Episode Transcript
I benefited from standing on the shoulders of dozens of other MDs who'd run programs before me and who I learned from. And part of it is just me being honest with people both about success and failure and what I learned along the way and screw ups that I made, because it is a mistake that some investors make that they go, "Hey, I know the way I've been there, done that, and I know all the answers." And I absolutely do not know all the answers. I don't even, don't even know the questions, but I'm happy to share what I think and feel and hopefully create an environment where you can figure out the right answer or the right question. Hey everyone, it's Antonia back with another episode of QuestionAble Strategy. The voice you just heard was Eamonn Carey, who was formerly the managing director of Techstars London. Now, if you haven't heard of Techstars, Techstars is a tech accelerator, which I kind of describe almost like a startup school. And it happens to be the biggest tech accelerator in the world. I did the program back in 2021, and Eamonn was the managing director at the time. So I have him to credit or to blame for a lot of the trajectory of my life, so thank you, Eamonn, for that. That's one of the reasons though, why I've been so excited to have this conversation. There are tons of questions that I wanted to ask him about being an MD that I didn't get to ask him during the program, or I was too shy to ask him. Who knows? Not only did he work for Techstars for over 10 years, but he's founded several companies himself, And he's had his share of difficulties and failures as a founder, which he talks really openly about, and I as a founder, really appreciate that because oftentimes successful people tend to gloss over parts of their career that were not so successful. But that's what really propels us forward, and that's an important part of our story. Beyond Techstars, he is an investor, not just an angel investor, but a general partner at several VC funds. So he has this great vantage point of knowing exactly how it feels to be a founder, knows how to support founders, he's got insight as an investor, on top of that, he got his start in journalism. And in 2022, he actually published a book called The Startup Lexicon, which teaches people with varying degrees of familiarity with the tech space what certain words mean that come up quite often. So needless to say, when we're talking about asking questions, Eamonn and I cover a lot of ground. And this is seriously a conversation that everybody should listen to. I think that people would really benefit from hearing more about how investors think, but also we get really honest about the process of being a founder and how it's not always fun. So this is how a managing director of a tech accelerator asks questions with Eamonn Carey. Eamonnn, it's really nice to have you on the QuestionAble Strategy podcast. Thank you for inviting me. I'm looking forward to chatting. Just a background for everybody listening. You were the managing director of Techstars, when I did the program in London in the fall of 2021. And so I have you to thank for why I'm living in London, but also for a lot of really critical decisions that I made with my own company, and I'm really excited to talk to you today because you've gotten to know a lot of founders, but also you've been a founder yourself, so we're gonna have a really interesting discussion. Excellent. I'm looking forward to it. The first question something that I love asking people is, who inspired you to be curious? I think I'm going to cheat and say maybe more than one person, but I think it's probably a combination of parents family. And then I think we all hopefully many of us anyway, have a couple of teachers or a couple of people in our lives that gave us a sense of kind of wonder and curiosity and in different areas. You know, with my folks, like my dad was a voracious reader, still is. Like he would read four or five books a week, maybe even more sometimes. So we went to the bookstore a lot when I was younger. We talked about books we talked about music, we talked about lots of different things. And the same with my mom, and then I had a bunch of really good teachers over the years who were amazing at things like the classics or incredible at music or just really got you inspired to get interested in different things. But I suspect like the single biggest one comes from my parents and to a certain extent encouraging all of these kind of flights of fancy and rabbit holes that I went down, and just being generally very supportive of all of these kinds of crazy ideas that I had over, not just my childhood but into my adult years as well. The emphasis that you just put on being interested in a variety of different topics is particularly interesting to me because some might say, "Oh, I got especially curious as a kid because I went down one particular rabbit hole and that taught me how to ask questions about that one specific thing." But for you, that's a variety of things. How does that factor into the startup mentality? I think as a founder, and you know this, you have to do everything a little bit at the start, right? When I started my first company, myself, and my co founder, like we were the people who signed the paperwork to incorporate the business. We were the people who came up with the logo. We were the people who came up with the website and built it. We were, we were making videos. Like all of these things that we didn't really know how to do, but we could have forced ourselves to learn because we didn't have a, VC or external capital. It was our own money and our own time that we were putting into the business. So I think having that level of curiosity about things is good because it, you're going to have to learn running a company, at least a little bit about marketing. You're going to have to know a little bit about sales. You're going to have to know a little bit about how the technology works. And whilst you should maybe not necessarily be an expert in all of those things, you should have at least the intellectual curiosity to understand how all of those pieces fit together. For me nowadays, at Techstars or as a VC, it's still the case that one day I'm meeting founders that are working on consumer applications. The next day I'm meeting people who are building crazy AI B2B tools. The next day I'm meeting people who are building hardware products or biotech products. So I think you constantly got to try to learn from almost every interaction and try to stay up to date with what's current. And I think you have to do that because I think running businesses, you can be a very specialist person in one area, but I think to run it successfully at the start, you need to force yourself into being a generalist. And thankfully that came at least somewhat naturally for me because of going down all of these kinds of different rabbit holes. I'm not a expert in anything, but I'm a kind of enthusiastic amateur in a bunch of things. I love that characterization of a founder as being like a Swiss army knife, because I think in some ways it's more effective to have a really dull Swiss army knife for some types of tasks versus a really sharp sushi knife, so I relate to that a lot. You've had several experiences starting your own companies. What are questions that you have to consider when deciding to actually pursue something? Yeah, I think for a little bit of context, I was working as a journalist in the kind of state broadcaster back home in Ireland back in, in whatever, 2003 or 2004. And I had a great job. It was a civil service job. Like basically they could never fire me. The salary was good. I was on the radio. My friends and family could listen to me broadcasting. Like people were, at least somewhat proud of all of that That's the dream. Yeah. Yeah. And also back then, you gotta remember, like hardly anyone started companies, right? Like when we had our careers day at school, it was like, oh, here's a doctor, here's an engineer, here's a police person, here's a pilot, or whatever. You would never, it wasn't like, oh, here's someone who runs a website, right? I don't even know if our teachers would've known, what one was, right? So it was a very safe place to be. But when we started that first company, it was from a point of