FF 014 Making Great Founders, Idea Creation and The First 100 Days Of A Startup with Alice Bentinck, CoFounder @ Entrepreneur First

In this episode of "20 Minutes VC," host Terry Stebings interviews Alice Bentink, co-founder of Entrepreneur First (EF), an accelerator that supports individuals in building startups straight out of university. Bentink, who rejected an offer from Google and learned to code to establish Code First Girls, shares insights on the importance of selecting co-founders with exceptional talent, particularly in technical fields. She emphasizes the significance of starting with a resonating idea and rapidly iterating based on customer feedback, rather than striving for perfection. Bentink advises non-technical founders to leverage their domain expertise and underscores the need for equity in co-founding relationships to be forward-looking. She also highlights the critical role of mindset, particularly a growth mindset, in a founder's success. Lastly, Bentink discusses the challenges and triumphs of scaling EF, including a recent fund closure that will enable investment in 200 new companies.

• Alice Bentink is a co-founder of Entrepreneurs First, an accelerator program focused on founders.
• Her background includes working at McKinsey & Co. and turning down an offer from Google.
• She co-founded Code First Girls to increase female participation in tech.
• Alice is involved in various boards and initiatives, including Founders for Schools and Imperial College London's Department of Computing Industrial Liaison Board.
• She has been recognized in various prestigious lists for her influence and achievements.

You are listening to the 20 minutes vc with your host Terry Stebings. And as it's Friday, that can only mean one thing. It's Founders Friday, and today we bring you one of the most exciting young founders in the UK. It is, of course, the brilliant Alice Bentink, cofounder at entrepreneurs first, the accelerator program that puts founders first.

This quote introduces Alice Bentink and highlights her role as a co-founder of Entrepreneurs First, indicating her significance in the UK startup ecosystem.

• Vidar Law specializes in legal representation for founder disputes.
• They offer services like assessing vesting stock and payroll payments.
• The firm is touted for its startup experience and aims for fair and amicable resolutions.

And with it being founders Friday, I'd like to talk to you about founder disputes and breakups. They happen to us all, and when they do, you want the best legal representation behind you. And that's where Vidar law come into play.

This quote discusses the importance of having experienced legal representation during founder disputes, promoting Vidar Law as a go-to for such issues.

• Alice Bentink's career began at McKinsey & Co., where she met her co-founder, Matt Clifford.
• The idea for Entrepreneurs First stemmed from their own experiences as graduates interested in startups but uncertain about the process.
• The goal of Entrepreneurs First is to enable talented individuals to build companies directly out of university instead of joining large corporates.

So after I left university, I headed off to McKinsey and company... And as we were thinking about leaving McKinsey, we were beginning toy with various tech startup ideas and eventually realized that what we should be doing is solving the problem that we had had when we were graduating from university...

This quote provides background on how Alice Bentink's career trajectory and experiences led to the inception of Entrepreneurs First, aiming to solve a problem she and her co-founder faced as graduates.

• Entrepreneurs First focuses on selecting individuals with exceptional talent, particularly in technology, to form co-founding teams.
• The approach to ideation should be to start with a resonating idea, rather than waiting for a perfect one, and to begin building and testing with customers quickly.
• The key ingredients for starting a company include finding great co-founders, coming up with a resonating idea, and beginning the building process promptly.

So I suppose there are a couple of important ingredients to build a good company from scratch... the most important thing when starting from scratch is to come up with an idea, an idea that resonates with you, that you're uniquely skilled and talented to start working on, and then just to get going.

This quote emphasizes the importance of starting with an idea that resonates and the urgency of beginning the building process to validate the product with customers.

• Nontechnical founders should become domain experts in their intended startup field.
• Domain expertise can be leveraged to partner with technically skilled individuals to build a tech startup.
• Examples include individuals with extensive industry experience, such as in translation, who can identify problems and opportunities within their field.

So for nontechnical individuals, our advice is become a domain expert... To give you some examples from the current EF cohort, we have Karen, who spent ten years working in the translation industry...

This quote advises nontechnical founders to develop domain expertise, which, combined with a technical co-founder's skills, can lead to the creation of a successful tech startup.## Founder Qualifications

• Industry expertise, contacts, and knowledge are critical for a founder's success.
• Nontechnical founders with years of industry expertise should leverage their experience to build startups.
• A common error is when experienced individuals are not interested in utilizing their expertise to create a startup.

