One of our core beliefs is that at the heart of every great business there’s a great entrepreneur. It says so on our homepage and it underpins our strategy at Forward Partners – we have set ourselves up to be attractive to the best entrepreneurs. That manifests itself throughout our business. We try to run quick and transparent investment processes, we try hard to add value through due diligence, our terms are fair and simple (we will release them soon as standard docs for anybody to use), and, most importantly, in addition to money we bring heaps of ingenuity and ecommerce startup experience to our partners. We want smart people with smart ideas to choose Forward Partners because drawing on our resources will give them the best chance of success.
I’m writing this now because I’ve just read a great article on Wired about Startup Factories. First up, I think factories is a bad word here. Startups don’t come off production lines, they are hand crafted works of art. Moreover, they are fashioned from within, not shaped by the building in which they are housed.
With that off my chest I will say that the article does a good job of explaining the different models out there, and to be fair it does say at the end that ‘You can’t manufacture magic’. It breaks startup factories down into two categories:
- Vehicles for parallel entrepreneurship – e.g. Max Levchin’s HVF – the idea here is to allow entrepreneurs to work on more than one company at a time
- Studios which create, invest in and acquire companies, usually round a theme – e.g. Science and Betaworks – the idea here is to create a constant stream of companies
The biggest difference between the two is the number of companies they work with, with studios working on many more.
As I’ve said it’s a useful article for understanding the space, but I think the narrative overplays the role of process and underplays the importance of the people who found and run the businesses. The implication is that with the right meta structure it doesn’t matter that much who is running the underlying companies, or at least it’s easy to find people who are good enough. I’m just not sure that’s true. If we are right that at the heart of every great business there’s a great entrepreneur then if you want to be involved with multiple great startups it makes sense to make sure they have great entrepreneurs from day one.