The importance of fika time to a startup

My newest venture, thestartupfactory.tech, https://thestartupfactory.tech/ has been up and running for three months now, and we’re in good nick, building our confidence, rhythm, spirit, cadence and culture. We’re a team of passionate folk who work with tech startups to turn their vision into a reality, enabling innovation and customer-centred thinking into their new tech product and business.

We’re entrepreneurs, software engineers, designers, analysts, and agile practitioners. We’re also bloggers, explorers, speakers, swimmers, dog lovers, coffee addicts, campers, walkers, musicians, gamers, footballers, readers, travellers, gardeners, parents, and optimists.

That list is about ‘who we are’. We bring our true selves to work. Our business is defined by who we are, our values and the culture we create. More grit than glamour, we’re built on the spirit and down-to-earthiness of Manchester, ‘factory’ being an acknowledgment of the industrial heritage of what made Manchester special, and also taking the disruption, innovation and ethos of one of the city’s most evocative businesses, Factory Records.

With an attitude of graft and guile, we are factory workers, we get our hands into the machinery of building a startup, we roll our sleeves up, get dirt under our nails and get stuck in.

The essential moving parts of any startup are the people capital, not the venture capital, as Drucker said, culture eats strategy for breakfast, and we’ve spent time thinking and building our culture ahead of any rush to market.

When setting out on our venture, we looked to other entrepreneurs for a steer as to what makes for a happy and healthy business. We found this quote from Jeff Bezos: Find the things that are important to you and invest heavily in those things.

So we created the Five Pillars, to stay focused on a list of meaningful things that created and sustained intimacy and interaction between us, and connected us at a personal level. I spend more time with the team that I do with my dog, so there had to be reason to be here.

So here is the list of Five Pillars, it’s on our web site.

Vision & Values

  • Our business is about people capital, not venture capital
  • Reach beyond your expectations, every day
  • First names are important, job titles are not
  • Trusting each other is the platform for everything we do
  • Everyone practices humility and self awareness, but also self-esteem
  • We know the mentality to be successful and we have it in abundance

Culture

  • No office hours, but minds always open
  • 40 hours a week maximum; 32 summer hours – 4 day weeks, July & August
  • Weekend starts 1pm Friday
  • We pay for one weekend holiday a year for everyone
  • Fresh fruit breakfast in the office every day; pay for a weekly ‘Hello Fresh’ shop once a month
  • Team social last Thursday of every month

Knowledge

  • Everyone has a personal R&D project
  • Host Lunch & Learns third Thursday in the month
  • Run four hackathons a year
  • Wednesday afternoon is your personal learning time
  • Everyone goes to one event a month; everyone has a monthly book allowance
  • Performance of the business is transparent to everyone

Social impact

  • Lead a Code school in Manchester for under 11s
  • Provide a platform for unemployed people to get back into work
  • Sponsor & help the homeless in Manchester
  • Mentor a Social Enterprise
  • Provide paid internship opportunities
  • Be an active contributor to Manchester Tech Trust

Success

  • We will keep our company small and intimate, with reasonable expectations
  • Our place of work is a welcoming oasis, not a chaotic kitchen
  • Anxiety is not a pre-requisite for progress
  • We are calm by choice and practice
  • Everything is about having a reasonable day, going home, and living your life
  • Success is looking at a visible horizon, and getting there in the long run

We’ve not done everything yet, there’s a few wrinkles and edges to sort as we’re not doing some things as well as we can, but the Five Pillars gives us clarity and purpose about our direction.

I’ve long been interested in entrepreneurial cultures and the underlying philosophies, how you create the conditions to spark a startup based on the emotional intelligence and connectivity of the people. We’re more reflective than rebels, and on crafting the Five Pillars came across a concept from Ikea, ‘fika’, which we’ve implemented.

At 9.45am every day, we have ‘fika’ time. We each stop what we are doing and huddle around a table, have a cup of tea or coffee, and just be with each other. We chat about anything and everything but work. Friday was about Chuck’s pending house move; James neglecting his desk cactus; Jake’s obsession with 3D printing; and my ridiculous new waistcoat wardrobe. We also get loud about curating our tsf.tech Spotify list.

What we sample is an experience and unique word at the heart of Swedish life and work – ‘fika’ (pronounced ‘fee-ka’). According to the Swedish Culture website it is described in this way:

Swedes prefer not to translate the word fika. They don’t want it to lose significance and become a mere coffee break. Fika is much more than having a coffee. It is a social phenomenon, a legitimate reason to set aside a moment for quality time.

