How to Be a Founder with Alice Bentinck (Part One)

Forbes Books presents the Startup Science Podcast with Gregory Shepard, brought to you by startupscience.io. Greg is an entrepreneur who has built and sold 12 businesses. He's a recipient of 4 private equity awards and is a featured TEDx speaker and Forbes author. Here's Gregory Shepard.

My guest this week is Alice Bentnick. Alice is the co-founder and general partner at Entrepreneur First, She's also the founder of Code First Girls, a nonprofit organization that has taught 30,000 women to code for free while they're at the university, making a significant impact on increasing diversity in the field of technology. She's also the co-author of a new book, How to Be a Founder. Alice, welcome to the podcast.

Thank you so much for having me. I'm delighted to be here.

You're welcome. I'm, I'm actually really excited because I spent a little time on your website. And I was looking at all of the cool stuff that you guys are doing and your background, and I was very, very inspired by what's going on. Part of the mission that I have personally is to help out marginalized people, and you're right in there doing the work that needs to be done. I have a question to start out with. What inspired you to co-found Entrepreneur First and help these aspiring founders build up startups from scratch? From my understanding is it starts from vision, right? I have an idea, are the people that you work with.

One of the unusual things about EF is that you don't even need an idea to apply or to join the program. All we're interested in is an individual's raw talent. And I suppose there's a couple of reasons why we started EF. And the underlying belief was that the world is missing out on some of its best potential founders. And largely it's because of the ecosystems they're in, and the people they're surrounded by. I think if you look at careers advice, careers advice hasn't really changed for the last 10, 20, 30 years. And the people who are giving careers advice are often pretty outdated, if you think how fast the world of jobs and careers has changed, particularly in the last decade or so. And I suppose one of the big changes in terms of how individuals can spend and use their careers and think about having impact with their careers is that now, founding a startup, pretty early on in your career is not just a viable path, it is, and should be, one of the most aspirational and attractive paths for the very best individuals. And so, Entrepreneur First was founded on the idea that we should be stopping our best and brightest from going down these very traditional, quite corporate career paths, and making sure they not only have the knowledge that founding is possible, but also access to the resources, the co-founders, the finance, and the structure to turn it into a reality.

You are speaking my language, sister. Like, this is, this is exactly what I tell people. I mean, I barely graduated from high school, you know. So for me, college was out of the question because I have autism and dyslexia. And I've started and sold 12 startups, you know, sold 2 to eBay. And I took this path that you're talking about because I felt like I had no other option. And I think that this is an incredible— I mean, I can't even tell you how excited I am to hear that you're helping out these people that have the inspiration or the drive. I call it a handful of focus, drive, enthusiasm, discipline, and optimism to start a business. I mean, I think it's incredible. What inspired you to do this? Like, what was behind it? You know, when you started this, did Did something come up inside you and say, oh, I absolutely have to do this? Did you meet somebody? What was the catalyst?

So, I met my co-founder at McKinsey, where we'd both started our graduate jobs. And both of us had done startup stuff while at university. But I think, as many individuals find when they're graduating, it's sort of, you know, you do startup stuff while you're at university, and then you need to go and get a proper job, go into a proper career. And we both became consultants because it felt like a way to get exposure to business and as a way to become more clued up so that maybe one day we could become a founder. And I think consulting is an amazing career path for lots of different people, but it doesn't necessarily teach you how to be an amazing founder. And I suppose part of building Entrepreneur First was thinking about how do we create a career path that is optimized for individuals to become founders very early on in their lives. And I suppose, why do we think that's important? Why do we think that's important? So, first of all, interestingly, if you look at our data now that we've been running for about 10 years, individuals with less than 2 years' work experience seem to have the outlier outcomes within our portfolio. We've got more than 500 companies in our portfolio, collective valuation is over $10 billion. And if you look at the outlier companies that are driving a lot of that portfolio value, the founders, between the two of them, between the two founders, typically have less than 18 months' work experience. So, there's something here about the amazing naive optimism that you have at the beginning of your career. And at EF, we really want to tap into that at that very early stage, partly because what we have seen is that as you go through your career, as you become more upskilled, more knowledgeable, have a greater network, In many ways, those things remove the naive optimism that enables you to go into an industry and fundamentally disrupt it. You need to have that naivety, and you need to have that optimism, because if you knew how hard it was, you wouldn't necessarily do it. And so, I suppose it comes from Matt and I starting out our careers, knowing that one day we wanted to be founders, but I suppose believing we had to take this kind of circuitous path rather than going straight into founding. And part of our founding belief at DF is supporting people at the beginning of their careers, because it is a founding career. As you say, Greg, you've started 12 businesses. It's a founding career. It's not that you start once, it doesn't work out, and you never try again. It's not that you start out, it succeeds, and you never try again. It's about building up a collective body of knowledge, experience, and intuition, specifically about founding companies, that will enable you to be a globally important, successful founder.

