The Great Startup Famine of 2015

Starting (if you’ll excuse the pun) with bad weather in the Spring of 1315, universal crop failures struck Europe creating what became know as The Great Famine. It lasted through 1316 and well into 1317 from Russia and Great Britain all the way down to Southern Italy.

Angels Bootcamp has just announced that it is to train over 1,000 new angel investors by 2015 starting this June in Berlin. We should all cheer the announcement of Angels Bootcamp, which aims to do what it says on the tin:

AngelsBootcamp is targeted at executives, entrepreneurs and finance professionals who have money in the bank to put into tech startups but who lack the knowledge about exactly what an angel investor should do.” (as TNW reports)

But Berlin, we have a problem.

While I heartily support anything which will accelerate Europe’s entrepreneurs (especially if it helps consolidate London’s position as Europe’s leading tech startup hub) where is the money going to come from so that all these newly invested startups can continue after their first $250,000 or $500,000 of investment?

It’s a metaphorical stretch, but there’s no point encouraging people to start a large family, if they won’t be able to feed themselves!

Europe and even London, Europe’s foremost tech cluster, already has a funding gap for adolescent startups. In actual fact, so does New York’s tech cluster.

“New York and London have more than 70 percent less risk capital available than Silicon Valley for Startups in the early, Pre-Product pre-Market Fit” Stages of the Startup Lifecycle.”  Startup Genome Report

And moreover even at the end of the rainbow, in the home of funding-food and plenty Silicon Valley, startups are experiencing an issue with follow on funding. Check out the graphs below, tracking the number of seed deals versus Series-A for U.S. startups: (courtesy Techcrunch, read the full article here)

 Capturegraph Capturevc2

“The “crunch” is perceived because of the boom in seed funding, which has brought a greater quantity of startups to the table looking for Series A funding…” (from the article Mining The Crunch)

Europe must find a way not to end up with a worse funding famine that of Silicon Valley now, which is that hundreds of startups funded by Xoogler’s and X-Facebooker’s are going bust -or becoming startup zombies– because they are either not worthy of further funding or because the market cannot sustain so many startups.

At a macro level, many of the much larger funds – the grandfathers of the tech VC in the U.S. and Europe – don’t perceive a problem. Possibly because they invest later stage and have extremely large funds (so are somewhat detached from the mass of earlier stage startups) or perhaps because those famous names get the very top pick of deals.

I was lucky enough to get Felda Hardymon from BVP on my panel at the recent Innotech Summit, along with Steve Schlenker from DN, plus others from Silicon Valley and L.A. to discuss this very topic (we even managed to co-opt Boris Johnson, the Mayor of London).

Boris gets to grips with a transatlantic Google Hangout

Boris gets to grips with a transatlantic Google Hangout

Perhaps not surprisingly (given that Felda has been at BVP since 1981 a full 16 years before I did my first startup) I agreed with almost every word Felda said. All of which was extremely insightful except that there isn’t a funding gap for startups in Europe.

There’s not a lack of capital for sure, but capital which people are prepared to risk at that critical, very high risk, very early stage of the startup life cycle? For sure there’s a dearth.

Perhaps the Series-A problem is that the whole approach to funding at that stage of a startups lifecycle needs to change, as one or two people I spoke to afterwards suggested.

After all, seed funding and angel funding has evolved immensely even in the last 5 years. But until that mid-stage funding environment does change, or until we teach our startups how to make a whole lot of revenue very very early on, it means that we need to educate our new European Angels not to make un-fundworthy investment decisions(!).

At the same time as a community we must find ways to open up the $1m to $4m investment bracket to more startups, by lobbying those with capital and the government for favourable incentives, alongside championing the value of technology startups both to society as a whole and as a vehicle for investment.

Venture investment (realistically, Series-A and above) create jobs. Fact. As crusades go, that's a good a reason as any. (Read Nic Brisbournes full post)

Venture investment (realistically, Series-A and above) create jobs. Fact. As crusades go, that’s a good a reason as any. (Read Nic Brisbournes full post on his excellent blog, which is where I stole this graph from)

In summary, Angel Bootcamp will go head and I wish it every success, but something needs to happen in the Series A world too, and there is much less chatter about solutions for this, or even talk of the problem, unless of course you’re a Founder trying to raise a Series-A round in Europe, and then you talk of nothing else..!

