Start-up Fables No. 2: My Little Unicorn

My Little Unicorn

By Stuart Hillston


Once upon a time, in a world quite unlike our own, there was a young horse called Bob. Young Bob cared about one thing, and one thing only – Unicorns. When he grew up he just knew he was going to be a Unicorn and so he thought about very little else.

Every day he told every stable mate who would listen (and quite a few who wouldn’t) “When I grow up I’m going to be a Unicorn”. He didn’t actually know what a Unicorn looked like (and neither did any other creature on the farm).

In the stables and around the farmyard where Bob lived, his ambition became the local joke. Behind his back they sniggered and laughed and said “Foolish Bob, everyone knows that Unicorns are mythical beasts”. And to his face they said “My! Little Bob you are growing up so big and strong, just like a Unicorn”.

As he grew up, so Bob came to believe he was a Unicorn. There were no mirrors in the farm yard, and the water trough was never still enough for him to see his reflection (not that he knew what a Unicorn looked like). All the other animals told him to his face that he was a fine Unicorn. Whilst everyone else knew the truth, Bob was happy and as a result lived a long and fulfilled life.

By the time Bob went to meet his maker, none of his original stablemates were alive. Bob was indeed a unique animal – and a very happy one at that.

Moral: Obviously Unicorns are mythical and everyone will take great delight in telling you so. But belief is a powerful thing, and just because they are mythical doesn’t mean they can’t exist. The difference between those with belief, and those without, is as plain as the horn on your head.

Start-up Fables No. 1: The Two Hunters

Permanent link to this article:

Start-up Fables No. 1: The Two Hunters

The Two Hunters

By Stuart Hillston


Once upon a time, in a world quite unlike our own, there were two hunters called Rabbie and Ellie. The hunters lived alone, each in a home next door to each other. The next nearest person lived a hundred miles away.

In this world animals were plentiful, and hunters ate meat – as this world is quite unlike ours, we can debate whether they should have been vegetarian another time. This is, after all, a fable.

They lived in an unusual part of their world, where there were only two types of animals. The small, furry and prolific animal quite like a rabbit, which we’ll just call Wabbits and the scarce, well dispersed pachyderm, a little like an elephant but without tusks, which we’ll just call Ellipants.

Being hunters, the two neighbours went hunting every day. They carried their weapons out in the open fields and forests and spent the day in pursuit of their quarry. Rabbie had a taste for Wabbits and the Ellie had a taste for Ellipants, so the two hunters rarely, if ever, saw each other during the day.

Each evening the hunters returned to their homes.

Most days Rabbie came home with a Wabbit in the bag, and so most days had something to eat. Wabbits were all around and bred like… well you get the idea. Rabbie bagged a Wabbit most days, which made just one main meal, and Rabbie didn’t have a freezer.

On the rare days when Rabbie missed, well these were days without a main meal. Rabbie had plenty of practice and rarely missed.

Most days Ellie came home with nothing. A little thinner from a lot of walking and definitely hungry. Thankfully Ellie had a freezer (or maybe two) and each Ellipant was carefully portioned up and would last a year.

This was a good thing, because it took Ellie about a year to bag an Ellipant. For some reason, though large, they were elusive and hard to find. And they always looked closer than they actually were. Ellie missed often, and got little practice, so each attempt had to count.

The hunters lived happily for the rest of their days, Rabbie catching Wabbits most days and Ellie catching Ellipants once a year.

Until that is, Ellie missed an important target and starved to death.

Moral: It is better to eat for a day most days than a year most years.

No rabbits, wabbits,  elephants or ellipants were harmed in the making of this fable.

Start-up Fables No. 2: My Little Unicorn

Permanent link to this article:

The Second Most Frequent Question I Get Asked

The second most frequent question I’m asked is “What is the difference between a coach and a mentor?”

I’m asked this because I am a mentor. I’m other things too as you will see, including a coach, but this question comes up time and again, and the answers I’ve heard others give have made me think deeply about this.

We (human’s that is) do like to find commonality and differences – differentiate and associate – and sometimes form judgements based on what we hear, and this old chestnut about coaches and mentors is a case in point. There are some strong opinions out there!

If you know me you will know I have been many things in my life, and my LinkedIn profile will attest to that. I still have an insatiable desire for learning – new experiences, new skills, new understanding.

One of my mentors used to say that “wisdom is the application of knowledge based on experience”. One of my favourite quotes (not sure who, Google can’t decide) is that “knowledge is of no value unless shared with others. I am not referring to the “knowledge is power” poster!

Last year I started a three-year course to gain a professional qualification in Psychotherapy; to gain experience and skills to be a psychotherapeutic counsellor. My close friends understand this – how this fits with my other skills, and why I am motivated to do this. It is all about helping other people – and especially entrepreneurs at any point in their journey. From start-up to exit.

This year I am going to focus my blog posts on two things – this is the main one. The Spectrum of Helping, and all that it entails. Although my primary “market” for helping is entrepreneurs, the lessons I have learned along my journey, which are encapsulated in the diagram below, apply equally in any business setting where you are helping someone.

