Navigating the Jungle: A Survival Guide for Student Entrepreneurs

So you’ve got a business idea, you want to get your first company off the ground and you need to balance this with getting the degree you want. It’s a tough position to be in – particularly if you don’t have much business experience. The good news is that there are a wealth of easily accessible people, resources and organisations which can help you out!

I was in exactly this position a few years ago. I had a business idea during my second year at university and started with the student society for entrepreneurship (Oxford Entrepreneurs). I also found great value in the resources below and these helped me develop my company GroupSpaces to where it is today.

Entrepreneurship Societies

I strongly advocate these – the entrepreneurship society at your university is a fantastic resource. The speaker events it holds can inspire you, the other members of the society can be your co-founders and the more experienced entrepreneurs in the society can offer you guidance and direction. If you’re not already a member, you can find out how to join the entrepreneurship society at your university at www.groupspaces.com.

Online Resources and Books

There are a plethora of online resources that will help you with ‘starting a business’ ranging from the embarrassing to the enlightening. Here are my top three that will provide you with genuine value:

1. Paul Graham’s essays at www.paulgraham.com – over 100 thought-provoking essays with a focus on entrepreneurship and technology by one of the global thought leaders on entrepreneurship. If you haven’t come across these before I’d recommend starting with “A Student’s Guide to Startups” and “Why to Not Not Start a Startup”. Paul sold his own startup Viaweb to Yahoo! in 1999 for $49.6M.
2. Stanford University’s Entrepreneurship Corner at ecorner.stanford.edu – over 1,200 educational speaker videos about all aspects of entrepreneurship, featuring the world’s top venture capitalists and the entrepreneurs behind Facebook, Google and dozens of other extremely successful companies.
3. Business Link at www.businesslink.gov.uk – guides to the majority of paperwork-related issues you will face starting a business, ranging from incorporating your company to payroll, taxation and selling your business (hopefully you’ll get that far!).

There are also a huge number of books about starting a business. Here are my top three:

1. Founders at Work by Jessica Livingston – a collection of short, candid interviews with founders of over 30 of the most successful technology companies from the last few decades such as Apple, PayPal and Dell. This brings the notion of starting a great company down to earth – you’ll be surprised by how clueless some of these entrepreneurs were at the beginning!
2. The Art of the Start by Guy Kawasaki – a how-to guide to making ideas happen by the venture capitalist and former Chief Evangelist at Apple.
3. The Four Steps to the Epiphany by Steve Blank – a guide to launching a company using the “Customer Development” methodology, something which I believe will become the de facto approach to starting a business in years to come. Steve founded or worked in 8 startup companies in California’s Silicon Valley.

Support Organisations and Schemes

There are several national and international supporting services, campaigns and initiatives which offer mentoring, advice, guidance and funding to students wishing to start companies. Here are 5 which you might find useful:

NCGE (National Council of Graduate Entrepreneurship) works to reshape and improve the environment for enterprise and entrepreneurship in higher education. It also works directly with students and recent graduates to support those who want to start a business through its FlyingStart initiative which provides training, mentoring and expert advice. You can build an online support team, find out about FlyingStart events and read success stories of entrepreneurs who have benefited from working with NCGE at www.flyingstartonline.com.

Shell LiveWIRE combines an online support service and awards programme for young entrepreneurs in the UK. It is one of the longest running youth enterprise schemes in the UK, promoting enterprise as a real career option since 1982. You can ask questions and receive expert video answers, discuss business issues with other young entrepreneurs and access an online business library at www.shell-livewire.org.

NACUE (National Advisory Consortium of University Entrepreneurs) is new to the scene. It is a national organisation that supports and represents university enterprise societies across the UK. NACUE provides budding entrepreneurs with a national, diverse and dynamic network to support them in their start up process. From providing students with the latest news on training, business support services, enterprise conferences, competitions and funding and incubation opportunities to enabling them to connect locally, regionally and nationally with like-minded young entrepreneurs across the country, over the next few months NACUE will become a central reference point for student entrepreneurs across the UK. For more information on NACUE and to sign up for its weekly e-newsletter, visit www.nacue.com

Seedcamp is Europe’s leading micro-seed fund and each year it provides 20 select, very early-stage software companies with a week of workshops and networking in London with Europe’s top investors, product experts and marketing gurus. At the end of this week, all 20 teams will have developed a network that would otherwise have taken years to build and 5-7 teams receive a small investment of up to €50k. Recent student success stories include Kyko and Zoombu, both of whom received Seedcamp investment in September 2008 and were founded by Oxford University students. To find out more and apply for Seedcamp Week 2009, visit www.seedcamp.com.

Y Combinator is a Silicon Valley-based micro-seed fund (founded in part by Paul Graham and Jessica Livingston – both mentioned above) which runs a bi-annual 3-month scheme for 10-20 teams at a time and offers investments of $5k + $5k per founder. The 3-month period runs from January to March and July to September each year and leads up to an “Investor Day” where each team gets to pitch their idea to a room full of Silicon Valley’s top angel investors and venture capitalists. Y Combinator has made in excess of 100 investments to date, 10 of which have been in British teams. The most notable being Songkick which was founded by Cambridge graduates and has raised in excess of $5M venture capital investment to date; and Auctomatic which was founded by Oxford graduates and sold to publicly-traded Canadian company Live Current for $5M in March last year. To find out more and apply for the next batch, visit www.ycombinator.com.

The last resource I’ll leave you with is myself – if you have any questions, feel free to email me on david [@] davidlanger.co.uk or tweet me on @langer

You can read the print version of this article in Issue #19 of The Gateway newspaper

Entrepreneurship & Execution

David Langer, Co-Founder & CEO of GroupSpaces speaks at Oxford Brookes Business Society, Oct 08.

