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A brief history of founders and co-founders

At some point in the last few years it became conventional wisdom that co-founding teams are better, so much so in fact that when Paul Graham stepped down as president of YC recently his number one tip to entrepreneurs was ‘get a co-founder‘. Similarly Dave McClure talks about the ideal founding team comprising a ‘a hacker, a hustler and a designer‘.

Today I got to thinking why that might be, and I think it is down to the fact that startups are now hugely capital efficient.

To be clear I’m a big believer in the power of teams, but we’ve had some success here backing solo-founders and then helping them find a co-founder shortly after that. Having had some success we are looking to rinse and repeat, and that has led us to think about the whole co-founder question in more detail.

It seems to me that having a technical co-founder is critical now for startups because they have to release product and prove traction before they can raise enough money to hire a team. Having a technical co-founder is the most reliable way to quickly and cheaply build and iterate a product. The alternatives open to most entrepreneurs are unattractive – hiring a full time developer is expensive and requires taking on employment commitments and outsourcing to an agency typically doesn’t allow for fast iterations.

Back in the days when companies would raise £2-5m before releasing a product they would hire a team of developers and didn’t face these problems.

I think that’s why having co-founders has become more important recently.

Accelerators have sprung to prominence since Y C was founded in 2005 because for the first time companies can do something meaningful with the small amounts of money they invest. The whole point of accelerators is that companies get advice and iterate multiple times within a three month programme. However, that simply isn’t possible without a developer on the founding team. That’s why Paul Graham and Dave McClure have observed that having a co-founder is so important and why accelerators around the world have contributed strongly to the co-founder meme.

I’ve written about this before, so apologies for repeating myself, but Forward Partners offers another way. Entrepreneurs we back pair with our developers to quickly launch product and iterate cheaply, and then find a co-founder.

Mark Suster wrote a good post on this topic back in 2011. He talks about the importance of having a partner in your business, but cautions against the risks of equal partnerships. In his view it’s better to start a company and then look for a partner. Lots of great people will join a startup for 20-30% equity, or even less.

The ALS Ice Bucket Challenge meme – nothing to peak in 16 days


Techcrunch has a good write up of how the ALS Ice Bucket Challenge meme started in Boston and spread around the globe. Speed with which it moved is incredible. As you can see from the chart above hits on the website went from nothing to their 2.5m peak in sixteen days. The internet is making our world small. More controversially, I think it is also reducing cultural differences, at least in some quarters.

Forward Partners solo-founders office hours – 19th Sept

We are holding our second open office hours for solo founders of ecompanies in the commerce ecosystem on 19th Sept. If that’s you please come along!

Pradeep explained the details last week on the Forward Partners blog, copied below.


We will be holding Open Office Hours on September 19th to meet solo-founders of ecommerce companies at the idea stage.

To apply please email Pradeep Raman [email protected] with a brief description of your business idea and a link to your website (if you have one).

Are you a solo founder with an idea? We have worked with a number of solo founders to get their ideas off the ground and find a co-founder. When we backed Matt Fox at SnapTrip, a last-minute self catered breaks service, and Daniel Van Binsbergen at Lexoo, a marketplace connecting SMEs and lawyers, they were both solo-founders.

We typically offer £250k over three tranches to these idea stage businesses where our minimum requirement is that the founder has a well formed and well researched idea. We can help develop and validate the idea, build a product and find a co-founder. You can read more about our solo founder hypothesis here and about how we helped Snaptrip here.

What we look for

It’s simple! We’re looking for great entrepreneurs with great ideas that attack big markets. We have a preference for individuals with domain expertise and we love people who obsess over product and understanding their customers.

Our focus

Our sector focus is the ecommerce ecosystem. We define that broadly to include any consumer facing business where there is a clear transaction/purchase and B2B companies that sell to ecommerce companies. We are particularly innovative shopping models, innovative product companies and software and services for small ecommerce businesses.

Three examples from our portfolio:


  • is a free personal shopping service
  • Lost My Name make beautiful and amazing personalised books
  • Parcelbright helps SMEs save time & money on parcel delivery


We are holding our next Office Hours on Friday 19th September, between 1pm and 3.30pm. You can come in for a 15 min chat with a member of our investment team. We’re happy to give advice, we’re happy to discuss your idea and we’re happy to be pitched.

Once again, if you are interested please email Pradeep Raman [email protected] with a brief description of your business idea and a link to your website (if you have one).

Crowdfund and then raise VC – breakdown by sector

One of the things we talk about here at Forward Partners is backing a hardware startup at the idea stage and then helping them launch a crowdfunding campaign. It ‘s nice to think that the crowdfunded dollars could provide leverage for our investment and build a company’s profile so it can raise a Series A.