"That means that she's the kind of right founder to be building that. I suppose one of our frustrations with nontechnical founders is that often we find people who have years of expertise in a particular industry, but they're not interested in using that to build a startup. And I think that can be an error."

This quote emphasizes the importance of industry expertise for founders and the missed opportunity when experienced professionals choose not to leverage their knowledge in the startup space.

• Entrepreneur First (EF) primarily selects individuals with deeply technical backgrounds.
• Only a small percentage of participants are nontechnical, including self-taught developers.
• Selection is based on talent rather than the startup idea.

"Just a couple. So we're about 90% that come from deeply technical backgrounds. So either computer science or engineering backgrounds, or we take a couple of self taught developers as well."

The quote details the composition of participants in EF, highlighting a strong preference for technically skilled individuals.

• EF does not select participants based on startup ideas.
• Applicants are encouraged to discuss potential ideas to understand their thought process.
• It is common for participants to change their startup idea multiple times during the program.

"We never select based on the idea, we only select based on talent. We do look for people who have ideas, and during the interview process, we always get applicants to talk through potential ideas that they might want to work on, but that's usually just to understand how they think."

This quote clarifies that EF's selection process focuses on the individual's talent and potential, and while ideas are discussed, they are not the basis for acceptance into the program.

• Strong technical background and a history of building things are valued traits.
• Previous startup experience is beneficial.
• Mindset, particularly a growth mindset, is the most important indicator of success.
• Willingness to learn a broad skill set is essential for founders.
• Attitude to risk and determination are also key qualities.

"But actually the biggest indicator of all, much more important than intelligence or even technical ability, is mindset and how they approach building a startup."

The quote identifies mindset as the most critical factor for a founder's success, surpassing technical ability and intelligence.

• Finding a co-founder is challenging, and it's important to avoid "co-founders of convenience."
• Networking outside of one's usual circles is crucial to find a suitable co-founder.
• Testing the co-founder relationship with clear communication and deadlines is recommended before committing.

"So making sure that you expose yourself to a wide group of people who are interested in co founding a startup and who have the right kind of skills is really important."

This quote advises on the importance of expanding one's network to find a co-founder with the right skills and interests, rather than settling for a convenient option.

• EF recommends nearly equal equity stakes in partnerships.
• Equity should be based on future contributions, not past actions or who originated the idea.

"So pretty much all of ours are 50 51. Of the important things to remember about equity is that it should be forward looking, not backward looking."

The quote suggests that equity distribution should reflect future work and contributions, rather than past efforts or idea origination, with a recommendation towards equal partnerships.## Co-Founding Relationships

• Importance of aligning incentives among co-founders.
• Equitable division of equity to prevent acrimonious relationships.
• At Entrepreneur First (EF), the standard advice is a 50/50 equity split.
• Recognition that different situations may require different equity divisions.

"And if you want to build a big, successful company, you're going to need to dedicate a significant proportion of your life to it. And you want to make sure that whoever you're co founding with is incentivized in the same way that you are."

This quote emphasizes the commitment required to build a successful company and the importance of having co-founders with aligned incentives to ensure dedication and prevent conflict.

"We've seen not within EF, but outside of EF, acrimonious co founding relationships based on, I suppose, unfair equity divisions or what becomes to be seen as an unfair division."

The quote addresses the potential for conflict in co-founding relationships due to perceived unfair equity divisions, which can be detrimental to a company's success.

"But I mean, at EF we're lucky because everyone's starting at the same time and they're all companies built from scratch. So I mean, our advice to our guys is it's 50/50."

This quote explains EF's approach to equitable co-founder relationships by having everyone start simultaneously and advising a standard 50/50 equity split to avoid disputes.

• Prioritizing product development over other startup activities.
• Importance of building something customers want.
• Advised to ignore elements like logos, accounting, and incorporation initially.
• Emphasis on creating test versions of the product, getting customer feedback, and iterating quickly.

"Our piece of advice is always stop building a startup and just build a product."

This quote highlights the advice given to founders to concentrate on creating a viable product rather than getting caught up in the peripheral tasks associated with starting a company.

• Importance of targeted feedback from potential customers.
• Risks of getting feedback from too broad an audience, leading to disparate answers.
• Feedback should come from those whose problem the product aims to solve.
• Caution against relying on overly positive feedback from friends and family.

"You need feedback from the people whose problem you are particularly trying to solve, and then listening to and condensing their feedback."