Produced by Henry Mori, Executive Director, Global Soken Research & Ex-VP, Imperial Entrepreneurs.

The Year That Made Me: Kulveer Taggar

Kulveer Taggar

Following last term’s Tycooons of Tomorrow series, this term I’m going to be interviewing four successful entrepreneurs (arguably, tycoons already!) on the pivotal year in their respective careers. The idea for the series came from a conversation with Paul Carr – we thought “A day in the life of” was going to need to be romanticised too much to get anywhere, but most people who have ‘made it’ can attribute a significant amount to one particular year.

In the first interview of “The Year That Made Me” series, I spoke to Kulveer Taggar where he shared his journey of studying at Oxford, to Investment Banking in London, to dot-com millions in Silicon Valley – all in just over a year!

Which was the year that changed your life?

2006, the year after I finished my PPE degree at Oxford. It was when I left my graduate job at Deutsche Bank to work on my start-up full-time and moved from London to Silicon Valley.

What was your situation at the start of 2006?

I graduated from Oxford in June 2005 and started at Deutsche Bank that August, a couple of months later. My final year at university was tough as I was the President of Oxford Entrepreneurs Society, doing my finals and had started up Boso.com (a marketplace for students) with my cousin Harjeet Taggar.

What were the main challenges you were facing at this time?

The real challenge was to maintain the business and try to take it forward whilst working full-time in the City. Access to outside email was blocked and it was tough to manage everything using only my BlackBerry (as well as doing my job there properly!). We had no income from the website at that point and had to raise some investment as well.

What were the key events that took place over the next 12 months?

I’d come to the end of my six months mandatory period in February, and then decided that if I was serious about becoming an entrepreneur, I should take the plunge before getting too deeply submerged in the world of banking.

Luckily, I had a really supportive boss and he gave me his blessing to leave (and a cheque for £16,000 to get started!).

I flew out to the US to meet Evan Williams (founder, Blogger.com and Twitter.com) and Max Levchin (Paypal) in May to ask for investment advice and general strategy, and returned with Evan becoming an advisor to the company, which at that time was really useful as we didn’t have a great network in London and not as many people were doing start-ups as there are today.

In August that year we ended up raising almost £180,000 in angel investment, and in November we took investment from Y Combinator, an investment firm based in Silicon Valley. That was significant because it helped us relocate to San Francisco, and exposed us to a great network of developers, investors and entrepreneurs.

You left your investment banking job in February, 2006. What finally made you take this decision?

Despite being really determined to make something of the start-up and work on it full-time, it was still very tough to leave the bank. My boss had just sent me to New York for the month in January to learn about the oil business (I worked in Commodities) and I was starting to like earning a healthy income. I remember drafting my resignation letter and failing at my first two or three attempts to bring it up with him.

One thing that gave me a push was the Silicon Valley Comes to Oxford conference I attended the previous November. I ended up going for drinks with the panelists after the event (some who I knew from the same event a year before) and they commented on my appearance and general lack of enthusiasm for my new job as a banker. Mike Malone, a journalist from Silicon Valley, in particular was pretty forthcoming that I should do the right thing and follow my dreams. His words stayed with me.

Soon after getting funded by YCombinator, you decided to divert your attention to a new idea – Auctomatic. Was this a difficult decision?

It was a difficult decision because it meant acknowledging that the first idea was wrong. We’d been working on Boso.com, a marketplace for students, for almost two years at this point, and had raised money for the idea as well. Being an entrepreneur is tough as you have to really believe in what you’re doing, almost to the point where it’s blind faith, but at the same time be critical about what you’re doing and keep an open mind about any changes you have to make.

What we realised was there was demand out there for a simpler way to sell things online than eBay, which is why people used boso.com in the first place. So we decided to tackle this problem in eBay itself. Auctomatic was a website that simplified the process of selling things on eBay.

What happened next?

We went through some significant changes. First we met 19-year old student Patrick Collison through Y Combinator and he became our third co-founder & CTO and dropped out of his degree at MIT. We then raised some investment from Paul Buchheit, the creator of Gmail, and Chris Sacca, Google’s former Head of Special Initiatives, and ended up launching the site in late 2007.

Very soon after launching, you received acquisition offers from some big West Coast companies. How did these come so quickly?

There was a lot of good fortune involved. The Live Current CEO had been reading my BBC Viewpoint pieces and met up with Patrick by chance in Vancouver and floated the idea of us joining them. Live Current was growing quickly and they saw value in the software we had developed for their e-commerce properties.

There were other companies that were very interested in working with us, and once word got out that an offer had been made for us they also jumped in.

You decided to take Live Current’s offer of $5M. What made you choose that over the other companies?

Live Current was most start-up like out of the offers we’d received. It was definitely a very tough decision to make, but in the end we trusted our gut instincts that this was the correct next step for us.

To trust your inner instinct was advice given to me by Evan Williams. Ultimately if you have a lot of good options you can go crazy trying to analyse them and so sometimes it can be better to just do what feels right.

Prior to the acquisition, I understand that you were running out of the angel investment you had received. How did you deal with this?

Even though we were incredibly cost-conscious, our expenses had increased once we had expanded to five full-time people. We needed to raise some more money but at the same time that wouldn’t have made sense if we were going to sell the company. So we were in tricky situation. There was one period where we had only $50 in the bank. We’d buy really cheap food to cook at home, and cut costs wherever we could. The extreme of this was 5 of us all living together in a two-bed apartment to save on rent!

This period must have been a real emotional rollercoaster ride. What difference did having your co-founder (and cousin) Harjeet go through it with you make?

