than me, you might be all of those things – you got it on me in nine categories.

But if we get on the treadmill together, there’s two things: You’re getting off first, or I’m going to die. It’s really that simple. For me, my resilience keep me going. Remember that true failure only comes when you give up.

Thinking about High Growth sat in a Temperance Bar in Rawtenstall

A Temperance Bar is a type of bar, found particularly during the C19th and early C20th, that did not serve alcoholic beverages. A number of such bars were established in conjunction with the Temperance Society, advocating a moderate approach to life, especially concerning the abstinence from alcohol.

Temperance Bars with full temperance licences (allowing them to serve on Sundays, despite English trading laws at the time) were once common in many high streets in the North of England. The movement had a massive following, fuelled mainly by Methodists. These bars were the first outlet for Vimto, also serving brews such as black beer and raisin tonic, blood tonic, dandelion and burdock, herb bitters and sarsaparilla.

The temperance movement (one foot in front of the other please) began in 1835 in Preston, amid concerns about the Industrial Revolution’s equally industrial levels of alcoholism. Although prohibition was never formalised in the UK in the same way it was by our supposedly sober cousins in America, a wave of non-alcoholic bars began popping up in most towns to guard against the dangers of heavy drinking.

In their heyday, temperance drinks were not only seen as delicious non-boozy tipple, but were thought to have health benefits: ginger for soothing nausea or colds, sarsaparilla and dandelion for detoxifying. I’m a little sceptical: according to family folklore, my gran’s deafness was caused when my great grandfather decided to shun the doctor and treat her ear infection with his herbal linctures.

Some of the most famous Temperance Bars carried the Fitzpatrick family name. The Fitzpatricks, a family from Ireland, came over to Lancashire in the 1880s. A family of herbalists, they turned to building a family-run chain of shops throughout Lancashire. These shops dealt in their non-alcoholic drinks, sold herbal remedies, and cordial bottles.

At their peak, the Fitzpatrick family owned twenty-four shops, all brewing drinks to the original recipes brought over from Ireland. However, as new drinks came over from America, the Temperance Bars slowly waned away. Today, Fitzpatrick’s Herbal Health in Rawtenstall is the last Temperance Bar in the country.

The Rawtenstall bar has been thought of with affection by generations of the town’s residents. It is notable for its old copper hot water dispenser, which was originally a fixture at the Astoria Ballroom in Rawtenstall. It has also won awards as the country’s ‘Best Sarsaparilla Brewer’, and for its dandelion & burdock.

The bar has recently reopened after four weeks refurbishment, with a fresher, brighter look and product innovations on the menu However, it has maintained its traditional offerings, past traditions and family-run ethos. The bar retains many of its original fixtures and fittings, including the ceramic tap barrels and shelves lined with jars of medicinal herbs. Mr. Fitzpatrick would be proud.

When I was growing up, dandelion and burdock was the social tipple of choice. Darkly mellow with just enough fizz and a pleasing aniseedy aftertaste, I used to drink it at my grandma’s house in Manchester – which we would gulp down with Jacobs orange Club biscuits. She would prop the bottle on the doorstep outside, ready for the man who collected the empties.

Apparently, dandelion and burdock dates back to the days of St Thomas Aquinas and it’s back, along with other old-style temperance drinks gracing much fancier menus than the chippies of my youth. For example, at the St Pancras Booking Office Bar at the London station, you can sip sarsaparilla or blood tonic whilst snacking on crispy calamari and parmesan chips.

The drinks may appear simple, but are unbelievably complicated. Sarsaparilla, for example, involves an intricate blend of sarsaparilla root, anise, liquorice, nutmeg, molasses, cinnamon, cloves, brown sugar, lemon juice and other botanical extracts.

But back to Fitzpatrick’s. This quirky Pennines apothecary, with its ceramic tap barrels and jars of botanical herbs and roots holds a special lure, with its ghostly inhabitants, unknown pasts and general eccentricity. Come rain, shine or old-fashioned drizzle, it will restore you, warm your cockles, quench your thirst and satisfy your need for quirkiness.

However, the fact that it is the last temperance hostelry shows you have to keep moving and innovate, otherwise your market evaporates as your customer preferences change or alternative products take your marker. The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew, and act anew.

