my first startup. It’s done, we’ve shut it down.
I joined Entrepreneur First‘s initial Berlin cohort in April (2018). Through the process, I very quickly met my cofounder and founded Simmunology Limited. We followed the checkpoints laid down by Entrepreneur First (EF), through founding the company, right up to receiving an initial investment of UK£80,000 in return for 10% of the company. Then, at the end of the kick-off meeting, I told them I wanted to shut it down…
It will always be to the credit of my cofounder and investors that they handled this news so well. There was no arguing. There was no disagreement about facts on the ground. There was huge disappointment all around. But everyone knew that this was always a possibility, and I was doing each of us a favour by not costing them any more money. By the way, we returned the full £80,000 investment.
Why did I shut it down?
I wrote considerably about overcoming shame in a previous article. I made a point of discussing the Fail Fast mantra of modern start-ups. What I removed from the final article was a discussion of how I felt that my then cofounder did not really subscribe to this mantra. He paid lip-service, as did many on the EF cohort, but he was not operating out of this approach.
I noticed very early on, that calls which could clarify whether we really had a viable product were not being followed-up on.
This is a red flag. But sometimes you ignore red flags for a while, in order to get to where you want to go. I had left academia last Christmas (2017), had moved quickly through a lot of ad-hoc, largely non-renumerated consulting positions while working on the ideas behind Simmunology, before landing at EF. I wanted to find out as quickly as possible what I want to do in life.
This was my personal goal. I was hopeful that I would find untold riches on the path. But more than anything, I needed to find what I was truly good at. In the past, I have moved successfully through pure mathematics, to statistical modelling (and machine learning), to fundamental neuroscience, to human behavioural modelling. I know how to move into a new environment and get good at it. What I had lost touch with, is knowing what I am truly good at as opposed to simply better than normal people. Founding a company, and working through EF, allowed me to get back in touch with this.
I admit, I had my doubts about my cofounder from about one month into our partnership, but I persevered.
My cofounder came back from a trip, largely for our work purposes, a changed person. The man who departed Berlin was highly enthused about our business and about breaking down doors in order to get the company off the ground. The news from the meeting in Paris was entirely positive. But when he came back, we very nearly did not submit out application to stay in the EF process.
I still wonder what happened on that trip. My guess is that the time outside of the EF hothouse gave him an opportunity to think, and some doubts crept in. Our technology offering was something entirely new, which he had to trust that I could build. He was struggling with the biology and with the fact that our potential customers are all PhD’s with salaries over €130,000 per year.
From that point onwards, I was the coach and I acted to keep him producing. He is a natural salesman, and I needed that to develop the business idea. I am an introvert and hate anything other than what I call a deep-sale. I am the credible, personable guy you bring in to close a sale. I do this by showing that we really are good at what we do, and I am good with people so I do this with gusto. From my partner, I was learning the lighter side of sales patter at a rate of knots. Cold-calling is horrible, but I’m actually quite good at it by now.
This shift in roles moved me from being the deep-tech science cofounder into being an equal business guy, who coached and mentored his partner alongside. But that left us with no dedicated tech guy. And, over time, juggling both responsibilities exhausted me.
We will never know whether we could have made this business a success.
My biggest regret is that we will never truly know whether we were onto something or not. I came into EF with the idea behind Simmunology. I did a massive amount of market research while in EF. But since nobody every really put an order on the table, we will never know if we were barking up the wrong tree.
We were credible enough to make inroads into companies. We were impressive enough to begin talks with two major pharma companies about pilot projects. But, at the end of the day, there was something wrong with our approach. These companies have mega-budgets. If we could have really solved a problem that somebody considered valuable, there would have been enough budget for us to keep the lights on.
I personally think that we were not approaching the right people. My cofounder was subtly steering our sales pipeline. I realised quite late in the day, that he was deliberately not following-up with the people who I considered to be our best prospects. He admitted that he didn’t want to receive a bad signal, which we would then need to report to our investors.
