Only a few years ago it would have been unthinkable to share your workspace with a stranger. Now co-working spaces across the UK’s cities are attracting a surge of ex-Corporate workers, tech upstarts, freelancers, and young millennial ‘portfolio careerists’ – who all sit side by side happily.

According to online directory CoWorkingLondon there are over 100 in the central London area alone, and a Desk Mag study estimates that almost 300,000 people worked in nearly 6,000 coworking spaces worldwide by the end of 2014.

In 2014, I started Pi Labs, a property tech accelerator that’s based at the stunning new ‘office of the future’, Second Home, in East London. This utopic architect-designed vision for an office is a great example of how our working environments are now being built with people in mind first – the space is transparent, light, airy, and has the best restaurant of any office space in London.

With Second Home full to bursting with the brightest minds in Tech City (it was at capacity before it even opened), it’s clear that people are feeling a strong pull towards working in these more sociable working environments.

Social Interaction

Today, we see tech giants like Google, Facebook and Dropbox leading the way as examples of companies with stimulating work spaces that encourage their employees to socialize and work alongside their colleagues in informal areas.

Entrepreneurs and tech startups who would normally not have the resources to recreate this kind of environment and office culture seek coworking spaces as a valuable alternative. Social interaction is at the heart these benefits, with Desk Mag’s second annual Global Coworking Survey finding that 84 percent of people go to coworking offices for the benefit of interaction with others.

For a new start-up with one or two employees, social interaction and encouragement is all-important. I know one lone working tech start-up who described his previous home working conditions as like being in ‘Solitary confinement’ – this was clearly no good at all for his motivation and sense of positivity!

Co-working spaces can deliver an environment that not only lets you surround yourself with people while you work, but provide a real community where collaboration and learning help propel your company forward.

Unexpected collaborations

A beautiful aspect of these co-working communities is that collaborations can come from the most unexpected places. I recently came across a tech public relations agency working in a shared office with an IT recruitment company, who after originally connecting over shared cups of tea in the kitchen, realised a few of the recruiter’s clients were tech start-ups looking for PR support – and a collaboration was established!

Inspiration

If you think back 20 or 30 years to office spaces of the ‘80s (think the classic 80’s films Working Girl, or Wall Street), the shut-off cubicles and harsh fluorescent lighting is such a stark contrast to how we work today. Co-working spaces and new offices are being designed and built with people in mind: open plan, sunshine filtering, brightly coloured and transparent spaces that truly encourage workers to “think outside the box.”

A large number of coworking spaces host events and programmes to inspire their members in the evenings, beyond their day to day interactions. I’ve seen talks from mindfulness companies, tech learning companies, to all-day hackathons and music sessions from up and coming artists.

Flexibility and Affordability  

The reason why startups and entrepreneurs are able to dive into co-working communities and take advantage of these benefits? Affordable flexible contracts.

Most shared working spaces have a membership tier, starting with a basic level of entrance to a communal office, and adding on access to facilities such as meeting rooms, individual desks, private offices and event rooms. Affordable rates and flexible contractual conditions make coworking spaces an easy and relatively hassle free choice for tech startups and entrepreneurs.

Will the next £Billion company come from traditional top-down, hierarchical corporate space or will it be co-created in a more creative coworking space that facilitated collaborations between creative, smart, forward-thinking people?

Read more:
Why the next Billion Pound Company is likely to come from a shared workspace

How can a start-up business prioritise one from another with so many different accelerators to choose from? When there is equity up for grabs, it is important for entrepreneurs to be vigilant. So when you see an accelerator pop up in your local town – it may be a good idea to do some background research on the people and the companies involved, and to really question its r’aison d’être.

I pondered this question for many months as I toyed with the idea of building my own accelerator. I looked closely at the market and saw that it was reaching saturation point. Yet, everybody was still saying that this model was the future. I still very much agree – it is. Just the generalist accelerator model will no longer satisfy the entrepreneur’s hunger for niche expertise. It is fair to say that at one time, the tech sector could be defined as one sector. Not anymore. Tech is too general a term. In fact, some people say every business will soon be a tech business and that technology essentially will be the ever-present backbone – the conduit through which we acquire customers, deliver services, and engage with stakeholders. While the underlying technology becomes more commoditised, it is niche sector knowledge that will be the prized skill, particularly in industries that have been deeply entrenched in their ways, like property. This was my thinking when setting up my latest venture – Pi Labs (Pi stands for “Property Innovation”).

The future of the accelerator model is in offering niche expertise to early stage ventures that are breaking new ground in difficult-to-crack sectors. Property, in particular, is an old boy’s club – family links prevail, and you have to go ‘shooting’ together to create and sustain deep personal and business bonds. But what about the creatives looking to disrupt (and thereby advance) the sector who just don’t fit this mould?  These new entrants have no formal training in the sector but are bursting at the seams with new ideas.  They could be the future game changers of the industry, but only if mentored by the right people and connected strategically with the people sitting comfortably inside the ‘ivory towers” of the property industry.  Enabling cross-sectoral collaboration (property and technology in my example) at very senior levels is what can lead to transformational change in once-staid industries.  That’s where niche accelerators, in my view, can hold their own.

Y Combinator, TechStars and many more have been successful with running general accelerators. I believe there will still be a place for these accelerators – they may continue to help talented entrepreneurs and commercially minded people find a path and establish a career, but these companies were founded in 2005 and 2007 respectively. In this seven year period since, the speed of change in technology and what can be achieved has increased exponentially. To put it into perspective, 2007 saw the invention of the IPhone, 2008 saw the invention of Apple’s App Store and Facebook did not enter the Forbes 500 list until May 2013.

These three inventions alone have absolutely transformed the way we do business. In fact app making and marketing for Facebook have become entire industries in themselves. I believe that in the post iPhone and social media world (yes, for simplicity, I’m dividing the history of tech into two distinct chapters), every industry is being permeated by tech at unprecedented speeds, but some are proving more stubborn and complex than others.  In this new era, where the older more entrenched industries (like property) still stand largely untarnished, sector specific accelerators will be part of the answer. We have already seen this done to great success in the FinTech sector. I saw that the property world needed a similar programme, but one that was uniquely designed for the nuances of the sometimes difficult-to-navigate terrain of property (see the sector map below if you don’t believe me!)

This is why I set up Pi Labs – to help entrepreneurs innovate in this sector at a scale that can be truly impactful and commercially viable. Applications are open now and I have already been impressed with the hundreds of applications that we have received from throughout the world.

If you are running an innovative property start-up and believe you could be the next big thing in this sector, applications for our first cohort are now open.

For information see: http://www.pilabs.co.uk or to apply visithttps://www.f6s.com/pilabsaccelerator#/apply

Read more:
Why Niche Accelerators Are the Future

“The empire of the future are the empires of the mind.” Winston Churchill

Where the wonders of the ancient world came by moving great masses of rock and building incredible feats of engineering, architecture and man-management such as the construction of the Pyramids of Egypt – the wonders of the world of late have been more technological and cerebral in nature. Virgin Galactic, the Moon Landing, the Smart Phone – all knowledge-yearning, inspiration and data driven projects – all firmly rooted in science – are most likely to stand out in history as equally as impressive feats of human achievement in future ages. However, we are on the cusp of something different in the modern world. We could end up innovating ourselves out of jobs. But fear of change – and the stagnation this fear brings – is in my view a far worse fate.

With many jobs involving strict protocols and processes – the likelihood is that the next decade will see them automated. The computers of the future (unlike the glitchy operating systems we know today that so often freeze when overwhelmed) will have enormous processing power and will boast a far smaller chance for error than humans. Such a change should be viewed in no other way but a welcome progression for a well-oiled society.

But what does this mean for employees?

It seems cruel – but such things are nothing new. The lamplighter was replaced by electric street lights that light automatically. The switch board operator was replaced by an automatic switching system. I’m sure the workers in these situations felt hard done by at the time. Looking at the bigger picture – these people’s efforts were probably better utilised elsewhere. To put it in historical context, would you protest the invention of the car just because you made your living from driving a wagon and a horse?

Nowadays, technology allows for huge amounts of interesting data from which insights can be extracted. The more our personal and professional lives become automated, the more data we create. However, although we have become increasingly advanced when it comes to collecting the data, the skill of being able to analyse this data effectively has not developed at the same pace. In the ever-changing workplace of the future, people will be required to be creative and adaptive problem solvers. The worker who struggles with activities lying out of his immediate comfort zone will find it increasingly hard to cope. Both companies and their employees must learn to prepare for this friction. The resistance from the workforce can be placated if they can tangibly see that some of the wealth created from automation will flow back to them – not unlike the way that the wealth that cars created for car makers ripple its way back to individuals and society at large in the decades following the roaring 1920s.