Rousing words from President Abraham Lincoln, taken from his 1862 annual address to Congress. It’s a call to action, which has resonance with the turbulence in most markets today. You simply can’t stand still, the need is to stay agile with a relevant value proposition and viable business model.

But most businesses hesitate to adopt new thinking, instead they focus on hunkering down and a low-key ‘back to basics’ approach, defaulting to a risk-reduction focus rather than a growth mindset. Whilst this often secures bottom-line improvement, it is unsustainable and rarely offers anything more than short-term expediency.

It impedes curiosity and experimentation, and stifles thinking beyond the immediate time horizon. However, whilst organisations may regard seeking breakthroughs as too steep a challenge and are content with simply maintaining their business, research shows that focusing on short-term aspirations typically yields only short-term results, whilst those seeking significant breakthroughs will both identify the big ideas and also generate closer, incremental ideas along the way.

It’s about holding an ‘innovation mindset’. Over time, I’ve developed a pretty keen sense of whether or not my efforts with clients will be successful, and one of the biggest red flags that tells me I’m in trouble is hearing this phrase: That’s the way we’ve always done things.

I can’t think of a single sentence that’s more antithetical to growth and innovation than the blind acceptance that some things can’t be changed within an organisation. It’s a sentiment few companies can afford to indulge, but transforming an organisation from innovation-averse to forward-thinking isn’t always an easy road to navigate.

And that’s where you need an entrepreneurial leader, so lets say if someone was to build a passenger-carrying rocket for joy rides into space and offer you a ticket, would you go? Of course you would, especially if Richard Branson was involved.

He’s a live wire, someone with a can do, will do attitude who doesn’t let short-term difficulties become traumatic, although I’ve had some mixed experience with Virgin Atlantic – the last time I flew the rate of progress through the lounge to board the plane was so slow that technically I was classified as a missing person. However, his innovation in mass-market long haul flights has had an impact, and of course, very customer focussed.

But let’s consider Branson himself. In the last twenty years, barely a week passed when we weren’t treated to the spectacle of Branson’s mouse like whiskery chops being winched to safety from some vast expanse of ocean. His speedboats kept running into logs of wood or his balloons too heavy for sustained flight.

However, I like the way he’s made it in business without a pinstripe suit or an obvious predilection for golf, and despite the often-disastrous attempts to go across the Pacific on a tea tray or up Everest on a washing machine, I do like the way he keeps on trying, his boldness and give it-a-go attitude. He’s also dyslexic, so overcome that significant personal challenge too.

He may be a publicity-seeker, but he’ll get us in space with Virgin Galactic. My concern wouldn’t be the perilous spins, loud bangs and crashes of Branson’s previous failures as I sat in my seat, but rather the expectation that every passenger will have to conform to Branson’s relaxed style and only allowed to fly in jumpers and corduroys, and his beardy face beaming out doing the safety procedure promo. He’s got nice teeth though.

But recall Fatal Attraction, you thought Glenn Close was dead, you relaxed and then, whoa, she reared up out of the bath with that big spiky knife. That’s one thing Branson doesn’t do. No, not lie in a bath of cold water pretending to be dead, love him or loathe him, he doesn’t sit back and think That’s it, I’ve had enough.

Obviously he doesn’t need the money, but he just keeps on with his self-belief and crashes into the next idea. He’s a disruptive force that never gives up and while his opponents are kept fully employed wondering what he is going to do, he is busy doing it, and its often something they hadn’t thought he’d do.

Based on this inspiration, research, my own intuition and experience, I’ve developed a blueprint for creating an innovation mindset, which I’ve called High Growth Anatomy, an assessment of you innovation dna. It’s a series of reflective questions, structured as to ‘Go’ and ‘No Go’. Evaluate yourself, what’s your ‘Go’ score?

Foresight or Hallucination?

  • We have clear and articulated goals based on our purpose, of where we want to be in the next 6, 12, 18 and 24 months;
  • We have some thoughts on where we are aiming to be, but it’s more of a wish list than a ‘lets make it happen’ plan.

Front-foot or Back-foot?

  • As a team we are moving forward all of the time;
  • As a team we are fire-fighting most of the time.

Clued-up or Clueless?

  • We are clear about how we make a difference in our market;
  • We are unclear about how to stand out in our market.

Dexterous or Clumsy?

