Forward Partners

The pursuit of skill and pace

By | Forward Partners | 2 Comments

Here at Forward Partners we are going through a process of rethinking our values. We have historically had seven, but found that was too many to consistently remember and action, so we recently consolidated it down to four:

  • We execute with skill and pace
  • We get better every time
  • We play the game differently
  • We enjoy the journey

The next step in our process is to flesh out what these mean in a bit more detail. I’ve been thinking about our ‘skill and pace’ value in particular. This is one that was part of the seven, so we’ve had it for a while. We adopted the value originally because we were having problems balancing speed and quality. We were getting conflict between team members who wanted to move fast and those who were concerned that we were compromising too much on quality. Most often this was when we were deciding whether to release products or launch services when bug testing had been done, but not done to death, and before the full suite of unit tests had been written. We realised that we didn’t have a language to discuss the trade-off between speed and quality and so introduced the ‘skill and pace’ value so we could repeatedly ask ourselves if we had the balance right.

As I’ve been mulling over it some more it’s becoming clear to me that another aspect of executing with skill and pace is being comfortable with both the big picture and the detail. The big picture gives you ambition, the need to move quickly and ensures you are on a worthwhile path. The detail is key to hitting your short-term goals and is what enables you to move at speed.

Conversely, people who prefer to live only in the big picture can be insufficiently practical and people who are only comfortable in the detail can find it hard to see past short-term obstacles.

Pre-seed investments work best when there’s a clear plan for short term value creation

By | Forward Partners, Startup general interest | One Comment

Most VCs will say that to evaluate deals they look at the market size, the product and the quality of the team. Different investors place different weights on the three elements but as a rule earlier stage investors place more emphasis on the team and later stage investors place more emphasis on the market. That’s because early stage companies find it easier to change their market than their team whilst later stage companies find it easier to change their team than their market.

Some very early stage investors go as far as to say that for them team is everything. If the founder is great that’s all they need to know to write a cheque. At Forward Partners we don’t go that far. We always say that the minimum requirement to back a company is a great founder AND a great idea, then for us a great idea encompasses an inspiring product vision in a large market.

Breaking that down a little further, what we’ve learned over the three and a half years we’ve been operating is that our pre-seed investments work best when the ‘great idea’ includes a clear plan for value progression in the first six months. In the sectors in which we invest that nearly always means building momentum with customers. Completing product development and hiring team members definitely helps, but it’s dangerous to assume that will be valued by new investors.

With seed stage investments and later it’s usually obvious how value will be created – by maintaining current growth in revenues or engagement. Hence spending time thinking hard about short term value creation is mostly a discipline for the pre-seed stage.

This week our thinking was put to the test by a highly competent serial entrepreneur with a great team who has a strong idea in a large market but who has yet to build out a clear plan for driving value in the short term. We compared his case with a couple of others in which we’ve invested where the short term plan was much clearer but the longer term thinking was hazier and decided we prefer the latter.

Here’s why.

Given time great entrepreneurs will find their way to big opportunities. The question then becomes “how do we give them the greatest chance of having enough time?”. The best answer to that is to generate the short term momentum which will allow them to raise more money and buy more time to navigate to the big upside. If the short term momentum doesn’t arrive then either the next round will be difficult or the company will fail – both outcomes we seek to avoid.

With most things in life, if you plan for it you are more likely to get it, and generating the momentum required to create value in the short term is no exception.


Supercharged storytelling

By | Forward Partners | 2 Comments


Every company has to strike a balance between focusing on being great at what they do and telling the world about it. Some very successful companies lead with hype and have their people permanently scrabbling to keep up. You might call that the Elon Musk school of entrepreneurship. Other successful companies focus on delivering value rather than making promises – Google and Facebook spring to mind as examples here.

There are pros and cons to both approaches. Leading with lots of ‘noise’ and hype can maximise interest in a business, helping to gain attention from investors (thus paving the way for fundraising) and can also ultimately drive growth. However, chaos behind the scenes kills many companies that take this path. Focusing on delivering value first is a safer approach to building companies of substance, but unfortunately this often results in slower growth and can mean that a business is left trailing behind hype-charged competitors.

