← The Times Tech Podcast
The Times Tech Podcast
The $14 billion Nscale story and how founders succeed in Silicon Valley
00:39:02
Alice Bentinck on finding the next tech founders
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this episode of the Times Tech Podcast is sponsored by Adobe Acrobat Studio.
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A lot of us lead very busy lives, including the tech bosses you hear from. On this podcast, we're dealing with more information ever before, often across disconnected tools and working in hybrid teams.
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If this sounds familiar and you're someone whose life involves scrolling through contracts, reports or pitches with important data buried in long documents or different sources, then you'll know it can sometimes be a struggle
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Check out Adobe Acrobat Studio and its new features now. Hello and welcome to the Times Tech Podcast where every week we unpack how technology is reshaping business, culture and everyday life. I am Danny Fortson out here in
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Silicon Valley and I'm Katie Prescott. Katie in the city, the city of London. And this week we're talking about the people who are building the AI companies that are taking over the world.
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People like you know Josh Payne, once a coal miner who in his spare time read some entrepreneurial books and all of a sudden he's become the CEO of a multi billion dollar data center company called N scale. Just raised $2 billion from investors including Nvidia, valuing the company at $14 billion. Life happens fast. Life happens fast.
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Raised a lot of money and raised a lot of eyebrows, I should say, as big question this week, and there's no way we're going to answer this in half an hour, but bear with us. What does it take to stand out and achieve that kind of success in the highly competitive world of tech and especially in this mad wild moment that we're in of AI? Is it about access to the right markets, the right people, the right capital? Or is it a unique vision, great leadership and a killer instinct?
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That's right. So later we're going to be talking on the pod with Alice Bentinck. She's the CEO of Entrepreneurs first, which is a talent investor that is on the global hunt for the world's future founders, often before those individuals even have a business idea.
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C
Yeah, a company that's just raised itself $200 million. And we'll be asking her why you shouldn't start a business with a friend. So maybe there's a lesson there for us and find out what she thinks it takes to become a successful entrepreneur. And spoiler alert, as you'd imagine, it involves working all hours. But first, Danny, let's talk about something that you've been following this week, which is this extraordinary social media trial out in California. It's been going on for a few weeks now and we've even seen Mark Zuckerberg, obviously the founder of Facebook, now meta, be grilled by lawyers in really an unprecedented way. Just remind us of the background to this, what's been going on.
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Yeah, so I went down to LA last week and spent all day on some very uncomfortable wooden benches at the back of a courtroom for this landmark trial that's taking place that, you know, depending on who you talk to, could be the kind of turning point for this kind of multi trillion dollar social media industry. So Meta and YouTube are the defendants. They're fighting allegations that their products are designed to be addictive. They have willfully built addictive products that are harming the mental and emotional health of their users. And in particular, this case is about one user. She's a 20 year old woman, she's known as KGM in court documents. And this is the first of what they call a bellwether trials. So there's something like 2600 lawsuits against the social media companies.
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C
Goodness me. What, from individuals like her?
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From individuals from school districts.
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C
Right.
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From local city, state government, state attorneys general, a whole menagerie of people. And so they have kind of combined all of these 2600 into two separate courts, one federal, one state. This one is a state in LA. And of the roughly 13 to 1600 cases filed in state court, they've chosen five or seven. And they said basically, look, the evidence is going to be broadly the same, the arguments are going to be broadly the same. Let's establish whether this new legal theory that social media is itself a dangerous faulty product designed to be so by the people who make them. If we can prove that, then that opens the floodgates to huge settlements. Think big tobacco in 1998, that kind of idea. And also forcing these companies to really change how they build these products to make them not addictive and therefore not harmful to people.
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C
You talk about the benches being uncomfortable, but I imagine some of the evidence was pretty hard to hear as well.
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Yeah, it's pretty dark, you know, and I should say just to kind of ground us in what is happening here, the beginning of the trial for the first several days you had over a dozen parents standing on the courthouse steps with pictures of the kids that they've lost.
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Wow.
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Either through suicide or dying in viral challenges or whatever.