  • We are agile in our business, we ‘seize’ the moment with alacrity;
  • We are blunderers, unable to move quickly or with grace.

Leaning-forward or Leaning-back?

  • We are restless thinkers, learning, imaging the future, eager to grow;
  • We are thinking about our future, but out time is spent living today.

Web-enabled or Webbed-feet?

  • We have a clearly articulated digital strategy in our business model;
  • We use the Internet and social media, but have no digital vision.

Harmonious or Mutinous?

  • We are all wearing the same jersey, pushing together in the same direction, one heart and one voice;
  • We’re a collection of tribes and opinions, connected but not united.

Curious or Cautious?

  • We develop lots of new things, some of them work, some don’t, but we’re always ready to experiment;
  • We generally keep trying things until they don’t work, then think of something new to have a go at.

Heads-up or Head-down?

  • When faced with a threat we respond rapidly and decisively;
  • When faced with a threat, we often step back and wheel-spin.

Fresh thinkers or Copy cats?

  • We are creative and restless, innovation is a core behaviour;
  • We don’t have a point of difference in our business model.

Stickability or Bendability?

  • When something is not going to plan, we reflect, adjust and kick on with renewed enthusiasm;
  • When initiatives do not work, we tend to give up and go back to what we know.

Kinship or Coldfish?

  • We actively pay attention to building our culture, values and spirit;
  • We do not pay attention to our internal culture – it just happens.

Connectivity or Disconnected?

  • We are hot wired, we’re all linked-in and linked-up;
  • Our organisation is not well co-ordinated – we’re disconnected and decoupled.

Insights or Blindspots?

  • We have a very good knowledge of our customers, their customers and our competitors;
  • We have an ad-hoc knowledge of our customers, their customers and our competitors.

These are uncertain times with Brexit, Trumponomics and a General Election. Companies are struggling to find the right balance between caution and optimism. No one knows what will happen next, and it is crazy to operate your business as though you do. But the more volatile the times, the more essential it is to keep your options open. Thus, taking less risk (closing down innovation options) is actually more dangerous than investing to preserve a number of future-focused options.

There are lessons for us all in the history of Fitzpatrick’s, decline and renewal, and the entrepreneurial attitude of Branson, where everything-is-possible and optimism rules. A strong sense of the possible is essential to driving innovation that in turn leads to success. Whilst the image of the swashbuckling adventure-hungry risk-taking buccaneering entrepreneur is somewhat of a caricature, positive energy and exuberance makes a refreshing change, as the news is a constant stream of maudlin and misery.

Things don’t just happen. You’re sure to get somewhere if you walk long enough isn’t the answer. Hope isn’t a strategy. It’s about strategic readiness, agility, clarity, direction and velocity and then execution. Sit down, have a glass of dandelion and burdock, and ask yourself the High Growth Anatomy questions and reflect on how to create your own future, before someone does that for you.

Entrepreneurial learning journey: building your startup team

Lean startup thinking is based around the concept of a MVP as a means of sharing your product vision with your target customers, containing sufficient value to attract early adopters. Asking the right questions of your MVP is key, it’s as much a process as a pilot version of your product, and guides you broadly around your business model assumptions, many based on your hunches.

Testing all aspects of the business model, not just the product features, is vital, and this applies to developing your ‘Minimum Viable Team’ (‘MVT’)?  As Steve Blank states, a startup is a temporary organisation used to search for a repeatable and scalable business model. Having a talented team is an essential ingredient to startup success and scaling, as any aspect of the business model.

Most startup founders work on the basis that they will find the folks they need to scale their business either by word of mouth within the startup community, or within their own network, when they need them.  Alas experience tell us those serendipitous moments don’t always occur. The route of chance isn’t always successful, or even best financially in the longer term.

So what are the key considerations in your startup team building strategy, when seeking to create a key part of your business growth engine? Here are some thoughts.

1. Hiring Philosophy

What is the vision for your MVT in terms of its purpose, values and principles held as underlying attributes that will make a difference?

Rockstars gives leverage You’re looking for rockstar starters who can create 10x more leverage – ‘moonshot thinking’ –  than an average employee. The effectiveness gap between employees can be multiple orders of magnitude. In startup hiring there are few shades of grey, go for those that can add rocket fuel to your momentum.