Europe did not fully recover until 1322 from the Great Famine of 1315, and while medieval starvation on a grotesque scale is more a human tragedy than any future mass deadpooling of startups, however severe, we should ask what can be done to ensure the tens of thousands of potential European jobs and startup Founder’s dreams, are not wasted away for lack of follow-on funding or Series A.

While supply and demand and market forces are one answer, I’m not sure a pure Friedman-esque approach to this growing problem is the only solution we should rely on.

Why The 350 Dead Bangladeshi’s Are Our Fault

Ever shopped at Primark or any of the other 100’s of clothing stores who turn a blind eye to their supply chain?

How's that cheap t-shirt you're wearing feeling today?

How’s that cheap t-shirt you’re wearing feeling today?

The terrible irony of Primark (which is often the target of choice by campaigners against cheap labour etc)  is that it’s actually owned by Associated British Foods plc, which is a conglomerate which is 54% owned by a not-for-profit trust which does a lot for charity in the UK. I know this because on my way to Sweden last week I sat next to the Marketing Director (of ABF, not Primark) who explained this. According to omnipresent Wikipedia:

“Some 54.5% of ABF is owned by Wittington Investments.[17] and 79.2% of the share capital of Wittington Investments is owned by the Garfield Weston Foundation, which is one of the UK largest grant-making charitable trusts, and the remainder is owned by members of the Weston family.”

Garfield Weston are a family-founded, grant-making trust which has been supporting charities across the UK for over 50 years (check out their good work here) but lets get back to clothing and 400 dead Bangladeshi’s

Your leverage to affect change is directly related your choice to buy from a retailer who guarantees supply chain good standards and ethics, or not.

Your leverage to affect change is directly related your choice to buy from a retailer who guarantees supply chain good standards and ethics, or not.

Specifically Primark, with revenues of £2,730 million and 36,000 employees, itself has the resources if it so wishes to ensure it’s entire supply chain adheres to certain standards. The market (in this case the supply chain itself) would accordingly respond if this is what was demanded of it by the buyers (e.g. Primark).

The future is in your hands

So, the fix, is actually really rather straightforward. All that is needed is the impetus – best demonstrated by our own purchase choices along with -ideally- a PR outcry, in the same way that most people don’t want horse meat in their burgers from some far flung country, resold and transported half way across Europe.

So friends, the power to prevent another 350+ dead clothing workers really is in your hands; or at the very least, the catalyst for change resides in your wallet/purse.

UPDATE: Primark (and some other companies) have offered compensation to the victims (BBC News link)

Co-CEO’s: The Bubonic Plague of the Board Room

..or Why I Believe co-CEO’s Are A Bad Idea.

Not so long ago I was invited to take a CEO position at an 18 month old start-up. There was a small team of seven, only three full time. The business guy in the team was one of the part timers and had also invested some money, but chosen to retain his existing position at a large corporate with a full time job and salary.

The two initial meetings, with one of the Founders who was the real day to day engine behind the business, went well. She was eager to bring in a CEO, part time or full time, to help put in a solid strategy – including raising money – and to hire new team members and ensure milestones were being hit, financials kept up to date, people managed etc; all the usual jobs of any CEO.

But when it came to negotiating terms the other part-time co-Founder I mentioned sprung on me a two character prefix to my title which meant I walked away from the deal. He wanted to add “co” to my CEO title. I was pretty surprised as he’d said previously he was happy bringing in an external person to be CEO and run the business.

There are a raft of reasons why I believe having co-CEO’s in your start-up is a thoroughly dreadful idea. Even if you’re both co-Founders of the business.  Reason number one is because it doesn’t work.

At least with a pantomime horse the front is in charge (unless the back disagrees of course). Enough said.

At least with a pantomime horse the front is in charge (unless the back disagrees of course). Enough said.