The way I see it, as technology advances, so will the human roles and skills needed to operate and interact with machines. The workforce is also going to have to progress at a similar trajectory. This new man-machine balance will free people’s time up – increasingly allowing people to take on intellectually challenging jobs and explore and experiment with the capabilities of these new technologies. A range of permutations and combinations of man and machine will emerge: think about how handymen will use the data collected by Nest smart-home thermostats to make better decisions about your home’s AVAC. Or how home owners will get better at selling their own home by using augmented reality apps from their smartphones when taking a potential buyer through a viewing. Or how office managers can search, qualify, book, and pay for flexible office space online. The possibilities are endless.

The worker of the future will use these tools from an early age and will have the resources to maximise their productivity, and therefore their potential in the workplace of the future. Although, of course, there will also be other factors at play – this democratisation of knowledge does allow the more motivated and technology savvy and opportunity to outpace those slower to adapt. Those from privileged backgrounds may lose their golden ticket to success to a breed of go-getter, data-gobbling techies.

The workplace of the future will be very different; roles, in particular, may be less boxed in and far more fluid. Any job that involves following strict processes and number crunching – such as the function of the accountant – will more than likely be simplified and automated – allowing an ambidextrous employee to execute an accounting function as part of a larger value adding role within a company. Computers and their increasing power to process data will become prevalent in ways we haven’t yet imagined. And with the rise of the FinTech movement – I believe that accounts production and reporting will become an automatic function generated digitally and updated seamlessly behind the scenes. All of a business’s monetary transactions (including the management of petty cash) will be recorded automatically and collated in to a cloud based app. The skill will then come in interpreting this data. Processing requires long periods of discipline without lapse in concentration whereas analysing requires a mix of experience, insight, and intelligence. Financial staff will need to ‘up their game’ to stay relevant.

So how does the worker of the future build resilience in the age of automation?

The ability for workers to be multi-skilled with sound analytical skills, honed commercial intuition, and a mature level of emotional intelligence will make them resilient in a business ecosystem where these qualities are valued. The workplace will also have to adapt to cater to this new type of environment. Executing projects successfully will require differentiating points of view, discussion and deliberation. This will require open collaborative workspaces, a trend which we are already seeing throughout the creative industries, who will ‘trend set’ for other sectors to follow. Already, it is becoming obvious that we do not need PCs and landline phones in the workplace. These unmovable forms of contact are impractical in the fast moving world of spontaneous interactions and flat hierarchies. Smartphones and tablets, backed up by unlimited cloud based storage and gargantuan processing power of remote servers, will inspire the way the offices of the future are designed. Cerebral, intellectual work will prevail while other work will vanish away – and this will change everything from workplace design to management organograms.

Churchill spoke about the empire of the minds being part of the future. Either way you look at it, change is coming. Any time you spend revolting against automated processes would be better spent ensuring you have the skills to do something else – because as the work place changes with increasing velocity, our best chance of survival is to join ranks with the ‘data gobbling’ technophiles.

Read more:
The Empires of the Mind: How to Remain Relevant In An Automated World

Rare are individuals who possess the sensitivities and wit of a poet yet the razor sharp commercial acumen of an entrepreneur. Felix Denis (the founder of Denis Publishing, the creators of Maxim magazine and PC Pro) was just this sort of rare individual. Known as someone who “lived life on his own terms”, Denis had a penchant for poetry which flows unabatedly through his best-seller “How to Get Rich”. In this entrepreneurial must-read, he weaves flawlessly between poetry and prose to deliver a surprisingly witty and informative account on wealth creation, despite the banal, crass title.

Last month, the great Felix Denis died at age 67, I dedicate this article to him in the best way possible: by delving into the realm of poetry myself, searching for wisdom for my entrepreneurial readers.

Not so long ago, I was in Shoreditch at a Bombay Sapphire themed pop-up bar meeting an entrepreneur and pondering business ideas over gin concoctions late into the night. As I sheepishly announced my departure (it was just before midnight), he eloquently recited a stanza from The Ladder of St. Augustine by H.W Longfellow. The spontaneity made me chuckle but deeper than the jest of the recital- the words really resonated with me.

Work Ethic

Here’s the verse from the Ladder of St. Augustine.
“The heights by great men reached and kept
We’re not attained by sudden flight,
But they, while their companions slept,
We’re toiling upward in the night.”

Taking this passage and relating it to entrepreneurship, it takes hard work (and far more of it than our peers) to reach that ‘life changing’ moment.

But these moments don’t come easy. Successful entrepreneurs have tireless work-ethics, even if their outward style (think Mark Zuckerberg in his shorts and flip flops) suggests otherwise. In the modern business world, it’s about what you can do, not how you look. You will not find a successful entrepreneur who does not have this tireless attitude to business.

I was lucky to have realised this truism of entrepreneurship many years ago and have since been setting my alarm for 5am. These ‘night time’ stints create two ‘me’ hours every morning – time to ‘toil’ and execute without distractions. While many of my companions sleep, these are the most productive hours of my day.

Having avoided poetry since high school English Literature, the lines from Longfellow had my creative juices flowing.

My research led me to a passage from Invictus by W.H Henley, which holds a precious lesson on the fear of failure.

“Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds, and shall find, me unafraid.”

While Henley clearly wrote this passage with other things on his mind, there is wisdom in here for entrepreneurs. The entrepreneur’s journey is pitted with ‘horrors’ and ‘menaces’ (cash flow, poor performance, competitive threats, to name a few). A savvy and tenacious entrepreneur will control his fate by assessing the upsides and downsides and taking a calculated view. What separates the savvy and tenacious from everyone else is the ability to overcome their fears and to take an action based on that view.

Entrepreneurs are eternal optimists

In my poetic studies, the verse below ‘Hope is a thing with feathers’ by Emily Dickinson seemed to reach out to me. One could argue that Dickinson’s entire career was based on hope; less than a dozen of her eighteen hundred poems were actually published during her lifetime.

“Hope is the thing with feathers
That perches in the soul,
And sings the tune without the words,
And never stops at all.”

I was conversing with a fellow investor last week about the CEO of a company we were looking to invest in. My co-investor was adamant that the CEO wasn’t a leader and that may be a deal-breaker. Not understanding the rationale, I asked why; the response from this seasoned investor was that the leader needs to be an eternal optimist. The CEO hadn’t displayed the sufficient dose of optimism to convince my investor friend.

The entrepreneur has to believe he can break boundaries and be able to convince others of that too. The finance and operations directors are the ones that bring everyone back down to earth, and this balance is necessary, but the entrepreneur/leader must believe anything is possible.

At The Speed of Life

Life is ephemeral and ever changing so never be afraid to move on. This next stanza – A Dream within a Dream by Edgar Allan Poe – offers one of life’s most important lessons: nothing lasts forever.

“You are not wrong, who deem
That my days have been a dream;
Yet if hope has flown away
In a night, or in a day,
In a vision, or in none,
Is it therefore the less gone?
All that we see or seem
Is but a dream within a dream.”

More than a century after these verses were written, they still hold true. Today, markets are constantly changing: competitors emerge faster as building businesses becomes ever easier with the advent of plug and play software, APIs, and pay-as-you-go services. In this brave new world, business strategies need to be able to pivot rapidly. New businesses often start with one strategy – and then through trial and error – end up adopting an entirely different path.

Don’t burst your bubble

The monologue starting with ‘All the world’s a stage’ from the comedy ‘As You Like It’ by William Shakespeare looks at the seven stages of a man’s life from infancy to old age. The verse below looks at the fourth stage known as ‘the soldier’ – where men are willing to risk death to earn a reputation for themselves.

“Full of strange oaths and bearded like the pard,
Jealous in honor, sudden and quick in quarrel,
Seeking the bubble reputation
Even in the cannon’s mouth.”

This verse can be related to the entrepreneur who isn’t afraid to take big risks to make a name. In the process, these entrepreneurs often experience business failures and learn invaluable lessons. Entrepreneurs set their sights high and often aim to achieve rapid success. The ‘bubble’ can rise very fast but pop just as quickly tarnishing one’s reputation, which in my view is an entrepreneur’s greatest intangible asset. This passage sends a foreboding message about reputation management – one that is not to be ignored in the age of social media.

Final word

My journey into the realm of poetry would only be complete if I trialed one of my own. With absolutely no intention to seek a career as a published poet, I venture below into the unknown…in honour of the great Felix Dennis, who leaves us a legacy of poetry inspired by a lifetime of entrepreneurship. For once, I can use the words ‘entrepreneur’ and ‘poet’ in the same sentence without sounding foolish.

The Fail Fast Limerick

There once was entrepreneur called Ken,
Who failed at business time and again,
But his spirit stayed strong,
He learnt from his wrongs,
Now an IPO is a matter of when!

Read more:
Entrepreneurs & Poets

I’ve found that ‘dumb’ questions actually reveal the smartest answers. To reassure people that ‘dumb’ questions are not foolish at all, I have decided to delve into the very history of the question mark itself. I discovered that the question mark is an abbreviation of the Latin word quaestiō, which you may have guessed means question. At some time in the Middle Ages, quaestiō became ‘qo’ – and over time ‘qo’ was simplified through several stages into the modern day question mark (?).