Here at Forward Partners we’ve focused on delivery first and have prioritised telling our story second. That’s our natural predisposition anyway, but it always seemed that the most important component in our mission was to deliver value to the founders we back and to our investors, rather than telling the world about our work.

Since I founded the business three years ago, we’ve concentrated on building a well-oiled machine which can supercharge our partner companies, providing not only the funding but also the operational help needed to achieve rapid growth. However, as we now enter the next phase of our own growth, we are beginning to focus on telling our story a little more. This is largely in the hope that we can speak to more of the next generation of entrepreneurs and more founders at the earliest stages will understand our unique approach to VC.

A big effort for us recently has been redesigning our website. It has become clear to us over the last year or so that the primary benefits founders get from working with us are speed and certainty of execution, and that comes because when we invest founders gain immense leverage from using our team. We wanted to communicate that message front and centre and also to have a more approachable look and feel. The homepage image you see above provides a flavour but please check the site out for yourself!

As well as working on our marketing materials, we’ve also been building out our press and storytelling function, for both Forward Partners and for some of our partner companies. Last week, we were pleased to be profiled in The Times alongside our partner company Live Better With – a really exciting step forward for our brand and incredible to share it with Tamara Rajah, one of our inspirational entrepreneurs.


Define your target customers narrowly

By | Forward Partners, Startup general interest | 4 Comments

I just read an interesting article about a startup called Silver Concierge that took Steve Blank’s entrepreneurship course in Stanford. The whole thing is well worth a read, but the killer section for me was “Startup Lesson #1: Know your customers — and why they need your product”.

Silver Concierge didn’t make it through the customer dev process. They discovered that there wasn’t enough demand for what they were offering and that the area where they did find demand (taxi service for older people) they couldn’t build a profitable business. However, whilst that might be a great testament to the power of customer development and their most important learning it wasn’t the thing they found out. They also discovered the power of narrowly defining their target market.

The team started out targeting ‘seniors’ but found out that segment was too broad with the result that they didn’t learn anything from their initial customer interviews. In their words:

Successful companies solve acute needs — and acute needs don’t exist independently from living, breathing human beings. “Seniors” is not a meaningful customer segment. “Female older adults with limited mobility living alone at home” is. As we learned first-hand, everything about our business followed from our customer segment; as such, it was critical to deeply understand who our customer was and what they cared about before trying to do anything else.

When I think through our companies the most successful ones have a well understood and well defined target customer. A good target customer base has the following characteristics:

  • They are easy to visualise and create personas
  • They have homogenous needs (with respect to your product)
  • You can market to them effectively

Many of the best companies start extremely narrow and then expand from there. Our most recent investment Patch is a good example. They are building an online garden centre chasing the £4bn spend in that market across the UK, but the first target customers are house-proud Londoners with balconies. Moreover, their initial marketing campaign will target a group of 3,000 flats with balconies in Stratford. These target customers are young professional couples, want plants for similarly sized spaces and we can reach them with fliers.

Over time Patch will extend to small terrace gardens, then larger suburban gardens and then huge rural gardens.

Two areas of opportunity in ecommerce

By | Ecommerce, Forward Partners, Startup general interest | No Comments

Kara Nortman of Upfront Ventures has just published an interesting and well grounded post on the future of ecommerce which got me thinking about where we see opportunities. I think there are two broad areas (Kara lists four, but I merged her four into two).

Brandtech – new brands that change stodgy industries

Simplified formula for success:

  1. target a large and valuable segment with poor product or unsustainably high margins
  2. deliver a great product and brand

As Kara notes this formula has played out well for numerous companies, including Warby Parker, Transferwise,, Just Eat and many others, but there are still many verticals with space for innovation, including food, soft home goods, furniture, toys, and educational products.

Forward Partners investments in this area include Lost My Name, Spoke, Zopa, Wool and the Gang, and Makers Academy.

Modern merchandising – new services that revolutionise how we shop

Simplified formula for success:

  1. target a large and valuable segment with a poor customer experience
  2. deliver a wow customer experience

This formula has also played out well for numerous companies, including Netflix/Lovefilm back in the DVD days, MoneySupermarket,, Uber, and many others. Once again there are other verticals that are still ripe for disruption, including many of the ones listed as open under Brandtech.