That is so true. I mean, I always tell people, they go, well, I feel like I'm failing. And I'm like, that is progress. You think it's failing, but it's actually progress. And everybody has stumbles along their way as they build a business. But the fact that you're going after people that choose this as a career path is so amazing. And your point about most of the people not actually understanding how to help them— I went to a conference and it was all universities in the conference, 578 universities. And there was a keynote speaker. And at the time, the keynote speaker raised his hand, said, listen, if you have done a startup, please raise your hand. And nobody raised their hand. Nobody. And so afterwards, I was like, well, maybe they're just a little shy. So then I walked around the room and I started asking people if they had started a company. And I went into their LinkedIn profiles. I didn't find a single one that had actually started a company. So then I went into the accelerators. And I started interviewing accelerators. And this research, you know, I started in 2016 on why, when, and how founders fail. And the big thing was bad decisions, which underpinned bad advice. And I was trying to figure out where that was coming from, but you nailed it right on the head. And in addition to that, the concept of founders choosing this as a career is just absolutely amazing. And I'm just so happy to have you on this podcast for all these founders to listen to because you're right. What it sounds like you guys are doing is you're grooming people to take on the career of starting a business, just like people go to school to be an attorney or go to school to be an accountant or what have you. So, when you're doing that, what are the key mindsets and tools that founders need to succeed that you find? And I'm assuming a lot of these things are soft skills. Yeah.

Yeah, I mean, there are some useful hard skills. So, we mainly work with technologists. The majority of our portfolio over the last decade or so has largely been investing in founders who have some sort of computer science, particularly AI backgrounds. And if you look at the majority of the companies that have been created through this process, about 70% of our companies have some form of either unique and novel artificial intelligence that they use, or they leverage existing So, we like founders who have technical skills. So, there is a hard component, but there are many computer scientists out there, and there are many physicists and maths grads and all the rest of it. Not all of them will be great founders. So, you're right, it is the soft skills that we particularly look for. There's a couple of things that I think are teachable, and then there are a couple of things that I think are more innate. Yeah. On the teachable side, we look for founders who have, or look, they're pre-founders by the time that we're talking to them, who have an incredible drive to achieve. So, these are individuals who have a very strong bias to action. They just get stuff done. And sometimes they can't even articulate why they have such a strong drive to achieve. It's not clear what they're trying to achieve. They just want to be the best at everything they do. And it means that there's often this sort of obsessive streak in them where they are totally focused on a particular area, want to become world expert, have an amazing growth mindset about learning everything within a particular area. And then once they're done with that, they'll move on to something else. So, I think there's these individuals who are hyperproductive, and we see that play out on the program. So, when they're trying to find a co-founder, when they're developing an idea, when they're going out and speaking to customers, they just produce more. They do more than everyone else around them. And the reason I say that's teachable is that I think a lot of that is innate, but you can help people understand what good and bad productivity looks like. So, I think often in startup land, there's a lot of bad productivity. So, things that are done to show to other people that you're doing the right thing. So, networking, gathering, collecting business cards, doing too much press. Whereas, you know, the best productivity is when we see individuals who are solving hypotheses about what their customers want at just such a crazy rate. And so, their rate of learning, their kind of feedback loop is on overdrive. I think one of the other kind of intrinsics that we see that is harder to teach, and, well, we haven't found a great way of teaching it yet, is this idea of personal exceptionalism. And this is the kind of belief that some individuals have that they're going to be okay, that they will be able to make it work. This isn't sufficient to succeed, but it is necessary to succeed. And this may sound like bravado, it may sound like arrogance or overconfidence, and it's It's not. It's just a belief that their odds of succeeding are different compared to their peers. And so, these are typically individuals who have had pretty exceptional trajectories. I think you have to be pretty exceptional to be a world-class founder, to build a truly globally important company. You do need to be exceptional. And it's unlikely that the first exceptional thing you do in your life is building a company. And so, we are looking for these individuals who have this high personal exceptionalism that is normally fed by having a track record of doing unusual and interesting things in the past, where they've outperformed their peers. And this doesn't necessarily mean being top of the class. It doesn't mean getting all the career promotions. It's usually something outside of the usual life track. So, it's side projects, it's counterintuitive decisions that they've made. And I think that is slightly harder to teach. I think often, if you've fully digested the cultural norms around you, it can be pretty hard to shake that when you're a founder. And I think founders have to challenge the status Yeah, 100%, right?