A massive red flag. I had seen a simpler version of this behaviour, earlier in our time working together, where I thought things were slipping too easily through the cracks. But an admission that he was deliberately avoiding finding out that we were going in the wrong direction was the end for me.
The difficulty with Entrepreneur First
I can write pages about what is wrong with EF. Many of my fellow cohort members are particularly sour about their experiences. I will write an article about my personal experience on the program at a future date, but that article will reflect my own gains – which may have little to do with the general experience.
Here though, I want to very quickly illustrate the points of contact where the EF template combined to hide and exacerbate the problems in Simmunology.
You’re stuck with them that brought you.
Most of the critique amongst VCs about EF is about the fundamental model. Can you really bring 50-100 people together and successfully find ~15 pairs who will form companies? This question is still open. I cannot answer it.
I will point out, very briefly, that most of the employees of EF seem to see this as a numbers game. They think that the more pairs that they can pass-on to the next stage in the pipeline the better that they are doing their job. This is patently untrue.
From my point of view, as a cohort member. I came to EF because they told me I could do deep-tech. But the deeper your tech, the more specific your requirements will be in finding a cofounder.
I partnered with the cofounder who I found most credible on the topic of interest to me. Only one or two others, on my cohort, could have come close to working on this topic with me.
On a side note, I did explore other topics. But part of this process is about learning what you are good at. And I am really, really good at what we wanted to do.
So I took my partner, and we did our best, but ultimately I was restricted to this small cohort and that is what led to our failure.
Passing through a checkpoint in EF means no do-overs.
The EF program follows a sequence of phases. I call the transition between phases checkpoints. This is different from the model on which EF was originally developed, we were the first cohort on the particular model which I am describing. Checkpoints are important to my story, because once you’ve passed the first one the rules of the game change entirely.
For the first two months on EF you are, healthily, encouraged to form new partnerships and quickly shut them down if they are not working out. I missed the first month, due to pneumonia, but I followed it online.
My partner and I were working together for one month when we had to submit our application to pass through to the second phase. The day that application was due, was the day he returned from Paris a changed man.
I think, today, that if we could have submitted that application just one week later then we would have broken up beforehand. My experience of writing that application was that, “this guy doesn’t want to be here.” While I mentioned above that I wanted to do some self-discovery in this process, I’m not an idiot. If you’re in a loveless relationship you need to get out of it!
My cofounder has a background in start-ups. My idea represented a level of ambition probably even beyond that of Google. We had credible CVs. I had spotted a way to revolutionise drug design. And we were in a programme which would give us inside access to to VCs. Once we passed through the checkpoint, he couldn’t back out! It goes back to the shame thing.
I did some pretty heavy soul-searching in the two weeks following that application. Then I discussed the issue with my cofounder. He agreed that we should not continue if there are any doubts, but tried to offload the source of the feeling on my discomfort at leaving academia. I decided to give it another try, but I would be paying attention.
I like learning. Actually, it’s what I live for. I even wrote a PhD on the topic. When I’m not learning I’m not particularly happy. So, I learned a lot from this process.
Pay attention to trajectories
My cofounder didn’t lie or cheat. He’s a good person. I like him and would happily go for a beer with him in future. He lost me because of his trajectory.
Starting a company was an entirely new world for me. I have learned over the years to calibrate my feedback metrics pretty well. But in a new environment it can take a bit of time to recalibrate things. Paying attention to trajectories is vital to aid this process.
I worked long hours. I was stressed and not sleeping. I was constantly switching between business, sales, and science. But I set regular appointments with myself to check-in on progress. I made copious notes in OneNote and I reread my old notes on those self check-ins.
What I observed over the 3-4 months of working together was two very different trajectories. I was increasing my rate of progress in this new world on a weekly basis (that’s an exponential trajectory in case you don’t realise). Meanwhile he was flatline – from day one until our final meeting following the shutdown of the company, his productivity was flat and not particularly impressive.