Forward Partners investments in this area include, Top10, Appear Here, Edge Retreats, Snaptrip, Live Better With, and The Gifting Company.

There’s obviously a lot more to building a business than the two simple steps I’ve listed hut the themes of great and/or radically cheaper product and radically better customer experience are big ones for Forward Partners.


Every founder and startup investor should be contrarian

By | Forward Partners, Venture Capital | 2 Comments

It follows that the average investor will make average returns. In the world of startups and venture capital all the money is concentrated in a small number of winners and average returns are probably below zero. Certainly they aren’t sufficient to compensate for the high risk and long lock up inherent in startup investing. The venture industry is highly secretive and I don’t have good stats, but I do know that only a very small percentage of VC funds make carry and that investors in VC funds know that only the 25% of funds are worth investing in.

Being an average investor in startups is therefore a waste of time. It’s actually a surefire recipe for losing money.

Doing better than average requires what Howard Marks of Oaktree Capital called ‘different and better’ thinking in a recent memo to his investors. He put it like this:

Remember your goal in investing isn’t to earn average returns; you want to do better than average. Thus your thinking has to be better than that of others – both more powerful and at a higher level. Since others may be smart, well-informed and highly computerized, you must find an edge they don’t have. You must think of something they haven’t thought of, see they miss, or bring insight they don’t possess. You have to react differently and behave differently. In short, being right may be a necessary condition for investment success, but it won’t be sufficient. You must be more right that others … which by definition means your thinking has to be different.

Peter Thiel is getting at this same point with his now famous interview question: what do you believe to be true that nearly nobody else agrees with you on?

Of course, being contrarian and wrong is no use. That’s just the same as being wrong. Being contrarian and right is the only place to be, as Howard says later in his memo.

This logic applies to startup founders as well as their investors. If around 10% of startups go on to be successful then to be an average founder is to fail. So like investors, founders need to be contrarian and have an edge which allows them to see things that others don’t. That usually comes from deep experience within an industry or real passion for a problem area.

We work hard to have an edge at Forward Partners. The most visible manifestation of that is our startup and growth team which helps founders execute better and faster by temporarily plugging skill gaps in their team, but we also like to think our understanding of markets, our experience with recognising great entrepreneurs and the reach of our networks give us insights that others might not have.

When an idea is ready to become a business

By | Forward Partners | No Comments

As regular readers will know Forward Partners invests in companies at idea stage, when there is literally nothing more than an entrepreneur and a plan. I’m frequently asked how we can do that and hope to make great returns given the risks of investing at this stage.

The answer to that question has many parts, not least that we have a product and growth team with a lot of experience helping entrepreneurs turn their ideas into great companies, but the one I’m going to focus on today is how we assess whether an idea is mature enough to take significant investment and become a business.

The following list is adapted from a post my colleague Matt Bradley recently wrote a post on the Forward Partners blog.

  1. There’s a great product idea – typically an exciting use case or exciting solution to a difficult problem, backed up by some objective desk research
  2. There’s a deep understanding of the market – customer behaviours and motivations, supply chain, pricing, go-to-market etc.
  3.  The competitive environment is benign – competitors are properly understood and differentiation is clear (note the properly…)
  4. Business fundamentals are strong – there’s a clear picture of how margins, customer acquisition costs, and customer life time value will look at scale
  5. Basis for long term competitive advantage – barriers to entry are clear, at least at scale
  6. Right skills – the founder is well suited to the opportunity
  7. Compelling plan for the first year

It took us a while to understand the importance of this last point. Venture capital works best when execution is fast and progress is rapid. Every founder goes through a period of exploration and in most cases there are periods that I characterise as ‘meandering’ – new ideas are explored, information is gathered, connections are made, but there’s no clear progress. Then (for the lucky ones at least) the stars align, a strong hypothesis emerges and a plan naturally comes next. That’s the point when we like to invest and help companies accelerate. We will help founders on their journey up to that point, but investing before the hypothesis is strong enough to generate a clear plan creates challenges because the idea isn’t yet ready to become a business and progress won’t be rapid.