Culture-contributors are better than culture-fitters A startup culture is part of the business model and customer experience. Just like we want people to contribute new skills and ideas, we want people to contribute new culture. Hiring culture-fitters does not make your culture better. The founding team will soon be outnumbered by new hires. They will decide your future culture, not you.

Hire for potential & learning not experience & experts Potential and experience are not mutually exclusive, but potential is far more valuable. Everyone usually hires for experience, but for a startup my view is to hire those whose potential will explode when they join you, pulling you along with them. Interviewing for experience is easy because you are discovering what someone has done. Interviewing for potential is hard because you are predicting what they will do. How do you do this? They get excited talking about what they could do rather than what they have done.

Static expertise quickly becomes obsolete. To survive and grow we must be a learning organisation. The clearest signal of a learner is curiosity. Curious people, by definition, love to learn, while experts talk about what they know.

Experimentation is a crucial mechanism for driving breakthroughs in any startup. If you want to create a successful, hyper-growth company, you’ve got to focus on empowering your teams to rapidly experiment.

Hire for difference not similarity There is a natural bias to hire people ‘like us’. Fight this bias. Hiring similar means we value repeatability and efficiency over creativity and leverage. Hiring different brings new skills, paradigms, and ideas, which are the sparks and catalyst of leverage. You will naturally want to hire people you connect with. Fight your instincts.. Don’t default to ‘she’s like one of us’.

2. Focus on Personality

Simply, what sort of people did we want in our team alongside us on our startup journey? I’ve developed this simple framework, a combination of attitudes, character and behaviours, to check for ‘togetherness’. They are:

·     Openness: We look for free spirits, open-minded folk who will enjoy the startup adventure and new experiences – the highs and the lows.

·     Conscientiousness: A startup can be a bit chaotic and disruptive, so we look for people who are organised and dependable.

·     Extraversion: We look for energisers, live-wires who tend to be more sociable and keep noise and energy levels up – not office jesters, but people who can keep the lights burning

·     Agreeableness: High scorers for this trait are often trusting, helpful and compassionate. Empathy is an invaluable trait to have when building your startup to balance the searing ambition.

·     Emotional stability: People with high scores for this trait are usually confident and don’t tend to worry often.

We are social creatures, and a deeper understanding of who we (and others) are can provide a valuable tool for working with others. You can build a more effective MVT using personality traits as part of your hiring decision.

In terms of the attitudes and behaviours we sought, these maybe summarised as follows:

They would much rather act than deliberate Generally, startup business plans are less useful than the planning process, as things change so quickly. Before the plan shoots out of the printer, things have already changed and ‘the plan’ is already outdated. Stuff happens.

Very few startups resemble their original plan, and that’s a good thing, because it means they’re pivoted and reshaping their businesses to meet the needs of their customers. Great startup employees are the same way.

They have an appetite to get out of the building Great start up people obsess over the customer, they understand calories are best spent making a real difference for customers. Every business has finite resources. The key is to spend as much of those resources as possible on things that matter to the customers. Fretting over trivial things doesn’t help anyone. It’s just a waste of energy.

They don’t see money as the solution to every problem One of the key lessons founders learn in a startup is resourcefulness. How do you take limited resources and turn them into something remarkable? That’s also true of the best startup employees. They’re remarkably resourceful. They’re constantly looking for creative ways to make the most of the resources they have.

3. The concept of ‘Tour of Duty’

Start-ups succeed in large part because their MVT is highly adaptable, motivated to go the extra mile and create something different. However, entrepreneurial employees can be restless, searching for new, high-learning opportunities, and other startups are always looking to poach them.

However, if you think all your MVT will give you lifetime loyalty, think again. Sooner or later, most employees will pivot into a new opportunity. When Reid Hoffman founded LinkedIn, he set the initial employee engagement as a four-year ‘tour of duty’, with a discussion at two years. If an employee moved the needle on the business, the company would help advance her career. Ideally this would entail another tour of duty at the company, but it could also mean a position elsewhere.

A tour of duty has a defined end, but that doesn’t have to be the end of an employee’s tenure. One successful tour is likely to lead to another. Each strengthens the bonds of trust and mutual benefit. If an employee wants change, an appealing new tour of duty can provide it within your company. This is a more effective retention strategy than appealing to vague notions of loyalty and establishes a real zone of trust.

