20VC Why More People Should Be Entrepreneurs & How Do You Know When You Are Ready with Matt Clifford @ Entrepreneur First

Summary Notes


In this episode of the 20 minutes VC, host Harry Stebbings interviews Matt Clifford, the founder and CEO of Entrepreneur First (EF), a leading pre-seed investment program for deep tech startups. Clifford discusses the unique investment model of EF that focuses on individual talents over existing companies, the importance of mindset over skill for entrepreneurs, and the critical role of feedback in startup success. He also highlights the future expansion of EF into Singapore, emphasizing the location's ripe environment for disruptive innovation due to its technical talent, emerging startup ecosystem, and supportive business environment. Additionally, Clifford touches on his personal routine and the potential for technology to revolutionize traditional sectors like politics and government. The episode is interspersed with a promotion for Lisa mattresses and Mattermark Daily, curated by Nick Frost.

Summary Notes

Introduction to Entrepreneur First and Matt Clifford

  • Entrepreneur First (EF) is Europe's leading pre-seed investment program for founders of deep tech startups.
  • Matt Clifford, founder and CEO of EF, has a background as a strategy consultant at McKinsey and academic experience from Cambridge and MIT.
  • EF's investment model is unique as it backs technical talent pre-company.
  • EF startups have raised over $100 million in external funding and are innovating in fields like artificial intelligence, robotics, and infrastructure.
  • Harry Stebbings endorses EF as his top pick for accelerators.

"I'm thrilled to welcome Matt Clifford, founder and CEO at entrepreneur First, Europe's leading pre-seed investment program for founders of deep tech startups."

This quote introduces Matt Clifford and his organization, Entrepreneur First, highlighting its significance in the European deep tech startup ecosystem.

Matt Clifford's Career Transition

  • Matt Clifford's career included prestigious institutions and roles before founding EF.
  • He chose to leave the traditional path to pursue impact through entrepreneurship.
  • Clifford's blog post "don't be a badge collector" reflects his belief that accumulating credentials is less fulfilling than creating impactful work.
  • EF was founded to enable talented individuals to scale their impact beyond conventional careers.

"So for me, starting entrepreneur first was really about how do I have impact? How do I kind of scale my impact beyond what would be possible through a conventional career."

This quote explains Clifford's motivation for founding Entrepreneur First, emphasizing his desire to create a larger impact than what he could achieve through traditional career paths.

Entrepreneur First's Model

  • EF challenges conventional venture capital wisdom by focusing on individual talent rather than pre-existing teams.
  • EF's model is based on the belief that the traditional VC approach is limited by a small dataset of entrepreneurial success stories.
  • The program supports individuals pre-team and pre-product, investing in their talent and ambition.
  • EF helps individuals form teams, develop ideas, and bring products to market within six months.

"Rather than putting up a sign and saying, hey, if you've got a great team with a great idea and a great product, come to us and we'll give you some money instead, we say, if you're a great individual pre company, then we, I think uniquely, are willing to take a bet on you, both financially and with our time, purely on the basis of your talent and your ambition."

This quote describes EF's distinctive approach to building technology companies by investing in individuals based on their potential rather than their existing business plans or teams.

The Future of Entrepreneurship

  • Matt Clifford anticipates a significant increase in entrepreneurship.
  • EF's stance is that not everyone should be an entrepreneur, but rather those who are most talented and ambitious.
  • The increase in entrepreneurship is attributed to a shift in societal views and opportunities.
  • EF aims to ensure that society's top talent considers entrepreneurship as a viable and impactful career path.

"What we actually believe is that the most talented and ambitious people in a society ought to be an entrepreneur."

This quote clarifies EF's position that entrepreneurship is not for everyone, but it is a critical path for those with exceptional talent and ambition to make a significant impact.## Career Paths and Entrepreneurship

  • In certain societies, well-worn career paths emerge as the default for ambitious individuals post-education.
  • In the UK and Europe, traditionally, these paths have been in financial and professional services.
  • The mission is to shift the default ambitious career path toward founding companies.
  • The increase in entrepreneurship, especially among the ambitious, is attributed to the unprecedented ability to scale impact through technology.
  • Technology allows for reaching vast audiences, which is attractive to ambitious individuals.
  • The current era is unique in its potential for individual impact and scale.

"Our mission is to change that to founding, but only for people who are unusually ambitious."

This quote emphasizes the goal of redirecting the ambitions of highly driven individuals from traditional career paths to entrepreneurship.

"This is the first time in human history that it's been possible to so radically scale your impact through technology."

The quote highlights the unique opportunity presented by modern technology to amplify one's influence and reach, which is enticing to those with high aspirations.

Can Entrepreneurialism be Taught?

  • Entrepreneurial abilities are discovered through the process of being a founder, not innate or taught in a traditional classroom setting.
  • Entrepreneurship skills are procedurally generated and improve with the experience of founding.
  • The only way to truly know if one has what it takes to be a founder is to attempt founding a company.
  • There is no test or quiz to determine if someone is suited to be a founder; it is a learned and discovered trait.