Sustainable engineering – avoid big re-writes

By | Forward Partners | 4 Comments

Last week friend of Forward Partners Douglas Squirrel published a post about Sustainable engineering on The Path Forward in which he advises founders on how to scale their engineering effort. When the focus is on validating the idea and building first versions of the product it usually makes sense to take shortcuts in code and process quality to accelerate learning, but when the focus shifts to scaling the company it’s important to shift to scalable and sustainable software development practices.

Squirrel’s advice is to eschew ‘big bang’ changes such as re-writing in a new language or framework in favour of incremental changes using techniques like ‘inline’ refactorings and ‘spike stories’. ‘Big bang’ changes nearly always come in late, over budget, and under specification whilst incremental techniques have lower risk and keep the feature set moving forward. Interestingly given he’s an experienced startup CTO himself, Squirrel says to be wary of the advice of developers who “always want to re-write everything”.

If you are in this situation, or think that you might be I highly recommend you read the full post.

Our plan is that more and more authors like Squirrel will become Pathfinders and contribute to The Path Forward. Squirrel is actually our second Pathfinder, the first was Matt Buckland, who used to work here but is now Head of Talent at Lyst. He wrote a about How to read a CV and we have more articles from him coming in the near future.

If you would like to become a Pathfinder let me know via the comments or otherwise reach out.

Using The Path Forward to determine fundraising strategy

By | Forward Partners, Startup general interest, Uncategorized | 2 Comments


As you might have seen we launched The Path Forward last week as a guide for ecommerce and marketplace entrepreneurs in their first year (diagram above). We’ve been using it internally for a while and we’ve noticed that we find it easiest to get excited about startups that are at Step 1: Valid Idea, and Step 3: Valuable Business. When we meet new companies at Step 2: Valued Product, entrepreneurs have made choices and started down a path which inevitably shuts off some opportunities that were there earlier but they haven’t got far enough along to know whether those choices are good.

It turns out we’re not alone. I saw this on Founders Notebook earlier today:

You can only raise money by pitching the “Dream” or by selling “Traction”. So either bootstrap your startup, or raise money in the early “dream” (no code, no plan, just a dream) phase or in the “traction” (the model is working) phase of your business.

The Path Forward is a good tool for understanding what makes a good dream and what qualifies as good traction. To summarise what’s on the site, pitching a “Dream” works best when the need has been proven with customers and a prototype really resonates, whilst pitching traction works best when the business looks set to scale. If you want more detail go to The Path Forward, click on the ‘About the Path Forward’ button and check out the definitions of Step 1: Valid Idea and Step 3: Valuable Business and associated Waypoints. (“Waypoints” is the name we’ve given to the sub-steps you can see in the graphic above.)



Launching The Path Forward

By | Forward Partners, Startup general interest | No Comments


As regular readers will know at Forward Partners we’ve been working with idea stage entrepreneurs for over two years. During this time we’ve seen the same patterns play out again and again and we’ve developed a suite of tools and tactics to help our partners. We’ve pulled those thoughts into a framework for ecommerce and marketplace entrepreneurs called The Path Forward that we launched at our #FPLive event last night.

I’m excited about this. I think The Path Forward has real depth both as a guide to help founders set priorities and as a practical tool to help with execution.

The graphic above illustrates how we’ve seen it work best for companies, and that’s to focus first on making sure the idea is valid, and then on building a valued product, and then turn to building a valuable business. Moving prematurely to the product or business Steps is counterproductive. Underneath each of the Steps we’ve set out the Waypoints companies should achieve to know they are ready to move onto the next Step.

On The Path Forward site there’s more detail about each of the Steps and Waypoints and then a set of highly practical articles and case studies organised under the Steps and Waypoints structure. For example under the Right Skills Waypoint (Step 1 Valid Idea) there’s an article titled Agency, outsource, or do it yourself?  and under the Growing Product Waypoint (Step 2 Valued Product) there’s an article about Channel testing, initial CPCs & judging scalability.

These articles were written by members of the Forward Partners startup and growth team (Leo Tsementzis and Tom MacThomas) and indeed all the content so far has come from us. We will continue to contribute new articles each week and hope that startup folk more broadly will also start chipping in so The Path Forward becomes a community owned project.

So we’d love you to get involved.

Here’s what you can do next:

And, if you like what we’re doing, please share!