frustration, right? I was going, Hey, we need to be doing more online. I had this trip to Korea where I'd seen people using their phones in in ways that seemed like 100 years in the future to me, but are very similar to how we use our phones today. And so I came back and said, "Hey, we need to do more on mobile. We need to push the boundaries here." And in a large public service organization, that's very hard to do, right? They went, "Oh, we're not sure," or, "Oh, we're not going to move that quickly." And so for me, I just got so frustrated because I was like, "Hey, this is going to happen." So it's like, what's the frustration? What's the skill I have? I could make content. I love mobile phones and I knew how to build websites. There's the kind of skill alignment. And I was really annoyed that this stuff didn't exist. And the same with the second company with FarmVillain. It was like look the internet is really boring Like why isn't there a South Park? Why isn't there a Monty Python? Why isn't it a bit more fun and that was a lot of where the kind of the genesis of that idea came from. The business that I failed with, I started an EdTech business trying to do competitive and collaborative platform for SAT and GMAT testing. Never set the SATs, never set the GMATs. I started the company because I was like, which sector can I make the most money in? And stupidly I thought education. So I think the questions you ask yourself are like, what is it that's either special about me or my network or my knowledge? I love the analogy of like the slightly blunt Swiss army knife, that at least is going to make one of the 75 implements on that Swiss army knife usable and worthwhile, because there has to be something that gives you an edge. And for me personally, I think, if you're going to run a business and be in it for five, ten years, you should hopefully feel strongly enough about it that that is something that you see as comprising a fairly substantial portion of your working and non working life. I absolutely agree with the fact that you need to consider what it is that you bring to the table. Because at the beginning of any company, it's kind of just you, right? If you're starting from scratch, "scratch" is the skills that you bring. And I appreciate you talking about a company that didn't work out and that you would characterize as a failure, even though I'm sure you learned a lot and overall probably wouldn't be, you know, a complete waste of time. Sadly, sadly, yes. I'll tell you, sitting the SATs is super fun. I think you do learn. Look, I think this is something we're very bad at in Europe, I would say, is celebrating failure, right? I mean, I've learned more about failure in relationships than I did from success in them, right? I've learned more from failure in business than I've learned from successful ones, because back to questioning, I think anyone who's gone through a kind of breakup with someone significant in their life, you don't sit down the day afterwards and go, "okay, let's reflect on that and what I, did right or wrong," and the same with the business. But after now I can look back on that EdTech business. Like over a decade later, and go, okay, here are some of the fundamental questions I failed to ask myself, or I failed to ask of the market. Here are some of the missteps I made." And a lot of that is what informed my work with you and others at Techstars is a lot of it is not necessarily telling people the answers to questions. It's helping people understand what are the questions they should be asking themselves. And I think a lot of that comes from the successful businesses, in some respects, were like successful in spite of me; the unsuccessful business was unsuccessful because of me. And so therefore you should be able to ask better questions and learn more about yourself from that. I'm glad that you brought up failure, and I'm glad that you brought up this kind of European inability to see failure as a good thing. You are Irish. And also you've joined this fund that is based in Estonia. They're two countries that have the highest number of unicorns per capita. What is it about them that you think makes them such fertile ground for a thriving startup ecosystem? I think there's a couple of things. I think both of them are small countries. If you start a company, you never think I'm going to build the biggest, company in X sector in Ireland because that's still tiny, right, in the grand scheme of things. But what they do have, and they're different in certain respects, but similar, they both have these amazing networks. So in Estonia, the country is so small that kind of everyone knows everyone or is somehow related either through family or through university or through a club or a group or town or city that they're from. And so over there you have You know, the folks who started Skype back in 2002 or 2003, they were the first big success story. And then the first employees of Skype became the folks who started TransferWise and the guys who made their money from Skype became the first investors in TransferWise. Now the founders of TransferWise are the investors in the next generation of companies. And all of those businesses, I should say, there's, 13 or 14 unicorns now in, in Estonia, which by head of capita is pretty substantial. All of those businesses created kind of thousands or tens of thousands of jobs. So if you're starting a company, B2C or B2B or AI or hardware, and you want to go, Hey, how do I get to scale? Or how do I think about expanding into my first market? Or how do I overcome technical challenge A, B, or C? You probably know someone who knows someone that was a founder of Skype or was an early kind of architect at Verif or built some of the hardware for Starship. So massively dense network, which Ireland has as well. We're still a pretty small population country. It's relatively easy to reach most people, but the advantage that Ireland has from a network perspective is the international network. It must at this point be like hundreds of millions of people who identify as second generation Irish. I mean, It still blows my mind. I moved to New York in 2015 or 2016 and I I walked from Central Park down 6th Avenue back down to where I was living in the Financial District. And it's like, the whole of 6th Avenue is basically a line of Irish bars. There's like more Irish bars on 6th Avenue than there are Irish people probably back home. So we have this huge ecosystem. And I remember, and we don't just do bars, I should say, but I was in Petra in Jordan, like in the middle of the desert in Jordan years ago, and turned around this corner in this tiny little town in the middle of nowhere, and there was a Guinness sign outside a place, and you kind of go, that, that, from a, from a cultural perspective, I think has helped an awful lot. There is a really thriving kind of diaspora of Irish Americans, of Irish people all over the world who are super, super helpful. And I think that's been instrumental. So I think networks are what they both have in abundance. I just think what we need to take more advantage of from an Irish perspective is like, how do we tap into this kind of really big global network that we have? And I think we're getting better at it, but there's still work to do. I think it's extraordinary how those are just two examples of how companies really bring people together and make people feel very comfortable. Something that I have spoken about a little bit on this podcast is the importance of relationship when it comes to asking questions. Because there are certain questions you would ask your mom, but you wouldn't ask your teacher or a random person on the street. It's all about who you feel most comfortable with. And so in the case of Skype and in the case of Guinness, you get these company-born communities that make you feel comfortable approaching people, whether that's making friends at a pub or whether that's getting advice or funding for your company in Estonia. I want to know, because we talked a little bit about the companies that you did start, taking into account the questions that you were asking prior to starting these companies, are there any companies that you wanted to start that you've decided not to because of the answers to those questions? Yeah, a couple of times. I think, I went