20 VC 040 The Required Qualities To Be A Great Founder, with Scott Taylor, CEO @ miDrive



In an insightful interview on the 20 minutes VC, host Harry Stebings discusses with Scott Taylor, CEO of my drive and advisor to EC1 Capital, his entrepreneurial journey from selling toffee at school to creating multiple startups, including a property platform and a Maldives travel agency. Taylor emphasizes the importance of being resourceful, imaginative, and eager to learn as key traits for successful founders. He also highlights the value of having mentors and maintaining a work-life balance to prevent burnout. In his role at EC1 Capital, Taylor advises on SaaS and B2C startups, looking for visionary ideas and founders with relevant backgrounds. He believes in the power of angel ecosystems and the potential of the automotive and logistics industry, driven by advancements like in-car telematics and autonomous vehicles. Taylor also shares his investment strategy, the impact of SEIS and EIS on UK investing, and the necessity of storytelling in entrepreneurship.

Summary Notes

Introduction to Scott Taylor

  • Scott Taylor is the CEO of My Drive, a startup focused on reinventing the learner driving experience.
  • He is an advisor for Ec1 Capital and a mentor for Richard Branson's Virgin startup program.
  • Scott is an investor in companies like Coupang and Mavericks.

"He is the CEO at my drive, a startup focused on reinventing the learner driving experience. He is also an advisor to leading London based VC firm Ec one Capital and a mentor for Richard Branson's Virgin startup program."

The quote introduces Scott Taylor's current roles and highlights his involvement in various aspects of the startup ecosystem, from leading a company to advising and mentoring roles, as well as his investments.

Scott Taylor's Entrepreneurial Journey

  • Scott Taylor began his entrepreneurial activities in primary school by cooking and selling toffee.
  • He started his first online startup, The Property Hut, at the age of 15.
  • The Property Hut aimed to remove estate agents from the property market, allowing people to sell their properties for a flat fee.
  • After expanding too quickly to the UK and Australia, Scott had to wind down The Property Hut.
  • Between the ages of 15 and 21, he started and sold around ten to twelve online startups, including a Maldives travel agency.

"I think I've always sort of had an entrepreneurial trade... I started my first online startup when I was sort of age 15."

This quote reflects on Scott's early entrepreneurial spirit and his initial foray into the world of startups.

Learning to Code

  • Scott learned to code by self-studying with PHP and MySQL books at a young age.
  • He acknowledges that learning to code was challenging without the resources available today.
  • His first website was built using WordPress, plugins, and PayPal, which he later sold for a profit.
  • After his initial success, he began hiring developers for subsequent projects.

"It was pretty daunting whenever you're sort of 1415 trying to learn about object orientated programming just through this huge book."

The quote highlights the difficulties Scott faced while learning to code and the lack of resources compared to what's available now for learning programming.

Qualities of a Good Founder

  • Scott believes that being relentlessly resourceful is key to being a successful founder.
  • Determination, dissatisfaction with the status quo, imagination, creativity, eagerness to learn, and humility are also essential qualities.
  • Founders should be able to think outside the box and strive to improve people's lives with their products.
  • Building networks and storytelling are important skills for a founder.

"Determination, being relentlessly resourceful, I guess having a real dissatisfaction with the status quo."

This quote summarizes the mindset and qualities Scott considers vital for a founder to possess in order to succeed.

Overcoming Challenges

  • Scott emphasizes the importance of having a strong mentor for guidance and an impartial view.
  • He advises against using board members as mentors, preferring mentors who are not attached to the company.

"I think having a strong mentor, I'm a big advocate of having mentors, people that have been there and done that."

The quote underlines the value Scott places on mentorship and its role in overcoming challenges in the business world.

Work-Life Balance and Avoiding Burnout

  • Importance of maintaining work-life balance to prevent loneliness and burnout.
  • Solo entrepreneurship can be a lonely journey, highlighting the need for balance.
  • Finding balance is crucial when founding companies at a young age.

"Other than that, I think having a strong work life balance, whenever I was finding those companies age 1415, it was quite a lonely endeavor because I was solo finder for the majority of them."

This quote emphasizes the speaker's personal experience with the challenges of being a young solo entrepreneur and the importance of work-life balance in that context.

Seeking Mentorship

  • Young people should consider their career stage and economic situation when reaching out to mentors.
  • Offering to intern for free can provide valuable learning experiences alongside successful individuals.
  • Building relationships, networking, and being resourceful are key to gaining mentorship.
  • Resourcefulness may involve directly contacting industry leaders with well-crafted, concise emails.

"Depends really what stage of your career you're at and also sort of what you can deal with economically."

This quote suggests that seeking mentorship should be tailored to an individual's career stage and economic capacity.

"And again, it all comes back to being relentlessly resourceful."

Resourcefulness is highlighted as a critical trait for those seeking mentorship and advice from industry leaders.

Investing and Advising at EC1 Capital

  • EC1 Capital is a leading web and mobile investment firm in London.
  • The firm focuses on early-stage investments, typically between seed rounds to Series A or bridge rounds.
  • As an advisor, the speaker evaluates pitch decks and advises portfolio companies, particularly in SaaS or B2C sectors.

