Don’t Blame Investors

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Bronwen Clune has written some great blog posts on Pollenizer recently but I really disagreed with one she wrote on The Guardian blaming investors for the lack of diversity in tech startups. A good conversation ensued when Avis Mulhall shared it on Facebook. There are lots of important areas in there, so I thought I’d offer my thoughts.

Here are Bronwen’s points and my thoughts:

Belief one: you can only succeed if you have an all-consuming passion for what you’re doing

It’s not ‘only’ but it is certainly helps, and if you have to choose between someone passionate and someone not, then of course you take passion – and investors hold the money. If you’re not passionate you’re not going to know the space as well and you’re less likely to stick through the hard times.

Belief two: working long hours separates the real entrepreneurs from the hobbyists

Again, it’s not mutually exclusive, you can have ‘four hour work week’ like businesses but any new business, even a cafe or accounting firm takes work to do the job, admin the business and grow the business. If you can do it in less hours, great, more power to you. But most of the time it takes a lot of work for the first few years. Mike Cannon-Brookes made an interesting point at the talk a few weeks ago saying that you can start off running really hard, but eventually you have to turn it into a marathon in order to stay effective over the ten year journey.

This is also the same for a lot of jobs or things people want to do. If you wan to be an elite sports person like a swimmer, then you have to get up early and go swim. It’s not easy and takes commitment. If you want to be a CEO of a big company or politician it takes lots of travel and long hours. If you’re not prepared to work the long hours, do something else.

For me personally, after 8 years of long hours, low salary, lots of travel and high risk trying to build startups I’ve taken a corporate job which is more balanced. I’ve got a young family and I know I can’t put in the time it takes to run a startup or even run my own business. It’s tough but I’m certainly not prepared to sacrifice my relationship with my wife or children for it.

Belief three: a modest salary proves you’re committed

It’s not that it proves you’re committed, it just means you spend less scarce cash on you and more on your growth, etc. Especially if you’re a developer. Companies just can’t afford to pay big salaries until they either generate enough revenue or enough traction to raise money. But if you can convince an investor to put in more money and take more risk to pay you a higher salary, then great, but don’t blame the investor if they don’t.

It’s sort of the same reason why there are less female co-founders. Tech companies need tech people and if the co-founder can code, and work for free or cheap, then you can raise less money and have more of a chance to succeed. My understand of the stats is that considerably less women code, which leads on to less women co-founders. I think this is changing and I really hope it does. I think the world of tech would be considerably more successful if there were more female coders and co-founders. That being said, this just means it’s a bit harder, not impossible. Rebekah Campbell from Posse, Nikki Durkin from 99Dresses, Jodie Fox from Shoes of Prey, Whitney Komor from Best Day, and Melanie Perkins from Canva are some local proof.

Belief four: startups aim to ‘change the world’

Yes, I think they do. Not all of it, but the part they are passionate about. Clones like Rocket don’t but genuine, innovative startups are changing something. It also helps with staying committed to it. If it’s was just for the money you’d go and work for a merchant bank or big corporate.

I also think it’s wrong of Avis to say that building technology companies is not changing the world in as good a way as social enterprises do. There are lots of ways that you can and we need to change the world for the better. Bill Gates didn’t build a social enterprise but he added trillions of dollars of productivity across the globe which had a big positive impact on billions of people. I was in Tanzania working with a micro-financing group helping HIV Aids widows and Excel made a huge difference in running the NGO, knowing what was working, following people up, etc. Yes, there are some people saying they are changing the world but really just want money, but if the passion doesn’t combine with it, then they will typically fail.

Finally, even if these things are true, none of them actually stop you if you really want to. Lots of companies grow without investors, so if you want to build a business that you’re not super passionate about, with a good salary, working reasonable hours and not try to change the world – great, go for it. I’m sure that some of investors fit the bill but I think to blame them a single group as culprits for lack of diversity and label them sinister, anti-family, sexist and racially prejudiced is unfair.

Again, this is an important discussion and I hope my strong response to a strong post sparks some useful debate and perhaps even some useful actions.

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