through a phase of wanting to start a company that was like a like a Reddit karma score for everyday life. So you could kind of upvote or downvote people for being nice to you, or being an asshole, or telling a funny joke, or whatever. And we went through this whole process, myself and a friend of mine, of mapping it out, and thinking through, like, how do you prevent bullying and all of these types of things. It felt to me like it was one of those ideas that should exist. And now you look at like this, your social credit score in China. I was like, no, I'm glad we didn't build that actually. But I did think that it was an interesting kind of concept. There's a little bit of behavioral psychology in there. There's a little bit of a social network in there. There's a little bit about being nice to people in there. And there was a little bit of the mischief that we had in, in FarmVillain and then others. But I think when I started looking at it and you do ask those questions of why am I building this? And what do I want it to become? And where do I want it to go? And am I the right person to do it? And and, ultimately, should this exist? I got to a point where I was like, like I like the idea It's not a company really it's more like a kind of social experiment that you could run or like a joke app that you could build, so I never did that one. And I don't know if there were tons of others. But like I have notebooks filled with like scribbles and 2am drawings of app pages and stuff like this where you're like, "Oh yeah, I'm going to do this." But if they don't pass that smell test, like if I don't get really excited about something very quickly, then generally that's a pretty good indicator that it's not something that I should pursue. When it comes to asking those particular questions, I completely understand the feeling of, "oh, I might not be the right person to do this." Most people would then just say it's important to build a founding team, or any kind of team where the people you bring on complement your skills and fill in holes you have in your experience or your interests. How do you think about pursuing or not pursuing those ideas, when maybe the solution is just finding somebody who has the tool that you're missing? And I think to a certain extent, that's the joy of angel investing is that actually part of my job is to, not necessarily look for problems that I want solved or ideas that I've had and fund those companies, but every so often you do find people who are working on something and you go, this is interesting. Like you're way more qualified than I am to run this business or you're way smarter than I am or way more connected in this industry." And so I think in some of those cases, that's kind of a a nice thing about, running an accelerator or investing in businesses is that you, to a certain extent, almost get to live vicariously, through other people's businesses and you get to find more competent people. I think for me, without wanting to sound all philosophical about it, at this stage of life that I'm at now, I think if I'm going to do something, I want it to be something that I wake up in the morning energized to get out of bed and do and get excited by. And I think a lot of the ideas that I had over the years were ones where I was like, ah, that's funny, that'd be cool." And then you forget about it and two or three days later, you think about it again, you're like, "hey, that'd still be cool." But you don't have this kind of burning obsession in the back of your mind going that idea," "that idea" and I think for me that's that's the critical thing is if you're going to go all in on something and give it a huge percentage of your time and effort and energy, I think it has to be something I'd be like super passionate about. And even if I could find a team and build it around myself and I'm still, I like it, I think I would get bored quickly and I wouldn't be a good co-founder. Do you still remember an interaction from your early days as a founder that absolutely devastated you? Yeah, yes and no. So I think for a long time, I was the kind of person that would remember every interaction that devastated me like an elephant. There's a story they tell in Ireland is about Bono, the U2 singer. And maybe Bono told the story, actually. In the US you see someone with a big house and a fast car and a beautiful partner, and you go "someday, I'm going to be that guy." And in Ireland, it's like "someday I'm going to get that guy." For a long time, I held onto resentments of things that people told me and it was like, someday I'm going to send back an email. It's like some article that proves me right 20 years later or whatever. So I worked hard to let go of that habit because it's quite toxic and really dumb as well. But I do remember I remember lots of rejection letters from partners that we were working with from people that we were talking to early days of mobile were, really until kind of iPhone and Android came out, like that period 2004 to 2007. A lot of people were just telling us basically that we were bonkers to even be doing what we were doing, that BlackBerry was the way forward. So you hear these types of things and, they knock you, but they certainly knock me back an awful lot more back then because I didn't have the same group of mentors and friends and people around me as I do now. But like dealing with that rejection was really hard early on because I thought "I have a great idea, why can't everybody else see it?" And when people didn't see it, it's Oh, is it me? Is it, am I to blame, et cetera?" So I think it takes time to build up that resilience, right and the, I don't know, whatever you want to think about it, a scar tissue or anything else of dealing with all of that rejection. But some of those, you would remember them for days and weeks and in many cases, months and years afterwards. But yeah, I try to let go of it now. Maybe I'll have a nightmare about it tonight. I don't know. I don't want to give you nightmares. That's not the point of this podcast, please. If you do, don't leave a review of the podcast telling people that. But I think that it's nice that you brought up the fact that sometimes rejection or these devastating interactions make you question yourself. And it's QuestionAble Strategy, so even self doubt questions are classified as questions. And I know that as a founder, that's ravaged me at certain points. And it's really difficult to deal with. And they don't teach you this in school, right? This is, This is one of these things where it's we have, even in college, right? Like we never got taught a coping mechanism for when someone rejects you from a job, right? Much less when someone rejects you from an idea that you have spent a year or two years of your life building. I think it is one of those very difficult human things that we could all learn how to do better. And, I've seen all sorts of reactions. One of them without wanting to play the world's smallest violin for VCs. But one of the hard things about being a VC is I say, no 990 times out of a thousand. Some people deal very well with it, some people are very mature, and lots of people probably take it the same way that I took it 20 years ago and have a pin cushion with my face on it. But I do think it is one of those skills, like one of the most useful things I've ever been told is to try and put yourself in the other person's shoes, right? And so if someone is saying no, to be able to reflect on that and go Okay, but why?" If I'm on their side, and I'm an investor, why are they doing this? If I'm on their side and we've gone on two dates and they tell me they don't want to go on a third one, ok, why is it? Did I you know, did I screw things up somehow? You know, what is it that you can learn from these situations? It's back to the topic of failure from earlier. I think it's challenging like it's super challenging, but I do think that being able to ask yourself the question is an important skill to be able to develop. As an investor, do you go into a pitch thinking it's a no and looking for a founder to change your mind? Or do you go in with a more positive mindset and look for reasons to say no? It's a great question. I think it's a really interesting, and this may display some bias on my part, but I think a lot of the investors