Kickstarter is five years old now and the data coming from them, Indiegogo and other crowdfunding sites shows that the above strategy can work, although it is highly risky. The chart below shows the money that VCs are putting into crowdfunded companies and which sectors it is falling into:



That’s $503m in total that went into 94 hardware projects from a total of 443 that Techcrunch found across the major crowdfunding sites when they looked in June this year (2014). However, the top 10 of those 94 took $336m, leaving the remaining 84 with an average of $2m each. That’s not much for a hardware company.

The takeaway is that only around 10 of 443 hardware projects went on to get significant funding. That’s a hit rate of just 2.3%, which tells me that whilst the theory of using crowd dollars to leverage an early stage investment is attractive it doesn’t work in practice often enough to be an investment strategy.

We will still make hardware investments (arguably Lost My Name falls into that category), but I doubt we will rely on crowdfunding as part of the investment thesis.

Latest Google X project – Project Wing: delivery drones

Delivery drones, aka Project Wing, is the latest project to be announced by Google X, the Google department that houses many of their most exciting projects including self driving cars, Project Loon and Google Glass. As you can see from the video below they are using a hybrid plance/helicopter design that takes off vertically and then rotates to fly like a small plane. The payload is winched down to the ground from a couple of hundred feet. This is very different from the equivalent project at Amazon which uses a quad copter design that lands at the delivery site.

I like the way they are focused on the user experience as well as the technical challenges. This from  The Atlantic:

Sergey [Brin] has been bugging me, asking, ‘What is it like? Is it actually a nice experience to get this?

Apparently the experience is very cool. The delivery drone hovers in the sky above you and then winches down the delivery before gliding away. It’s optimised for rural delivery though, and I’m not sure how the winch down would work in cities with tall buildings and limited outdoor space. The other interesting fact is that the drone is limited to a 1.5kg payload.

Impress investors with your execution of the fundraising process

Semil Shah wrote a good post yesterday with advice for entrepreneurs raising money. He makes a number of good points and the full post is well worth a read, but if I was to summarise it in one sentence it would be ‘impress investors with the way you execute your fundraising process’.

That means:

  • Get a quality introduction
  • Fashion your first email well
  • Have a good deck
  • Follow up quickly
  • Turn the pitch meeting into a conversation
  • Be on top of your numbers and don’t try to embellish or obfuscate – e.g. avoid cumulative graphs

Turning the pitch meeting into a conversation is worth dwelling on. Conversations are more fun for both sides than sales meetings and they give you a better chance to demonstrate your range and flexibility of thinking, and acknowledge the challenges that you will face.

Ice bucket challenge

The ALS Ice Bucket Challenge has been amazing, both as a money raising phenomena and a case study in how quickly memes spread these days.

And so perhaps inevitably my turn came around. I was challenged over the weekend and did it on Tuesday. Watch it below.

I tweeted the video out yesterday to keep the momentum going but I wanted to put it here for posterity.

Big thanks to our Head of Design Jack Oliver for bringing his magic touch to the video.


Gandhi on customers: this dude was way ahead of his time

I came across this quote at the weekend:

A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.

It’s widely attributed to Gandhi and whilst this utterance doesn’t rank amongst his greatest achievements it does show remarkable vision and foresight, given that he died in 1948.

In fact, most companies still haven’t woken up to this reality today, despite the fact we’ve been living with the cliche ‘the customer is always right’ for a couple of decades now.


260 customers surveyed, but sloppy customer research

I blogged recently about the difference between quantity and quality when it comes to customer research. My friend Michal Bohanes recently made the same point with a picture in his excellent post mortem on his startup Dinnr (in which I was an angel investor).


Michal was making the point that despite all this work he didn’t ask the questions that would have revealed customers didn’t care enough about his ‘deliver all the ingredients so you can home cook a meal’ service to actually buy. Instead he asked people whether they liked the idea and because people want to be nice and are bad at predicting what they will do in the future took away a bunch of ‘false-positive’ signals.

I know I keep going on about this, but it’s an easy and incredibly damaging mistake to make. Kudos to Michal for having the confidence to tell his story.


Avoiding burnout

“Dude. Go the gym!” is what one of my partners told one of our founders recently. He was stressed out closing a funding round and had dropped his usual routine, but the extra time didn’t help. In fact not going to the gym made things worse.

It’s easy for founders to get immersed in their businesses and not look after themselves. I was close to one company where that happened earlier this year and it was terrible. Bad for the founder and bad for the company. Bad enough that we are thinking about how we can add life coaching to the package of support we offer to our portfolio companies.

A couple of days ago Steve Blank wrote about his personal experiences with burn out. He was working hard and doing well, and the praise made him work harder still. And then he crashed. Here are his lessons learned:

  • No one will tell you to work fewer hours
  • You need to be responsible for your own health and happiness
  • Burnout sneaks up on you
  • Burnout is self-induced. You created it and own it.
  • Recovery takes an awareness of what happened and…
  • A plan to change the situation that got you there

Great advice. That said, I think you can find people to tell you when you are frazzled and should slow down a little. Husbands and wives can do that if you bring them into your startup journey. Mentors can also be a great help.