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You know, something that they've linked to
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social media that they blame directly on social media.
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Yeah.
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And KGM in this case, she started on YouTube when she was six, she got Instagram when she was nine. She was self harming by the age of 10. So it's just all, it's all very, very dark. And part of the job of the, of the defendants met in YouTube's lawyers is to kind of take apart that argument and say, actually KGM had a terrible home life. It's very heavy and like real and the stakes could not be higher. It was all very kind of cinematic in a way because you walk into the courtroom, there's two tables. Plaintiffs, Defendants. The plaintiffs. The lawyer is this guy, Mark Lanier from Texas, devout Christian pastor. He's like a performer, like he's very engaging. His two co counsels are his daughters. He has five kids. So it's literally a family defending a family. And on the other side you have meta and YouTube and I should say TikTok and Snapchat. They were also defendants. They settled right before the case started.
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Fascinating.
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So It's Meta and YouTube and they have just this roster of the best corporate product liability lawyers in America. Sharp suits, super slick. And as you start the day like everybody's like wheeling in these carts full of these bankers boxes just full of documents. And so there's like a whole, like there's probably three or four dozen boxes stacked up around these tables of all the evidence that they're going to try to draw on. And this is this first bellwether case. And then there's a, we're doing in the Sulligan in federal court starting in Oakland as soon as next month with another five or seven bellwether cases. So it's a big deal.
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Yeah, so. And it's also going to ripple out globally, whatever's decided 100%. Well, it's a huge topic of debate here and actually we're going to have Baroness Kidron, who's a big campaigner for children's rights and a big supporter of restrictions on social media on the podcast in a few weeks time. And she was actually in front of a select committee this week looking at this. But let's move on from California to here in the city of London to talk about N Scale, which I'm gonna describe as a British company, although that is up for debate, but a company that develops the AI data centers. And it has raised an astonishing $2 billion, valuing the company at $14.6 billion. And it's the largest single funding round raised by a British startup. And as well as announcing the big money, it's also announced some big names too on its board. Nick Clegg, former UK Deputy Prime Minister, of course, but then former President of Global affairs at Meta, Sheryl Sandberg, Meta's former coo. And the names that it's got as backers are astonishing too, like Nvidia. Its customers include Microsoft, OpenAI, all the companies we were just talking about, actually ByteDance, which owns TikTok. So Jensen Huang has, has said that N Scale could be a national champion for the uk. But I mean, I know you've looked into this really carefully. It came out of nowhere for us, didn't it? I mean, I think I first heard of N Scale when Donald Trump was over in London for his state visit with all the tech bros. And there were those big announcements about funding in Britain from the likes of Microsoft, as I just mentioned, and Nvidia. And they were all linked to N Scale and they came out in this press release from the Department of Science Innovation Tech. We were all like, hang on a sec, who is N Scale? And looking them up. They hadn't filed accounts on Companies House. They have just dropped today, Wednesday as we're recording. But it was like, who are these people? And suddenly they're worth $14 billion.
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It was like it had just like dropped out of the sky, like, oh, N Scale. Okay, who are they? And then it turns out that it was run by this 30something guy, Josh Payne from Australia, who again, no one has ever heard of. And so we just started looking into it and this is back what, six months ago. So I just did a deep dive into everything I could find on him and found out that like basically he's N Scale was a very, very new company, less than 2 years old at that point, and that it had actually never built a data center, which I was like, that feels relevant for the company that's supposed to build all of the data centers in the UK after
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all these deals, handling many billions.
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Yes, exactly. But what's really interesting is that there's been a series of stories that have been dropping in this past week. Other people looking into, like, who is this person, Josh Payne, who, what is this company and scale? And that's why I'm so happy to have Alice on today. Because again, I think oftentimes this happens like a company just comes bolt out of the blue and there's like this really larger than life or interesting or really gifted CEO at the heart of it or whatever. And I think that's the question a lot of people are asking now about N Scale and Josh Payne, because it has raised all of this money because it is in the center of the data center build out that everybody's talking about in the UK and basically, does this guy, does this company have the goods to deliver?