Just as the ‘dumbification’ of the question mark created an efficient way to show people that a question was being asked, I believe that asking the ‘dumb’ questions can streamline the business evaluation and creation process. As an investor who regularly undertakes due diligence on businesses, I’m used to asking a lot of questions, and what I find is that the simplest questions are usually the ones that unpeel the business back to its core and get right to the heart of how they tick. I advise all entrepreneurs to ask themselves and their team the ‘dumb’ questions. Below are six of my best ones.

1. How do I sell it?
If you can understand the end-to-end journey of one transaction, you can really get to the nuts and bolts of the business. I try to unpeel a transaction by finding out what is needed to provide that product or service, how it is marketed, and how much it is sold for and to whom. This stripping-back-to-the-basics approach will quickly tell you who you need to hire and where you need to promote your product.

When I recently looked at a transaction for one of my new ventures, I discovered – even though it was an online business – that many of the processes were done offline. It made me realise that the business needed a top technology guy who could automate those processes. By investing in that individual, the business could reduce our cost of service delivery in the long-run and in fact provide a far more enjoyable experience to customers.

2. Why would I want that?
Most entrepreneurs ‘assume’ that their product is exactly what the customer needs. Assumptions are dangerous. As Isaac Asimov wisely points out “your assumptions are your windows on the world. Scrub them off every once in a while, or the light won’t come in.”

To get the light to come in, you need to talk to real customers and find out if there is product-market fit. That customer may already use an alternative solution that is cheaper and better for them. If your product is groundbreaking, you need to understand the USP; and if it’s something that already exists, you need to know why someone would choose your product over the competition.

Unless you’re Steve Jobs creating a revolutionary product that people never knew they wanted until they saw it, you should always ask your customers for feedback at the early stages. Doing this will save you from investing too much of your time and money heading down the wrong path, or it will show you how the product needs to be tweaked to put it back on track. I’m sure Asimov would agree that the way to keep your ‘window to the world’ nice and clean is to speak to customers and have a very clear view of what they want. After all, great customer insight creates great products, which in turn goes on to create great businesses.

3. What does that mean?
Customers don’t understand industry jargon. If they don’t know what they’re buying, they won’t know why they should buy it. I often ask entrepreneurs to sum up their business in a Tweet, so in 140 characters. Not 141 characters. This helps to focus one’s mind. You may have an amazing product, but if people can’t navigate through the jargon to understand what it is, they won’t realise that it’s actually something they need.

Similarly, if your business is pursuing a strategy, those implementing it need to understand what it is they are supposed to be doing and why it is important. I’ve seen it time and time again where it seems as though ‘the blind are leading the blind’ because people within the company haven’t asked the simple question ‘what does that mean?’ A team that doesn’t know what it’s doing and how that ties into short, medium, and long term goals loses motivation, momentum, and productivity.

4. What have I got to lose?
This is probably the most important question an entrepreneur should ask when making a big commercial decision. All decisions come with risks, and sometimes it seems as though the risks are too high. But, if you look at the opportunity and weigh up the potential upside against the downside, the route you should take will become clear. I tend to look at key business decisions as evaluations of an investment case. Are we prepared to risk £100,000 to potentially start a new business division that could contribute £1m to our gross profit? This is a more focused way of asking ‘should I hire John and pay him a six figure salary to launch our office in America?’

I have some first-hand experience with this. One of my businesses was recently weighing up the option of opening an office in the U.S. The founder thought that it might be too risky. When I asked him what the potential revenues could be if the new office was a success, we soon realised that the pros massively outweighed the cons and decided to go for it. We evaluated the probability of the initiative being an aborted effort and were comfortable with our odds. Before that question was asked the management team had debated the issue for months; after it, they knew in minutes.

5. What happens if I get hit by a bus?
A business has to be able to exist without its founder, especially if you’re planning an exit to cash in on your nest egg. You need to make sure that you have a strong team who you can trust to run the business in your absence. A great commander, after all, is judged in his absence.

If, when asked this question, you realise that your product or service would be significantly impacted if you were no longer in the business, you need to find a way to give more responsibility to your team or hire the A-players that will fill the gaps for you. Even if you don’t plan to exit the business, being a one-man band is a sure way to burn yourself out.

6. What happens if we run out of money?
Sometimes entrepreneurs dwell too much on controlling the burn rate when they should be trying to grow the business. In order to control that fear, you need to have thought through the possibility of running out of cash. By taking actions today – and having a plan in place should that become an eventuality, you can invest in your business without worrying about it falling off a cliff.

Too often, founders brush this issue under the carpet and it stifles the growth of their business causing it to fall behind the competition and eventually fail.

Final word
Asking ‘simple’ questions will result in better, faster decisions as well as a more productive workforce. These questions have helped me navigate the treacherous terrain of business and have also helped me coach the founders I have backed. It may seem counter-intuitive, but spending ten minutes each day to ask yourself the ‘dumb’ questions will give you the wisdom to avoid making foolish decisions. When you peel back the layers of ‘dumb’ questions, they turn out to be quite ‘smart’ after all. Unsurprisingly, the Chinese had this all figured out many centuries ago. According to an ancient Chinese proverb, “He who asks a question is a fool for five minutes; he who does not ask a question remains a fool forever.” I’m pretty sure I know which type of fool I’d rather be.

Read more:
The Power of ‘Dumb’ Questions

Many people sit on the sidelines – never taking the bold step themselves but criticising those that do. More than half of all start-ups fail and an even a smaller percentage go on to be ‘game changers’. Both physically and emotionally, it would be a lot easier to work in a normal corporate job with normal hours and a stable income, but I’m guessing if you’re reading this article, that’s not what you want. You want to be a ‘dreamer’ and the only thing stopping you from pursuing those dreams is a fear of failure, self-doubt, lacking specialist skills, and simply not having done it before.

The power of ‘foxy’ thinking
Approximately 2,700 years ago, the Greek poet Archilochus wrote that “The fox knows many things, but the hedgehog knows one big thing.” The world is increasingly an uncertain place, and navigating it is probably better suited to a fox than a hedgehog. In a recent 20-year study by Professor Philip Tetlock of the University of Pennsylvania, it was concluded that generalists, or people whose behaviour resembles that of a fox, are far better at navigating uncertainty – as “they know many little things, draw from an eclectic array of traditions,” and are more likely to thrive in an environment where one has to “accept ambiguity and contradictions.”

When I started the HBRE platform in 2010, many around me were skeptical about my credentials in property, or lack thereof. I wasn’t connected in the property industry, I didn’t have an MSc in Real Estate, and I didn’t have a background in venture capital. I basically lacked depth of expertise and clearly wasn’t a specialist. I wasn’t a hedgehog. This could have easily stopped me, but I believed in myself and put my energy into making it happen. People often forget that an entrepreneur doesn’t need to know everything. Like the fox, we are resourceful creatures that recognise the skills we have or haven’t got. Where there’s a gap, a good entrepreneur will find someone to fill it. The only skill an entrepreneur really needs is the initiative to network with the right people to make an idea happen.

My advice: The best entrepreneurs are generalists. Make sure you know a little bit about everything – just so you have enough knowhow to hire the right specialists.

Wear “mental armour”
Going for scale can be a scary thought. We’re all surrounded by ‘doom-mongers’ who are waiting for us to fail and that can make us doubt ourselves. We’re all human and what people say can get us down, but you have to be able to blank it out. When someone tells you that you can’t do something you need to find a way to ‘pivot in your mind’ and think about something else. Wear some “mental armour” as Felix Dennis (entrepreneur and writer) says. The problem with most of us is that we look for reassurance from our peers before deciding to move in a certain direction – and that’s probably our biggest mistake.

My advice: Listen to the advice of others but make your own decisions, even if that decision upsets people in your team.

There will always be unknown unknowns
“There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.” – Donald Rumsfeld

At the end of the day, you can get all the reassurance you like about a key decision you need to make, but you’ll never know for sure until you’re in execution mode.

I’ve invested in seven businesses over the last 24 months – and people always ask me how I know that I’ve picked a winner. We do as much due diligence as possible on a deal, but in truth, you just don’t know. The only thing I do know is that you could sit there actionless or go for scale and give yourself a chance of making it. You can’t let the ‘unknown unknowns’ overwhelm your decision about whether to move forward or not. In my case, there’s no such thing as a perfect business and I know that I’ll have to improve things as I go along.

My advice: Keep shipping. The only way to navigate uncertainty is by ‘trial and error’.