When I raised my worries about his commitment to the project on three occasions, prior to the London kick-off meeting, he responded by briefly increasing his productivity. But this was matched by an underperformance on many other weeks.
Since I was paying attention – and taking notes – I was able to accurately evaluate this. The notes are important as they remove some of the retrospectivity bias of any evaluation. I performed minor interventions and observed the results.
I was also honest about my own trajectory. I didn’t just blindly assume that I was doing everything right. I was wrong more often than I was right. But I was improving. And each week, I was able to capitalise on the learning of the previous weeks to further increase my rate of improvement.
You need a good cofounder
I treated this as seriously as my primary relationship. Cofounding is a very long-term relationship. Typical exits in Silicon Valley style startups are after 8 years. In biotech, this timeline extends to at least 10 years.
My cofounder still has my trust and respect. He is neither a liar nor a cheat. Believe it or not, this is actually a rare thing. He has integrity. The mistakes he made are not failures of character, they come from some deeper issues which are not atypical and he is the one who will have to live with them.
My biggest learning is that you cannot change out cofounders half-way. I learned from an advisor that I could not keep my cofounder on as a 5% owner on the capitalisation table if I wanted to raise subsequent rounds of investment.
I learned a lot from my cofounder. In my mind, at the time, I would not begrudge him his 5%. But future investors would be bothered by it. They would insist that I go to the bank for a personal loan and buy him out. And that is the point which I would begrudge him. He contributed to my success, if we had a windfall I would like him to benefit a little, but I don’t want to have to pay him from my own pocket just so that I can continue a little further down this very risky road.
So cofounders need to be good. They need to be trustworthy. And they need to be somebody who you can continue to benefit from for the very long-term.
You can’t do deep-tech alone
I can’t do deep-tech alone. I doubt that anybody can.
I went into this process somewhat confused. I read a lot of books by prominent business people. At least half of those, who I’ve read, are solo founders.
Last winter, I spent a long time trying to figure out why I didn’t seem to be able to get this business off the ground on my own. In the end, I realised that the issue was one of splitting myself in too many directions.
Deep-tech requires not just technical expertise, but also time and mental focus. Sales and fundraising are inherently outward facing, time and energy consuming, activities. You can’t do both.
If I wanted to setup a grocery store, this is an inherently simpler task. It’s not an easy task. But the thought patterns involved are all at a similar level, so switching between them is somewhat easier. Plunging into deep-tech requires a level of focus which consumes all other mental energies.
Elon Musk might be pulling it off. I have my doubts about him. But he’s seeding things with his personal wealth. His original successes certainly did not involve him bridging this deep-tech – external divide.
To withstand the vagaries of the ups-and-downs you need to have the rest of your life in order
When things broke down I was planning on turning around and restarting the company immediately. I had investors lined up. I had customers who would pay me some money to keep things going. So why did I stop?
The rest of my life was at risk of falling apart.
I entered into entrepreneurship directly from a bruising experience in academia. I spent considerable mental energies on surviving that experience. But I had not had the chance to really recover and setup a support network outside of work.
I mentioned above that I had pneumonia in April. This is not normal for a healthy 35 year old. It came about because of living half a life for too long.
There is never a perfect time for entrepreneurship. But some times are better than others. I took my opportunity when it came. But, frankly I am surprised that I got as far as I did.
Right now, I am working on setting up a private life that involves living in only one apartment. I will top up my savings. I will have a regular exercise and meditation practice. And I will have friends again.
After that, we’ll see if I am ready to go out on my own again.
I actually love this stuff
I strongly suspect that I will found another company. It may be some time before I do so. I have some very exciting alternative opportunities in the offing at the moment. But I am likely to come back to this because I really love this stuff.
I enjoy how clear the goals are in business and founding.
I love not being subject to the politics of a hierarchy.
I love being able to try out my ideas and quickly learn and improve on them.
I love having an impact.