Coffee is traditionally at the heart of the fika. When coffee arrived in Sweden in 1685, it became so popular that it upset the rest of the import business. So much so that it was banned five times in Swedish history!

Fika is a combination of the Swedish colloquial word for cafe – fik – and coffee – kaffe. Who knows, perhaps the term fika served as a kind of code for those who took part in this once illegal activity. It is said that during the bans, Swedes were forced to drink their coffee secretly, out into the woods

Making time for fika is so sacred to Swedes that it’s built into many employee contracts. Some even say that the best ideas spring from fika breaks. We use fika time to cultivate an almost tactile sense of connection, here’s what we are trying to bring into our business.

Communicate frequently and constantly In tsf.tech we are always active on collaboration tools like Jira, Zoom and Slack instant messenger. Besides work content, we post links to interesting items, videos, learnings and stories. The point is that in the physical workplace we know we can relax and chat to people when we see them, but when we’re away from our work space and operating in the more detached digital world, we need to work harder at connecting, talking and feeling close. Fika gives us this.

Be open, vulnerable and honest Not every day is intense, but what works in the digital workplace is to reveal what matters to each of us. Speaking in your own authentic voice is essential. Honesty creates intimacy in digital worlds just as much as it does in the physical. Connecting becomes a deliberate rather than assumed experience. In tsf.tech we say that you do not need to be present physically but you do need to be present digitally, so if you can’t make fika face to face, connect using the tools.

Place your leadership front and centre The beauty of the digital workplace is that it has qualities that are impossible in the physical world. So take IKEA for example. In the physical world, their leaders cannot be everywhere in person having coffee and chatter with colleagues. But in the digital world, through real-time and other collaborative services, they can be ‘felt’ across far more frequently and with a much greater reach. But you have to invest time and authenticity in making it happen.

Use all the technology you can to bring you closer In tsf.tech we grab every new tool that may make us slicker and faster, as well as strengthen our bonds and connections. There is also a level of curiosity and experimenting. We do this because we like to be a ‘digital workplace lab’, we are in a position to experiment and innovate with new digital services in a way that large companies may not be. With all the team save myself under twenty-six, they are ‘digital natives’ and have a natural instinct for UX and gamification.

Make the social side of connection richer and deeper I dislike the term ‘social media’, it’s an oxymoron, because it drives isolated experience and consumption, it connects but doesn’t create engagement. Social for me is sitting next to someone and talking, and the things we talk about and do that are explicitly not work – they are social. Yes, we use social and online tools and the ways in which we use them are clear and distinct, engendering personal connection and relationships inside and outside the company. The point is we share our lives – issues, pets, families and homes. This generates the culture of closeness that the Swedes so value.

Use your own voice to talk and listen I mention voice particularly because on a phone call, Zoom or Webex we are talking and listening in reality. So far the only aspect of me as a human being that can be communicated digitally in the same way as if we are sitting together is my own voice, tone, intonation. I believe how we listen also matters hugely and when someone is listening to another person attentively, the talker can see that quality of listening. This is a key underpinning of fika.

We also have a ‘Your Voice’ item on our fortnightly team meeting agenda, when I encourage sharing ourselves with each other about how work ‘feels’. We also challenge each other and have debates and even arguments when needed at fika time, but we do that using our own voices because our vocal cords and tone of voice are such a powerful and distinct part of who we each are.

Meet in person when you can and make it matter Sometimes for some meetings this is not possible, but using opportunities to meet face-to-face does make a difference. It’s easy to default to the smart tech tools, but if we can meet in person, it adds to the richness of relationship, looking people in the eye and getting a sense of their body language is of much more value to see how we are.

While fika is good for mental and physical wellness, offering a period of calmness in a busy working day schedule, it can also help us to stay focused in the long run. Research has shown that taking breaks increases productivity. Sometimes, during the middle of a task, you might be stuck. With fika, you can have a break, come back refreshed and look at things from a different perspective. We insist that work talk is prohibited in fika. It forces you away from your work so you can re-evaluate things, come back refreshed and prioritise tasks when you do return.

So another year, another Scandinavian lifestyle trend. In 2016, the UK was fascinated by the Danish practice of hygge (finding the simple pleasure everyday life). For me, fika is an opportunity to slow down, come together for a face-to-face and interact. The social aspect of work is incredibly important.

The essential part is making a little space in your day to take a break. In our modern, hectic lifestyles, this is the part that is important: that we take a few moments to slow down in our day and make time to just sit and appreciate the moment.