The tour-of-duty approach for a startup works like this. The business hires an employee who strives to produce tangible achievements and who is an important advocate and resource in the MVT. A tour-of-duty is established, either two or four years. Why two to four years? That time period seems to have universal appeal. In the software business, it syncs with a typical product development cycle, allowing an employee to see a major project through. At the end of this ‘tour’, the business could pivot to a new direction, and thus the MVT needs to pivot too.

Properly implemented, the tour-of-duty approach can boost both recruiting and retention for a startup. The key is that it gives both sides a clear basis for working together. Both sides agree in advance on the purpose of the relationship, the expected benefits for each, and potentially a planned end.

The problem with most employee retention conversations is that they have a fuzzy goal (retain ‘good’ employees) and a fuzzy time frame (indefinitely). The company is asking an employee to commit to it but makes no commitment in return. In contrast, a tour of duty serves as a personalised retention plan that gives a valued employee concrete, compelling reasons to finish her tour and that establishes a clear time frame for discussing the future of the relationship. Personalised tours produce even positive feelings.

Thus when working with MVT employees, establish explicit terms of their tours of duty, developing firm but time-limited mutual commitments with focused goals and clear expectations. Ask, ‘in this relationship, how will both parties benefit and progress in the lifetime of the MVT?’

4. Lessons from Google

A company’s culture and core values are the bedrock of innovation and effective teams, and Google has established a suite of practices for you to use when building your own effective startup team.

Back in 2013, Google conducted a rigorous analysis deemed Project Aristotle to identify what underlying factors led to the most effective Google teams. Over 200 interviews were conducted across +180 active teams over the course of the two-year study. More than 250 attributes were identified that contributed to both success and failure.

Their hypothesis was that they would find the perfect mix of individual traits and skills necessary for a stellar team. Turns out they were dead wrong.

The researchers found that what really mattered was less about who is on the team, and more about how the team worked together. Here are the top five keys to an effective Google team, in order of importance:

Psychological safety Psychological safety refers to an individual’s perception of the consequences of taking a risk or a belief that a team is safe for risk-taking. In a team with high psychological safety, teammates feel safe to take risks around their team members. They feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question or offering a new idea.

Dependability On dependable teams, members reliably complete quality work on time (vs. the opposite – shirking responsibilities). Perfection is not optional. The enemy of great is good. Always strive for the best possible product, service or experience.

In a decentralised team working remotely, this core value is extremely important. Always trust your teammates are doing their best work with good intentions. Don’t jump to conclusions or judgments.

Structure and clarity An individual’s understanding of job expectations, the process for fulfilling these expectations, and the consequences of one’s performance are important for team effectiveness. Goals can be set at the individual or group level, and must be specific, challenging and attainable. Google often uses Objectives and Key Results (OKRs) to help set and communicate short- and long-term goals.

Meaning Finding a sense of purpose in either the work itself or the output is important for team effectiveness. The meaning of work is personal and can vary – financial security, supporting family, helping the team succeed, or self-expression for each individual, for example. The self-directed employee takes responsibility for her own decisions and actions. Having a team that can constantly say “We can figure it out” creates a competitive edge.

Impact The results of one’s work, the subjective judgment that your work is making a difference, is important. Seeing that one’s work is contributing to the organisation’s goals can help reveal impact. The world’s most precious resource is the passionate and persistent human mind. Get your team to embrace long-term thinking.

Every member of the team needs to embody a growth mindset: the belief that they can learn more or become smarter if they work hard and persevere.

That media fervour for the unicorn startups and their celebrity founders can suggest that it only takes the one or two entrepreneurs to build exceptional companies on their own, or with a co-founder. I think that’s rarely the case.

Henry Ford once said, Why is it that every time I ask for a pair of hands, they come with a mind attached? In a startup, minds dramatically amplify the value of hands and they become even more powerful when they’re able to engage with like-minded, stimulated other folk in the team.

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!

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.

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’.

Lessons in entrepreneurship from the baristas of NYC

The first time I visited New York, I was warned about three things: to be constantly aware of personal safety, to forget about tea as they only serve coffee, and, in the interests of political correctness (and, potentially, personal safety), never offer criticism of the President.

It was 1986 and for a week I walked around hyper vigilant for muggers, making no eye contact with strangers I passed on the street. When I needed a caffeine fix, I deliberately asked for a coffee with milk. And as for politics, the most political minded I got was that I wondered at times what The Ten Commandments would have looked like if Moses had run them through Congress.

