It’s been about a month since we opened the doors at Year One Labs. We’ll be making further announcements soon – there’s lots going on – but I wanted to take a moment and look at what I’ve learned so far in the process.
1. Interesting projects come from everywhere. Although most of the applications to Year One Labs have been from Montreal and Toronto, we’re seeing a lot of interesting projects and people from all over. Physical location is not a determinant of brains or ambition. It does impact culture though. But it’s clear that you can be from anywhere and take a crack at building a successful startup. Having said that, it’s the entrepreneur’s responsibility to do his or her homework on startup life, startup ecosystems and building businesses. Just because you live in a more remote or less “startup-centric” place doesn’t mean you can’t read up on what’s going on in the world of startups and business.
2. Interesting people are interesting, no matter what. We like seeing well thought out ideas with a supportive understanding of the marketplace, challenges, competition, etc. It’s only natural to focus on the idea, because it’s easier to debate and test. But after a month of interacting with entrepreneurs, and meeting with founders, I can honestly say that we focus primarily on the people. We’ve seen very interesting ideas from people that we didn’t have enough confidence in. And we’ve seen so-so ideas from people that we think have the DNA to be great founders.
People that want to be startup founders will find a way, whether it’s with their own idea or someone else’s. People that want to be startup founders will throw ideas out quickly and move on aggressively to something new. And Year One Labs will invest in individuals (or teams) like this, even if they don’t have an idea worth presenting. This is key: If you think you have what it takes to be a startup founder then contact us, even if you don’t have “the next greatest idea”.
3. Willingness to take feedback seriously is critical. One of the clearest determinants of our interest in working with an entrepreneur is whether or not they can (a) accept feedback; and (b) take it seriously. We don’t have a monopoly on the truth, and in a 2-hour brainstorming session with an entrepreneur we’ll throw out just as many bad ideas as good ones. It’s not the ideas themselves that really matter, it’s the response of the founder. Our model is to co-create startups – which means we’re going to provide significant input, and then roll up our sleeves and figure out what’s what.
Quite often we see entrepreneurs that either nod in agreement with everything we say (but clearly aren’t paying attention) or who argue with us tooth and nail. Arguing is good. Standing up for what you believe in is good. But you need to back it up. Arguing for the sake of arguing or being close minded is not good.
So I’ve definitely learned that people’s willingness to accept feedback (while also challenging us on things) is a big plus in our evaluation of entrepreneurs. Recently I wrote about the duelling conflict between taking feedback and loving your idea, which further looks at these issues.
4. Entrepreneurs are easily swayed by money. Year One Labs doesn’t offer a lot of money – up to $50,000. And given how bubbly things are in Silicon Valley, we see our fair share of entrepreneurs that are looking to raise much more money than that (the typical ask is ~$500,000 for some reason.) In some cases there’s a real reason for a bigger ask, but in many cases I believe an entrepreneur can do more with a lot less. It doesn’t sound as sexy, and your bank account won’t look as plump, but taking too much money too early is a big risk. Money is one part of the value equation for a startup, but far from the most important part.
5. Looking for nuggets of clarity. Alistair Croll (Founding Partner, Year One Labs) is much more eloquent than I am. He recently wrote a post entitled, Minimum Viable Vision about what we look for in an entrepreneur’s vision and goals for the future. It’s a great read. When I’m listening to an entrepreneur, I’m looking for nuggets of clarity. Startups are uncertain beasts. When starting a company, you know only a fraction of what you really need to know in order to succeed. Figuring out what you need to know, and learning quickly are big determinants of startup success.
Nuggets of clarity are moments or ideas or answers that a story and startup can be built around. They’re typically small (and that’s OK) but they’re the gems that you want to cling to and build upon. Sometimes a nugget of clarity is a personality trait or an experience an entrepreneur had that tells us a lot about them. Sometimes it’s an element of their business, a pain point they’ve discovered, a bit of research.
Startups are uncertain, murky and confusing. But I need to see those nuggets of clarity in an entrepreneur that allow me to cling to something.
Over the next few months I hope to share much more about my experiences with Year One Labs, especially as we bring in the first few startups. As I mentioned before, if you think you have what it takes to be a startup founder, just get in touch. We’re easy to find, easy to reach and interested in connecting.