The quote emphasizes the need for focused feedback from the target customer demographic to ensure the product direction is clear and relevant.

"Friends being kind and families being kind and giving feedback can often be very dangerous."

This quote warns about the potential pitfalls of taking feedback from friends and family, who may not provide the critical and relevant insights needed for product development.

• Considerations for taking investment from friends and family.
• Understanding the risk profile of early-stage startup investing.
• Importance of investors who are knowledgeable about the time and risk involved in startup investing.

"As a founder, you want to be taking money from people who understand how startup investing works, who understands the risk and how long it takes to get a return."

This quote stresses the importance for founders to seek investment from those who have an understanding of the startup investment landscape and the associated risks and timelines.

• The necessity of preparation for a successful investment pitch.
• Ensuring foundational work is done: right team, traction, market understanding, sales strategy, and tracking metrics.
• EF's role in assisting startups with preparation for demo day and pitching to investors.

"The pitch is, I suppose in many ways just the icing in the cake. It's a way to communicate what you've done, but to be able to do a good pitch, it means that you need to have done the work beforehand..."

This quote conveys that a successful pitch is the culmination of extensive preparatory work and is a tool to effectively communicate the startup's achievements and potential to investors.## Importance of Pitching in Startups

• The pitch is considered a window to the world for startups, crucial for generating excitement.
• The actual value lies in the work done before the pitch, ensuring the startup is viable and has potential for high growth.
• Entrepreneur First begins pitch preparation only a week before demo day, emphasizing the pitch's lesser significance compared to the foundational work.

"And actually, we only start a week before our demo day at Entrepreneur first, actually helping them get the pitches together. It's a very, very short process, but that's because the pitch isn't the bit that matters."

This quote highlights that Entrepreneur First focuses on foundational work over pitch preparation, starting only a week before demo day, suggesting the pitch is not the most critical aspect of a startup's journey.

• A founder's job changes dramatically every six months, requiring constant learning and problem-solving.
• Early challenges included skepticism from others regarding the viability of investing in people pre-team and pre-idea.
• Current challenges involve scaling, building out the team, and ensuring proper support for startups.

"Your job changes pretty dramatically every six months. You're always learning something new. There's always different problems to be solved."

Alice Bentink emphasizes the dynamic nature of a founder's role, with frequent changes and a need for continuous learning and problem-solving.

• Entrepreneur First (EF) has scaled from producing 15 companies a year to about 40.
• Closing their first three-year fund at £8.5 million allows rapid scaling and team expansion.
• The fund will enable EF to invest in approximately 200 companies over three years.

"So we just closed our first three year fund at eight and a half million pounds. And that's been a real highlight. It means that we're going to be able to scale rapidly, means we can build out the team and yeah, it feels like a big moment for EF."

Alice Bentink describes the closure of a significant fund as a highlight, which will facilitate rapid scaling and team growth for Entrepreneur First.

• Tony Hsieh of Zappos is admired for his book "Delivering Happiness" and his work on holacracy.
• The Azim Azhar newsletter, "The Exponential View," is a valuable resource for AI news and articles.
• Must-have apps include Slack for communication and Pocket for saving articles.

"I mean, one of the guys that I really enjoy reading his stuff is Tony Shea, the founder of Zappos, and his book delivering happiness and then his work on holocracy as well is really interesting."

Alice Bentink identifies Tony Hsieh as a thought leader whose work she finds particularly valuable and insightful in the tech entrepreneurship space.

• The next five years involve scaling EF, improving company quality, and potentially opening an international office.
• Personal growth for Alice Bentink is tied to EF's growth, with more work and learning opportunities ahead.

"I think the next five years for me and EF are very much entwined. So scaling EF, scaling the numbers of companies that we produce and the quality of the companies that we produce, maybe opening an international office, there's lots of interesting things on the horizon."

Alice Bentink outlines her intertwined future with Entrepreneur First, focusing on scaling the business and enhancing the quality of companies produced, as well as her own personal development.

• Individual legal and financial protection is crucial for founders in the event of a founder breakup.
• Vidarlaw offers amicable solutions and strives to protect clients' best interests.
• Contact information for Chris Verner at Vidarlaw is provided for those seeking legal services.

"So make sure you are legally and financially protected in the event of a founder breakup by heading over to Vidarlaw."

Terry Stebings stresses the importance of legal and financial protection for individual founders, recommending Vidarlaw for such services.