So, perhaps there are aspects of the IKEA fika around coffee and cake that you can create inside your own digital enabled workplace, like we have in tsf.tech, to enable you to enjoy that atmosphere and chemistry of connection the Swedes love so much. The only part missing so far for us is the cake, but I guess we’ll just have to wait for Jake’s 3D printing of food and add that to the digital workplace menu at tsf.tech fika meetings.

Networking tips for startup founders

Manchester’s tech startup community is bursting with events, meet-ups, workshops, hackathons and networking talks. Getting out there and connecting with like-minded folks is an essential activity for a startup, and building a great network is key to the success of any entrepreneur. Almost every breakfast, lunch and evening it seems is packed with invitations and opportunities to hang out at popular hubs and co-working spaces.

Don’t get me wrong, depending on your level of introversion, they can be a lot of fun, and you can meet some thought-provoking people and build vital connections. Then again, if you’re not careful, you could also spend most of the week chasing every single gathering of coffee and croissants, beer and pizza, using valuable time that you could and should be spending, you know, actually working on your startup.

Throughout it’s rich historic tapestry of disruption, growth and innovation, Manchester has seen many iconic meetings in the city, and this list is sure to give you inspiration for your next get-together in Manchester:

Charles Rolls & Henry Royce After Royce built a car in his factory in Cook Street, a meeting was set up with Rolls at the Midland Hotel in 1904. Rolls was impressed by the cars that Royce had made and agreed to take them, branding them ‘Rolls-Royce’. The combination of Rolls’ wealth and Royce’s engineering expertise spawned the creation of one of the most iconic car and engineering brands of all time, as Rolls-Royce Limited setup in 1906.

Marx & Engels It was in Manchester in the mid C19th that the Friedrich Engels and Karl Marx met to discuss revolution and the theory of communism. The desk and alcove where Marx and Engels worked and studied at Chetham’s Library in 1845 are still there today and remain unaltered. It truly was a meeting that shaped the world.

Graphene Fridays Professor Sir Andre Geim and Professor Sir Kostya Novoselov, at the University of Manchester, often held ‘Friday night experiments’ where they would try out experimental science. One Friday, the two scientists removed some flakes from a lump of bulk graphite with sticky tape and noticed that some flakes were thinner than others. By separating the graphite fragments they managed to create flakes, which were just one atom thick – and had successfully isolated graphene for the first time.

Women’s Social and Political Union A meeting at 62 Nelson Street, Manchester was the birthplace of the Suffragette movement, at the first meeting of the Women’s Social and Political Union. This historically significant building was the home of Emmeline Pankhurst and her family who led the Suffragette campaign and ‘Votes for Women’.

The Free Trade Hall, June 4, 1976 This was a gig that changed the face of Manchester culture forever, The Sex Pistols show defined music for generations to come. In the audience were future members Joy Divison (Ian Curtis, Bernard Sumner and Peter Hook), two founders of Factory Records (Martin Hannett and Tony Wilson), Mark E. Smith of The Fall, and one Steven Morrissey, who would form The Smiths.

Whilst we’d all give our right arm to be at meeting that would create such an impact to move our business forward, I can assure you that you simply do not need to attend 99% of the networking events you see cluttering your diary.

In fact, many respected entrepreneurs built their businesses from the ground up without jumping at every networking event they came across in their city. They chose instead to focus on building their businesses and gaining their customers’ trust, before eventually earning the respect of those they want to meet and establish relationships with.

One example is Mark Zuckerberg, who chose to focus on growing his social network independently into something of value, teaming up with just a couple of friends from Harvard to build it up in the early days. For two years he kept his head down, didn’t seek funding; he didn’t flock to every event to talk about and evangelise his idea.

Another example of entrepreneurs who focused first on ensuring their startup had real market value before attempting to build relationships with other entrepreneurs were the Whats App co-founders, Brian Acton and Jan Koum. Steve Jobs also never spent his days attending a bunch of networking events. He and Steve Wozniak spent all their time building and improving their product.

These examples demonstrate that instead of jumping around to every event before you have any traction with your own business, build your startup and let networking organically follow. Yes, get out of the building, but do so to test your ideas and validate your learning.

Our natural tendency is to see successful people as reflections of our own desires and values, and I see many embryonic startup founders beating a trail to every event, almost addicted to going to and being seen at networking occasions. This creates false expectations that will eventually cause a detrimental emotional reaction. It’s often the smaller, quiet moments on your own in startup life that create the biggest impact, which is often overlooked.