The entire startup process is an emotional rollercoaster. Having Harjeet made a huge difference. We would typically experience our highs and lows at opposite times and balance each other out. It must be really tough to do it on your own.

Which entrepreneurs do you still find inspiring?

Several, but most of all Max Levchin for his energy and continued ambition to create another billion dollar company with Slide after selling PayPal.

Last question, what’s next?

I’m now a Director at Live Current and have ended up focused on Cricket.com, where we are building a fantasy cricket game. We also bought the digital rights to the Indian Premier League in a $50M deal over 10 years, so it’s a very exciting opportunity. I live in Vancouver now, which is where our office is but may relocate to Mumbai depending on how things go.

You can read the print version of this article in issue #15 of The Gateway newspaper

The European Ecosystem is Entering Puberty

I just read Mike Butcher’s post entitled What is the future for tech VCs in Europe? and thought I’d share a few of my predictions of what I believe is likely to happen in Europe over the next few years; hopefully the predictions will serve to explain my rather crude choice of blog post title.

1. European entrepreneurs will become more sophisticated.

• The annual Silicon Valley Comes to Oxford conference which has been running since 2000 started being copied in Cambridge and London last year — and more people’s lives will change as a result. Having met several of the most successful entrepreneurs and investors from the Valley at the events in 2006 and 2007, I have some insight into the power it is having. A couple of friends of mine whose lifes have changed as a result are:

  Bob Goodson
  Bob met Max Levchin for the first time in 2004 and was headhunted to move to Silicon Valley 3 months later in order to become employee #1 at Yelp. Having helped take Yelp through to taking on $16M venture capital funding and over 4M monthly uniques, Bob recently left to found YouNoodle with Kirill Makharinsky, who was also headhunted by Levchin as an Oxford student. 

  Kulveer Taggar
  Kulveer met Evan Williams for the first time in 2005 and was soon persuaded to quit his job at Deutsche Bank and go full-time on BOSO in March 2006. After getting selected for Y Combinator in 2007, transferring what he’d learnt to Auctomatic and teaming up with Irish hacker Patrick Collison, subsequently raising investment from Chris Sacca and Paul Buchheit, his company was acquired by Live Current Media for $5M last month.

  Kulveer and Bob have now become role models for the younger generation of entrepreneurs – up and coming entrepreneurs such as Aly Chesney (Babuki), AJ Asver (Project Bluespark) and also Andy and I (GroupSpaces) have easily accessible people we can go to for advice and introductions. The foundations for a rich ecosystem are being laid.

• European founders will start reading and applying Venture Hacks. This is a blog/resource come recommendation service founded in March 2007 by serial entrepreneurs Babak Nivi and Naval Ravikant. I recently asked Babak what his motivation for starting Venture Hacks and he said:
  

  “First-time entrepreneurs usually negotiate sub-optimal deals that leave millions of dollars on the table. Or worse, they negotiate awful deals and screw themselves. Startups have one chance to raise money right. You can fix almost any mistake in a startup—but you can’t fix your deal. If you hire the wrong employee, you can fire him—but you can’t fire your investors.We try to level the playing field with knowledge, so entrepreneurs can do this critical job right. In the words of Francis Bacon, “Knowledge is Power.””

I went on to ask Babak what the most common mistake young entrepreneurs make with VCs was. His response was: 

“Entrepreneurs focus on valuation when they should be focusing on controlling the company through board control and limited protective provisions. Valuation is temporary, control is forever. For example, the valuation of your company is irrelevant if the board terminates you and you lose your unvested stock. The easiest way to maintain control of a startup is to create good alternatives while you’re raising money. If you’re not willing to walk away from a deal, you won’t get a good deal. Great alternatives make it easy to walk away.Create alternatives by focusing on fund-raising: pitch and negotiate with all of your prospective investors at once. This may seem obvious but entrepreneurs often meet investors one-after-another, instead of all-at-once.

Focusing on fund-raising creates the scarcity and social proof that close deals. Focus also yields a quick yes or no from investors so entrepreneurs can avoid perpetually raising capital.”

• European entrepreneurs will make stronger connections with and learn from their Valley counterparts. The knowledge and network of the ‘Y Combinator Mafia’ (as Sumon Sadhu has called them) will start propagating throughout the UK and beyond. Out of the 80 startups funded to date, 8 have been from the UK, which include friends of mine at Snaptalent, Auctomatic, Songkick and Clickpass.
• GroupSpaces was recently selected for WebMission which means we’re flying out to San Franisco next Friday. We’ve got an action-packed schedule lined up including the Web 2.0 Expo, presentations to VCs and the Press, and Startup School, for which Andy and I have also been selected. We’ll come back with increased social and intellectual capital, as will the other 19 WebMission companies, and this can only benefit the UK and Europe.

As more European startups immerse themselves in Silicon Valley, our networks and collective knowledge will grow and grow; like lots of neurons firing around a big brain meeting each other at an increasing number of synapses. Via a combination trial and error, face-to-face contact and reading the right blogs, Europeans entrepreneurs will evolve.

