The Struggle

As early stage investors, in predominantly B2B startups, the team here at Episode 1 sees our portfolio companies wrestling with the many attempts to achieve Product Market Fit. We love backing very smart entrepreneurs, often first timers, who are trying to solve big problems or deliver mission critical services in a variety of different industries.

I haven’t done a formal analysis, but I would guess that more than 80% of our teams have at least one founder with a first class degree, a top Masters or a PhD in a field relevant to the start up they are working on. And without exception, all the founders are people who have been successful in pretty much anything they have ever turned their hands and minds to. Top universities, top employers, top accelerators, top everything. They are winners, and success is second nature.
So failure is hard, it feels hard. Or maybe failure’s the wrong word, because it may not be failure, it’s the lack of immediate success, The Struggle. The sense that “this is the hardest thing I’ve ever done” the feeling that as you struggle to achieve one milestone (a funding round, an MRR target, a product development goal), “you round the corner, stop pedaling for a minute, look up and see another long steep hill looming in front of you”, as one of our entrepreneurs put it to me this morning.
This pressure to succeed straight away comes from a sense of responsibility to the early employees in the team, who have often given up jobs at great companies, or tertiary degrees to join the cause.
The sense of “I owe it to the angels and other investors who have taken a punt on me and my fellow founders, to make this thing work, to raise another round of funding, to follow the journey to Series A, B and beyond, not to let these people down” is also palpable.
There is also anxiety about “what the investors will think”. In our experience at Episode 1, this is almost always self-imposed by the entrepreneur. We’re trying to create an environment with our entrepreneurs where our interactions are open and honest, where there is no need for messaging or spin or promotion, where we’re working together to make this project that we all love as successful as it can be. Where we can openly discuss the lack of immediate success, acknowledge the struggle and work with our entrepreneurs to think about strategies to accelerate the move to something that is going to work. We’ve all had struggle; ask my wife about the 3-4 years in the mid 2000’s when I often didn’t sleep or if I did, I would wake at 2am then be up for the rest of the night because of work pressure. My partner, Simon Murdoch, one of the most successful venture investors in the UK, also had his own period of struggle as an entrepreneur (if you ask him nicely, he might even follow up with tales of his own!).
We know that developing an enterprise ready software product or platform is hard, that convincing first and other early users to take the plunge is often even harder, that things take longer, that prospective customers will prevaricate, postpone trials, move more slowly than we would all like. We know that there’ll be failure along the way.
When you’re trying to turn water into wine, in the absence of celestial assistance, it’s going to take a few iterations before you can get a drinkable product, let alone something that will fly off the shelves.
We want to be with you for the struggle, and if we can alleviate some of the pain along the way, so much the better.