Three Big Ideas #5
Bold thinking, an "October Surprise", and entering founder mode
Welcome to our weekly Three Big Ideas roundup, in which we serve up a curated selection of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
⚡️ Anastasia Bektimirova, Researcher
Ask an investor about the differences between British and US founders, and you’ll likely hear a familiar narrative about the deficit of ambition. They’ll tell you that British startups are not going after big markets, seek an early exit, or are pitching cautious rather than boldly optimistic sales numbers. In a recent World of DaaS podcast interview, when asked what conventional wisdom or advice he thinks is generally bad, Matt Clifford (Entrepreneur First co-founder and ARIA Chair) replied:
“There's a very annoying thing that happens in Europe. A lot of entrepreneurs get advice like ‘that’s a good idea, but do something just a little bit less ambitious because then you're more likely to succeed.’ A lot of people have an intuition that there should be an inverse correlation between odds of success and ambition – if you're trying to do something really hard, you're less likely to succeed. But it is much easier to succeed by being more ambitious, because in the end, it comes down to: can you attract talent and can you attract capital? Guess what? They're attracted to ambition. I think that intuition is just wrong and it gets amplified into very bad advice.”
This has made me wonder why founders don’t know better by default: what mechanisms might be at work here, and where else they might be restraining ambition. While not every founder is university-educated, the academic environment does play a role in shaping the mindset and ambition levels for those who are. From undergraduate to doctoral dissertations, filling a “gap in the literature”, no matter how incremental, is prized; supervisors encourage students to aim at “feasible” research above all, instead of letting their ambition roam while their work is still insulated from the pressure of the market or specific grants. This might be pronounced in some disciplines more than in others, affecting the impact we see from research in different fields and its commercialisation potential. It’s not hard to spot the same logic in education even earlier than university.
Reflecting on a year spent in the Bay Area, Alice Bentinck (Entrepreneur First co-founder) gives a mindset-rewiring steer which, I believe, applies to science as much as to entrepreneurship:
“The remedy isn’t an over-hyped slide that you don’t believe. The remedy is to ask yourself ‘what’s the most ambitious target we think we could achieve and then what would it take to get there?’. Pitch that.”
📦 Eamonn Ives, Research Director
In American politics, an ‘October Surprise’ refers to an unexpected event that occurs in the month prior to the presidential election, and that threatens to hurt the chances of one of the candidates. On 1 October, a strike called by the International Longshoremen’s Association looked like it could prove to be one for Kamala Harris – if it meant supply chains getting gummed up and inflation taking off again.
One of the demands made by the striking workers was a ban on automation at US ports. You might imagine this would be a straightforward hammerblow to productivity, but a fascinating post by Brian Potter suggests the impact could well be more nuanced. It also got me wondering, how productive are British ports?
Data from the World Bank’s Container Port Performance Index don’t make for pretty reading. Of the British ports it considers, only two – London and Southampton – feature in the top quartile, at 76th and 93rd out of 405 respectively. Every other port ranks deep into the triple digits – Felixstowe is 174th, Teesport 224th, Grangemouth 264th, Liverpool 293rd, Greenock 346th and, last of all, Bristol, coming in at a dismal 368th. These lowly figures mean a typical British port on the index would rank 230th – somewhat lower than the global average.
Economists have known for centuries how important international trade is for the economy, and the critical role exporting can play as a way of boosting productivity within individual firms. Previous research we’ve published has highlighted the pains entrepreneurs face when it comes to selling goods abroad. While it might not trigger an economic miracle, it wouldn’t hurt to nudge the performance of our ports up slightly.
💡 Philip Salter, Founder
My Big Idea for this week comes courtesy of our Adviser Francis Toye, founder of Unilink Software. He shared a Paul Graham's article from September on Founder Mode to get my thoughts.
In the September article, Graham shares the insights of Brian Chesky, CEO of Airbnb:
“As Airbnb grew, well-meaning people advised him that he had to run the company in a certain way for it to scale. Their advice could be optimistically summarized as ‘hire good people and give them room to do their jobs.’ He followed this advice and the results were disastrous.”
Chesky turned to Steve Jobs for inspiration. One thing Graham pulls out is that Jobs used to run an annual retreat for what he considered to be the 100 most important people at Apple. Critically, these weren’t the 100 people highest on the org chart: “It could make a big company feel like a startup,” suggests Graham.
As Graham acknowledges, clearly things need to change as a company scales. And there is a risk that a lot of bad management could be excused as “founder mode”. As Toye wrote to me:
"Extreme Founder Mode has obvious disadvantages: lack of delegation, micromanagement, high staff turnover, reliance on one individual etc., but on the other hand many corporate managers, however well intentioned and experienced, do not have the background to take a founder-led company into a successful growing business."
We still don’t fully understand what defines a great founder or when – and if – a company should transition to being run like a large organisation. Given the rising power of founder-led companies, getting this right (or wrong) could have huge implications for the rate of global innovation and the quality of all our lives.