2. European Investors’ balls will drop. They’ll become more like Valley Investors.

• In my (limited) experience, speaking to, but mostly hearing/reading about European VCs, they only seem to want to invest in proven concepts. Whether that means a product that already has traction, or an entrepreneur that’s already done it once before, they are pussies when it comes to taking risk. On the West Coast entrepreneurs get funded at concept stage on a regular basis. Loopt raised over $5M from NEA and Sequoia very early on, Xobni raised $4.2M from a dream team of investors pre-launch, and there are countless other less high profile investments at a similar level.
• Why are they pussies? My belief is that it’s down to a lack of confidence and/or experience. Just like a good cook, many Silicon Valley VCs know what combinations of ingredients will make a nice dish; sure, they might need to taste the dish as they cook it, adjusting things along the way, but they’re confident that in the end, it will turn out right. European VCs, on the other hand, just haven’t built up enough experience, or don’t trust their own judgment enough. Index and TAG seem to be the most confident investing at an earlier stage, driven in part by Seedcamp co-founder Saul Klein, which ironically brings me onto my next point.
• Seedcamp will become more like Y Combinator.
  It seems that Y Combinator picks founders and focus on product. However, it seems that Seedcamp picks business ideas and focused on business –- the first time. Having listened to an inspirational 1 hour masterclass by Paul Graham and Jessica Livingston at Silicon Valley Comes to Oxford in November 2007, and also read Founders at Work, I see 2 changes necessary for Seedcamp if they want a ‘Seedcamp Mafia’ to form:

1. Interview the teams face-to-face and focus more on whether the founders are ridiculously hungry, smart, determined nutcases who can and will do everything it takes to succeed.
2. Beat teams up more on their product/idea. 3 of the 4 partners of Y Combinator are product guys. Many of the people attending the weekly dinners are also product guys. Seedcamp’s team and program seem to have too much focus on investment and marketing, and too few good hackers/product guys ensuring teams make things people want.

3. English people will stop being so ‘English’.

By this I mean people will be more open.

If you meet someone who could really do with meeting this other guy you know, well hell, you’ll make an introduction even though you weren’t asked.

If you’re wrestling with a good idea, you won’t get out an NDA with everyone you meet, you’ll trust in the wisdom and good nature of people and share your idea -– for every 1 person that will try to copy you, there are probably another 9999 that will want to help. One of my best buddies AJ Asver has been sharing his journey since day 1 of his new venture, codenamed Project Bluespark, I’m sure he would vouch for the good it’s doing him.

And anyway, you can’t really give away most ideas in a sentence, because they’re dependent on all the experiences and related ideas the founders have –- and no-one can steal that stuff.

The other big drivers I see for openness revolve around groups and events:

• OpenCoffee has been started, again by Saul Klein, to embody these principles of sharing and networking, and if it continues to attract the right people, people will keep evolving.
• Zenopy, a members-only network of young entrepreneurs founded by Sumon Sadhu meets about once per month in London. It too is encouraging a more candid, sharing culture. The current list of members are all on the road to achieving big things, and they acknowledge what a fantastic resource they are for each other. Next month, I’ll be attending my first Zenopy Meeting, and it’s an exciting prospect.
• Oxford Entrepreneurs (OE), Imperial Entrepreneurs (IE) and increasingly more university entrepreneurship societies are providing a platform for experience to be passed down to the younger generations. OE’s now up to 6 funded startups since its inception in 2003; and already this year, I’ve travelled down from Oxford to see Paul Graham, Brent Hoberman, Sutha Kamal, Kieran O’Neill and Steph Bouchet speak at IE in London.

I’m going to finish this post by naming and thanking a few people who I see to be the real catalysts for the paradigm shift which is taking place:

Some European investors who ‘get it’
Danny Rimer, Saul Klein, Niklas Zennstrom, Mattias Ljungman, Paul Fisher, Martin Varvasky, Alex Hoye.

Some young European entrepreneurs who ‘get it’
Jamie Murray Wells, Michael Smith, Sumon Sadhu, Kieran O’Neill, Loic Le Meur (OK, Seesmic is now Loic’s 5th startup, but he definitely gets it and he’s making waves with Le Web 3 amongst other things).

I’m sure there are many others who passionately believe, as I do, that Silicon Valley is more of a state of mind than a place, and you too are the agents of change — the next 5 years are going to be defining for Europe.

[The Gateway IV — extended version] Decision Time

On many, many occasions during a degree, you contemplate what will come next. Some people are completely set on moving on to get a PhD in Theoretical Physics, while others have decided that McKinsey is by far and away the best place they could start their career in business.

However, most people aren’t fortunate enough to have this level of certainty. For an intelligent, talented student like you, furnished with a diverse range of skills and experiences, about to receive a good degree, how on earth do you choose from the thousands of career options available?

First up, let’s simplify the problem. Let’s assume you are ambitious and you want to enter the business world in some capacity. Also, let’s assume you don’t want to work in a medium-sized, mediocre, low-growth company. You want a little bit more. You want to make money or you want to make meaning or both.

We can now divide the available options into 4 categories:

1. Join a Large Corporate (Investment Bank, Consultancy, Law Firm, Professional Services etc.)

2. Go into Investment Management (Private Equity, Venture Capital, Hedge Funds, Pension Funds etc.)

3. Start your own Company (or continue with your existing company if you recently started one)

4. Join a Start-up Company

The first thing to say is that there is no right answer. Each person has slightly different needs, priorities and values. To help understand what might be the best option for you, let’s weigh up the pros and cons:

1. Join a Large Corporate
This is the easiest option to take.

Pros: You get a good name on your CV, good training, your friends and family will be immediately proud of your new job, you get a good work-life balance (except in IBD!), you have relatively good job security and you receive a high starting salary.

Cons: It’s unlikely you’ll get public credit for your work, your personal development is likely to be quite niche and narrow (management consultancy is broadest), long-term financial upside is often low (relative to starting and selling your own successful company), your role often has little or no impact on the wider world, you’ll have to deal with internal politics, established organisational structure, and your department is always likely to get bent out of shape a little.

2. Go into Investment Management
This one is tough to do straight out of university. Elite Investment Managers may only recruit 2-3 new analysts each year and they often prefer applicants with 2+ years relevant experience.