So, here are some thoughts to help guide your selection of which networking events you should attend:

Attend industry-specific networking events What business does a computer scientist have in an energy networking event? If it’s to meet prospects that may invest in their tech-related startup, they may have already wasted a lot of time. Anyone there is probably only interested in anything energy related. Attending a networking event outside of your own direct industry should be done if your tech solution could either directly solve a problem in that field, or if you were specifically invited. Otherwise, stay at home and work.

Attend activity based events Activity-based networking events involve you directly in the entrepreneurial process. Carrying out tasks with co-entrepreneurs offers some genuine peer-group learning and reflection. Don’t just go to events and listen to people talking about themselves. How will this take you forward? Participating in an activity, doing something with someone, means a short-lived partnership that means hands-on, in the moment thinking, that can end up laying the groundwork for learning and a pivot in your product.

Attend invitation-based networking events Invite-only events usually have top quality guests present with something meaningful and relevant to say. Knowing that an event is packed only with people invited makes it a lot easier for people to build relationships with others they meet. If a person you’ve identified as someone to meet is attending, then hustling the ticket is a great bet for you. Remember, even though most in the startup world are pretty chummy with each other, this is business. Time is an essential ingredient in all startups, make it count. Rather than appealing to your emotions in a bid to sprout a friendship, appeal instead to your self-interest.

Research who you want to meet Before you attend an event, research the speakers and others entrepreneurs in attendance. Prioritise who you want to get to know, as this will help you craft a plan to make the most of the event. The goal of attending any networking event is to build quality relationships, this involves you approaching and talking to people who would add value to your thinking and your business. Knowing who to engage in a conversation largely requires a preset plan before you arrive.

Even better, people enjoy people via some exchange of value. When you try to impress with nothing to back it up, the relationship you thought you were building will fizzle away. What can you add to their thinking? The people we surround ourselves with at the outset of our venture are too important for us to be hasty or wasteful with our time and energy. They can determine a lot in our future, so be focused on the potential for making connections that could trigger both customer acquisition and growth opportunities.

Network with a purpose Do not go to a networking meeting aimlessly. Have a purpose. Your goal is to meet people that you can help and people who can help you. You do not know who they are yet so you have to mix with a fair number to improve your chances. But you must have an overall goal. It helps other people to help you if they know what you are looking for.

The old saying, ‘It is not what you know; it is who you know’ is true, you can significantly increase your chances of success in almost any field if you know or can get in touch with the right people. This is the power of networking, but it has to be focused. Frankly, I’m fed up of be asked to play in ‘name check entrepreneur bingo’ – do you know Mr X, or Mrs Y? What’s the point?

You must target networking events where you can determine that you’ll have a chance for real conversations. Too many of these events involve quick chats, exchange of details about each other’s’ businesses, and move on. How many have offered real follow-up value?

Prepare your introduction Sounds obvious, but do you have a crafted and elegant introduction, as this is the best way to start the conversation. You don’t just go barging in and start talking about your startup being an investment opportunity, and don’t make it sound like an elevator pitch. Be polite and friendly, let them know who they’re talking to, make it personal, warm and interesting.

After a clam introduction, talk about something they’ve done that has amazed you when you learned or read about it. Doing this will make the person more open to you, knowing one of their products or services has had an impact. Show your curiosity, make yourself someone genuinely worth knowing.

Next, find something in common, that will start to create a deeper connection and build trust. Also, instead of just imposing your ideas and thoughts dominating the conversation, spend more time asking intelligent questions and listening to the replies than talking about yourself.

Understand that it involves more than exchanging business cards. Your challenge is to build a human connection. That means you’re not doing all the talking, but encouraging give and take with good, insightful questions that show you sincerely are interested in how the other person thinks. It also means you pay attention to the answers. There is no value in a pocket of business cards at the end of the event if you haven’t agreed to a follow up.

Circulate and know when to get out A key message for introverts who are uncomfortable with networking, or extraverts who get deep into a conversation quickly and dominate – don’t stay the whole time making comfortable small talk with the first group you meet. After a while make a polite excuse and move around the room spending say ten to fifteen minutes with each new person. You will find that you can leave conversations without being brusque. Networking means circulating and people at the meeting are aware of this.

Your time is better spent, and a much better connection made, when you linger with those where you’ve sparked good give-and-take. Get out gracefully, when you feel you’ve been cornered by someone who isn’t a good match.

