At this year’s Sifted Summit, the Startup Life newsletter came alive on stage for the second year running — this time, on a bigger (and better) stage.
Over two days, the Startup Life Live! Stage covered everything from how to hire an engineering team in the age of AI to how CMOs can get their marketing strategy right.
Here are a few takeaways.
What founders should know about raising a Series A
Fundraising has gotten tougher since the heydays of 2021 — and the bar has risen in terms of what VCs are looking for in startups.
- Tim Chong, cofounder and CEO of credit card fintech Yonder said that “strong product market fit is the key difference to a 2021 Series A. Investors are less interested in giving you a valuation based on MRR (monthly recurring revenue) and are more looking at EBITDA (earnings before interest, taxes, depreciation and amortisation.”
- Murvah Iqbal, founder and co-CEO of electric parcel delivery network Hived encouraged founders to “focus on building, not on the investment. The market is so tough, so you want to focus on making the company great” in terms of hiring, efficiency, growth and resilience.
- She added that founders at Series A don’t have to have everything figured out, but they do need to demonstrate financial discipline, and be aware of budget cycles. They also need to have a plan on who they plan to hire into specific C-suite roles, how they will double their team and build a company culture. By Series B, startups should have their C-suite properly in place.
Hiring engineers in the age of AI
Most startups are looking to implement AI into their business, which means building a solid team of engineers. AI isn’t going to automate engineers out of a job, said our panelists — and, controversially, some said that engineers need to learn how to think and innovate before learning how to use gen AI tools.
- Companies of all stages should hire junior engineers because they need people who have soft skills, such as curiosity and a willingness to learn. Knowledge of specific coding language skills or tech stack skills is less important.
- Coding may become easier with AI, but what will never be easier is the ability for humans to create and innovate. Engineers need new ideas and the ability to translate that into technical terms: for example, they don’t need to know how to build something themselves, but they do need to know how to write succinct and specific prompts to help AI do it for them.
- Georgie Smallwood, chief product, technology and data officer at online greetings card company Moonpig, said that companies should not allow their junior engineers to use gen AI tools for at least the first nine months on the job. Engineers need to learn how to think and understand how tech works under the hood, so if tools are down (like in the global Microsoft outage in July this year) they know how to deal with it.
- On the topic of company benefits, Michelle Coventry, head of talent at early stage VC firm Creandum, and Harry Jones, cofounder of second-hand car marketplace Motorway, said that benefits aren’t just salary or equity; engineers need excitement, the ability to see different areas of the business by moving around in different roles and career progression.
Scaling a business without sacrificing your health
Burnout among entrepreneurs is common — and while it is heartening to see that people are speaking more openly about their struggles with mental health on social media and conference stages, there are a lot of founders who do suffer in silence. Our panelists pointed out that some company builders don’t realise they are burnt out until the situation is really critical.
Here’s some tips they gave on how to spot the signs of burnout — and how to deal with burnout if you are going through it.
- Hannah Samano, founder and CEO of Unfabled, a consumer marketplace focused on female health and wellness, said that during her experience of raising seed funding, a process which took over a year, her friends started to notice she wasn’t herself and told her that she was burnt out. Reflecting back on that time, Samano realises that there were certain signals that she was heading for burnout that she hadn’t acknowledged at the time: including insomnia, getting ill regularly and not being able to find joy in activities outside of work.
- When facing burnout, Reeva Misra, cofounder of Walking on Earth, a preventative health platform for workplace stress, emphasised the importance of focusing on what you can control rather than what you can’t. The job of an entrepreneur will always be inherently stressful, but defining your personal thresholds for stress, and realising when you need to take a step back, can really help. “Reflect on the things that drain you and invest in those that energise you,” she added.
- Emma Obanye, cofounder of OneTech, a non-profit increasing opportunities and access for underserved entrepreneurs, said that reminding herself of what makes her happy was really important in her burnout recovery. She implemented a few habits into her daily routine to help keep her grounded: such as going to the gym, having regular therapy sessions, doing meditation and creative activities (i.e. things not directly related to her work).
Putting together an effective board
At their best, boards are a springboard for discussing critical issues, advancing strategy, and inspiring founders with a diverse range of opinions. At their worst, boards can be disappointing, lacking constructive advice or simply a waste of time. So, as a founder, how can you make boards work for you?
Our panellists gave the following tips:
- As an early stage startup, a board is imposed upon you; it’s not the case that you can handpick industry figures yourself (that comes later where you can encourage independent people to join). In the early stages, it’s about making that group as effective as possible, said Andrew Wigfall, executive in residence at multistage VC firm Balderton Capital
- Laura McGinnis, principal Balderton, recommended that CEOs try and set up good practice from the outset; planning out an agenda and having regular touch points with the board. “We kick off the year, we set a schedule for how many times we’ll meet a year. From there, you start to instil good habits. Recently I sent a new company a template of guidance for what I’d like to see at each board meeting,” added McGinnis.
- It’s important to have an honest relationship with your board members — at the end of the day, they’re there to help you. Wigfall advised founders to be open with board members and “Tell us bad news quicker than good news, because we can help you out on it.” Later, he added that if board members are micromanaging, then they’re not the right people for you.
- In terms of what an ideal board size is, McGinnis said that three to six members is usually the sweet spot. “At the beginning, you might have three cofounders, who are all on the board, and ideally you have someone else. Then later it’s usually the CEO, maybe some other cofounders, and then you bring in outsiders,” she said.
- “I’m a board observer on a later stage company and we’re starting to think about this now. Series B, C is when a chair comes in. Between rounds is a great time to onboard and offboard people. If you’re exiting, you need someone who’s IPO-ed or been acquired before. As you raise later stage capital, you’ll naturally get investors on the board with that expertise,” added McGinnis.
