Recently I was in the audience at a redbrick warehouse somewhere in East London enjoying another demo day. On the stage in front of me, team after team of high energy, media-drilled tech-stars were performing live. Showtime! And then a thought struck me – tech has become the new Rock’n Roll. I used to spend a lot of time in California, and I was fond of saying to friends and colleagues there that growing up in the UK, youngsters of my generation – full of aspiration and ambition – wanted to start a band. In California it seemed to me, you grew up wanting to start a company. Well, as so many times before, the youth of the UK are looking to the West Coast for inspiration.
Stay with me here for a second. Anyone who has spent time with the folks at Entrepreneur First or Techstars knows tech has plenty of congress with the glamour of youth. Anyone spending a lot of time with entrepreneurs recognizes the powerful narrative of idealism and creativity that can be harnessed by an articulate founder. And anyone bold enough to have invested in a company at an early stage understands the inherent danger when a heady cocktail of optimism and overconfidence is confronted by critical disdain and commercial indifference.
Youth, glamour, energy, idealism and danger – the analogy is perfect! It also explains the fascination with early stage tech in London – things are rapidly changing, but for a long time hype outstripped reality. I remember the first few times I went to investor/entrepreneur meet-ups in London. It seemed pretty much everyone was in a suit, over the age of 50 and had formerly worked in banking. Scattered in and among the crowds were a few earnest and shiny youths with jeans and tee-shirts – the talent. It felt like some elaborate positive discrimination policy in action. Now we know it was just the early stages of a creative revolution, the business equivalent of Punk in the mid-70’s.
In fact, even the sub-genres resonate – the IoT guys are clearly closest to Heavy Metal. Imagine 4 skinny unshaven researchers in tight trousers surrounded by lots of iron. “Probes and Gateways” and “I’m Always On” even sound like hard rock classics. The Machine Learning guys are natural techno aficionados. Nothing better than 24 hrs at 140bpm – “try one of these algorithms – I brought them back from Berlin. They’re awesome – I’ve been up for days!” And of course for hippies and lovers of folk music we have the sharing economy – “all property is theft, but transactional intermediation is liberating”. This last is even complete with it’s own anti-capitalist fringe movement in Open Source. Code just wants to be free, man…
Alternatively, think of it from the point of view of a start-ups career progression. First of all we have the inspired debut – that new, fresh, ideas-packed sound that’s going to change the World. Everyone wants to sign you – angels and seed are there to help, and crowdsourcing adores you. Then there is the difficult second album – it takes longer than anyone plans, the team keeps missing milestones, songs need to be re-written, personnel change, and expenses are too high. And one of the founders has developed a drinking problem. Ok so its Jolt and not Jack, but you get the point. But Series A and eventually even B arrive, salaries rise, it’s getting easier to hire, and pretty soon the big labels want to sign you and you start spending more time designing the room in which you are going to hang your gold discs.
So if tech entrepreneurs are the new rock stars, then it stands to reason Venture Capital houses are the new record labels. The big labels are those who specialize in signing the breakout stars, managing inflated egos and adding distribution and marketing muscle. At the other end of the spectrum, are the early stage funds, the A/R guys, touring the clubs and bars to find the best, fresh, early stage talent. As an entrepreneur, you should choose who you sign with carefully and make sure their approach matches to what you need at your stage of growth. At Episode One, we believe our job is to recognize your potential, help you develop your talent, find the right collaborators – and then set you free with the right skills and connections to allow you to flourish.