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Well, should we talk about what we do know about him? And then so as you say, he's in his early 30s. He got interested in entrepreneurship from reading business books like the Four Hour Work Week when he was working in a coal mine. And so that got him interested in renewable energy and crypto mining. And it seems that N Scale has actually spun out of a crypto mining business, which actually it wouldn't be the first data center company to do that. Right, that's exactly what coreweave did.
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And he explains, because he's done one interview now with the New York Times, he explains like, he was over in Australia, he'd gotten into renewable energy, he'd raised some money somehow. And then he's like, oh, I'm really interested in this books. A ticket. A 24 hour journey to Oslo, Norway. I paused when I read it and he's like, yeah, I just stayed there for two weeks and I left with a signed letter to buy a data center in Norway. And you're like, how'd you do that?
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There are lots of Data centers in Norway, cold and has free energy.
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Exactly. And thus began the kind of the journey where, you know, a year plus later he's, he's at state dinners in the, in the red carpet and, and best mates with, with Jensen Huang.
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So here in the uk and I was just looking through their accounts before we started recording, which they say they've only just come out today, which is mad for a company that's worth $14 billion, that they've just published one and they're out of date because they're for 2024. Nonetheless, in December 2024, the company signed an agreement to buy a chunk of land in Loughton and has bought that for about. Well, they put down a deposit of £2 million. They've now paid the deposit £40 million and they're building the various infrastructure there to put energy in place to build a data center. So it looks like here in the UK that's the first one, but they've also got spaces, as you say, in Norway and in the States.
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I think it's worth also just kind of making the point Chat GPT like hit the world like a meteor three years ago, effectively. So there's a lot of companies and a lot of people being like, oh, this is going to change the world, I need to get in on this. And so, like these kind of what they call neo cloud companies, these companies that have kind of started up or shifted their focus to building AI data centers. This is not a unique thing. N scale isn't the only one, but it does speak to this moment where if you're in the right place, right time and you're kind of in it to win it or whatever, you can make some extraordinary things happen. Because there's this, I think four companies, the big four hyperscalers, that's Meta, Amazon, Microsoft, et cetera, they're going to spend something like $600 billion on data centers this year and they spent about 500 billion last year, you know, like a trillion dollars in two years, you know, so there's a lot of money sloshing around and they need, they can't do it all themselves, they need partners. And then you have folks like N Scale like Josh Payne who are like, I'm going to put myself in the middle of that.
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C
And it's worth talking about some of the circular deals that we've been talking about a lot when it comes to AI, which are a part of this. I mean, just in the accounts, it was really striking. Nvidia paid $60 million for a stake in N Scale. Right. But in exchange for that, they're going to basically underwrite their lease for a facility in Texas for $860 million. So if they don't, if they don't pay for that, Nvidia basically is the kind of the big dad coming in saying, hey, you know, I'll back you up here. And if it falls through, you know, they get more N Scale shares.
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Yeah. And Nvidia's put hundreds of millions in N Scale. But of course, what does N Scale need to buy? What's the main thing they need to buy? Nvidia chips. And that's what a lot of people like. Well, Nvidia is just going around the world funding its customers. Someone coined this term the announcement economy. You know, where you have these like big announcements and share prices go up and down or whatever, but as you move away from the announcements and then you have to kind of circle back to like, okay, well are you delivering on said announcement that major share prices go up and made everybody kind of jaws drop? That's where we are now. We're moving to that next phase. Post announcement.
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C
And a couple of points before we move on, there are, as you said, so few players involved in this. And the fact that they're all involved in N scale is a huge sign of strength for N Scale because you need the chips, you need the power, you need the money. Oh, look, you know, you've got Microsoft and Nvidia and then Sheryl Sandberg, Nick Clegg. And then on top of that, there is an obsession at the moment, as you know here in Europe, with sovereignty and ownership of AI and data centers. And so this allows Britain essentially to say that it has and other places in Europe to say they have ownership of their data center, of their AI infrastructure. But the money is still coming from the us.