"My role, I think I've been working alongside or advising EC one for a year and a half or so now, and I'm simply just an advisor."

This quote describes the speaker's role as an advisor at EC1 Capital and his involvement in evaluating and advising startups.

Evaluating Pitch Decks and Founders

  • Personal resonance with the idea and vision is crucial for interest.
  • The potential for the idea to make a significant impact is a key factor.
  • The founder's background and ability to attract high-profile team members are important indicators of potential success.

"I think first and foremost does the idea and vision resonate with me."

The speaker values a personal connection with the idea and vision of the startups he evaluates.

"Was the founder able to pull in some high profile domain experts?"

The ability of a founder to attract experts is seen as a de-risking factor in the decision-making process.

Market Size Considerations

  • Market size is important, but the required size varies depending on the investor's perspective.
  • For angel investors, exits of $1 million or more are desirable.
  • For venture capital firms and Series A investors, much larger exits are necessary for a positive return on investment.

"Well, if I've got my angel investor hat on, I don't know, exits of 1 million plus for venture capital and Ec one Capital and series a people."

This quote reflects the speaker's perspective on the different exit size expectations for angel investors versus venture capital firms.

Virgin Startup Mentorship and Funding

  • The speaker has been a mentor at Virgin Startup for several months.
  • The process to attain funding through Virgin Startup was not fully discussed in the provided transcript.

"Yeah, so I've been a mentor at Virgin, I think now for about five or six months."

This quote indicates the speaker's relatively recent involvement with Virgin Startup as a mentor but does not detail the funding process.

Virgin Startup Loan Process

  • Virgin Startup is a delivery partner for the Startup Loans company, a government initiative.
  • The application process involves creating a business case.
  • Virgin Startup provides coaching and advice on financial models and business analysis.
  • A committee approves or disapproves the loan applications.
  • In 2014, 10,000 applications were submitted, and 3% received loans.
  • Post-loan support includes mentorship for the life of the company.

"There's an application. You go through the application where you pull together your sort of business case. You start to decide how much of loan Virgin startup is sort of a delivery partner for the startup Loans company, which is a government initiative which has been going from strength to strength."

This quote explains the initial stage of the Virgin Startup loan application process, highlighting that it is part of a government initiative and requires a business case.

"Then you submit your case, then the Virgin sort of startup committee will approve it or disapprove it. And just to sort of give you an insight into the numbers, in 2014 there was 10,000 applications and about three or 3% of those will successfully get loans dispersed."

The quote provides insight into the approval process and the success rate of loan applications in 2014, indicating the competitive nature of the process.

"And then you do your submission and if you get accepted, then there's the post loan support where the mentors kick in, which is where I would start to talk through and you're matched with a mentor and it's really that relationship for the life of your company."

The quote describes the post-approval phase, emphasizing the importance of mentorship and the long-term relationship between the mentor and the entrepreneur.

Eligibility for Virgin Startup Loans

  • Virgin Startup loans are available to pre-product businesses.
  • A significant percentage of applicants are from the manufacturing and retail sectors, not just online and tech.

"No, for sure it can be pre product. And interestingly, I think I was just looking through some stats this morning. I think like 22% of the applicants are within the manufacturing and retail space."

This quote clarifies that businesses do not need a working prototype to apply for a Virgin Startup loan and provides statistics on the diversity of the applicant pool.

Views on Early Stage Funding

  • The rise in angel investment is positive for the ecosystem.
  • More businesses and hypotheses are being tested, providing valuable market data.
  • Angel investment in London and globally is beneficial, following Silicon Valley's example.
  • The UK market is becoming more buoyant due to schemes like EIS and SEIS.

"I think the explosion in angel investment is great. It's great as an ecosystem. It means that we get to prove more hypotheses."

The quote expresses enthusiasm for the increase in angel investment, highlighting its role in testing business ideas and supporting the startup ecosystem.

"It's something we haven't had that many huge exits over here in the UK. But thankfully now with EIS, seIs, all of those things, we're definitely seeing this market become more buoyant."

The speaker compares the UK's angel investment landscape with Silicon Valley's and notes the positive impact of investment schemes on the UK market.

Impact of SEIS and EIS on Investing

  • SEIS and EIS provide tax advantages for high net worth individuals.
  • These schemes have significantly affected the investing environment.

"Yeah, definitely. If you look at the maths of it, if you're doing sort of a 5100k ticket size, the sort of tax advantages and stuff from it are great for high net worth individuals."

This quote affirms the positive impact of SEIS and EIS on investments, particularly emphasizing the tax benefits for those investing larger sums.

Friends and Family Funding Round

  • Friends and family rounds are a common first step in funding.
  • The risk of startups failing must be communicated to friends and family.
  • Only funds from those prepared for a potential complete loss should be accepted.

"It's difficult because if you look at the core maths of startups, the majority will fail. And if you're sort of raising ten, twenty k from friends and family, it's always that bit more difficult."