Overcoming “fear of failure” can be practiced
Corporates fail to recognise employees who have had the boldness to try something new but failed. It’s that staid corporate culture which, in my opinion, affects a corporate individual’s mindset and discourages them from starting up their own venture. Perhaps there is a negative correlation between successful entrepreneurs and corporate experience; entrepreneurs simply have less formal training and dogmas constraining their thinking.
A lot of the founders I’ve come across are from corporate backgrounds and the key hurdle for them is getting over their fear of making a mistake when it comes to making key business decisions. I’ve seen it time and time again; they come up with an idea and debate it to the nth degree without ever putting it to action. We all make mistakes, so that shouldn’t put you off trying new things. My first ever business – an e-commerce business called Tribal Monsoon – ended up failing, but I’ve never once regretted starting it. I believe my failure has made me a far more considered and seasoned decision maker. And business really is a collection of decisions, so this is a critical skill-set to develop. I recently brought someone into one of my businesses who was a five time failed entrepreneur. The way I see it, he has five stars on his CV.

My advice: If you’re a first time entrepreneur, start a scaled-down version of a business, trial it, and go through the start-up journey until you get to the point where you’re either going to scale it up or fail. You win either way. You’ll have an experience that helps you to get over your fear of failure or you make it at the first time of trying. The fear of failure can be practiced away.

Living your life like most people won’t
Simply starting a business is one thing, but going for the scale that’s required to create substantial personal wealth is an entirely different ball game. Entrepreneurs striving for scale have to work hard and make sacrifices – just like a champion tennis player. Most people aren’t prepared to live a life of extreme discipline or lack the patience to see it through. But that’s why the rich make up such a small proportion of the population. A lot of people look at my lifestyle and tell me that it’s extremely intense; my wife included. I wake up at five a.m. and I’m pretty much working until I go to bed at half past ten at night. I probably have one hour a day which I consider my personal time. Even on Sundays I’m working from lunchtime onwards. My lifestyle reminds me of the quote: “Entrepreneurship is living a few years of your life like most people won’t, so you can spend the rest of your life like most people cant.” – Warren G. Tracy’s student

My advice: You have to love what you do because work life and home life will become very much intertwined.

Final word
As someone that’s had the daunting experience of starting his own businesses, I’m often coaching founders to get over their fears and take the steps that are necessary. The only way to achieve scale is to be bolder and develop the ability to formulate a view and make sound commercial decisions, even if they don’t work out. As Felix Dennis says, debating is not going to eliminate the risks; all it’s going to do is clarify the next step. If you want to live your dream, you can’t let your insecurities and the unknown unknowns stop you. All successful entrepreneurs have one thing in common: like foxes, they use their survival instincts to navigate the murky forests of business where uncertainty thrives and surprises lay ahead at each corner. The good news for you is that your options aren’t as binary as the title of this article suggests: the ‘foxy’ life can be learned, but you must first have the appetite

Read more:
Are you a Fox or are you a Hedgehog?

You need to feel that all the hard work you have put in is worth it and that there has been progress. When you get back home, eat dinner with your wife, and talk about your day, it can be quite demoralising if you fail to see farther than the short term horizon. In a Steve Jobs-esque fashion, you need to be able to look at several chapters in your life journey and connect the dots.
I have made a conscious decision to look at my life in 12-month snapshots and stop being a short-termist, something that hasn’t been easy for me as I’m naturally quite impatient. But I’ve found that this approach has made me realise and appreciate just how amazing the journey has actually been. So – here it is, my quirky version of a “day in the life of piece”, in which I’ve randomly picked highlights from the past year and created a day in the life of Faisal Butt.

5am – As soon as I wake up, I start my planning for the day. I ask myself: what is today about and what am I looking to get out of it?

6am – I leave the house. Off to the gym for an hour-long session with my personal trainer Kevin. I still haven’t had breakfast. With the workout I’m about to do, I need an empty stomach.

6.15am – I begin a very intense, disciplined workout. I am convinced Kevin takes inspiration from Rocky Balboa. I’m doing things that I’ve never done before, working multiple muscle groups at the same time. Today it is squats with shoulder presses in compound movements. And I’m doing supersets, so I’m not allowed to rest in between exercises. It’s excruciating and challenges me physically and mentally as I break down the barriers of what I thought I could achieve.

7.30am – I’m showered and change into my three piece suit – it’s important to stand out from the crowd in my line of work. Socks, tie, and cufflinks all colour coordinated. I set off for the train station feeling good and ready to take on the day ahead.

8.00am – My train arrives. Today’s ‘train time’ is for blue sky thinking. It’s a sunny spring morning and it will help me to think limitlessly. I’ll use tomorrow’s journey to troll through my unread emails, of which there are many. I subscribe to the “strategic” inbox management approach.

8.45am – I pick up my breakfast from a restaurant called Vital Ingredient. I love this place; you can make your own muesli. Today, I go for the granola with fresh fruit. And when I’m done, I pop into Pret to pick up a strong, skinny, extra hot latte. The crew at Pret have my order memorised. My time in Southern California has definitely made me more health conscious. I never used to be this way back in Pakistan – tucking in to my rich ‘homely cooked’ meals.

9.00am – I arrive at the office and eat breakfast at my desk. My day is going to be jam-packed. Like a whirlwind, I’ll be going from meeting to meeting and I won’t have much time for myself.

10am – First meeting of the day. It’s with an entrepreneur called Alec Watt. He looks a bit like Alec Baldwin and has the charisma to match. He wants to launch a furnishing and interior design business for landlords and HNW individuals. He’s been there and done it before as MD of another company in a similar sector. This business will benefit from ‘generation rent’ and the growth of the PRS sector. I also recall Warren Buffett investing in something similar. I’m interested.

Lunch – Heading to the boardroom for a lunch meeting with my fellow founders. This is the first time that they have all got together to talk about their businesses and plans for the future. I’m amazed by the number of synergies and cross-pollination opportunities being discussed. And there seems to be a lot of business chemistry too. I’ll definitely be doing this again.

3pm – I’ve just convinced Taylor Wescoatt, the ex-Head of Business Incubation at eBay, to become the new Chief Operations Officer at my latest venture, online estate agency eMoov.co.uk. What a coup. Technology is what’s going to take this business to the next level and we have a top tech guy to help us to do it. When I point my laser at something, I’m confident that great things can happen. The tough decision is “where do I point it today”? The question I’m always asking myself is “How do I allocate my time, my most precious resource?”

5pm – I’m at my board meeting with project management consultancy L+M. The sector is changing and we need to offer retail clients something different: an integrated commercial and construction approach. I suggest bringing a senior director from Land securities on board, someone I’ve known for some time. He’s never going to leave a giant like Land Sec for a start-up. I suggest offering him a partnership. Carry on in a corporate following a linear path or take a chance as part owner of a forward-thinking business? When he sees how passionate we are and realises the great opportunity to be part of an entrepreneurial platform that is rapidly scaling, he’ll go for it.

7.30pm – I leave office. No train back today. I head straight for the hospital. My wife’s giving birth to our baby boy. I’m so excited. My daughter has a little brother to play with and I feel like my family is now complete. Welcome to the world Noah.

10pm – What a day! I take a shower then I read ‘Barbarians at the Gate’, a book about the private equity leveraged buyout of RJR Nabisco. This deal in 1986 was considered to be the epitome of corporate and executive greed. I can’t think of a better topic to combine business with pleasure.

10.45pm – It is bedtime and boy I’m tired. No time to watch Ferris Bueller’s Day Off, I have another big day tomorrow. If I’m going to succeed, I have to be willing to put in the hours. As Britain’s most colourful centa-millionaire, Felix Dennis, says of good fortune: “the harder you sweat, the luckier you get.”

Final word
I always tell people that they need to take baby steps in the right direction and they shouldn’t get bogged down by a day or a week. You need to take a long-term view on what you’re doing and not be shortsighted in your own perspective. Remember – short termism is contagious and you wouldn’t want it plaguing your entire team! I connect the dots in my head and there’s generally a plan. But sometimes there isn’t, and that’s ok.

The art is in connecting seemingly unrelated events, people, and knowledge together at a later stage in your journey to create something of value. Much the same way that Steve Jobs connected the learnings from his calligraphy class at Reed College to the fonts he introduced in his early Apple computers.

So, next time you’re on that train back home, wondering what it’s all been for, try to create in your mind your own quirky version of the “a day in the life of” snapshot. I’m sure you’ll see then that you’re probably heading in the right direction and some of those isolated little dots actually do connect.

Read more:
A day in the life of Faisal Butt

Too many get sucked into other peoples’ requests and forget why they got into business in the first place. As an entrepreneur, you need to know what your own agenda is and prioritise it accordingly – put yourself first.

There have been thousands of books written on this topic and plenty of techniques that people adopt – but my view of time management is really quite simple; overcomplicating it just wastes more time. All I do is ask myself ‘will this activity make me personally wealthier’, and if it doesn’t – I’m not going to do it. This is what I mean by ‘wealth creation time management’. It’s a very primary approach to managing my time that helps me to delegate a lot of what comes to my desk. You may come across as selfish but – in my opinion – that’s the extreme level of focus an entrepreneur needs to be successful and thus provide the most value to everyone else in the business.