that I've really liked working with are the ones that went into most of those conversations going, I'm definitely going to invest in this company. And now I got to find, one, two, three, four, five reasons to not do that. And I think the reason that I like that approach is that it forces me to go into every conversation in a very positive frame of mind because you're like, "Oh my God, this is amazing. Let's do it." And then, a bunch of things happen during the conversation or as you dig into the data or dig into a bit more about the company, you're going to go, "Ooh, red flag." "Ooh, that's not so good." "Oh, okay. This is a bit of a problem." But even still, I think going into those conversations in a positive way is helpful because again, you've been there as a founder. I'm sure lots of people listening have been too. It's tough going into a bunch of investor meetings and half the time people, you know switching their camera off or the ones that have their camera on you can see reflected in their glasses that they're actually on a different window or that they're watching like TikTok or they keep looking down here, whatever. And I'm not perfect I'm sure again, if there are people listening to this, who've pitched me before, and I've been outside and it's been windy and I'm trying to do things like no one is perfect in that regard. But I do think that I have always found it really important to try as much as I can to go into those meetings going, "yes," and then find reasons to say no. Because also I think it gives you better feedback for the company, because what you don't necessarily want to do is go, everything sucks and you're awful." Even though, in many cases, that's actually the case. It's nice to go, "okay, I thought it was great that you came from this angle, you're thinking about it in this way. However. dot, dot, dot, dot, these are the two or three big challenges that made me say no." So it's almost like a psychological positioning for myself that I don't go into those conversations in a, in a negative frame of mind. Do you think that mentality is mirrored in your social interactions as well? Probably not. I'm sure my friends will probably say I don't come to every interaction in the most positive frame of mind. Especially if it's about sports or politics or the world. No, I think that's probably more a function of that being a way that I want to try and do business or behave with people in a kind of business environment. And a lot of that springs from having been on the other side of those conversations as a founder, where you're like, you get on and straight away that the person's in a negative frame of mind, you're like, "God, I'm going to have to sit through 29 more minutes of this, and it's not going to go anywhere." And I still have to sound upbeat. I think what's quite nice about friends, really good friends and family and that side of things is that I'm very rarely Business Eamonn" with my friends or with my family. And I think they all know me long enough to like, clip me around the back of the head if I do switch into that mode. And the nice thing about a lot of the friends that I have is that they don't work in this industry. So their level of interest in my passion for Claude versus ChatGPT is non existent. So we don't talk shop an awful lot, which is which is quite nice. It's it's back to that kind of generalist range of interests. That was one of the reasons I always struggled in San Francisco, was that like you go to a bunch of dinner parties, it's like everyone is a founder and everyone's in the tech industry. And "it's okay, this is great, but I also want to talk about movies or I want to talk about the new Pearl Jam record." I found New York and London easier cities to live in in that regard because you go to an event, and the person sitting next to you might be a artist and the person on the other side might be a lawyer and the person on the other side might be a founder and someone else works in a bank. I found like 80 percent of the interactions I had in San Francisco was like, oh, everyone here is either a founder or VC. The only difference is like one is fintech and one is crypto. So I think that range of people around the table is interesting for my sanity. Because if I came home and talked to my wife about tech all evening and talked to my friends about it, A) I would be like a super boring person and B) I think I would be super bored as well. I would go crazy. There are instances when things haven't been going great with my company or I've been in a negative headspace and I've gone back home to New York and I have actively avoided hanging out with people. Cause I mean, I live in London. I'm barely in New York. A ton of my friends live in New York, but I knew that going back there and hanging out with them, I would have the same conversation over and over again, where they would ask me, Oh, how are things with Toucan? Tell me about the company. Tell me about tech. Tell me about all this stuff." And that was the last thing that I wanted to talk about. Yeah. And I think that's the advantage of having a broad base of friends, right? To go, okay, who are the people who I can have those conversations with? I think one of the benefits of kind of Techstars and YC and those types of programs is you end up with a group of like peer CEOs or peer founders who are in many cases going through the same ups and downs and ins and outs. But for me anyway, personally it's always been super important to go, Hey, if I wanted to talk about a life event like births, marriages, deaths, illness, any of those types of things, who are the people that I would trust to have that conversation with? And the, you know, thankfully there are a bunch of them and what's the overlap in the Venn diagram between those people and the people who would be interested in, hearing me talk about cyber security pre seed investments in Central and Eastern Europe? Those two ovals are very far apart. So I think that's, that's nice to have. And I think everyone should try to have a little bit of that balance in life. And having the ability to decompress away from exactly what you've just described of, how is the business?" I don't want to talk about that. I want to talk about this sandwich. Like that is what I care about right now. I'm so invested in what you're eating, that's all I want to talk about. Because if I talk about this other topic that's on my mind, I'm going to get sad or depressed or, or I've spent the last two weeks talking about it. Can we have a break? Yeah, for sure. I really want to talk about your time as MD of Techstars. Personally because I'm curious to know the inner workings of that machine but also because you've just seen so many founders come through with tons and tons of different ideas. Techstars companies are very early stage but some are earlier than others, so sometimes there are fully formed ideas, sometimes there aren't. How do you separate companies that are further along from companies that are super early when it comes to groups that you admit? So I think there's a couple of things. We almost from day one or day minus a hundred, probably with Techstars, the mantra that they always had was, the way that you invest is based on team, market, traction, idea. In that order. And so the atomic unit, the most important thing is: Who is the founder or founders? Why are they doing this? What is the unfair advantage they have? What is the insight the understanding, the knowledge they have? And then it's: Is it a venture scale market or does it feel like it's going to be? Then is there some traction? And last really is the product because, in general, probably 30 40 percent of companies that do Techstars programs end up doing at least a minor, if not in many cases, massive pivot during the program. So you're really trying to understand the team that you're backing and are they, coherent? Is there the right balance of skills within the team? Do they all feel like they're pulling their weight? Do they all seem like they like each other, right? Are they going to be able to, do they have some degree of resilience in terms of what they're going to go through at an accelerator program? Will they be able to take a hundred mentor meetings in two weeks or three weeks and hear a hundred different opinions about their business? And