More than 30 years on, the change in a few decades is pronounced; time has made the city safer and seemingly better caffeinated. No comment on the President. From Manhattan to Brooklyn, there are hundreds of independent coffee shops. I am sitting in one, Five Leaves, a bistro-café in Greenpoint, Brooklyn, on a crisp winter’s morning. In the cool light it is bursting with vibrancy: brightly coloured eggs, salmon and, everywhere, the unmistakable green of smashed avocado.

So many features of this airy cafe are familiar to others in the city – the distressed faded, almost run-down decor, the subtle scent of vinegar-laced boiling water for poaching eggs, and its packed with customers. Then the heavily tattooed barista, who has Death before decaf etched into one of his arms. I overhead the chat: I had to learn how to make 400 coffees in a morning.

The decor is pared back, with tiny stools at tiny tables piled into a tiny space. A small kitchen sends out freshly made artisan breakfast meals that are just fascinating in design and flavours, matching the artistry on the menu boards on the wall, and in reality judging by the gusto with which they are consumed, tasty. The cafe’s vibe is warm and welcoming, with around ten staff overseeing a customer base that comes and goes with amazing frequency.

What you see here is an example of entrepreneurship at a much smaller, individual scale – forget the tech behemoths that have emerged from NYC, the wave of independent coffee shops are the playgrounds of barista entrepreneurs. The barista-entrepreneur is no different from any other person choosing to launch their business idea a startup reality. They need to do their research, learn their craft, secure funding, find premises, create and test their product and then launch it.

In small independent coffee shops, the man or woman serving your flat white is often the proprietor, having to juggle everything from serving the coffee to mastering social media to managing suppliers. They are operating in a highly competitive market, against other independents and the global chains. They will stand or fall on the quality of their product, customer service and ambiance of their venue.

My week in New York, visiting my son was a great experience. I managed to get some work done too, commuting in with him on the L train, enjoying the hustle and bustle, sight and sounds, but most of all I got into the habit of seeking out the artisan independent coffee shops mid-morning and mid-afternoon.

I watched baristas operate as true entrepreneurs. From beans to roast to brew, offering signature blends of coffee with smooth taste, providing an alternative to the international chains known for the powerful brands, but their industrial scale lacking intimacy.

The extent of personalisation provided by the baristas surprised me, earning accolades from customers in their sincere greetings and genuine thanks. There was sincere recognition and rapport between barista and customer. So much so, that in most cafes I visited, the baristas recognised the customer and what coffee they wanted before they asked – despite them having thousands of customers each day.

New York does coffee. Coffee served quickly, exactly like the customer asks for it. Coffee places like Five Leaves do it right. They know what people want. The baristas are prepared. Baristas serve two functions in this equation. Baristas make the coffee the way the customer likes the coffee, but before they do that, they listen and recognise what they customer wants. They serve the very important function of listening. This made me stop in my tracks, because I didn’t realise just how much practice it takes to listen. It’s a vital piece in the customer relationship, over and above the coffee itself.

The espresso they serve is exactingly made, very tasty, and perfectly portioned with milk that’s just hot and foamy enough. For those looking to try something new, there’s a rotating selection of boutique, in-season beans at a higher price tag. Along with cortados and lattes, you’ll find the slightly more obscure shakerato, espresso shaken over ice and served with simple syrup and an orange twist.

But, back to the practice of listening. It’s a lot like the practice of delivering great coffee. Listen to what baristas say: I have that grande decaf mocha for you, when you’re ready; Tall skim cappucinno on the bar, just for you.  A little extra touch. No matter how crowded and busy the queue, they talk to their customers, and in talking with the customers, they learn about them.

So let’s look further at the lessons to be shared between successful entrepreneurs and baristas, what are their common attributes, behaviours and qualities?

Discipline Both have discipline, entrepreneurs to ‘make the main thing, the main thing’, to focus and not deviate. For a barista, maybe the game plan is simply consistency, prepare a great cup of coffee time and time again for every customer on every visit.

All entrepreneurs have a North Star, a barista is no different. Indeed scaling a business means being consistent and delivering to every customer, time and again.