It sounds so easy – but in my experience – getting the founders of a fledgling business to think this way is a challenge. Because founders get used to doing everything themselves (every phone call, every sales pitch, even solving IT issues) at the early stage of a business, it can be hard to extract them from these remedial tasks. There’s this fallacy that no one else can do it better than them. As an entrepreneur, you need to take a step back, break down everything that you do, and ask yourself ‘am I the best person to be doing this’ and ‘is this going to make me wealthier’. My approach, I admit, is binary and a bit ruthless, but it helps me to focus my time solely on those things that are commercial priorities and helps me to build businesses.

The internet, and the office environment, for that matter are full of distractions. How many times have you walked into your office only to find documents landing on your desk and people tapping on your shoulder – and suddenly you’re not in control anymore? What’s important to me is that I’m always in control of my own time. I’m not going to let the company take control of me. And I constantly revise and improve the way I manage my time. It’s not good enough to start the year with a New Year’s resolution to manage your time more efficiently, you need to be constantly monitoring it and asking yourself ‘how did I do this week’ and ‘what can I do better’.

Personally, I make sure that I get a couple of hours of thinking time every day. Often, I just disappear and no one knows where I am, and I don’t want them to know either. I’ll be sitting at a nice little coffee shop somewhere doing what I want to do. As an entrepreneur you will naturally think about your business whatever it is you’re doing, so why not put yourself in a more creative environment. I come up with my best ideas in coffee shops, not at my desk. A lot of people think that they need to be at their desks to be seen as performing or to set an example to others – but I think that’s just an insecurity that people need to get rid of.

Often, founders tell me that they don’t have time for thinking time. It’s a classic sign of losing control of your time and your priorities, and a rescue mission is required. As a starting point, you need to get your PA on your side; they need to understand how important thinking time is to you. And when they’re on your side, you can systematically build thinking time into your week. It should be considered high-priority strategic time.

Everything you do affects your mood and your ability to think creatively. I’ve seen so many founders that have started a business with so much enthusiasm and great ideas – only to be distracted from implementing those ideas. If I were to take a look at my board meetings with founders, when I list the key commercial points, time management is right at the top.

Founders are the real ‘rainmakers’ of the business but so often they are preoccupied with low value activities. I recently realised with one of my companies that the founders were deep down in the trenches and weren’t able to think strategically about the business. They had lost connection with what the original business plan was because they were too busy with day-to-day tasks. At a board meeting, we made a strategic decision to hire people below them to relieve some of the pressure. Since then, they have proposed three new business building initiatives including new offices in Kuala Lumpur and the U.S. If you’re too busy, you’re not going to think ‘big’ in that way.

Some of you may have watched the film Big over the holidays. Tom Hanks, a child in an adult’s body, gets a job at a big corporation that makes toys. By sitting in a room playing with all of the toys he is able to think more logically and creatively than the corporate ‘number crunchers’. One of the ‘number crunchers’ uses his stats on buying trends to justify why they should launch a new line of toy buildings that transform into robots. Unimpressed, Hanks’ character states the obvious by saying: “what’s fun about that.” Sometimes you just need to sit back and play with things to think creatively about what your business actually offers its customers by putting yourself in their shoes.

Proof that this approach can work in real life can be seen with Apple under Steve Jobs. Jobs used to spend a lot of time in Apple’s design lab with the designers, playing around with the products like ‘kids with toys’, and that’s how a lot of the best ideas came about. Using this “tactile” approach with products such as the iPhone, Jobs’ playtime in the lab actually turned out to be productive time. And I don’t think you need to be in a business that has a physical product to break away from the day-to-day and think creatively.

It is easy for me to talk about ‘wealth creation time management’ because it’s something that I naturally think about as a venture capitalist. We shouldn’t expect everyone to grasp the concept, what it means, and how to go about it. Entrepreneurs need to be coached on the concept of wealth creation, and only when they fully embrace it as a key priority, can they use it to influence how they spend their time. Often, what you need to do strategically as a business is staring you in the face – but if you’re too busy being distracted – you may never see it.

Read more:
Wealth creation time management

I spent eight of the formative years of my life in California – often trekking between university and work in Los Angeles and friends and family in Silicon Valley.

A lot of the innovation in tech at the time coincided with the first dot-com era. I was very much part of that ecosystem and feel California has left a lasting imprint on the way I view the world. People who know me today as a Mayfair based venture capitalist would be surprised to hear that I actually did some of the software coding for Web 1.0. I was also was one of the thousands laid off when the dot-com bubble burst in the early noughties. I’ve been through that cycle, and survived it with battle scars and inspiration that I brought with me when I moved to London in 2009.

When I joined hands with James Caan in autumn 2009, I entered the business world in Britain with an open and inquisitive mind. I wasn’t quite sure which industry I was going to disrupt. It just so happened that we were in the midst of a global recession fuelled by a property boom and bust cycle. There were definitely similarities with the early noughties recession in the U.S. I observed an industry in churn where people had been laid off and teams were in movement. To me, the property sector seemed ripe for disruption. What had worked before wasn’t going to work for the future – and a lot of bright, talented people were now idle and looking for new ways of doing things. My thesis for investing in property innovation in 2009 was really that simple, but it’s one that has quickly proven to have some legs.

As a venture capitalist – I was a recipient of the business plans created by the unemployed-come-entrepreneur masses created out of the “Credit Crunch” – so I had an apex view of what was going on in the property sector and had a premonition of what would come. At the time James wasn’t looking at the property sector in a VC sense, but seeing the similarities with what I had experienced in the U.S., I saw an opportunity. You only have to look at businesses like Skype and LinkedIn, which both launched during the dot-com recovery, to see what can be born out of ecosystems that are in churn.

I felt that this would happen again with the property sector in Britain, and I wanted to be at the centre of it. A lot of innovation is formed out of constraints. When faced with adversity, people tend to tap into recesses of their brain that they wouldn’t normally utilise. Armies of innovators, faced with numerous constraints – the newly unemployed – were formed almost overnight. Like never before, people were questioning the status quo and challenging a sector that has been starved of innovation for decades. This was an early indicator of the change to come.

The drivers for property innovation in Britain go beyond market churn and constraints. I have definitely seen a “cluster effect” happening. In many ways, London is to the property sector what Silicon Valley is to tech. Real estate in London attracts investment from all over the world, and London is a global hub for professional services. There are financial, legal and accounting services that are built around the property sector here. And – because of the number of transactions and overall strength of the sector – there are all of these other support services that you wouldn’t see to the same degree in other parts of the world. The UK has a worldwide reputation for its property related services. You have British architects working on projects in Kuala Lumpur, British project managers in Dubai, and British agents and furniture people jetting off to new-development launches in Southeast Asia.

That said, we have also seen a massive influx of international tech talent. Since 9/11 immigration restrictions in the U.S. have become tighter – and a lot of international talent that would have gone to Silicon Valley – has set up shop in London instead. We now have a vibrant tech hub of our own – “Silicon Roundabout” in Shoreditch. Many of these tech entrepreneurs will try to solve problems in other industries, and we have seen hybrid businesses forming: FinTech, HealthcareTech and also PropertyTech. Rightmove and Zoopla are examples of that collaboration. These success stories have been an inspiration to both property and technology entrepreneurs alike.

What’s interesting is that it is people coming in from other sectors that have created this innovation. Alex Chesterman, the founder of Zoopla, for example, first founded an online DVD rental service which eventually merged with Love Film. No doubt he drew on his lessons from the subscription e-commerce space to disrupt the property search space.

People from other sectors aren’t boxed in by traditional ways of thinking. They are more likely to challenge the status quo and look for solutions. I’ve seen some very interesting business plans from these “industry connectors” – those that straddle two different industries and innovate by connecting dots that wouldn’t otherwise be connected. I’ve seen new ways of delivering estate agency; there’s no reason why estate agency shouldn’t go in the same way that the travel agency industry has gone – completely online. I’m also seeing plans for online household property services. It’s so cumbersome to manage all of the services that come into your house. Why is it so disparate to order a cleaner, gardener, babysitter, or plumber? There’s no reason why you shouldn’t be able to order these services through a single app on your smartphone, pay through one account, have all appointments sync with your smartphone calendar, and know exactly what you’re getting through an Amazon-style feedback loop. I’m seeing a lot of interesting things like that – and I believe it’s just a matter of time before streamlined offerings like this become commonplace. I call this next wave Property 2.0. And it’s coming soon to a home near you.

Perhaps more surprisingly, I’m seeing a lot of great ideas in the commercial property sector too. Unlike the residential sector where people tend not to have a vocational degree, the commercial sector is highly influenced by the Royal Institute of Chartered Surveyors and the associated RICS accreditations. While this has been good for the industry in terms of making service levels more uniform and consistent, it hasn’t necessarily been the best thing for innovation. But once again, “industry connectors” are making their entry and changing things. A business called WeArePopUp.Com is an online service that enables landlords to fill vacant units with ‘pop-up’ tenants that are looking for space for a short period of time. With the challenges the high street and retail sector are facing, this is a clever solution that again is born out of an industry in churn. I’m not surprised to learn that the two guys that set up the company are not from a property background. This is a start-up borne out of disruptive thinking from a strategy consultant and a research scientist.