I also kind of always thought like, do I feel like they'll actually benefit from the program? Like, Is there some someone or something in here that's going to make a difference to the company? And that was part of the assessment criteria for those later stage companies. The last thing I should say is the thing that I saw that was really beneficial is you would have three or four, maybe even five or six super early, like smart people, who are just starting out with, if we were lucky, like some designs in Figma and maybe a few things sketched out on a piece of paper. You would have a couple of maybe two or three, four companies where it's like the product was about to launch or it existed and it was being tested out, et cetera. So they were a little bit further along. And then you would have a company that was maybe five, 10, 50 K in, in MRR that was expanding from Korea to the UK market. And what was really nice was like, the later stage companies will be looking at the idea stage ones going, "look how quickly they're moving look how quickly they're able to iterate." And the super early stage companies would look at the ones with an MVP and go, it's so much easier for them because they have just done this one thing and I can get advice from them about how to do it." And so you end up kind of building a little bit of competition, right? Because that's natural in a group of people who are ambitious, but also a high degree of cooperation. And I tried as best I could to never have companies that were competing. And so I never wanted to have two fintech companies that were trying to sell into hedge funds because then you get a clash, right? As opposed to a bunch of companies that were doing things that were so unrelated that they would be happy to help each other. But that was, the people was the biggest part. i really like the idea of creating an environment of mutual admiration because every team could see aspects of other teams that they wanted to bake into their own dynamic. I think there are a lot of questions that come along with that, namely, why can't we be more like them? And sometimes the answer is obvious, and sometimes it's less obvious. But as MD, how did you approach really difficult conversations with the companies in the cohorts? Because just for all who don't know, the MD has weekly meetings with each of the companies where they work through the challenges plaguing them for that week. How did you approach really tough ones? I remember years ago, I lectured at my old university after I graduated. And I remember the head of our faculty saying to me, Oh, you're, you realized like when you were in college, I could see on a Monday or Tuesday morning, like who had broken up with their girlfriend, who was still stoned, who had been out and, drank too much, who was, who had actually done the reading, et cetera." And I kind of laughed and then I did my first lecture and I was like, oh, you actually can see it." And the same is true in the Techstars environment. I could see people coming in and out of the space. I could see conversations happening. I could see people in real time. So you got a better picture for when things were going very well or very badly. With the difficult conversations, what I always try to do is not force it too soon, like in an ideal world, I'm not necessarily telling someone the answer. What I wanted to do is create an environment where people could ask questions where people could learn as much as possible where they could make a bunch of mistakes. And it was, I hate to use the word like it was safe space, but like it was an environment in which for 13 weeks they could play around the fringes a little bit and learn from it. And the same is true with those tough conversations. So generally what I would try and do is, in those Deep Dives, ask a couple of questions that would dig into the business without necessarily digging into it too much, or dig into what I saw might be the problem without digging into it too much. And then you just sit back. There's an Irish journalist called Paul Kimmage who was one of the kind of central figures in the Lance Armstrong doping scandal and unmasking all of that. And he did a talk with us when I was in college and he was like "the most effective thing that you can do as a questioner is use silence as a weapon," which is a strong metaphor, but it was true, right? In a lot of those meetings, you would go, "oh, okay, your KPI's for this week were x and you didn't hit them, and this is like the third week in a row. You know how are you guys feeling about that? Is there anything that we can help with to change it?" And they would talk for a little while and then you just let them finish their answer and then just sit there for 10 seconds, right. 10 seconds a really long time when no one is saying anything. And sometimes you would get people going, Oh, and also, by the way, I hate my co-founder." Oh my god. Then it was like almost they would surprise themselves by filling the space with information. You're like, okay. It's like, well, I kind of knew because I see both of you sitting at opposite ends of the of the table glaring at each other all the time. I didn't have to read too many tea leaves. But there were those ones where you tried to let the conversation evolve to that point. And then there were other ones where you have to sit down and go, I see you're not collaborating anymore, or I see people coming in at different times, or I'm hearing things from mentors that suggest to me that you're having separate conversations." Or, you would hear things, where people were behaving in a way that I didn't think was right for what we were doing. Thankfully not very often but, there were a few cases where people flaked on investors or were rude to people. All of these types of things where, again, I think in those cases you, you address it head on. But I think it was very rare that I got like annoyed or angry, and I'm learning it more as the parent of a three year old now. It's way better to be the parent who's not angry, I'm just really disappointed, than it is to be the one that like throws things across the room and gets like super emotional. And we went through births, deaths, marriages, breakups, co-founder breakups and real breakups, all sorts over the years and different founders have a unique set of stresses and a unique set of personalities. And some people just needed time to open up. Some people needed a kind of poke of a tough question to get them to open up. Some people didn't want to open up. Again, this is the advantage of running an accelerator versus the traditional VC way is when I was physically sitting in the office with someone every day, you got that picture of what someone's personality was like. And over time, you start to go, Hey, this person reminds me of this person and what they needed in this situation was just lunch. I'm just gonna go and sit and have lunch and talk about nothing. And then 30 minutes into lunch, they'll go, oh, by the way, my childhood dog died and I haven't been able to stop thinking about it and I can't do any more meetings this week." And then, you just go, "okay, great. Thank you for telling me. Thank you for sharing it. Let's you know, work together." And also learning, this is one that I'm still learning and will forever learn, that like most of the time, my job is not to solve the problem. It's just to be a pair of ears hearing it and acknowledging it. The risk sometimes as a founder going into investing is that you end up going into solution mode of like, "Oh, your childhood dog died. Here's a book you should read. Like, do some meditation and you'll forget about it in a couple of weeks." Like most people don't want to hear that. They want to be like, Jesus, that's horrible. My dog died once too. It sucked. It took me a long time to get over it, eventually it'll be okay." And then people will ask the question, "Oh, what did you do?" Or whatever. But I think a lot of it is just is empathy in those tough conversations, because trying to do as much as you do in an accelerator in 13 weeks is like living inside a pressure cooker. Um, And that's not a, that's not a fun environment. No I had fun. There were times when it was really fun, but a lot of times when it was not. And I think there's so much to unpack in what you just said