Taavet Hinrikus is one of those figures in the startup world known by just his first name.
Plural, the anti-VC firm he founded with three other experienced startup operators — Ian Hogarth, Sten Tamkivi and Khaled Helioui — announced a €250m fund last summer, with a rather ambitious goal: “To have GDP-level impact on Europe.”
Since then, it’s invested in seven companies, including carbon income platform Arbonics, battery storage startup Field Energy and metaverse gaming platform Ready Player Me, staying true to the plan that each partner only do four or five investments per year, to enable them to be very hands-on.
It’s also made several operational team hires — Daniel Tarver, head of investor relations; Kate Connolly, chief of staff (previously at DeepMind); Tamsin Ashworth Reeves, general counsel (formerly in the same role at Entrepreneur First); and Verner Uibo, head of finance — and promises Sifted that a new partner will be announced soon too (fingers crossed she’s a she).
Sifted invited Hinrikus onto our podcast, Startup Europe, for an in-depth interview covering how Plural’s getting on, what Hinrikus the founder got wrong and why founders can be a pain in the ass to work with. Listen to the full episode here, or watch it here:
“I think the balance question is so hard, and it's hard to force it on people. A lot of it, I think, goes back to setting a somewhat healthy example. I'm sure we've all heard of companies where the leaders are pulling all-nighters constantly and forcing people to do it. But, you know, at the same time, it's hard, because I also haven't heard of a single company being built with a four-day work week. So there's definitely a sacrifice to be made. And I think we shouldn't be saying there isn't.
I haven't heard of a single company being built with a four-day work week
“So the question is, how do you do it for 10 years in a row? How do you avoid burning out yourself? And how do you avoid getting burnt-out people on your team? I definitely have taken personally having people burn out on the team, to the point where they're physically in a bad spot. It's not fun, and it's very hard to deal with that in the early stages, especially if the team is fired up, and everybody is like 'I want to make it work'.
“Somewhere I read that when the first Boeing 747 plane was being built in the 60s, the employees would secretly crawl back into the factory at night to continue building it because they were so driven by the project. That happened in the 60s with kind of moonshot-type projects. The same thing happens with startups, especially if you're doing something that's great and new people are fired up about. So sometimes you have to keep them back.”
On the importance of the first few employees
“It’s a cliche, but the importance of the early team, the first 10, 20, 30, 40 people, can’t be underestimated — because they will end up hiring the first few 100 people. That ends up kind of building the culture of the company.”
On angel vs VC investing
“I'll tell you honestly that doing lots of angel investments started feeling a lot less satisfying, over time. It was kind of like becoming the equivalent of Wall Street indexing — like, ‘Oh, that's a great company, can I put in a ticket in the round?’ Suddenly every company ends up being a line in a spreadsheet. There’s no enjoyment and no way of having GDP-level impact doing it that way.
“Doing fewer investments is more disciplined. You do need to think a lot harder about the company, the founders. How can you be helpful? Can you be helpful? And are you doing things that you really care about? It's a lot harder for me to get excited about a SaaS HR company. I probably won't go for a run and think really hard about how this HR problem is going to be solved by this SaaS tool. Whereas if I'm thinking about how we scale something that has an impact on energy, there's a likelihood that when I go for a run, I will think about it.
"Obviously, at any given moment, you have to work on things that are probably not something to get out of bed for, like something that goes wrong, etc. But still, if it happens in a company or an area that you deeply care about, I think there's a much bigger chance of having a positive impact.”
“While I agree that the Tech Nation and visa things are not good, I think it's far too early to say the UK tech scene is in any significant problematic state. I'm broadly optimistic about all of Europe — we are more and more living in an age where tech companies are going to happen everywhere.
"Bloody Italy had its second unicorn last year! I mean, how great is that? And I'm sure that now Italy having two unicorns will accelerate the ecosystem development over there.
A lot of what the governments do doesn't end up being that helpful
"So yes, there will be temporary hiccups. And maybe the funding in the UK didn't grow as much as France last year. But who cares? I think it's dangerous to try to conclude too much from this. Yes, of course, we should go and protest outside of Number 10, and tell them to get their act together and see what they can do.
“But the reality is the biggest thing they can do is get out of the way, which you know, I think they've been semi-successful in doing.
“In most cases, it's a handful of key policies that have a huge impact, whether it's about stock options or immigration, and so on. There, the government is the only one that can have a huge impact.
“I think this happening in France will make every other government think much harder about what they can do as well and hopefully develop more blueprints of what can be done that actually works — because also a lot of what the governments do doesn't end up being that helpful.”
On the ways in which Plural is different
“We are still standing true to not having an investment committee — as in a committee that decides on making investments — the equivalent of the dog and pony show which is a partner meeting at most venture firms where they spend Monday together and just shuffle entrepreneurs in and out, coming to do a presentation to partners who are reading their emails or watching cat pictures. We don't do that.
We don't hold ourselves back, we get straight to the point
“It's working well for us. We do spend extensive amounts of time discussing deals internally, which was what we planned. We have a structure where we write an internal investment memo, and we spend lots of time debating it. We don't hold ourselves back, we get straight to the point. And I think we are making each other better and keeping each other accountable.”
On the plan to add more former operators as partners
“I still feel really good that by the end of the year we'll be around 10 [partners]. But something we've learned building companies is that you may get ahead of your skis if you do it too fast. So, we just need to make sure that we get the right people on board at the right time. Eventually, can we be 20 or 50? Time will tell. We believe that if anyone can find a way to scale venture differently, we're in a good place to do it.”
On why founders can be a pain in the ass
“They're fucking stubborn. But you know, you can't have it all. This is a question of finding investor-founder fit. If you speak to a founder and they listen to everything you tell them and act on it immediately, the maturity of the founder is probably a little bit too low, or you cast a magic spell over them. And that's not too healthy. And the opposite — when they never listen to you — is also a waste of time.
"There is some kind of a sweet spot in between where some of what you say gets thought about or acted upon. And that's what you need to be looking for. It also depends on the human type. I'm sure there are founders where probably, I won't enjoy it, they won't enjoy it. And yet, there are plenty of founders where I think we have good chemistry and we find we respect each other and hopefully, that's where one plus one equals two point zero one.”