Follow Up You’ve invested time in getting to the event, three days after making a new connection, give them a call and re-introduce yourself. If you don’t follow up, where is the return on your investment? This is the chance to meet for a more purposeful one-to-one conversation. It is important to stick to the three-day follow up rule, as any time longer than that may diminish the relationship established at the event.

Some sort of follow-up is important, though this will depend on the quality of the connection – the extent to which you really ‘click’ personally and professionally. What’s important to remember is that the best relationships are mutually beneficial, so the first meeting is just that, you have to nurture the connection: the more you put into it, the more will come back to you.

Attending every networking event ultimately robs you of the time you could have spent building your startup and understanding your customers. You become part of the ‘celebratory startup circuit’ where you have to see and be seen. Whilst you can get inspiration from hearing about the journey of others, it’s actually perspiration – your own – that will ultimately move your business forward.

Realistic expectations are only part of doing networking right. It’s also important to understand that doing it right takes time. Focus on quality and forging genuine friendships, respect, trust and rapport, not ‘contacts’, or being able to say ‘I was there’ at an event.

I’ve met so many who have opened doors for me and remained in my life both personally and professionally. After a while, networking doesn’t feel like ‘networking.’ It’s both serendipitous and unpredictable, and something that just naturally becomes part of your work life and your personal life.

However, don’t keep score, it’s not about the ‘who and how many’, rather connect with people because there is value, and nurture the relationships that will truly help propel you towards accomplishing great things. Ultimately, focus on having in-depth conversations with fewer people about subjects relevant to your growth.

Startup stories: David v Goliath, where agility beats scale

The next time you hear a ‘David versus Goliath’ business story, where an emerging startup has knocked over a large, established enterprise, don’t think of an underdog that got lucky. Instead, think of a confident competitor who is more than happy to be underestimated, and used it’s own unique capabilities to out wit and out manoeuvre a larger entity.

David’s victory over Goliath, in 1 Samuel Chapter 17 of the Old Testament is the battle between the Israelites and the Philistines. Twice a day for 40 days, Goliath, a nine feet tall giant wearing full body armour and the champion of the Philistines, challenged the Israelites to send out a champion of their own to decide the outcome in single combat. But Saul, the King of Israel, and all the Israelites were afraid.

One day David was sent to the battle lines by his father to bring back news of his brothers. David was probably just a young teenager at the time. While there, David heard Goliath shouting his daily defiance, and he saw the great fear stirred within the men of Israel.

David hears that Saul has promised to reward any man who defeats Goliath, and accepts the challenge. Saul reluctantly agrees and offers his armour; David declines, dressed in his simple tunic, carrying his shepherd’s staff, sling, and a pouch full of stones, David approached Goliath. The giant cursed at him, hurling threats and insults.

David and Goliath confront each other, Goliath with his armour and shield, David with his staff and sling. David hurls a stone from his sling with all his might, and hits Goliath in the centre of his forehead. Goliath falls on his face to the ground, and David cuts off his head.

David then took Goliath’s sword, killed him and cut off his head. When the Philistines saw that their hero was dead, they turned and ran. The Israelites pursued, chasing and killing them and plundering their camp.

In popular culture, we refer to the outcome of this battle when a smaller entity has overcome a much larger adversary, and victory is held to be an anomaly. But it is not, Davids win all the time.

The political scientist Ivan Arreguín-Toft looked at every war fought in the past 200 years between strong and weak combatants. The Goliaths, he found, won in 71.5% of the cases. That is a remarkable fact, especially when the result is in the context of the sample of conflicts analysed was where one side was at least ten times as powerful in terms of armed might and population as its opponent – even in those lopsided contests the underdog won almost a third of the time.

Why, what happened? Simply, the underdogs acknowledged their weakness and chose an unconventional strategy. In those cases, David’s winning percentage went from 28.5% to 63.6%. When underdogs choose not to play by Goliath’s rules, they win, Arreguín-Toft concluded.

Entrepreneurs perpetually play the role of David against their Goliath competitors, and, just like their biblical counterpart, small businesses can defeat their large competitors by outmanoeuvring, out-imagining, and outperforming them. The business lesson is this: when underdogs choose not to play by Goliath’s rules, they win.

Entrepreneurs are perfectly positioned to operate as insurgents against their entrenched corporate competitors, because they’re more willing to take risks, challenge the conventions about how commercial battles are supposed to be fought, and are generally more alert and agile.

Large companies build assets of all sorts in anticipation of large-scale engagements, serving mass markets, but, despite their size and strength, they can be lumbering in their decision making an getting new products to market, rarely prepared to confront nimble and fast-moving adversaries that refuse to challenge them on the battlefield of their own design.