very briefly. I think that using silence as a question almost is such an incredible skill. I've heard people talk about using silence in negotiation, but I think that what you said is absolutely true for asking questions as well. Second, I think that something that a lot of founders can empathize with is sometimes other founders just need to be therapists. And an MD in particular, that's almost your job because once you admit all of these founders into your cohort, you're supposed to shepherd them through the early stages of being a founder. And I reckon the most important person in any founder's life is their therapist, and that's sort of the role that you fill. Yeah. I mean, I think it's, the best advice, which I must admit I should have followed more was David Cohen, who started Techstars, he used to say to people when they were getting engaged or getting married, he was like, "have you started going to marriage counseling?" And I was like, "it seems, it a Like we're, not even we're not even married yet." And he's no, he and his wife have been going to the counseling for years before they ever needed it because it was just a place where they could have a conversation and have a dialogue and express various different things. And I think it is a remarkable relationship that you can forge. And starting the company, it's like the dumbest, craziest, stupidest, most brilliant thing that you will ever do. And it will be the hardest thing, from a business and financial and emotional and relationship perspective. You know, it's why I think being a solo founder sometimes is so hard because you can have founding team members, and you can have people around the business that you're friends with. But if things are not going well, it's very hard to have a conversation with someone and not feel like, "Oh, did I just say something that's going to make that person apply for a new job?" And it's very different to the relationship that you have with your lead investor. Let's say who's going, "Oh, if I tell them this, are they going to go, I'm not going to invest in their next round." So having, whether it's an MD or a therapist or a bunch of other founders that are on your side, I think that's one of the most important things that, that you can have both in a business context. And then back to what we said earlier, having people outside of the business that you can just go and shoot the breeze with and not think about company stuff. Everyone needs processing time, like running a business is all consuming, but I think if you don't take a break and take a breath, consuming can very quickly turn into something that's not a lot of fun. Like it's, you don't have a business that you run anymore. You have a job that you hate. A thousand percent. And on that topic of marriage counseling, one of my previous guests on QuestionAble Strategy is Eva Dillon, who is a couples and sex therapist. And she was saying to me that on average, couples wait six years after an issue starts to start going to couples therapy. And at that point, there's just so much crap that's piled onto that issue that it's unrecognizable and it makes her job a lot harder and their relationship a lot worse. Yeah. I think what you just said echoes that, but in a startup professional context. Something that a lot of people said to me when I went and did Techstars is that you get what you put in. So some people put in very little and then they get out very little and some people fully commit and go really hard, and then they get a lot out of it. I think that a really important piece of that is your job as the MD to create an environment where people feel comfortable asking questions, even if they think that they're really dumb or elementary. Because as as early stage founders, you need to have that space to get advice on things that you feel like, oh, maybe somebody could judge me for asking this question." How do you build that space where you invite even the most elementary of questions? I mean, I think it's, it's empathy and honesty, right? The reality with most companies is that they're not going to work. Even companies that, that are like 1 percent of companies or less than 1 percent that applied for Techstars got in. And even out of those companies, law of averages says that four or five, six, seven of them are not going to work out for a bunch of different reasons. We, we had one instance years ago, not on a program that I ran, but where a co founding team basically had a massive blow up before the demo day, the company broke apart and ended during the program. No one's fault. No one was a bad person. No one was to blame. In that case, you go, look, I hope that they've learned enough from this process to then go, if I start another company, if I do something else, that three months was at least useful. And I remember a friend of mine telling me years ago, he was one of the youngest people to ever raise venture money in the U. S. He was like 16 or 17 when he did it. And I was going, it's challenging enough to raise it. Like when you're super young, how do you do it? It was like, these people, they're not investing in this business. They're investing in me because they hope that if this business is a success, great. Even if this business is not a success, they're going to be the first person I call when I start my next business after learning all of the lessons of this one living through the bruises and bashes and everything else. So I think if you're honest about those things, if you create that culture where people can say, This isn't going well, or I don't know what I'm doing, or the mentors have told me this, and I think this, and now I'm going crazy. I think you get an environment where people are happy to share. And I think a lot of that was, those Thursday evening all hands that we did, where people talked about their kind of highs, lows, and asks. The companies that came in every week and was like, everything is great, nothing is wrong, we have no asks. Did they really get anything out of the program versus the companies that came in and said, okay "This was good But here's three things that we really struggled with and I desperately need a connection who can help me with x." I would say You know 99 times out of 100 those requests were honored or at least people tried to help them. So I think Techstars was really good at creating a framework within the 13 week process for people to talk about what was going well and what was going badly in their company. There was a great leveling factor that that created. So I think part of it was the process and I benefited from standing on the shoulders of dozens of other MDs who'd run programs before me and who I learned from. And part of it is just me being honest with people both about success and failure and what I learned along the way and screw ups that I made, because it is a mistake that some investors make that they go, Hey, I know the way I've been there, done that, and I know all the answers. And I absolutely do not know all the answers. I don't even, don't even know the questions. But I'm happy to share what I think and feel and hopefully create an environment where you can figure out the right answer or the right question. I remember this is kind of a notorious moment for everybody in my cohort, but I think it was the first intro call that we ever had with you where you blatantly said most of the companies that you guys have founded, I don't really believe in. Like, I think that they're going to fail, but I like you guys. I'll let you figure out which of your ideas I actually like." And that was a really humbling moment for all of us because we kind of looked around and we were like, Oh well, is it me? Could it be me? You're no longer MD of Techstars. Was my company one of those companies? No, No, I actually did think that there was a big gap in the market in terms of how, people were communicating and connecting with one another, because I've been since like the Skype days and probably even before that, I've been using every different technology under the sun and had never found one that I thought was delightful. And so when I used Toucan for the first time, I thought, actually, there's something here. There's something about this UI. There's something about the UX that I thought was really compelling and obviously then the team