Pros: High kudos – there’s no doubt these places are hot, you get a very good work-life balance (normally < 60hrs/week work), direct exposure to top people (both within the company and meeting clients), a relatively high starting salary, reasonable job security and high long-term financial upside (if you reach fund manager).

Cons: Training is on-the-job (albeit with some useful professional qualifications), your impact on investee companies can be significant although your pre-occupation with leverage and a target IRR (internal rate of return or “yield”) can conflict uncomfortably with their non-financial objectives, and personal development is again relatively niche and narrow.

3. Start your own Company
The scariest option – not for the faint-hearted.

Pros: Incredibly steep personal development – you have to learn and adopt new roles very fast, you can personally have direct impact on the world, it’s definitely best for getting public credit, it’s your idea so you’ll be super-passionate about coming into work every day, you have no boss, there’s no politics as everyone is equal to start with, you only have to work with people you like and there is huge financial upside if you nail it – you could become rich and famous.

Cons: no brand name for the CV, no training or guidance – you have to work out everything yourself from first principles, terrible work-life balance – the start-up will be your life, you risk public humiliation if it fails and you have no initial salary.

4. Join a Start-up Company
In contrast to jumping into starting a company yourself, this can act as an intermediary bridge.

Pros: Good for personal development – you’re likely to get stuck into lots of different areas, little politics (if it’s still a small team), salary is stable (especially if the company is VC funded), long-term financial upside is potentially high if you joined early enough to receive a significant (1%+) equity share.

Cons: Unlikely to be a brand name for your CV, no formal training, work-life balance isn’t great – there’s a lot of work still to do, less public credit than if you were a founder and long-term financial upside is still much lower than the founders.

Many of these pros sound great. How do I choose?

Do internships. Internships not only provide you with an education and insight into a prospective industry, but during one, you also get paid well and have a lot of fun (particularly in London).

Internships also help you work out what you don’t like. This helps you home in on what you actually do want to do.

For example, I interned in Investment Management with Lehman Brothers in the summer of my first year, did the Discover course with McKinsey in the easter of my second year, and then interned in Exotic Derivatives Trading with JPMorgan in the summer of my second year.

I had a lot of fun with each company and ended up realising that what I really wanted to do with my career choice was optimise for maximum impact, responsibility and personal development. This led me to entrepreneurship, and continuing establishing my business, GroupSpaces, as the obvious path to choose.

Kulveer Taggar, ex-President of Oxford Entrepreneurs society and Co-founder of Boso.com and Auctomatic.com took a slightly different path having spent 6 months at an Investment Bank after graduating:

“I actually did both, the graduate job before leaving to do entrepreneurship. In my case, I quickly realised I’d have more immediate control over my future by doing my own thing rather than working in an Investment Bank. I valued working with dynamic people and in situations where I was out of my comfort zone. Also, I very practically believed that entrepreneurship would get me to financial independence quicker than a graduate job.”

Now you could probably work out most of the pros and cons mentioned above for yourself – they’re freely available from many books, websites or people who’ve formerly walked down those paths. In fact, most people will have all of this information at their disposal by the time they make their initial career choice.

Why, therefore, is everyone not happy with their job? Why do some people regret their chosen career paths?

It’s because they didn’t think things through enough, they didn’t play the tape forward, they bought into some of the popular misconceptions people have today:

“But I thought…

• …starting a company is too risky.”
  Is it? How much risk are you actually taking? When you graduate from fresh out of university, you’re young and broke. So you try starting a company for a couple of years and it doesn’t work out. You’re still young and broke. What are you actually risking? It’s only the opportunity cost of not getting a job.And anyway, having interviewed with many employers and worked as a professional Careers Coach myself, I know that experience of starting and running a business is valued highly by employers. The amount a candidate will have learned is now well understood – irrespective of success or failure.

  Not only this, but if your start-up fails, you’ll have learned many lessons from the mistakes you made first time round and you’re more likely to succeed if you try to start another company.

  Lastly, it’s important to understand the relationship between risk and opportunity. Mark Andreesen (Founder, Netscape, Opsware and Ning) puts it well in his “Guide to Career Planning”:

  “Without taking risk, you can’t exploit any opportunities. You can live a quiet and reasonably happy life, but you are unlikely to create something new, and you are unlikely to make your mark on the world.”

• …I need to get some experience before starting a company.”Charlie Osmond, Co-Founder & MD, FreshMinds very nearly bought into this misconception:
  

  “During my final year at University, I happened to notice Richard Branson having dinner in a restaurant. I had just been offered a consultancy job and was trying to decide between starting my own business and becoming a consult. Who better to ask for advice than Sir Richard.

  I ventured up to his table and he asked me to sit down. Having explained my dilemma he said “you should definitely take the consulting role. It’s a great way to learn”. I was rather surprised that he advocated the corporate route considering that he’d gone straight into entrepreneurship himself. In the end I chose to ignore his advice and start my own business on graduation rather than go into consulting.

  It’s turned out to be a great decision and one that I have never regretted. However, eight years on, with a better perspective on my choice, when I am asked what I’d recommend, I often repeat the advice I was given despite having gone against it myself.”

  It’s important to bear in mind your risk appetite as you get older – taking the leap of faith doesn’t get any easier. A certain level of ignorance, naivity and blind optimism can actually be a good thing for start-up founders. It can keep you going in the face of the inevitable doubt you will face from people.

  Along with FreshMinds – Google, Microsoft, Facebook and Yahoo! countless other successful companies were set up by first time entrepreneurs with no serious work experience.