This quote addresses the high risk associated with startups and the complexities of raising money from friends and family due to the potential for loss.

"So, yeah, it's sort of a mixed balance."

The speaker acknowledges the dual nature of friends and family rounds, balancing support with the risk of losing their investment.

Advice for Entrepreneurs Seeking Capital

  • Entrepreneurs should first approach wealthy relatives.
  • Crowdfunding platforms like AngelList are a viable option.
  • Networking and identifying successful founders can lead to investment opportunities.

"Well, first, port of call is sort of rich auntie and uncles. Second is angel list all of these sort of crowdfunding websites."

This quote suggests a strategy for entrepreneurs to seek initial funding, starting with personal connections and then exploring crowdfunding platforms.

"Third, just networking, getting out there, identifying young finders or finders that have done pretty well."

The speaker advises entrepreneurs to actively network and seek out individuals with a successful track record for potential investment opportunities.

Angel Investment Avenues

  • AngelList and Crowdcube are highlighted as the favorite avenues for finding angel investment.
  • Being succinct in email communications is advised when reaching out to potential angel investors.

"So yeah, there's plenty of avenues to try and find angel investment, but I think Angellist and sort of like crowdcube would probably be the favorites."

The quote emphasizes the popularity and effectiveness of AngelList and Crowdcube as platforms for securing angel investment.

Disruptive Industries

  • Scott Taylor is most excited about the automotive and logistics industry for the future.
  • The industry is described as wide-spanning, including in-car telematics and logistics.
  • Startups like Uber, Lyft, Tesla, and Zendrive are mentioned as part of this tech wave in automotive.
  • Advancements such as in-car telematics are expected to improve risk profiling and lead to lower insurance premiums.
  • The potential of autonomous cars in the next 10-20 years is highlighted as particularly exciting.

"Automotive and logistics is a pretty widespanning industry... there's a lot of tech within automotive at the minute. And I think it's only getting started."

Scott Taylor explains why he is excited about the automotive and logistics industry, citing the current technological advancements and the potential for growth in the future.

MyDrive's Expansion and Market Impact

  • MyDrive plans to expand into Europe by early 2016.
  • 10% of learners in the UK are currently learning through MyDrive.
  • The number of users is rapidly growing, with adjustments to the user count needed weekly.

"Expanding. We want to get into Europe within early 2016. For me."

Scott Taylor outlines the immediate expansion plans for MyDrive, indicating a strategic push into the European market.

"Yeah, it's crazy. I've got a figure in my email signature which has our number and you know, you're doing pretty well if you have to come back every week and adjust it."

Scott Taylor describes the rapid growth of MyDrive's user base, which is a testament to the company's success.

Asian Tech Market

  • The Asian tech market is seen as robust and growing.
  • Scott Taylor mentions Apple's revenues in China surpassing those in the United States as indicative of the market's strength.

"Yeah, it's again going from strength to strength. I think I read over the weekend that Apple's revenues are now greater in China than the."

This quote highlights the burgeoning Asian tech market, with Scott Taylor using Apple's revenue figures as evidence of the market's potential.

Favorite Books and the Importance of Storytelling

  • Scott Taylor's favorite books are "The Hard Thing About Hard Things" and "Into The Woods."
  • He emphasizes the importance of storytelling in finding and selling companies.
  • Crafting a compelling narrative is crucial for gaining investor trust and selling products to consumers.

"I think one of the things that became clear to me as I started to find and sell and find and sell companies is being able to tell stories."

Scott Taylor stresses the significance of storytelling in the entrepreneurial process, from securing investments to engaging consumers.

Selling Companies: Timing and Considerations

  • Scott Taylor advises against starting a company solely with the intention to sell it.
  • Factors to consider when selling include strategic reasons, personal desires, and company growth.
  • The timing of a sale is influenced by a variety of considerations, including market conditions and the entrepreneur's goals.

"I think if you start a company with the sole goal of selling it, it's not really a great place to be."

The quote suggests that the aim to sell should not be the primary motivation for starting a company, as it may not lead to a fulfilling entrepreneurial journey.

Recent Investment in Stealth Mode

  • Scott Taylor's most recent investment is in a company operating in the same space as Just Eat.
  • He was compelled to invest because of the team and the attractive unit economics of food takeaway and delivery startups.

"It's still in stealth, but it's a company that operates in the same space as just eat. And again, I invested it because of the team and actually the unit economics of food takeaway and delivery startups are pretty compelling."

This quote reveals Scott Taylor's recent investment decision based on the team's strength and the business model's economic viability.

Conclusion and Resources

  • Harry Stebings expresses gratitude to Scott Taylor for the interview.
  • Listeners are directed to the blog for resources and encouraged to follow the 20 Minute VC on Twitter.

"Now for all the resources mentioned in today's show with Scott, head on over to the blog at www. Dot the twentyminutevc.com and you can follow the 20 minutevc on Twitter at 20 minutevc, all in lowercase."

Harry Stebings wraps up the interview, providing listeners with directions to additional resources and ways to engage with the content online.

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