It is examples like these which reinforce my belief that the UK is certainly a leader in property innovation and PropertyTech. One of my co-investors from the U.S. has been surprised by the businesses I’m showing him in the UK, and through his venture capital vehicle he’s now spending quite a bit of time with me looking at businesses over here. Of course, businesses don’t have to be tech related to be innovative. I’ve invested in an investment advisory firm called 90 North Real Estate Partners. They have taken advantage of Islamic investors’ appetite for UK property by structuring Shari’ah compliant real estate investments. Not a technology solution at all, but one that responded rapidly to changes in the property fund management industry.

Being a generalist by nature without any preconceived notions, and as a venture capitalist, I tend to look at the property sector from an aerial view. From where I’m sitting, British innovation is very much alive and kicking. If you want to create a conventional business, a high-calibre management team with sector depth has a good chance of delivering success. But – if you’re looking to create an industry beating, category defining business – team up with someone outside of your sector. The debate you’re going to have about challenging the status quo is what’s going to drive ideas and create new offerings. What I’d really like to see is more marriages between the property guys in West London and the tech guys in the East. On my own VC platform, my strategy is to bring these two polar opposite worlds together like an arranged marriage.

Zoopla – the champion of inter-sector marriage – has recently hired a major investment bank to explore growth opportunities for the business, with one option being an IPO that would potentially value the business at £1.3 billion. I’m convinced that a billion pound business could not be built in just five years with insular thinking from the property sector alone. For Property 2.0 in Britain to really flourish, we need to see the West End property professionals spend a bit more time getting to know the East End technology entrepreneurs. It’s a match made in heaven, and one I understand quite intimately as my Californian battle scars and wisdom shape my forays in Britain’s property sector.

Read more:
Property 2.0: Britain’s Property Innovation

Amongst their myriad of entrepreneurial powers, they demonstrate a razor sharp skill in PR, branding, and creativity (development of logo, the building of a secret superhero headquarters etc.) all while keeping their identity a secret. The superhero must remain current and topical to keep the spirit of hope alive and to reassure people that evil will not be the victor. Being agile and adapting with the times while holding on to their values is core to the superhero’s continued existence. Once the public stop caring, the illusion dies.

In my earlier blogs, I have taken my readers through a journey exploring different “reservoirs” of entrepreneurial wisdom. We have sought inspiration from quotations, Hollywood movies, athletic champions, and failed businesses. Today, on Halloween 2013, we fight the forces of darkness by looking toward our comic book superheroes for inspiration and business wisdom:

Batman

Not only does Bruce Wayne defend Gotham from crime, but he also manages to run a multi-billion dollar business in the form of Wayne Enterprises. Although he puts up a guise of the careless millionaire playboy, this is all for the cameras, a mere distraction technique hiding the true purpose of his existence. His public image has Wayne labelled a reckless rogue, too immature to run a multi-billion dollar empire.

Yet Wayne Enterprise is involved in various different industries including shipping, medical equipment, food production, entertainment and electronics. With a fictional turn-over of $98.5 billion, the company’s innovations in technology are far superior then anything Batman’s foes have access to. Wayne is an innovator who doesn’t hold himself to the limitations of the ordinary Gotham citizen.

He also knows how to build a good team around him. Albert offers him the harsh criticism which nobody else will, and Robin works as his apprentice, waiting patiently to be passed the crime fighting torch.

Lesson: Too many entrepreneurs fail due to their own hubris – they start to believe they are invincible, which clouds their judgement, and then it happens, the poorly conceived decision, unchecked by peers, that unravels their success. Like superheroes, entrepreneurs must tread that fine balance between self-belief and humility. Not all of Batman’s battles would be won by his technologies alone. It is his team, the human capital he is nurturing, that ultimately makes him dominate the superhero world of Gotham City.

Daredevil

Matt Murdock a/k/a Daredevil’s life changes forever when he is blinded by a radioactive substance in the Hell’s Kitchen area of New York City. Instead of accepting his blindness, Murdock innovates and uses a new way in which to view the world. Instead of becoming a victim of circumstance, the tragic accident heightens the strength of his other senses leading to the development of extremely acute hearing.

He develops echo-location similar to that used by bats. This is the skill of measuring the rate at which sound waves bounce off objects to envision the world. Taking something perceived as a weakness and turning it into strength is entrepreneurial behaviour. He saw a different way of achieving a task he no longer was able to do.

Lesson: Turning a weakness into a strength is an essential weapon in both the superhero’s and entrepreneur’s arsenal. It is sheer doggedness and resilience that are the most valuable intangible assets of successful entrepreneurs. A skill not only needed in an entrepreneur’s first success, but also essential for his reincarnation, known in the superhero world, as the “come back”.

Ironman

Tony Stark is a billionaire playboy, astute businessman and the most gifted engineer of his generation. His company, Stark Industries specialises in creating advanced weapon and defence technology with a fictional turnover of $20.3 billion.

The greatest piece of weaponry created by Stark’s company comes in a moment of need for Stark. He invents the Iron Man suit when he is kidnapped by terrorists who try to force him to create an atomic bomb. Instead of doing this, he uses the tools provided to engineer the Iron Man suit and escape in a move of inventive genius.

It was innovative and creative thinking like this that made his company a success in the first place. The inbuilt ability to think quickly on one’s feet using a mix of survival thinking and creativity is what entrepreneurship is all about.

Lesson: Some of our greatest inventions are born out of adversity and constraints. When faced with physical, mental, technological, and mechanical barriers, a “survival instinct” is triggered in us, tapping into recesses of our brain not ordinarily used. And great ideas, products, and services come out of it. “Frugal” innovation, innovation that arises from adversity, is what led to Tony Stark’s creation of Iron Man, not his lavish, high-tech laboratory in Malibu, California. There is a lesson in here for all entrepreneurs.

To take a quote from Spiderman; “With great power comes great responsibility”. It is no coincidence a lot of these comic-book heroes run successful fictional businesses and are looking to make their society a better place. These fictional heroes are change-makers and have what I call social leanings i.e. an urge to contribute to their community and environment in a heroic way. For example, co-founder of Ebay, Jeff Skoll, runs a successful media company Participant Media but channels millions to social entrepreneurs globally through his philanthropic initiative, the Skoll Foundation. Is he not a superhero of sorts?

It is no surprise that many super heroes also manage successful careers in business as well as being caped crusaders. It is the same attributes – vision, execution, speed, agility, resilience, innovation – that makes them good at both. In both activities you turn a dream into a reality and achieve something that all others thought was impossible. Both capture the public’s attention and involve standing bravely to defend what they believe in.

On the surface, superheroes make for good entertainment. But if we dig deeper, we find that they are also innovators who develop and harness new technology and embrace creative ways to achieve, survive, adapt and prosper. Like so many things in life, we need to peel back the layers to get a 360 degree view. A bit of unpeeling with my favourite comic book heroes has shown me that they are a lot more like entrepreneurs than we think…and there’s a lot more that is “super” about them than their super powers alone.

Learn more about Faisal at www.faisalbutt.com

Read more:
What Makes Superheroes So Super

An entrepreneur lives and breathes their business in a way that very few corporate managers ever would. Ask people to go through their New Year resolutions and most will segregate their personal goals from their professional goals. Not the entrepreneur, the personal and professional are intertwined and inseparable. The business rarely stops for them. Whatever they’re doing, watching a film or taking a stroll through the park, their sub-conscience is grinding away on the business. This is in my opinion what defines ‘the secret sauce’ of start-ups. And there’s a lesson in here for big business.

The ‘secret sauce’ boils down to the psychological sense of ownership. Ownership completely changes the way you view yourself, the way others view you, and how you behave. It’s very obvious to me when a corporate salesman comes in and pitches to me versus the owner of a business. The sense of ownership also makes the customer experience much more enjoyable. Customers by nature gravitate toward businesses that have personality, values, and vision, which owners exude with an ingenuity that’s not easy to foster in employees. But this intangible (passion and how people in business view themselves) can also be created, and herein lie some of the key lessons that bigger companies can learn from start-ups. Very few big companies have managed to hold on to small company principles, but those that have (for example Apple and Southwest Airlines) have reaped the rewards.

Passion is rooted in a sense of ownership, which can be created through entrepreneurial remuneration structures. It’s hard to imagine why a corporate guy would feel passionate about pursuing ideas when there’s such a definable glass ceiling in terms of how much they can earn. For this employee morale issue, it is the start-up world where some of the most innovative remuneration structures can be found. As an owner, you know that your ideas and hard work will bring you closer to the ultimate exit, what many refer to as the ‘life changing event’, and that spurs you on to succeed. Your motivation is also rooted in the ‘fear factor’. You know that if you don’t create value, your income is directly affected and that could have serious implications for you or your family. These ‘owner principles’ can, with some creative thinking, be woven into a corporate manager’s pay scheme, where they effectively share the risk and own the income and capital value they create above and beyond what was there when they joined.