• …a big company will pay me more money.”
  Yes – it will in the short term. You get a nice, large salary. However, you don’t get equity beyond a few token employee stock options. You don’t get access to a potentially massive financial upside in the future.

  How much money do you need straight out of university? Many people care much more about the money they’ll have to support their family and live when they have the time to enjoy the money. If this is the case, then surely long-term financial upside should be what you are looking for?

  What is more, money is just one currency. What about learning skills and developing a network? Do they have value? Did you think about them? What would you learn in that job you are considering? Who will you build relationships with? Even if you do ultimately want money, is it therefore better to choose the option which will give you more money now, or the option which furnishes you with the tools required to make a lot more money? For example, starting up a company will require you to learn financial, legal, sales, marketing, strategic, management and many other skills. Surely learning all these has serious value?

  In his “Guide to Career Planning”, Andreesen went on to say:

  “After graduating is when you should optimize for the rate at which you can develop skills and acquire experiences that will serve you well later. You should specifically take income risk in order to do that. Always take the job that will best develop your skills and give you valuable experiences, regardless of its salary.”

I’ll leave this debate with a closing quote from Charlie:

“Overall, there is no right route, whatever decision you make, the key is to learn from it and reassess your options. Don’t get stuck in a job and find you never take the risk of starting up. Equally, if you start something that’s going nowhere, make sure you fail fast and move on.”

You can view the original version of this article on page 8 of the most recent edition of The Gateway.

Finalists Announced in Oxford’s Idea Idol Competition

In preparation for the upcoming Idea Idol final, I was (apprehensively) drafted in to star in one of those viral videos. Now the ‘virality’ of a piece of content or application on the Web is measured by its viral coefficient. That is how many users (or viewers) get added virally for each additional user. If this number is above 1, then you’re likely to see exponential growth. I wonder what the viral coefficient of the Idea Idol 2008 Promo will be:

Idea Idol 2008 Promo starring David Langer, Jitin Dhanani, Alasdair Bell and Jenny Tsim. Produced and directed by Joe Kennard and Nigel Steer from Purple Media.

Here is the official press release announcing the finals:

The young entrepreneurs behind the six shortlisted ideas will have just two minutes to deliver an ‘elevator pitch’ and impress a formidable panel of judges, including Deborah Meaden from BBC’s Dragon’s Den, at the final of the Idea Idol competition to be held on Tuesday 19th February at Said Business School, University of Oxford. The shortlisted ideas:

Altitude Medical – a path-breaking invention to counter the spread of hospital acquired infections such as the MRSA superbug

Heat is Energy – an Einstein-patented process to use heat that is currently treated as waste in data centres thereby saving money, carbon and energy

Zoombu – the ultimate way to plan a trip between any two destinations, incorporating all available options of cost and speed

CivSpark – on open source philanthropy platform enabling everyone to fundraise for the causes that appeal to them most

NowIknow – a one-stop source of career information to help individuals find a path through the bewildering array of options

Open Source University – a website providing university level education free of charge and without the accompanying bureaucracy for those who just want to learn

Now in its 4th year, and open to all Oxford students, Idea Idol is a competition to identify the brightest entrepreneurial ideas and uncover the successful entrepreneurs of the future. So whether it was a Eureka! moment, scribbles on the back of an envelope or the result of long, hard planning, the competition may put budding entrepreneurs on the road to realising their dreams.

The final judges include:
– Deborah Meaden of Dragon’s Den fame
– Reshma Sohoni, CEO Seedcamp;
– Katherine Mathieson – Head of Future Innovators at NESTA
– Sebastian Grigg – MD of Investment banking at Credit Suisse

The total prize money is £10,000 with three prizes to be awarded at the judges’ discretion.

This year, the audience – made up of around 300 fellow students, local entrepreneurs, venture capitalists and business angels, as well as representatives of the sponsoring organizations – will have the opportunity to participate in the action. £1000 in cash will be given away to those willing to stand up and give a one minute pitch. The four lucky enough to be selected by the audience will pitch side by side for the judges’ interest and face a group inquisition. With no judging criteria, he who dares wins in the ‘melee pitch’.

Last year £5,000 was given away in a dramatic final featuring Theo Paphitis, Shaa Wasmund and Dan Wagner. 2007 finalists Design the Time sidestepped the prize fund and received direct funding from Dan Wagner and Shaa Wasmund’s own venture capital boutique ‘Bright Station Ventures‘.

Idea Idol is the flagship event of Oxford Entrepreneurs, Oxford University’s student society for entrepreneurs which now has over 3000 student members within the University.

[The Gateway II — extended version] Team Talk

Last week we discussed idea generation and evolution. Here we’re assuming that you’ve got an idea, developed it into a planned product or service and you are now working out who else you need to work with to help turn your dream into reality.

First of all, you probably need co-founders. A quick analysis of all the recent success stories points to 2 or 3 being the optimal number. For example, Bill Gates had Paul Allen at Microsoft [current team of CEO Steve Ballmer and Chairman Bill Gates above left] , Larry Page has Sergey Brin at Google and Mark Zuckerberg initially had Andrew McCollum and Dustin Moskovitz at Facebook.

Setting up a business on your own occasionally works e.g. Jeff Bezos with Amazon, but the process of bouncing ideas around just isn’t possible in the same way. Finally, if the core team start off as 4 or more, people often end up dropping out due to having differing expectations or effectively becoming a ‘spare part’ due to there being an overlap of skills within the team.

A good way to improve your understanding of these sort of relationships is by reading Founders at Work (by Jessica Livingston, Partner, Y Combinator) – a collection of 32 candid interviews about the early days with founders from the likes of Apple, Hotmail, Yahoo!, PayPal and Firefox.