Keep a clear head Amidst the hullaballoo and the fury of the frantic queues in the coffee shop, baristas have to keep a clear head. In the heat of the moment, they cannot get caught up in the intensity and lose focus or the lessons learned from their training, which is an important skill to have as an entrepreneur.

Entrepreneurs have to be both mentally alert and hold bundles of mental toughness, which helps to hone their mentality. It’s what makes an entrepreneur see the opportunity when others around them can’t see the way ahead.

Resilience Boxers get punched in the face, some get knocked down. The difference between a good boxer and a great boxer is the ability to get back up. It’s the same for an entrepreneur, they have to be able to dig deep, look within themselves, and have the confidence, courage and heart to keep getting back up, no matter how many times they get knocked down.

Baristas may not get punched in the face, but sometimes when things don’t go your way, it feels like it. But if you are confident enough in yourself and your business, and you want it bad enough, no matter how many times you get knocked down, you will find the courage and heart to keep getting back up.

Build muscle memory Muscle memory is equally important in business as it is in sport, especially when times are tough. Having weathered countless storms in the past, entrepreneurs rely on my muscle memory to kick in so, despite the loss, they maintain the mindset of growth and opportunity to go again and find new customers.

For Baristas, resilience in times of peak demand is needed to keep the customer experience as fresh and stimulating as the coffee.

Patience As an entrepreneur patience is as important as an ability to move quickly. Sometimes you may want to rush out and spread the word about what you’re doing or talk to potential customers, but if you move too soon, you may not have a full understanding of the situation. It is important to make sure that when an opportunity arises, you are prepared for it, able to recognise it, and attack it with great precision.

For the artful barista, it’s the combination of the quality of the product and the experience, they don’t cut corners despite the customer perhaps being in a hurry, creating the product takes time, care and attention, whilst finding a few moments engaging with the customer personally is a vital ingredient too.

Enjoy the oxygen Top rugby players use a technique whereby they take 30-second breaks in-between agility drills, weightlifting, jump-roping and sprinting in a five-minute intense workout. During those brief seconds, they are exhorted to enjoy the oxygen. This teaches them how to breathe using their diaphragm, not their lungs, and to lower their heart rate during breaks in play when on the pitch.

So many business folks are so caught up in the heat of the moment that they don’t stop to take a deep breath, step back, and pause for reflection, or to appreciate, understand and evaluate what they’ve accomplished. Pausing to collect your thoughts, regain composure and adjust your physiology helps entrepreneurs persevere over the long-term, especially when encountering those unexpected speed bumps and disruptions.

I’ve seen the baristas do this too, spending a quiet moment to themselves to reflect on the success of their business that morning, enjoying the success of seeing returning customers, before going again.

Put accuracy before power Business is more about rhythm, technique and accuracy than simply raw power. Power is useless if it misses its target, it wastes energy. That’s a great analogy for any entrepreneur who’s chomping at the bit to launch a new product or service, and dazzle the world. The best planned product or service will fail miserably if it doesn’t solve a customer want or need, all the smart marketing muscle in the world won’t matter.

This is how the independent coffee shops win against the global chains, they do lots of little things differently, they don’t try to compete on the same basis, they make a difference by being different, and focus on that.

Keep moving forward Although entrepreneurial success is heavily dependent upon skill and the perfection of the craft, anyone can be broken physically by a relentless challenge. It’s hard to keep moving forward when you don’t see visible signs of success, it becomes as much a battle of wills and mental endurance as it does a battle of stamina, strength, and skill.

Many of the greatest successes are of those people who just kept working – James Dyson, inventor of the dual cyclone bagless vacuum cleaner, spent five years and produced over 100 prototypes of his machine before success. We never hear about the guy who quit, but the guy who persists and perseveres and keeps moving forward to their goal.

People’s desire for that perfect cup of coffee or shot of espresso creates a queue of people in a hurry, but where baristas showcased the art form of artisan beverage making, everyone was happy to wait. Much like the subway artists in NYC, the barista craft is an art form to behold, performed with purpose.

I saw tonnes of guile, grit, creativity and determination – and smiling faces – from the hard working baristas who were putting a long shift in, they knew that today was a step forward to success and may not feel like it in the moment, but a focus on their horizon and holding their vision was vital to success.

It’s tough out there and the pace is fast, but like any entrepreneur they had discipline, clarity and focus to guide their thinking and doing towards their goals.