"I don't think it's either. We've often talked entrepreneur first about your abilities as a founder is something that you discover by being a founder."

The quote refutes the idea that entrepreneurship is either innate or can be taught, suggesting it is a skill developed through the experience of founding.

Readiness to Start a Startup

  • The concept of "readiness" is a dangerous obstacle for potential founders.
  • Founding a company is unpredictable, and the challenges faced make it nearly impossible to be fully prepared.
  • Abilities as an entrepreneur are discovered through the process of founding and vary from one startup to another.
  • The notion of readiness is challenged by the success stories of unqualified individuals who became great founders through the process.

"I think it's very, very dangerous and very, very negative for people to believe that they need to wait until they're in invert commas ready before they start a startup."

This quote criticizes the idea of waiting for a state of readiness, suggesting that the true capabilities of a founder are revealed through the act of starting a business.

Rapid Iteration and Product Release

  • Rapid iteration is a core principle, applying to product strategy and team building.
  • The philosophy is to release products quickly rather than perfecting them through extensive market research.
  • Reid Hoffman's thesis that one should be embarrassed by their first product release is supported, emphasizing the importance of learning from early and frequent iterations.
  • Beliefs about a startup should be strong but flexible, allowing for quick adaptation and change.

"We really live and breathe rapid iteration entrepreneur first."

The quote underscores the importance of quick, iterative processes in entrepreneurship, which is a fundamental practice at Entrepreneur First.

Approach to Idea Creation

  • Entrepreneur First (EF) evaluates individuals based on potential, not their initial ideas.
  • The concept of "edge" is central to EF's selection and development process, referring to a person's competitive advantage derived from skills, knowledge, or experience.
  • EF focuses on nurturing individuals with clear competitive edges, which can translate into globally competitive ideas.
  • The transition from having an edge to generating ideas is facilitated by bringing together smart, ambitious individuals with distinct advantages.

"Where the ideas come from at EF is an idea that we call edge."

The quote introduces the concept of "edge" as the foundation for idea generation and the selection process at Entrepreneur First, highlighting the importance of individual competitive advantages.## Intersection of Edges and Idea Generation

  • The process of idea generation involves bringing together determined individuals with different "edges" or competitive advantages.
  • Participants discuss their individual edges to explore potential intersections that may yield innovative ideas.
  • Ideas are iteratively developed through discussions of these competitive advantages within the cohort.

"And they all talk about what their edges are. And what we've discovered is that by having the right environment and the right people and the right vocabulary, so that people can say, well, I have an edge in deep neural networks. It's like, well, I have an edge in agriculture."

This quote explains the importance of diversity in expertise and the value of a collaborative environment where individuals can share and combine their unique advantages to create new concepts or businesses.

Mindset Over Skill

  • Mindset is considered more critical than raw intellect or skill in the success of founders.
  • Entrepreneur First initially overvalued intellect but now places higher emphasis on resilience, determination, growth mindset, and leadership.
  • Founders should focus on mindset-related attributes as well as their intellectual abilities and unique edges.

"What we found is that actually intellect is very important. Being able to solve problems is very important. But compared to the ability to keep going in the face of obstacles, compared to being able to find a way when other people would think there isn't a way to improve and adapt in the face of difficult feedback, insight is just not that important relative to mindset."

This quote highlights the realization that while intellect is necessary, the ability to persevere and adapt is more indicative of a founder's potential success. Mindset trumps skill in entrepreneurial endeavors.

Balancing Long-Term Vision with Short-Term Focus

  • Founders must be resolute about their long-term vision while being flexible and responsive in their short-term actions.
  • The "why" of a company should remain constant and inflexible, while the "how" and "what" should be adaptable based on feedback and data.
  • The concept of "strong beliefs, weakly held" encourages founders to commit fully but remain open to changing their approach in response to evidence.

"And the way I would think about the balance, then, between long term and short term is that I think as a founder, you have to be absolutely resolute, even inflexible, on the why, on the vision."

This quote emphasizes the importance of maintaining a steadfast long-term vision while being willing to iterate on the methods to achieve that vision. It underlines the necessity of differentiating between the core mission and the strategies employed to fulfill it.

The Step Change and Impactful Technologies

  • Entrepreneur First believes in the transformative power of emerging technologies and their early adoption.
  • The company aims to build businesses at the frontier of what's possible, focusing on technologies that can radically change the world.
  • Founders should have a sense of mission, and the excitement of working with deep, step-change technologies can fuel this.

"Our belief is that the existence of these technologies, the earliness of their adoption, provides a set of opportunities for people who understand them and who are very ambitious."

This quote conveys the conviction that emerging technologies present unique opportunities for ambitious individuals who grasp their potential. It speaks to the philosophy of building companies that can lead the next wave of innovation.