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Can I say one thing about our friend Sir Nick? At the Times Tech Summit, you may recall, he.
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I too, I know what you're gonna say.
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He went up on stage and he's like, Britain is becoming a vassal state. Why are we getting so excited about bunch of sheds? Everybody's like, 30 billion dollar pounds of sheds. Who cares about data centers? Why are we getting all excited about this? Fast forward 6 months and he went further.
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He said, sheds with chips that are just gonna go out of date in a few.
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Exactly. And here he is joining the board of the prime shed maker.
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It is the autumn shed maker.
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Exactly. The newest, like sexiest shed builder in the uk.
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Well, we've invited Nick Clegg onto the podcast so fingers crossed he can come and tell us what his new opinion of Sheds is.
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Exactly. I imagine it may be a bit more nuanced, let's say.
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Well, it feels like a good time to move on to our interview.
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Yes.
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And you know, try and answer that question about what does it take to succeed in this mad, bad, wild world of AI?
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Yeah, like basically, how do you become Josh Payne? How do you go from like, hey man, I'm reading four hour work week in between shifts to like, now I'm a billionaire, how do you go from
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the coal mine to, I don't know, king of the mine? Well, hopefully our next guest, Alex Bentig, will be able to tell us. So we'll be back just after this.
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We combine deep operational expertise with disciplined long term investing, uncovering value and partnering alongside clients to shape tomorrow's economy. Today Brookfield Own what's next? Learn more@brookfield.com this is not an offer to sell or investment advice. Investing involves risks, including loss of capital. There's one place for the newest drops in wellness and performance and the biggest sale of the year. It's the drop by gnc. Curating the best of what's new, handpicked by the pros who know what works. And right now, get it all. Buy one, get one 50% off during the semiannual Live Wells sale. From crushing workouts to leveling up your nutrition and everything in between, get the best deals on the latest innovations. All the newness is all on sale right now during the Live well sale on the drop by gnc. Hello and welcome back to the Times Tech Podcast. Our guest today is the CEO of Entrepreneurs first, which you can think of as kind of like a talent agency that looks for people, not companies, to invest in. Often before those people even have a business idea.
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Their Portfolio of companies is now valued at over $16 billion. And the majority of those founders, no surprise perhaps, are working on AI.
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Some of the companies they've backed, Clio, Friend of the Pod, Poly, AI, Friend of the Pod Magic Pony Technology, which was acquired by Twitter. And as we record, this company just announced, as we mentioned, $200 million in fresh capital at a $1.3 billion valuation. That was quite the intro for you, Alice. So welcome.
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A
Thank you so much for having me. Delighted to be here.
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C
So you describe yourself very much as a company, but you are also like a fund. Just for listeners who might not understand that, how do you explain that difference and what difference does it make to the way that you think about who you invest in and how you operate?
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A
So if you think about a fund, a normal vc, the main thing that they are providing to the founders that they work with is capital and very large amounts of capital. The difference with what we do at EF is because the unit, the thing that we're investing in is a person, an individual, before they've necessarily started a company, before they actually have an idea or a team. The main reason why somebody comes to us to work with us is for our product. So, you know, we see ourselves as a product company that has a business model, that is venture capital. But actually the main reason that individuals come to us is that they're trying to figure out what they want to build, you know, building a startup, if it goes well. And you know, I speak from personal experience here, it's a 10 year journey and actually taking the 12 weeks of EF to explore. What do you want to spend the rest of your life working on? What is your life's purpose? What is the work that you want to commit yourself to and who do you want to work with that on? And having opportunity to test it out, test out different co founders, test out different ideas. And honestly, one of the memes we have internally at EF is that everyone comes to EF with a bad idea, something they're deeply attached to, that within the first two weeks they pivot off and end up working on something that's much better. And I think it's because ultimately coming up with an idea is it's a process, it's a skill, it's something you can learn, it's not something that is necessarily innate. So yeah, ultimately EF is a product company, but we make money through investing.
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When did EF start?
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So we actually started in 2012 as a not for profit education company and we started investing 10 years ago.