Possibly the best example is Airbnb. Large companies are often scaled to compete in the mass market, often paying less attention to niches, which can still be lucrative. All you have to do is take advantage of their ego, serve these small niches with passion and customer service, and you’ll win business.

So what’s the strategic mindset of a David in today’s market? Here are some thoughts.

Expect to win David had faith that Goliath could be defeated. Faith is simply the ability to act despite tremendous doubt. As an entrepreneur, you must never see your competitors as infallible. You must see a possibility to out perform them. If you execute and implement your competitive strategy with this mindset, success will be yours.

Self-Belief In David and Goliath the Israelites had faith that Goliath will someday be defeated but only David had the self-belief that he was the one to do it. As an entrepreneur, you must believe your business can do it. Ask yourself why not?

Another way to strengthen your self-belief is by drawing courage and inspiration from your past achievements and track record. David drew courage from his past achievement of killing a bear and a lion.

Leverage Give me a lever and a place to stand and I will move the earth, said Archimedes. Leverage is simply the ability to do more with less, and ask yourself: how can I position my business to compete favourably with fewer resources?

David knew Goliath was stronger, more skilled. He won by sheer courage, determination and focus. David asked the question; how can I defeat Goliath without engaging him in a hand-to-hand combat? That answer came in the form of leverage. That leverage was his sling.

For a small business, leverage can be in the form of personal commitment, energy and timing of response, personalised service and agile thinking. In fact, there are many ways to surpass your competitors using leverage as a tool.

Velocity Your greatest and most powerful business survival strategy is going to be the speed at which you handle the speed of change. Goliath was armed with a shield, spear and a sword but David had only a sling and a stone. Now what was the difference?

The weapons of both had the potential to kill but the difference emerged in their speed. David’s weapon was lighter and smaller, it had the ability to reach its target faster than that of Goliath. The sling and stone had the power of speed. How fast is your plan and how fast is your strategy?

Agile Strategy David’s strategy and tactics surprised Goliath, he wasn’t expecting to be confronted by such an opponent, and David’s agile outwitted and outsmarted Goliath’s ego and complacency. He wanted it more, and made it happen for himself.

Now in the game of business, you must develop a smart strategy to help you achieve your aim. You will note that David was strategic in his approach towards Goliath. His strategy was to subdue Goliath with minimal effort. To ensure the successful implementation of this strategy, David employed the following tactics:

  • He picked five stones instead of one just in case the first stone didn’t make the hit.
  • He avoided engaging Goliath in a hand to hand combat
  • He exploited Goliath’s ego and over confidence
  • He aimed at achieving his goal with the first shot
  • He took Goliath by surprise and caught him off guard

Focus on the customer as an individual Giant companies suffer when they lose touch with the granularity and simplicity of their business model, they become complacent and lazy about their approach to customers. Often the giants will make compromises in quality and service, thinking customers won’t swap to a smaller operator. Often they’re not close enough to their customer. Some distant manager adjusts a few numbers on a spreadsheet, but customers react and in a click of decimal points, they switch to a rival.

The value of an individual customer is always greater for small businesses than for large corporations, and understood as such. Your business is important to me. Make each customer feel they are your only customer, and the only thing that matters in that moment.

The primary reason is that small businesses are able to feel their own pulse, the stream of day-to-day events as they occur, you feel all of these things as they happen and can react and direct accordingly. This high level of sensitivity is unique to small businesses. The pulse gives you a sixth sense for change and how to retain your customers.

Play to your own strengths Big competitors’ perceived advantages can often mask their even bigger disadvantages, David is a lowly shepherd boy, and yet he’s the only person willing to fight Goliath. He also refuses to wear armour. Why? Because David realises that heavy armour weighs a warrior down. Goliath could easily kill David with his sword, but only if David were foolish enough to walk right up to Goliath. Of course, that’s the last thing David plans to do.

The final misconception is the idea that David goes into battle with only a sling. But it’s a highly effective weapon David has used many times to protect his flocks from wild animals. He’s not going to fight Goliath in hand-to-hand combat, he’s using his experience and expertise to fight on his own terms, Goliath can’t counter this. When David lines up, he has every intention and every expectation of being able to hit Goliath at his most vulnerable spot between his eyes.

