Entrepreneur First is on a mission to make entrepreneurship the new normal for graduates.
Sparking innovation isn’t easy, some of the biggest businesses in the world have struggled to embed an entrepreneurial spirit in their workforces.
But one company in London thinks it has perfected a model of how to create successful entrepreneurs.
“Actually all the traditional assumptions of how good ideas come together, how a team ought to form, these all come from a world where being an entrepreneur was incredibly niche and incredibly weird,” Matt Clifford, co-founder of Entrepreneur First (EF), told The Memo.
“Today all these ideas are just totally wrong.”
At its core EF is an investor in early stage businesses, looking to put money into the ‘next big ideas’. But, unlike other investors like Balderton Capital and Index Ventures, Clifford and his team aim to invest in entrepreneurs before they have even come up with their next big idea.
“We want to ensure the people who become investment bankers today, decide to become founders tomorrow.”
EF starts by headhunting 100 potential entrepreneurs for its cohort, often before they even have a business idea, and invites them on a six month programme during which Clifford and his team attempt to tease out business ideas.
And since starting in 2011 the programme has been a huge success in London. Companies formed through Entrepreneur First have gone on to raise over $50m in funding from Europe’s biggest investors.
Some of the recent successes are Blaze, the cycle safety light which is being rolled out by Transport for London across the capital’s Santander Cycles, and advertising tech firm AdBrain, which has gone on to raise $9m in funding from Octopus Ventures.
But just how does EF create these young successful businesses?
“We start by finding the right people and saying ‘you look like you could be a founder, do you want to find out if you actually are?” says Clifford.
To some the idea of finding entrepreneurs before they even have a business idea might sound counter-intuitive, but Clifford believes the proof will be in the pudding.
“We think we’re moving into a world where entrepreneurship is the new normal, particularly for people with technical skills.”
The team at EF believe that becoming an entrepreneur is becoming a viable career path for the highest skilled graduates and young professionals, but even these workers need something more to be accepted onto Entrepreneur First.
“The number one thing we look for in interviews is ‘edge’, it means you’ve got a competitive advantage that’s going to make you a great founder in a particular area.”
“We believe if you don’t have edge you shouldn’t even bother applying.”
From the cohort of 100 Clifford and his team encourage the potential entrepreneurs to find business partners and start experimenting with ideas.
After three months EF typically has around 35 two-person companies, while 20% to 25% of the entrepreneurs have dropped out by this stage, having struggled to form a team or find a workable idea.
At this point the companies formed are given a £10,000 investment from EF, which takes an 8% stake in each team, and have another three months to develop their ideas.
After six months the companies will pitch a demo of their idea to a group of around 300 investors, from the likes of Balderton Capital, Octopus Ventures and Index Ventures, seeking to raise investment to take their businesses to the next stage.
After five cohorts and some 250 entrepreneurs turned founders, Entrepreneur First is now eyeing world domination with its first international programme in Singapore.
“It’s a very different ecosystem, but there are lots of similarities with London,” says Clifford.
A workforce of young professionals, many in finance and technology, but without a strong cultural drive to become entrepreneurs… Singapore doesn’t sound too dissimilar from London’s just a few years ago.
“That’s the reason we exist, to help people found companies that they might otherwise not, and I really feel like we can do that in Singapore.”
Time will tell if Clifford and his team can embed an entrepreneurial spirit into Singapore’s talented graduates but, if EF’s success in London is anything to go by, the Asian city-state might be the next tech hub to watch.