What were your biggest learnings from your time at Blinkx and the 12 years spent in Silicon Valley?
Blinkx was an incredible journey – but not without its challenges. Building a company is all-consuming and after more than a decade as CEO, I was done. I do wonder about whether I would have felt differently had I planned my life for a thirty-year journey. You can’t start out at 100 miles an hour and expect to sustain that pace for decades.
As a founder, you have to look after yourself in order to perform at your best. That’s one of the biggest lessons from my own experience – and one that has shaped my approach now as an investor. The prevalent ‘just work more’ ethos in the tech sector is too simplistic. I firmly believe there is a better, smarter way of working – as the elite sports industry and many others have already figured out. It’s not about slacking off, shirking responsibility or vague ideas of well-being. It’s about being smarter and investing in yourself, both mentally and physically, so that you can build more, faster and better.
I know first-hand how tough the journey can be, so I’m proud that we at Balderton provide a more meaningful, holistic kind of support. Our wellbeing and performance platform, launched this year, aims to tackle this very issue.
How do you build consensus with your portfolio boards before decisions are made and how important is constant communication with the management team?
Successful boards are built on a foundation of mutual respect. It can be tricky to get board dynamics right, so empathy and collaboration need to be at the core of your approach. You have to be unafraid of healthy debate, open to having difficult conversations and able to help the leadership team handle tough situations.
As a board member, your responsibility is to support and guide the leadership team and business to make effective, responsible decisions. Listening is the first, most crucial, step to getting that right.
All this to say, quality of communication trumps quantity. Great boards go beyond business as usual and focus on empathic, holistic support for leadership teams. My colleague Laura wrote a fantastic guide that dives into this in more detail.
In the current market, what are you advising your portfolio companies with regard to slowing down, pulling back from hiring too fast and stressing cash flow limits?
Every company faces a unique set of challenges, and there is no one-size-fits-all approach. And plenty of companies are continuing to thrive and reach new milestones, which is fantastic to see.
If you do need to slow down, there are many areas to look at to extend your cash runway through operations – including some more traditional (e.g. RIFs, expense scale-backs) and more creative routes (e.g. roadmap reprioritisation, forward deployment).
What’s most important is that companies are making these decisions based on their own leading indicators – not just following the crowd. It can be easier said than done, but it’s crucial to focus on what’s happening right in front of you in your business, not what’s happening around you in the sector.
What are the biggest reasons startups fail?
Start-up failure is rarely the result of one single factor, it’s usually a compound effect. From struggling to find product market fit, burning through cash too quickly, or battling to keep up with the competition, start-ups will face many different existential threats in their lifetime.
One of the biggest reasons start-ups fail – and one that hits home for me on a personal level – is founder burnout. The trope of the ‘superhero founder’ is harming start-up success: founders are starting out at a simply unsustainable pace, meaning that when things really get tough, they don’t have the extra reserves needed to navigate these challenges.
It’s frustrating because it’s a problem that can absolutely avoided. As an ecosystem, we need to shift the narrative and provide founders with the support and resources they need to set themselves (and their companies) up for success in the long term. It’s in everyone’s interests.
Having closed Balderton’s largest early stage fund ($600m) in 2021, how would you access the current European early/seed stage market in 2023?
2021 was something of an anomaly, and over the past 18 months we’ve seen the sector return to a more balanced position. That shift has of course brought about challenges for many start-ups, but as an investor I remain as excited as ever about the opportunity in European tech. Europe is a hotbed for talent and innovation, with strong leadership in key areas like AI, health and climate. And entrepreneurship is on the rise, with more businesses being started than ever before. So in many ways, the best is still yet to come.