Start-ups, perhaps due to sheer lack of management knowhow, tend to organise teams in a fluid and unstructured way, allowing ideas to flow freely and rapidly. Join a corporate and you’re placed within an uninspiring, predictable category. You’re either graduate level, associate level, or director level, and you pretty much know what you’re going to earn. Entrepreneurs look at the org chart from a different lens – and they often allow prospective joiners to get tied into the company’s performance. Entrepreneurs may ask a new joiner to invest in the company, or if they’re going to lead a particular business stream they can become MD of that division and own part of it. There’s a myriad of different structures that can be played around with to tailor the package to that individual. We live in times of mass customisation, and the rigidity of corporate remuneration structures may not be fit for the times. Start-ups offer a repository of knowledge on this subject.

The secret sauce of start-ups goes beyond shaping employee self-image, fostering passion, and remuneration structures, however. Start-ups also tend to be the ‘hot beds’ of ‘frugal innovation’ – innovation that is born out of constraints. In a start-up, R&D budgets and processes are non-existent and you’re free to unleash your creativity in a fairly opportunistic, bottom-up, and unstrategic fashion. You can pursue any projects or initiatives you like. It doesn’t matter how whacky they are; you have the freedom to trial and error them. And with each trial and iteration, start-ups get closer to breaking new ground. Skype, Spotify, Halo, and Wonga are great examples of innovative global services that were created in a start-up environment. Corporates may have wells of creative talent but they often remain unmined because of the focused KPIs that managers have to follow. Big company structures rarely afford employees the opportunity to explore ‘off the cuff’ ideas that they’re passionate about. The fearlessness to try new things – and the fluidity with which bad ideas are weeded out and good ones propagated – is an important lesson for corporates – and one that requires a structural and cultural shift if they aspire to be ‘idea engines’ themselves.

Like a meal prepared by a Michelin star chef, the secret sauce of start-ups has many ingredients, and the complex flavours rarely reveal themselves altogether. Perhaps the most critical ingredient of start-ups is their ability to attract entrepreneurial talent. Corporates are great at attracting your run of the mill university graduate who goes on to do an MBA and follows a pretty linear career path – but entrepreneurs attract other entrepreneurs – so in my opinion smaller founder-run businesses are much more likely to attract the ‘future game changers’. They’re much more willing to give opportunities to the creative, rebellious types that are seen in the corporate world as unemployable.

I’m a prime example. Five years ago, I was told by a career counsellor at Oxford that I was “unemployable”. Today, I lead a dynamic platform of entrepreneurs that is rapidly growing and making waves in each sector that it enters. And now I’m looking for ‘unemployable’ people that have a bit of the ‘secret sauce’. In all the businesses I invest in, I look at the workforce as a network of entrepreneurs rather than your typical organisational structure where you have owners at the top and employees at the bottom. My strategy is to attract other entrepreneurs to join my companies – and often I give them stakes in the business. No matter how big the company gets, I’ll retain those small company principles, which I believe scales the business a lot faster.

Working closely with start-ups, I’m immersed in the wisdom of this ‘creative ecosystem’. I think that there is a lot that big companies can learn from the start-up world. If you’re a senior corporate manager reading this, maybe you’ll start to think about how you can add some ‘secret sauce’ within your own organisation. Creating an owner mentality by aligning one’s earnings to business performance, hiring entrepreneurial people, and innovating through trial and error are all principles worth considering. It seems that the ‘secret sauce’ of start-ups isn’t such a secret after all. Like all these things, however, the secret lies not in the ingredients but in the preparation and delivery.

About Faisal Butt
Faisal Butt is Co-founder and Managing Director of Hamilton Bradshaw Real Estate, a venture capital firm he founded with James Caan to invest in entrepreneurs with property related ventures. He is a former winner of Shell Livewire’s “Young Entrepreneur of the Year”, a recipient of the much-acclaimed Skoll Scholarship, and holds an MBA with Distinction from Oxford University. Faisal is known for his unrelenting focus on ventures he embarks upon and his partnership approach to doing business.

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The Secret Sauce: what big companies can learn from the start-up world

A few weeks ago I took a last minute trip to Cornwall with the family. I stayed at a place near Kynance Cove that had a spectacular cliff edge where I went to have some reflective time.

There was nothing in front of me but the ocean, and I started to think about my businesses, asking why we were on a certain track, and questioning a lot of what I had accepted as standard practice. I came out of my ‘cliff edge moment’ immersed with ideas.

Maybe it’s the four walls or the comments from the naysayers but our office environments seem to constrain innovative thinking. It’s no coincidence that some of the best business minds take time out for refection.

Bill Gates is known to take two ‘think weeks’ a year in a remote cottage, and refuses to take telephone calls for the duration. And Jack Welch of General Electric used to have one hour of ‘looking out the window time’ every day. This was not seen as a rest but valuable thinking time, which helped them to develop ideas for their business.

I keep telling my business partners that the top entrepreneurs are ‘architects of ideas’ and you have to find a way to unlock your creative potential. But most management teams still restrict thinking time by ‘scheduling themselves to death’, believing it’s what they need to do to be productive.

As someone looking at businesses aerially, my view on time management is different. When I came back from Cornwall, I advised one of my partners to stick to the tasks that added the most value and delegate the rest. Don’t worry about hurting people’s feelings because you haven’t replied to a certain email. Instead of trying to do everything yourself think about whether it’s going to lead to wealth creation. It’s very easy to destroy time in meetings or by getting caught up doing things that aren’t adding any real value.

Steve Jobs “the billion dollar hippy” and Bill Gates both grew up in the 60s when there was a rebellious ‘counterculture’ that brewed from a number of different movements, including the Civil Rights Movement and the Anti-War Movement. Back then challenging the status quo was the done thing. Young people growing up in that era broke boundaries scientifically, academically, and in the business world.

Jobs had such a strong ‘challenger mindset’ that his colleagues used to say that he was surrounded by a “reality distortion field”. He was able to ignore the boundaries set by the world around him and think limitlessly. This enabled him to innovate and inspired his team to work harder than the competition. It was that disregard for what was perceived possible which led to the creation of a revolutionary product like the Macintosh in 1984.

Perhaps the environment back then lent itself to out-of-box thinking in a way that is less ingrained in society today. We now live in a more stable environment, and that’s bound to create a stable mindset where people march behind one another as ‘corporate drones’ instead of stopping to ask “why”.

If people today don’t have the ‘challenger mindset’ in their DNA, maybe it’s time to create it if you want your business to innovate and become an industry leader.

In my view, founders and management should embrace challengers throughout every level of their organisation. They should encourage people to question things and challenge the naysayers that cling to the status quo. They shouldn’t let their egos get in the way; the most enlightened founders are those that are prepared to be challenged by their teams. It’s that type of mindset that will encourage people to break new ground.

There’s an excellent article that I read in The Economist called “In praise of laziness”. It offers a contrarian view about how time should be managed and questions the conventional view that employees need to work harder than everyone else to succeed. After my ‘cliff edge moment’ I’m beginning to think that ‘less is more’.

Free time for management teams, founders and workers could actually add more value if it’s used for ‘ideating’, i.e. doing something that helps you to come up with ideas. In my opinion, if we work people too hard they won’t have time to think and question what’s going on around them, and we’re going to lose the ability to innovate.

We should instead be trying to implant the Steve Jobs “reality distortion field” into people.
So – I’ll be telling my business partners to “go and have a cliff edge moment”. Spend more time working outside the office; there’s no point in making appearances just to be seen as being productive. Who’s to say that we can’t do more out of the office? I’ve had some of my best ideas while taking a stroll in the park.

In fact, the most successful business I’ve founded was conceptualised around a restaurant table, and one of the best documents I’ve produced was written on a transatlantic flight. You’re far more likely to have an epiphany if you get out of the office environment and expose yourself to things that are not part of your everyday life. Think of Sir Isaac Newton and the apple falling from the tree.

Running a business can be an overwhelming experience; there are so many things to do. 70 per cent of the time you’re told that something can’t be done, and it creates a sense of rejection in the office that dampens innovative thinking. Visionaries like Steve Jobs had a natural enlightenment that seemed to counteract this by distorting reality.

We can’t all be like “the legend” but maybe we can change the way we work to boost our ‘challenger mindset’. So – if you’re aspiring to become a ‘game changer’ with a boundary-shifting vision for your sector – I would suggest you go and have your own ‘cliff edge moment’.

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Go & have a cliff edge moment

There are hundreds of thousands of talented professionals that have latent entrepreneurial capability whose inner voice is being muted by corporate constraints.

As a venture capitalist, I back experienced professionals who often spin out of the corporate world and start-up their own company. I call this group of new businesses ‘Spin out Start-ups’ (SOS).