That’s exactly what David did, walks right up to Goliath (but still far enough away that Goliath’s swords and javelin are useless) and kills Goliath with a single shot to the head. Recall, the scene in Indiana Jones shoots the intimidating Arab swordsman in Raiders of the Lost Ark – he made the most of the moment on his own terms

Take a look at the story again. The lesson isn’t simply that when a powerful competitor takes on a smaller one, the smaller one might nevertheless win by chance. Instead, understand that the real keys to competition are sometimes obscured by our misconceptions. Perceiving them correctly can amount to a new basis of advantage.

Are you facing what you believe to be a giant problem or impossible situation? Stop for a minute and refocus. Can you see the situation more clearly from David’s vantage point?

Just be yourself and use the familiar skills and talents you have. Look at the challenge from a different perspective – lean forward, how can I win? – we see more clearly, and we can fight more effectively – rather than leaning back with anxiety. What is our strategy that they can’t counter, don’t take the battle on their terms, create the conditions where you have an unfair advantage on your terms, reframe the debate.

George Mallory’s entrepreneurial mindset: because it’s there

Research into the motivational drivers of entrepreneurs has highlighted that far from being the opportunity to earn financial gains, it is the extra-rational motivations, the psychological rewards, that provide the stimuli for relentless drive, sacrifice and determination:

  • the thrill of competition
  • the desire for adventure
  • the joy of creation
  • the satisfaction of team building
  • the desire to achieve meaning in life

Ask any entrepreneur how much blood, sweat and tears they’ve put into their startup, and you’d get an imprecise answer at best. They are more driven by success, more likely to take course of action that is uncertain, and to do something unproven. It’s because the challenge exists, it’s because it’s there.

Those three words, Because It’s There. This was the driver of George Mallory, possibly the first man to reach the summit of Everest. The Fight for Everest is the account of George Mallory and Andrew Irvine’s 1924 expedition, when they disappeared near the summit, giving rise to folklore as to whether they were the first men to have reached the top of the world, some 30 years ahead of Edmund Hilary.

The book’s black-and-white photographs and fold-out maps capture the imagination and carry you away to the Himalayas. You can see the distant white peaks, snow storms approaching and the climbers reaching up the ice-walls on the North Col, scaling with ropes. You can imagine the physical and mental challenge.

I have marked the passage of the book that etched an enduring memory, the description by Noel Odell, the expedition geologist, of his last sighting of Mallory and Irvine, 800 vertical feet from the summit on June 9, 1924:

There was a sudden clearing of the atmosphere above me, and I saw the whole summit ridge and final peak of Everest unveiled. I noticed far away on a snow slope leading up to what seemed to me to be the last step but one from the base of the final pyramid, a tiny object moving and approaching the rock step. A second object followed, and then the first climbed to the top of the step. As I stood intently watching this dramatic appearance, the scene became enveloped in cloud

Over and over I read that passage, and I wanted nothing more than to be one of those two tiny dots, fighting for survival in the thin, icy air, unfazed by adversity. That was it. I lived intensely with and through these explorers, spending evenings with them in their tents, thawing pemmican hoosh.

No evidence, apart from this testimony, has been found that they climbed higher than the First Step (one of three final physical stages to the summit) as their spent oxygen cylinders were found shortly below the First Step, and Irvine’s ice axe was found nearby in 1933. They never returned to their camp and died high on Everest.

Mallory took part in the first three British expeditions to Everest in the early 1920s, joining the 1924 Everest expedition believing that at 37, it would be his third and last opportunity to climb the mountain. Mallory’s grandson, also named George Mallory, reached the summit of Everest in 1995. He left a picture of his grandparents at the summit citing unfinished business.

The grand prize of mountain climbing is Everest, for obvious reasons. It’s not the most difficult or dangerous mountain, but it invites the adventurous to stand at the peak of the world, the spot closest to the moon and stars, the ultimate junction of earth and sky, of horizon and zenith. It allows the brave to revel above the clouds, look upwards into the void and leave the earth behind. This is what drives people to risk physical exhaustion, dehydration, even death.

Only a fraction of people have ever exalted in that experience and lived to say: I climbed Mount Everest. But for Mallory, this was not recreation or physical challenge, that was not what he sought – he pursued the pure adventure of climbing. It was Mallory with the famous aphorism that, to this day, best summarises the avid climber’s pursuit, quoted as having replied to the question Why do you want to climb Mount Everest? with the retort Because it’s there, which has been called ‘the most famous three words in mountaineering’.