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So you've been doing this for a decade plus. Can you like orient us to this moment? Because it's all a bit bamboozling and kind of the world feels like it's moving a million miles an hour. And we were just talking before you came on about N Scale, which is like founded by this guy who was coal miner, you know, reading a four hour workweek between shifts or whatever, and all of a sudden he's a billionaire in the middle of this whole thing. And it feels like things are quite extraordinary right now. I'd love to get your sense of kind of not to mix my metaphors on this coal face of like, of, of how things are working right now.
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A
It is pretty crazy. And companies are being built faster than ever before and I think that's super exciting. And one of the big pieces of work that we've done as EF over time is trying to push this cultural shift in what the most ambitious people want to do with their lives away from the status quo. You know, I started my career at McKinsey. It's where I met my co founder. And we've been trying to push this idea that actually one of the most aspirational, ambitious things you can do with your life is become a founder. And that has never been more true. And I think we are in this golden age of entrepreneurship where it has never been easier, cheaper or faster to build something that is unbelievably consequential for the world. Now I think for investors the challenge is where do you put your capital? If I look back to sort of autumn of last year and when we had, we had a demo day and it's amazing to see how investors preferences are changing from October of last year to January's demo day, how their preferences are changing because they are constantly trying to work out what are the big labs about to release, which of the startups or which of the industries is it going to kill that they should or shouldn't be investing in? And so I think we are in a very reactive market at the moment. Probably one of the most reactive markets I've seen in the decade that I've done this. But I also think to some extent that's right because the market is moving so fast. Now the great thing about EF's model is that we can take a lot of bets. We built 100 companies last year, we should do about 25% more than that this year. And so it means that we can take a very broad portfolio approach to what might be hot. And if you look at EF's more mature portfolio, some of our biggest companies are Clio, which is a B2C app, or Aztec, which is a really deep tech piece of blockchain technology. Or if you look at Polyai, which you mentioned, which is, you know, a B2B facing AI company. And so our thesis has always been not technology driven, but founder driven. You know, what are the most smart, ambitious, interesting individuals talking about right now? And whatever that is, we want to back it.
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C
It's not an easy one though, is it, spotting talented entrepreneurs. How do you spot people who you think really should be founders and have got what it takes? And actually people who are brilliant, but entrepreneurship's not for them.
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A
So this is really the core of what is hard about what EF does, is having taste in individuals before they've actually taken the leap. So instead of evaluating them on their idea or their traction or their technology, you're evaluating them on their behaviors. And so I suppose some of the behaviors and self beliefs that we look for are. Some of it's really obvious, like being smart helps. Being really, really smart helps, like your ability to solve problems. And when you're a founder, as I'm sure you're very aware when you're a founder, there's a lot of problems every day. You're kind of clock speed on solving them and usually tipping towards the right answer that matters, but it's not sufficient. You need to have a strong bias to action. You need to be able to build, you need to be able to create. But I think some of the things that we look for, the maybe slightly less obvious is we like mega maniacs, you know, we like people who are looking to unleash their power and their beliefs on the world. And that's not really something that is typically okay to say within, within sort of polite, polite society. But when I speak to founders and you know, probably the most common answer to why do you want to be a founder? They will say something that's more socially acceptable, like, I want to have impact on the world. But when you actually unpick what that means, you know, they'll say things like, yeah, I want to have a billion people who are using my product and I want to influence how they're living their lives. I want to influence how they think. And that is, that is megalomania. And I think it can be a very, very powerful driving force for some of the world's most successful founders. One of the other things we look for is pronoia, which is the opposite of paranoia. So paranoia you believe the world is conspiring against you, Pronoia. You believe the world is conspiring in your favor. And it's so interesting. Some of the founders that I worked with who have been super smart, really good at building so fast, high velocity, all the, you know, ticking all the boxes, but they didn't believe that they were going to have a great outcome. And so you then start allocating too much of your brain space to downside protection. And actually that that means that you're not fully committed to what you're doing and the market can sense that and you can sense that. And so actually, many of the most successful individuals that I've worked with, they believe the world is conspiring in their favor. They've never doubted that they would succeed. Now, it's obviously not sufficient to succeed, but I do think it's necessary. You do have to believe that to some extent you are different and that the odds are stacked in your favor. And so actually, one of the really difficult things that we have to do is sort of, you know, looking at someone as an onion and working out how many layers do we need to peel back to actually work out what is motivating this human? What is their ultimate goal in life and how likely are they to get there? And it's, you know, we work across Europe, India and the US and for each of those cultures, it's very, very different. You know, how those people present, you know, how does Magdalmania present? How does ambition present? How does pronoia present? And that's actually sort of a key part of what EF has been able to work out is, okay, well, they're saying one thing. How do we actually get to the crux of what they actually mean?