Having read the book myself, it seems that a common pattern emerges – complimentary skill sets. Guy Kawasaki (Author, The Art of the Start) explained the dynamic well at the annual TiE conference in 2006:

“If you’re a great engineer, you need to find a great marketer. If you’ve got a great engineer and a great marketer, then maybe you need to find someone who’s good at operations. If you’re a youthful young visionary, then you need to find adult supervision.”

OK. The last sentence is slightly tongue in cheek, but the point is clear enough and you can draw upon analogies from any number of sporting teams. However, it’s not necessarily essential to cover every single base of skills in the initial team. You’ll learn and develop skills on the job. For example, with GroupSpaces I started off having done a couple of banking internships and an alumni fundraising campaign which furnished me with reasonable finance and sales skills; and my co-founder Andy Young started off with several years of Web development under his belt. After working together for a couple of years, Andy’s developed into a top graphic designer and my understanding of management, marketing and corporate law has developed tremendously. That’s now resulted in us having pretty much all the bases covered

The other thing to bear in mind is quality. You need to “Keep the A-team the A-team”. In the speech mentioned above, Kawasaki also touched on the rationale behind this saying:

“A-team players hire A-team players, B-team players hire C-team players, C-team players hire D-team players and if that happens, before you know it, you’ve got Zee-team players.”

And finally, remember – lots of people have exciting ideas, but they’re worthless without good execution– it doesn’t matter how fantastic your idea is if you don’t have a sufficiently talented team to make it happen.

I’ve got a team, who else do I need?

Find the right mentors. For any first time entrepreneur, this is absolutely crucial. Unfortunately entrepreneurship isn’t something you can learn by studying, you learn by doing. I remember a Harvard MBA saying something particularly memorable to me while we were having dinner at Smollensky’s in Oxford last August:

“Business is a trade; you learn with an apprenticeship and you improve by practicing.”

Where this school of thought derives from is mistakes. You learn about how to start a business by trying stuff out and making mistakes. Gradually you realise what works and what doesn’t and this is called “experience”. This is where the mentor comes in particularly useful. Any good mentor will have lots of experience and can hopefully share the lessons from many of the mistakes which they themselves have made in the past so that you don’t have to make them yourself.

The PayPal Mafia are a prime example of the benefit which good mentors have. PayPal’s original CEO Peter Thiel invested $500,000 in Facebook when Zuckerberg went to meet him in June 2004, 5 months after they launched the website. Having already taken PayPal from zero to a $1.5bn sale to eBay in 2002, Thiel clearly knew his way around Internet business. Now that Facebook has over 50 million users and has been valued at 10 times this figure ($15bn) with 23-year old Zuckerberg and Thiel still composing 2 members of the 3-man board, most would credit Thiel’s guidance significantly.

Further evidence of the value of mentors and experience is provided when one realises that of the original PayPal team, Reid Hoffman (former Executive VP, Business Development) founded LinkedIn, Chad Hurley and Steve Chen (former developers) founded YouTube, Max Levchin (former CTO) set up Yelp and then Slide, and David Sacks (former COO) has recently started Geni. With a combined valuation in excess of $5bn, it’s not hard to see the value in sharing lessons learnt in setting up particular types of business.

At a more mundane level, it can make a big difference having someone with experience to call on when you want to incorporate a company, draft a shareholders’ agreement or even just write important letters.

My idea needs money to make it happen. Where do I go?

1. You’ve probably heard of Venture Capital. VCs (Venture Capitalists) give entrepreneurs cash in exchange for shares in their company. Generally, Venture Capital investments are £500,000+ and firms often don’t want to invest less than £1M in companies for their portfolio. In the UK, VCs tend to only invest in proven concepts; now this could be the entrepreneur running the company (i.e. he/she’s been successful before) or it could be that the company already has a well-developed product and lots of customers. It takes time to get to this sort of stage and a VC would almost certainly want the entrepreneurs they invest in to work full-time on their company. Therefore, this one’s unlikely to work for you.
2. Angel Investors are affluent individuals who provide capital for start-ups and they typically invest their own funds. This is in contrast to VCs, who invest the pooled money of others via a professionally managed fund. Investments of £50,000-£500,000 are typical angel territory, and like VCs, they probably want shares in your business. Connecting early-stage companies and angel investors can be difficult outside of personal networks, so angels often get together in “angel networks”. Formed out of a group of angels, these function like a real-time version of Dragon’s Den. Once every couple of months, a few lucky entrepreneurs get to pitch their idea to the network at a presentation and they are subsequently asked questions. Hopefully they end up receiving offers of investment too. Popular angel networks in the UK include London Business Angels (LBA), Oxford Investment Opportunity Network and Oxford Early Investments (OION & OEI) and the Great Eastern Investment Forum (GEIF).
3. Micro seed funding (as oppose to “seed funding” which is synonymous with “angel-level funding”) has been pioneered by Y Combinator (YC) in recent years. It is a biannual scheme with an intensely competitive application process: first, hundreds of entrepreneurs around the world submit answers to 25-30 questions; next, a chosen few teams are interviewed; finally, around 10 receive funding each cycle. For the chosen ones it was well worth running the gauntlet – not only do they receive somewhere between £5,000 – £15,000, but the teams also spend 3 months living in a start-up hub, get the opportunity to meet many successful entrepreneurs and at the end pitch their ideas and products at an Investor Day. In addition to YC which runs in Boston each summer and Silicon Valley each winter, Techstars (Colarado) and Seedcamp (London) have also launched micro seed funds.
4. If all the above options sound like too much hard work or you don’t feel confident of going through the gruelling process necessary to get financed through one of them, you can always resort to the Three “Fs”:

   >> Friends
   >> Family
   >> Fools

   Typically, people in these groups might give you up to £50,000. The great benefit here is that you’re unlikely to have to do lots of legal work agreeing everything and you can work under a more relaxed arrangement

In terms of student entrepreneurs receiving funding, Oxford Entrepreneurs society (OE) seems to be leading the way in the UK. Having spawned 5 companies who have received at least 6 figures of funding since its inception in 2003, they are developing a reputation for deal flow. As Thomas F. A. Whitfield (Founder, Miomi.com) said:

“Entrepreneurs build companies; OE builds entrepreneurs.”