was compelling as well. And it comes back to what we talked about right at the start the team thing But there are a bunch of companies that have gone through programs that I've run where it's like, this idea is is okay. Or maybe once or twice I took an idea where it was like, I think this is terrible, but these founders are amazing. That's also part of the process is to go, look, some of you are here in spite of your idea. There was one program I ran where I actually loved all of the businesses. And I still gave them that talk, right? Because you know what it does, it creates that kind of level setting of oh, am I, am I the, the one in the bunch? And in many cases, the answer was, or wasn't one of the bunch, it was, I knew the businesses would have to evolve a little bit, but maybe um, in a couple of cases, there were a few where I wanted them to evolve a lot. Well, That's very nice of you to say, and you've put my mind at ease. Thank you. I should have told everyone that after demo day, actually. Oh yeah, it's a little too late, but it's okay. They'll all listen to this podcast. Good. As an investor now, what do you think are questions that founders ought to ask investors when pitching them for a potential investment? there's a lot specifically at the moment, given the kind of world that we're in, it's like, where does your money come from? We have had situations where people have taken investment from VC funds without doing the due diligence on where the investors of those funds came from, and in some cases they come from the Russia, in some cases, they come from other parts of the world where there are sanctions. And if you're now trying to do business in the US or within NATO, or raise capital for business, then that can be game over curtains for you. So where does the money come from? But I think the questions people should be asking at the end of a call, first of all, you should always ask a question at the end of a call if a VC or an investor or anyone says Oh, listen, we've got like five minutes at the end for you to ask me a question." You should always ask something. I just think it's it's an open goal. But the ones to think about are like, okay what are the next steps? You what's your internal process? So if you're talking to a VC, some of them will have what's called a full consensus model. So everyone in the fund has to agree on making an investment. And that tends to take an awful lot longer than if it's an individual partner, who can go, I like this. I'm running with this ball. Does this process involve you pitching the business internally, or do we get to meet the rest of your partnership and pitch? Asking about timelines, asking about, co investors, right? Will they lead a round? Will they bring co investors in? Who do they like to co invest with? Who, and funds that have invested a couple of times in follow ons or in rounds subsequent that they'd like to work with? Because, again, it's good to know, like, how do these people actually know other investors who might help us in the future? And then you should always reference investors. Like I will happily give people the names of companies that I've backed, but like, I have a sneak around on AngelList or LinkedIn and find others and just ping them a note and go, Hey, what's it like to work with, this person? We had a situation where a portfolio company a couple of years ago where, they met a VC, everything seemed pretty interesting. VC founders had relevant experience. They were, smart, seemed capable, et cetera, et cetera, moving quickly, which most founders tend to really like. I was kind of like, Oh, this is moving surprisingly quickly, but okay. I'm happy to be, cautious. And then we asked, can we do, can we talk to a couple of portfolio companies to see what it's like to work with you? And this fund said, oh they're all really busy. You're like, okay. That seems weird. So, um, Reached out to a couple of companies that we found on Crunchbase and PitchBook that they had invested in. We reached out to three. I think one was like, "yeah, they're not bad." And the other two were like, "we would give them their money back if we could. Like they're a nightmare to work with." So do that level of due diligence because what you absolutely do not want is someone on your cap table for 10 years that you're going to have to deal with, who is like obnoxious. A) like life is too short, but B) they can also make your life very difficult as a founder. And so doing that diligence on investors, I think is really important. And I, again, this is a personal thing, but I love getting calls from portfolio companies going, this founder they rang me or emailed me or whatever to ask what you were like, because A) it shows me that the founder is systematic and thinking about this, b) It shows me that they are running their own process as well, which means that it might be a competitive deal. So I need to make sure that I have founders who say nice things about me. But I just think from a process perspective, it's very easy to accept money without asking too many questions. Because right fundraising takes a long time. It's boring and it's hard but sometimes if rounds come together things seem a little bit too good to be true, it's because they are. It's very easy for founders to fall into the, this kind of desperation mode where they feel like the funds need to pick them. But it's important to keep in mind that even if it slows down your process, you also need to pick the funds. Two way street mutual relationship. You recently wrote a book called The Startup Lexicon. And regardless of your field, it's notoriously difficult to put yourself into the mindset of a complete beginner. How did you do this when writing The Startup Lexicon? How did you think of the questions that somebody new to the startup world would ask? so partly exhaustion, I wrote most of the first edition when my son was like two or three months old, and so we split shifts at night. My wife would go to bed at nine, and I would keep the kid from nine until 3 a. m And then I got to bed at 3 a. m till 9 a. m So there was a lot of like writing in between naps and feeds. And so out of my mind with exhaustion, so it was very easy to put myself into a discombobulated person's shoes at that point. But I think it was actually a lot of the book came out of what I see I'd learned and done at Techstars. So Ken, who I wrote the book with and whose idea it was initially, gave me the idea. And it reminded me of so many conversations I'd had with founders over the years where they would come in and these were like the 0. 1 percent or whatever. There was 0. 5 percent that got accepted into Techstars. They would come in. They would meet like a hundred mentors. And after, the first four meetings, they would come over and they'd be like, everyone keeps asking about our CAC, and I don't know what that is. They're like, Oh, it's your customer acquisition cost. Like, how do you not know that? Then it's like, well, how would they know this? Right? Like, It's not like there's a textbook or a guide, but yes, there's tons of stuff that you could read on the internet, some of it you have to go and specifically look up. So I think a lot of it was informed by having those conversations. We did a lot of work at universities and emerging ecosystems and so spending time there and realizing that everything we talked about was like massive acronyms and very technical or legal terms. And then also just like talking to friends of mine who are you know reading the papers and starting to see a bunch of stuff about this tiny corner of the world that I operate in and going like why is everyone talking about LLMs? What does that even mean? And it's funny how many times you, someone asks you that question, you're like, I know the answer, but I can't explain it. And so that was the, that, that was one of the key things was going, okay, how would I explain this in two sentences or three sentences? Because we wrote a dictionary, not an encyclopedia, and so it needed to be short, easy, and then if you want to dig in a bit more, great then go and read the Investopedia, or go in and read more in detail descriptions of these things. We wanted something that would bridge that gap for folks who were coming in regardless of what stage they were coming into the industry. my