It turns out that Mallory actually did answer his own question more fully, and perhaps even more beautifully, a year prior to his famous quip:

The first question which you will ask and which I must try to answer is this, ‘What is the use of climbing Mount Everest?’ and my answer must at once be, ‘It is no use’…. if you cannot understand that there is something in man which responds to the challenge of this mountain and goes out to meet it, that the struggle is the struggle of life itself upward and forever upward, then you won’t see why we go.

What we get from this adventure is just sheer joy. And joy is, after all, the end of life. We do not live to eat and make money. I look back on tremendous efforts & exhaustion & dismal looking out of a tent door on to a dismal world of snow and vanishing hopes.

Mallory is one of our last great explorers and one of the greatest truly ambitious men, exhibiting all the traits of an entrepreneur. While today climbing Everest is almost commonplace, back then it was possibly the most daunting physical challenge available. The highest peak that had been ascended was Montblanc, at 15,000 feet, which Mallory had climbed.

Remember this was the 1920s, Mallory had to hike through miles of Nepalese jungle without a map – this was all uncharted. He hadn’t even seen Everest until he arrived there, and yet from the second he heard the idea he never hesitated. He is so revered that the ice-wall on the North Col which must be climbed for all who summit Everest via the North Route is named after him, the Mallory Step.

On 1 May 1999, a frozen body was found at 26,760 ft. on the north face of the mountain. Name tags on the body’s clothing bore the name of G. Leigh Mallory. No subsequent searches have found either Irvine or a Kodak camera, known to be in their possession, which could hold the answer as to whether they were on the top of the world 30 years before Hilary and Tenzing.

Mallory carried a photograph of his wife, which he was to leave at the summit. When his body was discovered, the photograph was missing. Whether it will be proven that he reached the top or not, he certainly had climbed to an altitude of at least 28,000 feet in 1924 with clothing and equipment far inferior to what is available today, a remarkable feat.

President Kennedy quoted Mallory in his speech announcing the NASA programme in 1962, his own words with the same sentiment of ambition: We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.

Mallory epitomises the same unwavering entrepreneurial ambition and attitude to succeed – focus and clarity on his goals, a tenacious will-to-win. Starting and running a small business is a lot like climbing a mountain for the first time, look at the similarities:

  • Inner drive Entrepreneurs are driven to succeed, they see the bigger picture, set massive goals and stay committed to achieving them regardless of challenges that arise. Mallory had this in abundance.
  • Strong self-belief Entrepreneurs have a strong and assertive personality, focused and determined to achieve their goals and believe in their ability to achieve them. Mallory had this confidence.
  • Search for innovation Mallory had a passionate desire to be the first man on Everest, just as entrepreneurs look to bring new ideas first to market. Both are pioneers in their aspirations and approach to the risk and opportunity before them.
  • Competitive Successful entrepreneurs thrive on competition. The only way to reach their goals is to be the best they can be. Mallory’s wasn’t competitive with other climbers – but with himself and the mountain before him.
  • Highly energised Mallory was always on the go, full of energy and highly motivated. Entrepreneurs have a similar high energy, restless and always trying to get to where they want to get.
  • Accepting of obstacles Entrepreneurs are on the front line and hear the words it’s never been done, it can’t be done as opportunity. They readjust their path, obstacles are an expected part of the journey. Everest was both a physical and mental obstacle in Mallory’s journey.

Sometimes you need to remind yourselves as to why you’re working so hard every day. If you haven’t looked up from the grindstone for sometime, your vision can get cloudy. Mallory’s story and attitude reminds me that there’s a purpose and a reason for your dedication, discipline and hard work.

Don’t get lost in life’s busy shuffle. Mallory reminds me not to just ‘do things’ but to do them with a passion and a purpose bigger than ‘just turning up’. Do them because it matters. Not just to cross it off a list but for the purpose of a creating a story to tell that what you’ve done matters, and that it makes a difference.

As Mallory said in one of his final interviews, when trying to explain why he’s climbing Everest, I have dreamed since I was a boy of standing atop this mountain, and it’s worth it to risk your life to make a dream come true. Business life isn’t as risky to life and limb, but there is no finishing line, just keep reaching out and pushing yourself, and ask yourself why do I want this?

Because It’s There, was his answer.

Do them because it matters. Not just to cross it off a list but for the purpose of a creating a story to tell that what you’ve done matters, and that it makes a difference. Mallory provides a new perspective on our own aspirations and inspires us to strive for our own Everest. Because it’s there.

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.

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: tips on investor conversations

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Good luck in your next meeting.

Startups 1-2-3-4 Go!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

Startup leadership lessons from the Charge of the Light Brigade

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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