And with highly motivated alumni such as Sumon Sadhu (currently on Y Combinator in Silicon Valley) graduating and setting up Imperial Entrepreneurs in 2006, the future looks bright. Today – LSE, KCL, Warwick, Bristol, Bath and a growing number of other universities also have societies using similar models. So if you’re looking to raise some money to help make your idea happen, the entrepreneurship society at your university should be one of your first ports of call.

Now you’ve got an idea, you’ve worked out what product or service you’re going to provide, you’ve formed an initial team, got your mentor(s) in place and hopefully raised a little bit of start-up capital. Surely this is great news? But wait. Don’t you still have a degree to do?

Coming up next week: How do I balance my degree with my business?

You can view the original version of this article on page 8 of this week’s edition of The Gateway.

A Week of Conferences (Part 2)

The Garage

At 9am on a chilly Monday morning, I strolled down to the Said Business School with my housemate Alasdair Bell, the current President of OE (Oxford Entrepreneurs). Over the weekend, Alasdair and I had been discussing the topic for the morning Garage session – dedicated to OE. The “Garage” at Silicon Valley Comes to Oxford is a workshop where dozens of people get divided up into small groups; the groups are then guided through a multi-stage creative process and subsequently come up with ideas related to the topic in question.

I suggested:

“How can start-ups compete with Goldman Sachs to hire Oxbridge graduates?”

– a question to which many young British founders would like to have an answer. Given that the majority of the participants in the session would be current students, they settled on:

“How can we make it more appealing for graduates to go and work on a start-up rather than a large corporate?”

After some organised brainstorming which involved hundreds of Post-it notes, the groups settled on their favourite ideas. These ranged right through from a start-up in a day competition for students to a new religion with a start-up church! Sure, start-ups are definitely more than just a job – they’re a way of life, so should we create a religion for them? “Give us this day, our daily users, and…”

In my group, the idea of a Careers Fair for start-ups received the most votes. Sumon Sadhu and Rob Jones (Creative Director, Oxford Entrepreneurs) spent some time developing the idea further. It’s clear that there are deep pain points that need addressing on both sides:

• Start-ups struggle to hire top graduates. They can’t afford to hire the Randolph Hotel out for a night in Oxford. They don’t have the luxury of sitting alongside Investment Banking, Management Consulting and Law with their own fairs attracting thousands of students. Outside of their immediate personal networks, it’s very difficult for start-ups to access the talent. Even when they do advertise positions, the people who apply are often not the people they really want.
• Students generally don’t hear about the opportunities available in top start-ups. The thought of looking at what’s available on the market, creating a shortlist and sending out 10 applications (a la corporate job hunting) to the top 10 most appealing companies just doesn’t occur. And even if they wanted to find these start-ups, where would they start their search?

Personal contact is a crucial component in the recruitment process. Why should students only have the choice of careers fairs filled with City recruiters? Why not have a fair for start-ups too?

Having discussed the idea with Rajeeb Dey, a co-founder of Enternships^TM, it could well become a reality in 2008. If you want to get involved, e-mail me with your ideas.

A Week of Conferences (Part 1)

Last week, I had the pleasure of attending Silicon Valley Comes to Oxford on Monday, Essential Mediatech at the BFI IMAX Theatre, London on Tuesday and the Oxford Private Equity Conference on Friday. The week contained too much free coffee and not enough sleep, but I’ve listened to and met some pretty inspirational people. In the next couple of posts, I’ll share my experiences and thoughts from the more tech- & entrepreneurship-oriented conferences of Monday and Tuesday.

So on Monday I attended Silicon Valley Comes to Oxford for the second year running. Last year’s conference was held on 20^th November 2006 – just after we launched the first version of ClickUni. I found the event particularly enlightening. The masterclass from Matt Cohler, VP Strategy & Operations, Facebook stands out. He gave a talk entitled “What is Silicon Valley?” which was my first proper insight into the place and culture that has spawned so many of the successful technology companies in recent years.

It was also the first time I met Bob Goodson (former President, Oxford Entrepreneurs) Chris Sacca (Head of Special Initiatives, Google) and Reid Hoffman, the world’s most successful investor in consumer Internet. Reid’s LinkedIn profile alone names some 44 companies in which he’s angel invested including Facebook, Digg, Friendster, Ning, Flickr, Last FM and Six Apart. He claims to have help finance over 60 companies in total.

This year, the 7^th year of the event had an exceptional list of speakers as always – Reid Hoffman, Chris Sacca, Bob Goodson, Kirill Makharinsky and also Auctomatic boys Kulveer and Harjeet Taggar were back again. New appearances were made by Biz Stone (Co-Founder, Twitter), Kim Polese (CEO, SpikeSource) and Bill Byun (MD, Samsung Ventures) but the highlight for me was Paul Graham and Jessica Livingston from Y Combinator. Having keenly watched their scheme develop over the last couple of years, and written about it in a recent post, it was great to see the people behind it face-to-face.

More on what happened when I met them coming soon…