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What was your biggest miss?
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A
Ooh, we've definitely had misses when we've said to people, it's not a no, it's a not yet, but come back in a year. And actually the best founders don't want to, they don't want to wait, they just want to get going right away. And we're seeing, you know, the, the age of founding and sort of what founders are getting funded right now is just going younger and younger and younger. And when we first started EF it was a graduate program, you know, it was something specifically designed for graduates. And over time, our average age sort of crept up sort of mid-20s. But now we are right back down investing in, you know, 18 year olds or college dropouts. But, you know, someone like James Dackom, who He's just raised 2 million for his company Olegs. And they're building a new kind of chip that actually uses photonics rather than the traditional GPU architecture. What they're trying to do is create a lower cost chip that is also higher in efficiency. And it's pretty exciting. We actually first started working with him when he was 18 on his first company, co mind, which was a brain computer interface to detect issues with the brain. And it felt pretty high risk at the time. This is what, seven years ago to back an 18 year old to basically build a medical device. And then watching him, his insane determination and the insane velocity to get his product into hospitals in the US while basically still a teenager. And now he's started his second company age 25. You know, those kind of individuals who are basically just unstoppable. And I do think there is something about when you start really young, what you're signing up to is founding as a career path. And I still don't think this is talked about enough. Often founding, particularly in Europe, has talked about, okay, you tried building a company, didn't work out, you know, go and join a startup or go and join a big company. But I think this idea of actually the best way to learn how to be a founder is to be a founder and maybe your first company isn't going to be the massive success, but you know, try that first company when you're 18, when you're 22, whatever, and then use those learnings to deeply inform what your next company will be. You will be a better founder, you'll have better founder intuition. And so I think, you know, the more we can push this idea of the founding career path, the more great entrepreneurs we will have in the world.
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C
How much do you think about diversity in your cohort? I mean, we know it's an enormous problem that female founders don't get funding in the way that guys do. And you can talk about diversity in other ways as well, clearly of backgrounds too. I mean, is that a consideration? And do you try and reach out to people who might not naturally, you know, take on founding as a career path? Because it is inherently risky, you know, and so for a lot of people, actually that's frankly not even a possibility.
- [31:57]
A
Yeah, we do think a lot about this and have done since we first started. You know, when we first started ef, I think rather naively, we thought we could solve this problem very quickly and started a not for profit called Code First Girls, which has now taught more than 100,000 women across Europe to code for free. And the idea Was, you know, we'd create more women with technical backgrounds and that would increase the number who end up founding. We've seen a little bit of that. But yeah, it is a perennial issue for us. The way that we work with this is constantly trying to raise awareness of what it takes to become a founder and that founding path. And usually it's through bringing together smart, ambitious, underrepresented groups to meet each other and to have those conversations and to see that it's possible, you know, with women in particular. Around about 25% of our cohorts are women. And actually last year many of our best seed rounds actually had female founders as, as the CEO. So we do see some remarkable and fantastic outcomes for female founders. But I think still there's like there's an awareness issue and tipping them over to try it. That's, that's, that's kind of what we're pushing is how do you help them take that first, that very first step?