Quite simply co-CEO arrangements in my experience don’t work, or don’t work as well a different structure. This conclusion is both from being in situations myself where CEO responsibilities were split between two people (even if the actual official title wasn’t) and also from seeing some others trying to run their company’s this way. Having Co-CEO’s creates its own set of problems, outside of the challenges inherent in being a CEO.

Here are some of the problems (and please feel free to add your own in the comments!):

  • Someone has to have the final decision, because people do not always agree.
  • Legally, someone must be responsible to report to the board of directors
  • Someone must “own” the over-arching business strategy and the milestones on it.
  • Logistically, if you have co-CEOs, in reality for both people to be equally well informed they must both attend every meeting which might impact any significant business decision a CEO might make OR one co-CEO must relay and discuss all this with the other co-CEO, to convince them it’s a good idea and bring them up to speed
  • If you have co-CEOs the team do not know who their boss really is
  • If you have co-CEOs there is always the risk of the team or the board or investors playing the CEO’s off against each other
  • If you can’t sort out with your team and co-founder who is going to be CEO and what that means, how on earth are you going to sort out other problems
  • If one personal isn’t responsible, it’s not really fair to measure them entirely for not performing the role
  • There’s a danger you can both re-enforce your own errors of judgement, making those miscalculations or oversights further entrenched
  • Measuring performance becomes harder. If CEO responsibilities are split, or the CEO isn’t driving forward the things they should be, someone needs to call it out. Another co-founder, a Board Director, shareholder, the team. That’s harder with co-CEO’s and there is one less person who could be devil’s advocate.
  • If makes it harder for both people to perform well. If two people are sharing the co-CEO spot (even as a shadow CEO rather than named title) then it’s all too easy for things to end up dropped on the floor, between the two people – who most like are both very well meaning souls who want success for the company as much as anyone.
  • And my personal favourite, if you have co-CEOs it simply looks stupid. Investors and the outside world will probably think “why not just get one competent person to be CEO, rather than two who individually are not?”

Indecision, confusion, mixed messages and an increase in communication workload are the last things you want in a start-up or any business, and I feel co-CEOship encourages just that.

In summary, avoid being a co-CEO or working in a start-up which has them. And don’t take my word for it just look how well it worked for Blackberry.

The march of Windows Metro inspired design

A while back I wrote a blog post saying I thought the forthcoming release of Windows Phone and it’s metro interface (plus subsequent Windows 8 release) would probably trigger a change in fashion with regards digital design. This was partially demonstrated by the MySpace new design also.

Seems this prediction may have been salient, as I’ve started seeing a variety of designs popup both on software and websites which clearly owe a nod and sometimes more, to the Metro interface.

What designs have you seen which look like bastard children of the Metro UI ?



Note the menu design on the Port du Soleil website navigation and the new AVG anti-virus navigation.

What happens when you complain to TFL about London Bus drivers? short, the answer is a belated but appreciated personal reply, but tangibly, precious little.

Many London bus drivers, employed by private companies operating in conjunction with TFL, are at best aloof and at worst down right rude.

Many London bus drivers, employed by private companies operating in conjunction with TFL, are at best aloof and at worst down right rude.

Credit to this article on public transport customer service, for the photo>

My main complaints were:

  • That I had a specific bad experience with a bus driver
  • That this is not unique
  • That many people I know (including other bus drivers I have spoken to) AGREE that rude, uncommunicative, unfriendly bus drivers are endemic in the industry

My complaint, and subsequent reply, are published below in full, for those who care.

My email sent on the 3rd December 2012:

Sent: 03.12.12 12:10:19
Subject: Formal Complaint

Dear Sir / Madam

Bus REF: DLA20S,
Registration: W404VGJ,
Route: 243 from Waterloo, @ 10:47 am on Monday 3rd December 2012

Can someone explain to me why TFL find it acceptable that on repeated occasions your bus drivers are permitted, seemingly encouraged, to treat passengers with such contempt?

The bus reference and time above refers to just one occasion where, after I ran to the bus stop and bus door, the driver closes the doors as I arrive, sees me, looks at me, and despite it being obvious I wish to board chooses instead to drive off.