There is another option

People are naturally worried about what will happen if they jump the corporate ship. There are ramifications for their family, personal life, and of course the consistency of their income. But – successful entrepreneurs take what I call ‘a calculated leap of faith’.

They weigh up their options, identify the risks, and take steps to mitigate them. I wouldn’t encourage anyone – no matter how good their idea is – to jump ship and start up completely cold. It’s far too risky. Map out your way into entrepreneurship and prepare yourself for a completely different lifestyle.

Those that take the ‘calculated leap of faith’ rarely regret it. I recently asked my Ivy Gate team, an estate agency that we launched three months ago, if they would ever go back to employment. They told me I’d have to drag them back kicking and screaming. Indeed, this is the reaction I get from most of the entrepreneurs who I liberate from corporate life. Once they have that freedom over their own destiny they never want to give it up.

Timing is everything

People that find themselves in environments so structured that their ideas are not able to be nurtured should consider their position – because if they stay too long – they could end up losing their creative spark. Moreover, people that leave it too late reach that point in their life where they’ve become comfortable and won’t take the risk.

The people I back almost always range from their mid-thirties to early forties. This is the age when you’ve got 15 years of good experience behind you as well as the stamina to set up on your own. It’s also the point in their life where they’ve been in a corporate long enough to realise that it’s always going to be the same and their job is never going to create the nest egg they long for.

De-risking

Entrepreneurship needs to be well orchestrated. It can’t be a ‘knee jerk’ reaction. You need to find the risks and de-risk them. One way of doing this is to find a co-founder. Startups formed from a team that has worked as a cohesive unit in the past tend to be the ones that are the most successful going forward.

There isn’t that issue of getting a new team to gel as it already exists. The other way to de-risk is by starting your business with a pipeline.

Businesses that start with an active pipeline have a higher chance of getting through the initial 12 months, which is the period that has the highest failure rate.

Not having a pipeline often means a long lag in income generation, which is demoralising for everyone involved.

Put together an action plan

An action plan should be used to help you play out the situation in your head. Ask yourself where would you go, where would you be sitting, what your day would look like, and who would be advising you. You then start to identify the key pillars of your strategy for spinning out of the corporate.

Find a mentor

I never advise new entrepreneurs to do it alone. You should try to find a mentor or a strategic partner.

Your mentor should ideally be someone that’s a successful figure in your industry, who can fast track your business. Look for someone that can provide capital, knowledge and expertise.

Someone who has long standing relationships and can pick up the phone and open doors for you.

And someone who has made the mistakes and had their hand burned. Seeking advice from people that have failed a few times can help you to avoid making the same mistakes and will de-risk it for you. After living the formative years of my life in Los Angeles, I subscribe to the Californian mantra that ‘failure is a badge of honor’, so I would add this to the top of the list of credentials you would look for in a mentor or strategic partner.

You should go about finding a mentor in the same way you would search for a new client. You need to build a long list of targets, approach everyone on your list and shortlist the ones that are most appropriate. I advise entrepreneurs to find a mentor that would be prepared to invest in your business.

This aligns interests and keeps everyone working together toward the same end game. Your mentor could be an angel investor (often retired entrepreneurs or executives), a venture capitalist or a first time mentor that’s interested in investing. There are plenty of people that have done the same thing that you’re looking to do – so reach out to them.

Talk to people

Entrepreneurship is a psychological journey. Even though you may feel like it when you’re stuck in a rut, you’re not alone. Your colleagues may feel exactly as you do and may even want to join you. And having a close business partner provides you with someone to share your feelings with. You want to have someone who loses sleep over your new venture when you do, and you want to be able to talk about it with them the next day.

You also need to be talking to someone on the outside that will potentially be your launching pad when you spin out and start up. That individual will act as a sounding board for you as you make key decisions to leave your job and become an entrepreneur.

There are serious mindset and lifestyle changes to consider which often lead people to procrastinate. Don’t sit around twiddling your thumbs; talk to people who have been through it before; it will speed up your transition.

People leaving career-stunting corporate jobs to launch new (sometimes world-changing) ventures is not a new thing, so the veterans are definitely out there. Seek them out.

Final word

There is significant entrepreneurial talent (and potentially billions in economic value) locked up within SMEs and corporates in the UK. These ‘would-be’ entrepreneurs are seasoned, they’re less likely to make mistakes, and they have established networks.

People with disruptive or innovative ideas that are being drowned out by the corporate voice should be provided with the platform, funding, and the mentoring to create something that’s new and different. It’s the natural way for industries to improve, evolve, and grow.

Remember, the founders of Google could have taken a corporate job with Microsoft but they decided to take the risk and now they’ve created more than £300 billion of economic value, as well as becoming billionaires personally in the process. Who’s to say that there aren’t individuals in the corporate world that made the wrong decision all those years ago and they’re actually sitting on a billion dollar idea. Send out an SOS, you never know what might happen.

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Sending out a business SOS

I met former TV Dragon James Caan when he came to speak at Saïd Business School, Oxford. I was an MBA student with a couple of businesses already under my belt. I knew the right backing could make a vision reality.

Experience and experiences
Venture capitalists want people with a strong track record who are recognised in their sector. When I gauge experience, I look at a combination of things. I’ll start off general and home in on the specifics. I need to form an opinion on the soft aspects as well as the hard aspects. I want to know who is the entrepreneur is, what motivates them, and what their strengths and weaknesses are.

I’ll want around seven to 10 references. I need to talk with everyone; an investor that might have invested with them before, former clients – both a happy client and unhappy client, colleagues who reported to them and bosses that they reported to, service providers, and any legal or financial advisors.

I try to form a 360 degree view on them. I’ll even speak to friend so I can find out what they’re like personally. There’s no better way of finding this out than through references yet a lot of VCs don’t pay enough attention to them, probably because they don’t know how to go about it.

It’s only then that I look at what they’ve done. I look at the level of transactions and the deals they’ve closed over the last 24 months. I talk to them about it in detail. It helps me to understand the role they played, the challenges faced, and how they overcame them.

Work in a team
The most successful entrepreneurs work in a team. If they can get another person to join them – it’s another layer of vetting for me – because they’ve demonstrated that they can attract people. Also, I can look at that person and see if they’re a ‘heavy hitter’ in the industry. It shows they can attract talent, what type of talent they attract and who they will continue to attract.

Moreover, two or three people can scale up a lot faster and they can work together to attract new people. Because I invest in start-ups and need to see fast results, I’m usually disinclined to back a lone entrepreneur. In business you also want someone to bounce ideas off, someone that’s going through the exact same thing as you. When you’re lying awake late at night thinking about the challenges facing the business, having somebody else that’s going through the same thing gives you that emotional and psychological support. It can be a lonely place for one person.

Be realistic
Entrepreneurs need to be practical about their earnings. If they expect the same level of guaranteed payment that they had working for someone, it’s going to affect their mind-set. They’re coming in with an employee mind-set which is completely contrary to the concept of entrepreneurialism. Entrepreneurs need to realise that their earnings are linked to how the business performs.

Use your contacts
The ‘heavy hitters’ tend to flock together, so being well connected is important to VCs. Being introduced through a mutual contact certainly helps. I’m always keen to meet somebody if I rate the referrer. You can form a view on someone through those they associate with. Someone that’s well connected will be able to win clients and recruit top talent – two essentials for developing a successful business.

Persistence pays
I don’t take offense from persistent people. It’s a good entrepreneurial quality to have. I myself never take no for an answer. It shows me they’re going to go out and win business. There’s nothing wrong with a few follow ups. I don’t see it as desperate; I see it as knowing what you want and going for it.

There’ve been occasions where I’ve said no to an entrepreneur and their persistency brought me round to it. One person I said no to kept me in touch with their progress. They updated me on their monthly figures without me asking for it. And because the figures were encouraging, I’ve warmed to it. They could have moved on but chose not to. It showed character, professionalism and business smarts. They knew if they could demonstrate a ‘hockey stick’ growth curve, it’s going to make me interested.

Good pitchers are good for business
Most of the people I’ve backed are sales orientated. If they can’t pitch their business, it makes me think that they can’t sell. Sales people will always be good pitchers whether it’s to sell products or win investment for their business. Other skills can be brought in as the business grows, but the initial team has to be sales orientated because there isn’t business without sales.

The business plan
Once the entrepreneur has come up with a headline business plan based on their own commercial assumptions, one of my business planning experts will sit down with them and break the plan down to its building blocks. This process helps us to learn more about their business, and gives them the chance to work closely with us on something and establish a relationship with us. It provides useful insight into how we’re likely to work together as partners.

Unlike many VCs, my approach isn’t all empirical. It involves a lot of emotional intelligence work. I judge the person as well as the business idea. As an investor in start-ups, I know that success is down to the people within the business and the people joining it. And – of course – the right backing helps too.

Read more:
How to tame a Dragon