final question is a question that I ask all of my guests, which is, what is one question that you like to work into a conversation, whether it's at work or in a social setting, that really helps you get to know someone? I always almost always certainly in a work capacity and frequently at home, although it's a bit weird when you hear the question. I always ask people what keeps them awake at night? What is the thing that, has them staring at the ceiling at three o'clock in the morning? And the kind of joke I always use is, like, when I was running my first company, certainly like I can probably draw you a map of the cracks in the ceiling of the bedroom that I slept in back then. Because you were awake at two o'clock in the morning, staring at the ceiling going, am I going to make payroll? Is this contract going to come through? Will this company honor their 90 day payment terms? Should I fire this person tomorrow or should I give them a, an extra week to see if they're going to work out? Et cetera. And it's interesting. Some people are very quick to answer it. For other people it throws them a little bit because it's it is a slightly personal question, but I think it's always interesting to see the response that it elicits in people. And I think generally people are pretty good at being honest about like if they sit and think about it for 10 or 15 seconds, then usually people are pretty good at going, "actually, it's this." And it's back to that kind of silence as its own question. I also like it because there is no right or wrong answer. Like If someone turns around and goes, look, you can look at my Oura Ring data. I sleep 10 hours every night. Okay. That's its own answer, but I'm fascinated by what it is that is the thing that plays on people's minds. Is it something very general or something very specific? It just gives you an interesting insight into folks. Well, I can't wait to try that out. I'll let you know how it goes. Eamonn, thank you so much for having this conversation with me. It's an honor to have you on QuestionAble Strategy. And also It will help me sleep better at night to know that Toucan wasn't one of the companies that you hated. Sorry it took me so long to say that. It's okay. Better late than never. Thank you so much. Thank you for having me. I had such a fun time having that conversation with Eamonn. He is somebody that I look up to a lot because of all of the advice that he's given me over the years, the chance that he took with me admitting my company to Techstars and all of the guidance that he's given me since. I just knew we were going to have a great conversation because he's had so much experience wearing different hats that he can speak on any challenge or any issue from whichever perspective you're most interested in hearing at the moment. Plus, not that many people know what an accelerator is. I know I didn't before I started my own startup, and I only figured out what it was by kind of looking into it and doing some more research. So I hope that it gave some of you guys an understanding of what an accelerator is and how they help startups. I want to get to the question that he left us with at the end. What keeps you awake at night?" And for this one, I have a bit of a story, just like usual. I went recently on a day trip to Stonehenge, from London. It was one of those bucket list activities. I just had to do it while I was here. And the thing about Stonehenge is that you probably spend about 30, 35 minutes at the actual site, but it takes three hours to get there. So you kind of need to make a day out of it. And the way that I did that was I decided that I was going to hang around Salisbury, which is the town closest to Stonehenge, and watch the Switzerland versus Italy Euros match which is soccer or football, depending on where it is that you're from. Anyway, that plan got derailed. I ended up chatting with this guy who was clearly kind of drunk and crazy, but in a fun way. And he asked me if I wanted to come hang out with his friends. Because they were there for a big reunion in Salisbury, because a few of them were in the military. And Salisbury has a big military base. So of course I said yes and I ended up spending a couple of hours hanging out with this fascinating group of friends who were just having a really good time. They were absolutely hilarious and I found them so interesting because our lives were completely different. And at one point, I was chatting with one of the guys at the table about his experience serving in the military. He served for about 10 years and had been deployed all around the world. So to military bases in the Middle East, but also in the United States. So he really had a range of experiences. And I asked him about the dangerous situations that he'd been in and all the stress that comes with it, but overall, I was really kind of shocked by how nonchalant he was about everything. He talked about being in the army, even when he was deployed to the most hostile regions and was actively in harm's way as just hanging out with your best guy friends and painted it like it was one big family. And I eventually said to him, it's so interesting that you're so calm about a circumstance that otherwise seems extremely stressful. What, if anything, keeps you awake at night?" And immediately his facial expression shifted, and he said, My daughter. And then he explained that he and his girlfriend have a one year old daughter, and she's completely changed the way that he thinks about life. He decided to leave the army when she was born, despite loving it and the community that he found there, because he felt like he needed to put her first and make sure that he was not in danger because she was relying on him. And now, I've been in my head about using this question out in the wild because I'm usually hesitant to be a downer. I don't want to be the guy at the party who's like, "Oh, tell me about your trauma, because that'll be super fun." But in this case, I felt like the question added so much depth to my understanding of this man's character and what motivates him. Up until I shifted the conversation, I found him interesting because I couldn't really relate to his life experience and just wanted to know more. But that inability to relate to him also made it difficult to connect. And what this question did was got him to open up about another incredibly important part of his life that I could understand much better. Even though I don't have kids, I have a family and younger siblings that I love and would do anything for. So, it allowed me to put myself in his shoes and understand what he's been through more than I could when he was just making jokes about being in war zones. Overall, this question is challenging because it can come across as being a downer. You're asking people to share with you what's stressing them out. And it is very personal, which Eamonn did give as a disclaimer. But it also does say a lot about a person and can be an excellent way to relate to somebody on a human level. We all know what it's like to feel stress and worry. Though we may not be stressed and worried about the same things. And this goes back to one of my core tenets of question asking, which is, as much as you can, try to find a way to reference an emotion inside a question because emotions trigger memories in people's minds and sharing memories leads to greater personal connections. So thank you, Eamonn, for suggesting this question. I had a lot of fun thinking through how I would work it into a conversation, and in the end, I made a new friend with it, and that's always a great thing. This has been an episode of QuestionAble Strategy. I'm your host, Antonia Hellman, and if you like what you just heard, go back. We've got some great episodes already up with practical tips that you can apply to asking questions in your everyday life. And in fact, here's a question that you can go and ask your friends: Have you listened to QuestionAble Strategy?" And if their answer is no, just send them the link. And while you're at it, follow, like, subscribe, leave a review. It all helps. Let me know what you're interested in hearing about and who you're interested in hearing from. Where there's a will, there's a way, and we can get them on the podcast. Till then I'm Antonia Hellman, and I will see you next time.