- [33:03]
B
I have two questions. One is, you know, you're, you're in San Francisco now, the home of Y Combinator, the startup boot camp that has kind of this like global amongst founders anyway. Like, you know, it's a big attraction. How do you set yourself apart from them when they're also doing some. Something similar, not same to you, but like what do they Invest now is 100 grand or 200 grand for 7% of the company. And then the second question is, you're obviously not from California, but you're here now. Is that big cultural gap that people have talked about for ages, does that still exist? Is it getting smaller? Is it getting bigger?
- [33:41]
A
With yc, YC is the most incredible investor and really pioneered this very early stage pre seed investing when everyone else thought it was crazy. I mean, the main difference between us and YC is that YC predominantly takes people who are in teams and who have companies. And our product is designed specifically to help individuals go through that very first stage of even deciding what the idea is and who to work with. And one of the things that we offer is a pool of co founders who are committed and ready to go right now. You know, smart people always know other smart people who could be great co founders, but often the commitment isn't there and the commitment to go right now and be interested in the same things. You know, we see a lot of co founders of convenience where your best mate also wants to co found a company and so you sort of try and make it work and end up working on something that neither of you are actually that interested in because you're trying to protect the relationship more than actually working out what is the thing that you want to dedicate this founding journey and your career to. So, yeah, that's probably the main differences. And then in terms of culture. So I moved to San Francisco two years ago and have to say I'm still surprised almost on a daily basis how different the culture is between the US and Europe. I strongly believe that all founders, but also all investors need to sort of do a pilgrimage to the Bay Area to immerse themselves in the optimism, the ambition, but also the speed that things happen out here. I think that's the thing that has really, really surprised me is that the speed in terms of transferring information between investors, between founders, the speed that people get things done, whether they're a VC or a founder. But if I look at our companies that have come out here, the speed that they get to their first 100k of revenue is just like, unlike anything else I've seen.
- [35:32]
C
Because of the size of the market,
- [35:33]
A
would you say it's the behavior of the customers. So customers here are more interested in the profit motif. They are more inclined to experiment with new products, and it means that they're thinking in hours and days rather than weeks and months. And I think that is one of the big shifts. And one of our investors, Charlie Songhurst, he's on the board of Matic, he actually said to me, you know, one of the things that you will undervalue, and he was completely right, was that the culture of the companies will be set by the customers, not by the founders. And so if you're working with customers that take two months to get back to you, three months, you know, you're going through a long procurement process. All the rest of it, that is the speed of your company. That's. That's how fast you can go. Whereas if you're working with customers who just have that super fast clock speed, that will be the culture of the company. And I do think that is really, really undervalued by founders from outside of the Bay Area. I'm a big believer in the quality of European talent and the quality of our universities, the quality of the founders that are coming out of Europe. But I do think, you know, the bay area is 50 years ahead of us in terms of the depth of the ecosystem here, and it is setting the norms and the clock speed for how this industry works. And I think you do need to. You do need to come and get exposure to it.
- [36:44]
C
It was really interesting earlier. You talked about the sort of culture sometimes hiding an entrepreneurial spirit and you having to peel people back like an onion. What do you think you have to peel back with European founders compared to American ones? Now you're kind of straddling both sides of the Atlantic. And what can European founders learn from maybe US culture or vice versa?
- [37:09]
A
I suppose the trope is ambition, Ambition, ambition, ambition. Like Americans just come across as more ambitious. But I think the misinterpretation of this for a European founder is cool. I'm going to come up with some big, lofty goal that sounds outrageous. Firstly, in my experience, the big lofty goals actually don't sound outrageous enough. And they just need to put. I spoke to one VC who's European but based here, and she said they just need to put two zeros on everything. Doesn't matter what the number is, just more zeros. But I think actually the more nuanced way of thinking about this is ambition shows up in absolutely everything you do and it's how you behave and it's how fast you move and it's how ambitious you are in what you think you can achieve. So I was speaking to one VC out here who's invested in a lot of European companies, and I said, well, what feedback do you have or what's the comparison that you see between European and US founders? And they said, well, European founders are very methodical, they're very thoughtful about their product development, and really they were just saying they're slow. Again, it comes back to this thing of, are you thinking in hours and days or weeks and months? And it's much better to quickly get it wrong than methodically plan it. And honestly, in startups probably still get it wrong, the methodical planning isn't going to save you. And so I think this idea that ambition is literally, how fast do you respond to messages, how quickly do you build, how quickly do you throw things out, how quickly do you get new customers onboarded? And it's that sort of ambition in action that I think Europeans often get wrong.