I mean, that's what you're doing. You're solving problems and challenging problems that have been solved every day, right, to try to build it out. I agree with you 100%. And that exceptionalism is totally true. Like, when I look at deal flow as it comes in, we're always trying to figure out, like, what did they do? So, you know, sometimes you see somebody, it's like, oh, they were an Olympic athlete. And you're like, okay, well, they understand discipline and commitment. And They're not going to fold up as soon as things get hard and that sort of stuff, right?

Yeah. And we've had individuals who have done pretty incredible sporting achievements, whether it be being on Olympic squads. But I think the resilience— resilience is a really interesting one because you have to be hyper-resilient to be a founder. The rollercoaster that happens on a daily or weekly basis as a founder is pretty extreme. And one of the reasons we believe so deeply in co-founding co-founding teams, particularly co-founding pairs, is that we believe, and we've seen, that it engenders and creates far greater resilience. Co-founding teams are often cited as the most common reason why startups fail, but I suppose our slightly counterintuitive belief in this is that if you have the right co-founder, they are the reason why you will succeed. They will not just make you more productive, you know, 2 people are better than one. They will not just enable you to have a better idea. Your quality of ideation will be better, but ultimately, they will enable you to be more resilient because you have somebody that is privy to absolutely everything that you're going through and is incentivized in the same way that you are. So, I think resilience as an individual is important, but supercharged resilience often comes from the quality of the co-founding team.

100%. I mean, you're right. It does show up in Why Founders Fail, but that study that everybody refers to is not really that good at all. I mean, I looked at it, uh, we went, did a 5-year study on it. And, uh, the real reason when they look at that is because, you know, a lot of times you say, oh, well, they're referring to this document that was referring to this document that was referring to the— and you, you're chasing this thing down and somebody just fabricated a lot of it. But what's really fascinating is what you said about the co-founder, right? You're right in that they'll say that A lot of the times the, the team doesn't get along and that's why it, it fails. But there are reasons why the team doesn't get along, and usually those things are identifiable right away, right? Like one of them is a visionary and the other one's an executor, or both of them are executors, or one's a, a big company type person, the other person's a gritty founder who's willing to roll up their knees and do the work. Out of those things, what are your advice that you have available? for co-founders and founders to understand whether they have the right team to begin with?

This is a great question, and we've spent the last 10 years really exploring how do you create not just stable co-founding teams, but exceptional co-founding teams. We've had about 3,000 people go through EF across 3 different continents, and I've worked with hundreds of individuals now to help them find their co-founder. What is always interesting to see is that often individuals have quite a fixed idea about who they think their co-founder will be before they get started trying to find one. And often trying to find somebody in a certain image with a certain skillset, often influenced by what they've read in the media as to what a good co-founder looks like. In reality, what we find is, because we bring together small, highly curated groups of individuals who are all ready to find a co-founder right now, it's usually between 30 and 50 individuals, What we find is the best co-founding teams come from a process of testing and iteration. So, you join us, you join this group of other very carefully selected individuals, and you spend 8 weeks testing out different co-founder relationships. It's actually very hard for us and for the individual to predict beforehand who will be the right co-founder for them. The best, and pretty much the only way to know, is to start working alongside them, for the co-founders to work alongside each other on something they really care about. And this can be in very short sprints, almost like hackathon-style sprints, but where there's a clean breakpoint. So, after 24, 48 hours of working together, they sit down and have the conversation of, do we feel that we make each other more productive? Do we share the same beliefs about what we want to create? Do we feel that our working styles intersect well together?

Hmm.

