By James Silver,
An ever-growing number of tech incubators and accelerators select start-ups based on the strength of their teams, rather than their business ideas, which frequently fizzle out in their earliest iterations. But few, if any, use the blueprint developed by Entrepreneur First, a talent accelerator that targets graduates, who apply individually, with neither pitch nor partner.
Sitting in a meeting-room on the third floor of Campus, where Entrepreneur First is housed on a rotating basis with other accelerators, co-founder Matt Clifford, a personable 27-year-old Cambridge and MIT graduate, explains the rationale behind the program. It was, he says, born out of a sense of frustration that while the UK’s top universities train some of the world’s brightest tech talent, far too many of them typically want to be algorithmic traders in investment banks or corporate lawyers the moment they leave university. “But if you walk into a similar classroom at MIT or Stanford, they all want to start the next big thing [in tech],” he says. “We started Entrepreneur First in response to that challenge – asking what would it take to bring that same culture over here?”
Clifford toured British university campuses with co-founder and fellow McKinsey alumnus Alice Bentinck, also 27,(the two are pictured on Informilo’s home page) to find out what was stopping their target market from becoming tech entrepreneurs “We assumed they’d say money and risk, but …(their reluctance] comes from a feature of the existing tech ecosystem – investors and even accelerators will not invest in individuals, only in teams,” says Clifford. “ Nor will they really invest in talent, only in ideas. If you ask them, most investors will tell you they’re ‘all about the entrepreneur’ and that’s great, but if you came to a meeting and said ‘Hey I’m great, make a bet on me’, you’d be sent packing.”
So the pair zeroed in on a pre-team, pre-idea, talent-led model. The resulting twelve-month program, which launched a year and a half ago, screens over 500 applicants annually and is designed to fit the university recruitment cycle. “We’re literally going head to head with the banks and consultancies in the milk round to recruit these people,” Clifford explains. “We spend the first six months, between February and September, with them as individuals, running a very intense series of weekly events for them to experiment with new teams and ideas within the larger group of thirty. By the end of that, they know each other really well – they are like blood brothers. By September, they commit to a team – to a line of enquiry, if you will. Sometimes it’s a very specific idea, but more often it’s a problem that they’ve discovered. Helping them discover real world problems is a huge part of what we do.”
Entrepreneur First see many applications from would-be entrepreneurs with ideas like better ways of sharing lecture notes or selling used text books. Those may be big problems to students, but it is hard to get people to pay a lot of money for those products. So, Clifford says the program puts a lot of our time is putting entrepreneurs “ in front of people with problems with the budgets to match them.”
The next six months are spent tackling the problem with their teammates. The first half of this period is about “validating the idea, through talking to customers and iterating the product in response to feedback”, says Clifford. The second half is much more like a typical accelerator in that it’s focused on turning the product into a viable business.
Until December, Entrepreneur First was based in six-floor walk-up in a nondescript office building in Cannon Street, in the City of London (loaned to them “by a property developer who is very into start-ups”). In January they moved on Campus for a three- month stint. The impact was instantaneous.
“If you’re on the sixth floor of a tower block, as we were, and below you the other floors are being used by, say, a recruitment consultancy and professional services firms, it means the [opportunity for] serendipity is pretty limited,” says Clifford. Getting the mentors to come to a random address [in the City], persuading investors to come in and see the teams and pulling off big events – you just can’t do all that without a real community around you. Having Seedcamp upstairs, TechHub downstairs and being able to see investors, not just because they’re making a special journey to see you, but because they’re in the building anyway – that’s just totally different.”
Campus “ is like a physical API for start-ups; it’s plug and play,” says Clifford. I don’t have to run every event that these guys attend for it to be really valuable. They can literally just plug in to a TechHub or Seedcamp event and get a huge amount of value out of that too. Equally people can plug into one of ours very quickly.”
Entrpreneurs say they find that really valuable. “The Cannon Street offices weren’t that far away, but sometimes when you’re doing quite a bit of work, you kind of think ‘I’m not sure I can afford the time’. But when you’re right here its not even a question, because if you go to an event and find it’s not what you were expecting it to be, you can just go back upstairs to work again,” , says Niluka Satharasinghe, a cofounder of Verse, a start-up created within Entrepreneur First which enables Microsoft PowerPoint users to sync presentations created by large, distributed teams.
Investors also reap the value of proximity to so many budding young entrepreneurs. “If you’re an angel investor, who has partnerships with other guys in the building, then Google have made it incredibly easy to plug into us. Now, some of that is serendipity, but a lot of it is making it completely seamless for mentors and investors to get involved with a program like ours,” says Clifford.
Thanks in part of investor interest, as its first batch of teams leaves ,Entrepreneur First is changing its own business model. For most of its initial eighteen months, the program was funded via corporate partnerships with sponsors including the City of London Corporation, Experian, McKinsey and Microsoft – in addition to free office space from Google and legal support from Osborne Clarke. Entrepreneur First would neither offer cash to their teams, nor take equity in their businesses. From now on, however, the program, while retaining its partnerships, will pivot to a ‘traditional’ accelerator model whereby the selected teams will receive upfront investment from angels in exchange for a small percentage of equit. Clifford says he plans to monetize by charging a program fee, which teams will pay from their investment.
Clifford concedes that there was “huge skepticism” when the talent accelerator launched due to its untested model, which was viewed more as a means of encouraging talent to choose the tech sector than creating sustainable start-ups. But with nine of the first twelve teams receiving investment so far and one of them – AdBrain- about to close a $1 million round- those questions have vanished. London, it seems, has not only got tech talent, it is starting to know how to leverage it, assemble it and build fundable companies with global aspirations.