Entrepreneur First's Expansion into Singapore

  • Entrepreneur First's mission is to redefine what careers and ambition look like in the 21st century.
  • Singapore was chosen for expansion due to its pool of technical talent, emerging startup ecosystem, and supportive business environment.
  • Entrepreneur First seeks locations where the default career path can be shifted toward entrepreneurship, which they believe is already the case in Silicon Valley.

"For us, Singapore ticked those boxes. You have extraordinary technical talent both within Singapore and within the kind of broader region."

This quote explains the rationale behind choosing Singapore for Entrepreneur First's expansion. It highlights the alignment of Singapore's attributes with the company's mission to foster entrepreneurship in environments ripe for disruption.## Career Path for Ambitious People

  • Founding companies is seen as a primary path for ambitious individuals.
  • The role of the speaker's job is to have the most impact by being where innovation is not yet prevalent.

"The career path for ambitious people is very much to found companies." "So our job is to be wherever in the world we can have the most impact by being there where it's not played out."

The first quote underscores the importance of entrepreneurship for those seeking to make a significant impact in their careers. The second quote emphasizes the strategic approach to positioning oneself in areas lacking innovation to maximize influence.

Favorite Books and Their Impact

  • "The Name of the Rose" by Umberto Eco is the speaker's favorite fiction book for its depth and exploration of human questions.
  • "Sapiens" by Yuval Noah Harari is the speaker's favorite nonfiction book for challenging foundational assumptions and reframing big questions.

"My favorite book is the name of the Rose by Alberto Echo. And the reason I love that book so much is I love how deeply learned it is and opens up a world that I knew very little about, while at the same time actually touching on some very basic and deep human questions about that we would all recognize." "The book that comes to mind is the book sapiens, which I read last year. What I loved about that book is it's a great example of how a book can challenge some really foundational assumptions that you have and in the process help you kind of reframe a lot of big questions in totally new ways."

The first quote explains the speaker's admiration for "The Name of the Rose" due to its intellectual depth and relatability. The second quote highlights the transformative effect of "Sapiens" on the reader's perspective.

Sectors with Potential for Innovation

  • The speaker is excited about technology impacting traditionally innovation-resistant sectors.
  • Politics, government, and social policy are areas where the speaker expects significant startup innovation.

"So I'm really excited about the potential for technology to have an impact in sectors that have been largely untouched or much less touched by innovation."

This quote conveys the speaker's anticipation for technological advancements to revolutionize sectors that have previously seen little innovation.

Common Mistakes by Entrepreneurs

  • A common mistake made by entrepreneurs is not seeking or responding to enough customer feedback.
  • The speed of processing and iterating based on feedback is crucial.

"I think the single most important thing, and it's a cliche, but it's cliche because it's true, is simply not getting enough feedback and not responding to it."

The quote emphasizes the critical importance of customer feedback for entrepreneurs and the need to act on it rapidly.

Favorite Blog or Newsletter

  • The speaker has been a long-time reader of marginalrevolution.com for its wide-ranging content.
  • The blog is appreciated for its intellectual stimulation and breadth of topics covered.

"So I was a very, very early reader of marginalrevolution.com, which is Tyler, Karen and Alex Cavarok's blog, I was going to say on economics, but one of the things I love about it is it's actually, about absolutely everything."

This quote expresses the speaker's long-term engagement with marginalrevolution.com and the value they find in its diverse coverage.

Morning Routine

  • The speaker is an early riser, starting the day at 6:00 a.m. with a routine that includes making coffee and writing a diary.
  • Coming into the office early is part of the routine to maximize productivity.

"So I'm a fairly early riser. I get up at 06:00 a.m. Every day and make my wife a coffee. I then write my diary. I've been keeping a diary nonstop since I started working McKinsey, which I find really useful."

The quote outlines the speaker's disciplined morning routine, highlighting the importance of starting the day with personal rituals and early work hours.

Exciting EF Companies

  • The speaker is particularly fond of companies that innovate with machine learning.
  • Examples include Third Eye for crime detection, Cloudnc for manufacturing automation, and Avalon AI for early dementia detection.

"I do have a soft spot for companies that are using machine learning in interesting ways. And just to pick ones simply from the most recent cohorts... We have company like Third Eye, which is using machine learning to automate the use of CCtv and detection of crime."

This quote reveals the speaker's enthusiasm for startups that apply machine learning to solve complex problems across various industries.

Acknowledgments and Show Promotion

  • The host thanks Matt Clifford for his participation and contributions to the podcast.
  • Promotion for the show includes following on Snapchat and signing up for the newsletter.
  • Lisa, a mattress company with a unique delivery model and social impact, is advertised.

"And I'd like to give a huge hand to Matt for giving up his time today to be on the show." "So join the movement and get yours by heading over to lisa.com feed VC and enter the promo code vc 75 to get a wicked $75 off."

The first quote is an expression of gratitude towards the guest for sharing insights on the show. The second quote is a promotional message for the sponsor, highlighting their product and social responsibility.

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