There was no traffic which caused his need to depart so speedily as Waterloo bus station is not on the highway.

The hall mark of a successful business in this day and age is good customer service. While a minority of bus drivers still seem to embody this (and what I would hope remains a British tradition of politeness and good will) a vast majority do not.

I have too often experienced an arrogance from drivers, or at best ambivalence. Aside from driving off, many:

– Don’t respond when said “good morning” to or “good afternoon”
– Some accents are so thick that if they do reply they either mutter or sometimes one can’t understand their response
– Some don’t speak or respond when asked questions, at all!

I’m paying for a service and they are being paid by the custom I provide. Moreover, they are representing my (and presumably their) country and London, to everyone single passenger that boards a London bus.

I’m fed up with feeling like an unwelcome guest aboard my own bus service.

In summary then I would like a proper response (and action taken) around two points:

1) Regarding my specific experience:-

A) why the driver felt it appropriate to drive off

B) what has been done to ensure he pays more care and attention in future

2) In general why so many TFL bus drivers:-

A) seem to feel empowered not to put the passenger first

B) are rude, unresponsive and uncommunicative (if you don’t want to speak to the general public all day, don’t be a bus driver)

C) ..and what is going to change in TFL’s training and employment policies to ensure the points A/B change to substantially improve the customer service and friendliness of London bus drivers, to have an impact on tens of thousands of peoples lives every day who use London buses.

Perhaps TFL’s senior leadership can view it as a revolutionary new approach to their people, to go along with their revolutionary (and very good) new London busses.

Yours sincerely,

Andrew Scott

NB: To ensure a considered response from you, this letter will be published on line, on my personal blog, to my 3,600 twitter followers, publicly on Facebook, and sent to the Evening Standard newspaper.

The reply I received, 23 days later:

Our Ref:         1011585328/ABB

Date:              27.12.2012

 Dear Mr Scott

 Thank you for your message. I was very sorry to hear that a bus driver on route 243 (registration W404VGJ) did not allow you to board his bus when departing from Waterloo on the morning of 3 December 2012.

 Arriva London, who operate route 243 on behalf of Transport for London (TfL) have asked me to pass on their apologies to you. The driver could have allowed you to board and the incident is being followed up with the aim of minimising the possibility of similar errors on his part in the future.

 I am also sorry to hear of your many experiences when bus drivers in London have not exhibited the expected level of customer service. Transport for London (TfL) certainly does not encourage the sort the sort of behaviour you described and we engage with the private bus operating companies, who employ the bus drivers and manage the day-to-day running of the routes, to ensure that standards are as high as possible.

 All bus drivers in London are formally assessed by a Driving Standards Agency (DSA) Approved Assessor and must pass an additional test for Passenger Carrying Vehicle’s (PCV) as assessed by the DSA (which includes a focus on customer service). In addition, we work very closely with all our bus operators to improve the quality of our services, highlighting the need for attention to proper standards of service and driver conduct. We also strongly emphasise staff training and liaise with all bus companies to ensure we continue to achieve improvements across London. Whenever we receive complaints about poor standards, we follow them up with the bus company concerned. Assuming the complaint is upheld and it is not of a nature that could lead to dismal or suspension, the driver will undertake a variety of follow-up actions aimed at improving their standard of service.

 We would hope that the majority of bus drivers are not rude, unresponsive or uncommunicative and that they do try to the put their passengers first. The evidence we collect from our various monitoring exercises suggest that most of London’s 21,500 bus drivers carry out their jobs in the manner expected of them and customers find many to be helpful and professional in general. It is regrettable that isolated drivers cause this perception to be called into disrepute. Therefore we greatly appreciate you highlighting this incident to us, as it allows the bus operator to take action aimed at continuing to improve the level of service provided to our customers.

Once again, please accept our apologies for the delay and upset caused by the driver’s behaviour on 3 December. Thank you for bringing this matter to our attention. Please don’t hesitate to contact me again should you require any further information or assistance.

Yours sincerely

 David Gwynn

Transport for London – Customer Experience