- [38:37]
B
Before we let you go, could you give us a little window into your world? What is the most kind of out there idea that has come across your desk?
- [38:46]
C
What are we all going to be talking about next year?
- [38:48]
A
Space is hot right now. We've got a great company called Icarus Robotics that just raised $6 million and they are building autonomous robots for space. So you know who is going to be manning the ISS in future? It's going to be these miniature robots moving things around the International Space Station. We've got a bunch of people working on brain computer interfaces, both invasive and non invasive. I think time will still tell what that looks like when it actually is in customers hands. But I think there's something really interesting and exciting there. This wave of AI is still so novel. Surely there's something more than chat for us to interact with these incredibly powerful models. We have some of the world's most impressive technology in our hands and we're still chatting to it in a way that's sort of like texting, SMSing with somebody in 1997. So what are going to be the new ways that we interact with it? Is it going to be brain computer interfaces? I think that's super interesting.
- [39:43]
C
Well, thank you so much for taking the time to talk to us.
- [39:46]
A
Thank you so much for hosting me.
- [39:50]
C
I mean what an amazing story of kind of how to find the ingredients of a successful entrepreneur. But also ultimately, you know, there are wild cards and so there's no perfect formula.
- [40:04]
B
Yeah, it's, it's more art than science it sounds like but it's also, and we didn't get into this but it feels like you know, the, the people they raise the money from 200 million. It's like all these tech billionaires like Patrick Collison and like all these people and all of those people have networks upon networks upon networks. I imagine a lot of the people that come in through those networks and through the, you know, top universities and everything but I don't know, space robots. That sounds pretty cool.
- [40:32]
C
I thought you were going to be bouncing off walls over that one. I love that your favorite things are space and robots. I know space robots have been her first answer. Danny's going, yes, we got space and robots next year. Cool.
- [40:46]
B
And brain chips.
- [40:47]
C
I mean, you know what extraordinary thing. But on the point about the ingredients that make entrepreneurs, I was really struck when she said we want megalomaniacs.
- [40:57]
B
Yeah, you want crazy people because you do.
- [40:59]
C
And in my experience the top entrepreneurs are actually very difficult people as well.
- [41:05]
B
Yes. And that's why you always read those stories of like whenever something, you know, goes wrong at Company X, then the kind of, the, what I like to call you the, the now you tell us stories come out where it's like all the people who are like, let me like start spilling the beans about what difficult people these people often are. But you have to be kind of uncompromising in a way that most people aren't.
- [41:29]
C
Yeah. A megalomaniac I think sums it up.
- [41:32]
B
Yeah. Ruthless and able to total self belief pronoia Exactly. That's a new one for me.
- [41:39]
C
We should add it to our tech lingo for the.
- [41:42]
B
Yeah, pronoia. Exactly. We should double click on that one.
- [41:46]
C
So what do you reckon? Have we learned what it takes to be an entrepreneur? Can we do it?
- [41:50]
B
Yes, because you're a megalomaniac.
- [41:53]
C
So you've got it and you're like, totally pronoid about life.
- [42:00]
A
Everything's working for me.
- [42:02]
B
Yes, exactly. Anyhow. Well, that is it for this week's episode of the Times Tech Podcast. If you're enjoying the show, please drop us a line to let us know.
- [42:12]
C
And we'd love to know your thoughts as well on today's discussion. What do you think it takes to make it as a successful entrepreneur? Do you just need an idea or the ability to work really, really hard? Get in touch.
- [42:25]
B
That's right. So email us at techpodimes.co.uk that is TechPod thetimes.co.uk. we'll be back here next week.
- [42:35]
C
See you next week.
- [42:36]
B
Bye.
- [42:38]
C
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B
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