The reason we push so hard on this testing idea is that all of those things, You can have very great detailed conversations about it, but until you are actually working alongside each other, as if this is the startup that is going to turn you into globally important founders, everyone is compromising. And one of our big beliefs is that a lot of co-founding relationships out in the world, outside of Entrepreneur First, fail because they are a co-founder of convenience. They were the only co-founder that was available. So, ultimately, people kind of have to make it work, and they make a huge amount of compromises. The thing that we are so passionate about at Entrepreneur First is it's not about finding the convenient co-founder, it's about finding the right co-founder for you, the one that will turbocharge your productivity, your ideation process. And really, that is just through a process of testing, iteration, and experimentation.

That is so true. When I looked at the data, this massive research project, I had 5 people working on this thing, and it started in 2016, it's still going today. You're totally right about the convenient co-founder. I love the language there.

Mm-hmm.

It occurs almost every time there is a situation where the founder and the co-founder split up and, you know, they call it— it's under bad team, I believe— that there is a situation between the conflict that they're both the same types of personalities. So instead of, you know, fitting together like a puzzle, they just run into each other constantly. So, I'm wondering, you know, you've looked at and helped over 2,000 individuals, right, become successful founders. What are some of the key lessons that you've learned that you can pass to the founders that are listening about what is the components of a successful relationship that they should be looking for based on their own personality type? Like, if you're this type of a personality, you're going to want to look for somebody like this. That sort of stuff. Can you provide some advice for the founders listening?

I think you're exactly right here. Often, the push is to find somebody who is your total opposite. What we encourage founders to think about is there needs to be a sufficient overlap between the two of you so that you can effectively work together. One of the reasons why we take so many technologists onto the Entrepreneur First program is that If you have a technical background, if you've been taught to think in a scientific way, it's actually much easier for you to work with other people who have been taught to think, and who naturally think in a very similar way to you. I suppose the adage that is often pushed of, you know, you need the business person, and you need the tech person, this doesn't work, because they're coming at the problem, like, they're coming at the way of problem-solving, the way of working, from such different angles. One of the almost hilarious common challenges we've found, where you have a very technical co-founder and a non-technical co-founder, is their preferences around working hours can often cause a lot of conflict. Often, the technical co-founder, and maybe this is a bit of a stereotype, but often, they will prefer to be working later in the evening. Often, the non-technical co-founder, again, it's a stereotype, often has a preference to be working more typical business hours. And it's amazing how something like that may seem inconsequential, but can actually cause a huge amount of friction. So, Every team, to be successful, needs somebody who can act in the CEO role, and needs somebody who can act in the CTO role. And we have a very strong belief around pairs, and having the individuals take one of those 2 roles. Our push for the CEO, though, is that you don't have an MBA business type. Instead, what you have is somebody who has at least a lightly technical background, but who is interested in, and has some of the intrinsics to be able to be in the, what is for a venture-backed company, typically a fundraising-heavy role. The CEO of a venture-backed company, often surprises people, will spend 60%, 70% of their time fundraising. So, raising the next round, closing the round, and preparing for the next fundraise. And so, ultimately, if you have 2 deeply, deeply technical individuals, and neither one of them wants to play that role, again, we've seen that that team formation doesn't work. So, you're not looking for somebody who is identical to you, but you're looking for somebody where there's sufficient overlap that both of the roles are covered, both the CEO role and the CTO role, and both of you can both thrive in those roles and have enough context to be able to support the other individual on their role.

Yeah, that's exactly what I was talking about. And you're right about the stereotyping, but it is true. I mean, I used to be a coder, you know, so when you sit down and you want to code, you're usually doing that at night with your headphones on when everybody else is asleep. But when you're doing business development and those other more social activities, you're doing those during the day. And you're right about the balance. A lot of the stuff that we saw in our study also was that you see these disagreements and then you go and interview— we would go and interview the 2 people and we would say, can you explain what the disagreement was? And one person would be like, well, they just weren't pulling their weight. And the other person would say, well, I was working at night. They couldn't tell that I was pulling my weight.

Right.

You know, and a lot of those sort of those sort of disagreements. So it fits right in. I mean, you clearly know exactly what you're doing. I'm really, really impressed, and we have much more to get to, but we have to stop right there. Coming up in the second part of my talk with Alice Bentnick, the co-founder of Entrepreneur First, Alice shares the simple fact every founder needs to understand: You don't need to be an expert to start a startup.

You need to be an expert in your particular idea. And your particular idea hopefully is unusual enough and new enough that you can be the, the, the world expert in, in what you're doing and the particular problem you're solving.

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