This is my first post of the year (2017) so I’m introducing the model, and will post more on specifics later. When taken in a wider context, the question above (the differences between mentors and coaches) can be seen to be a small subset of the many ways in which we can help someone in business.

And these “ways of helping” do not have definitive boundaries, like many things in life. There are blurry lines between them, this is a continuum, a spectrum, a set of skills. Many people who are, or have been, in business will have some of these skills. Many chose one way to deliver them – maybe two.

What if? What if instead of the helper picking a methodology, they consulted with the client and determined the best methodology for that client – based on their needs, their preferences and their circumstances. And delivered help in the best way for the client?

For my part I have never (that I can recall) been an interim manager. I have been everything else on the spectrum and with my developing Hypnotherapy skills I am on the first steps of the ladder to becoming a counselling helping.

And the most frequent question I get is “will you invest in our start-up?”!

The Spectrum of Helping for Entrepreneurs

Permanent link to this article:

Into The Fox’s Lair!®

What a great day in Leicester yesterday!

I was invited by the marvellous Edwina Goodwin to be a panel member for Fox’s Lair!®De Montfort University’s panel format for judging of Year 1 pitches in the Leicester Business School.

I attended what was Leicester Poly as a student at the end of the 70s. You probably won’t be surprised to know I wasn’t a a model student but somehow scraped my way through a Maths & Computer Science degree and into a job. The rest is detailed in all its painful “glory” in my LinkedIn profile.

This is now part of De Montfort University in the centre of Leicester. It has changed dramatically; big new modern buildings and facilities and a good business school. As one of a number of “Foxes” I assessed pitches for potential businesses as part of their Year 1 assessment – which meant our scores directly affected to their degrees. Some very good pitches and presentations, some real innovation (I really like the flip book to demonstrate the steps through an app – see picture below) and just a small number of not very convincing pitches of the “oh sh*t two weeks to go, we’d better think of something” variety (nothing like a deadline to foster creative thinking). The standard was high – comparable to MBA students in Business Schools with higher profiles.

Returning to Leicester after all these years was a bit of a nostalgia wallow for me; then straight into two sessions seeing 9 pitches in total. I chose to walk back to the station (less than a mile – I love small cities!) and the glory that is New Walk – a pedestrianised road created in 1785!

The train back was early – just 65 minutes to London. Like my work at Oxford with Saïd Business School, I think it is time we stopped pouring so much of our entrepreneurial ecosystem efforts into one of the most expensive cities in Europe for start-up founders and supported initiatives elsewhere. There is more to the UK than London.

Very well done to all the team members in all the teams. Some really stepped up to the plate to play their part, and well done to Edwina and the rest of the staff in shaping the thoughts and attitudes of future entrepreneurial thinkers.

Stuart – 29-IV-162016-04-29 12.27.06a

Permanent link to this article:

A more meaningful mathematical puzzle

Instead of all the incessant “only a genius can solve this” type posts, which can be easily solved if you know the mathematical order of operations,  I thought I’d share a simple maths puzzle which seemed to confuse a start-up I was helping yesterday. I totally understand why, and I simply helped them understand the correct answer.

It is a very simple piece of math(s), and if you’ve had any involvement with investments you’ll know the answer intuitively. I share it simply to illustrate that when/if I assume that a new entrepreneur understands this, I am at fault in my assumption. I try not to assume, I check and explain as necessary.

Two founders start a business, each with 50% of the equity. They raise three rounds of equity funding, for new equity, and each round is for 20% of the Company’s equity. The rounds are discrete, different investors, increasing in value and spaced apart by a number of months. There are no outside parties taking a cut, no options or warrants are issue as part of the process. They are simple transactions.

After these three rounds, how much equity do each of the founders hold, and how much do each of the investors hold? For these purposes I’ll refer to them as Founder 1 & 2, and Investor 1, 2 & 3.

You can understand why my founders believed they’d each hold 20% each.

As this is the Internet, you can rule out any extraordinary events – the business is healthy, the founders are still happy to work together, neither loses their equity in a divorce (or any other of those possibilities I can just hear someone suggesting)!

One of my favourite books of the 1990s is Innumeracy by John Allen Paulos, which contains a similar (simpler) puzzle – if I reduce the price of an item by 50% and then by 50% again, why is it not free as a significant proportion of people interviewed Paulos believed?

Permanent link to this article:

One hour a day


Imagine only having internet access for 1 hour a day.

And when you did have access you could only view but not respond, reply, like or send a new message.

This is the self-imposed digital exile I have just enforced upon myself for one week. I did it to take a break from work for the first time in four years, and to practice a digital detox to see how it went. I should also add that I’m in the middle of writing a book, so some uninterrupted time to be creative and write was much needed.

Last Sunday (Oct 4th), after successfully getting tickets for Glastonbury 2016, I set off for Scotland with a car full of “stuff” and a determination to start work on my book and to get off-grid. Seven hours of driving later, I was in a different (yet familiar) world.

I stayed in a friend’s cottage in the Highlands (Perthshire) where there is no land-line, no TV signal, no mobile reception and definitely no broadband. A short walk up the mountain behind the cottage there is a weak GPRS mobile signal on O2 with which I phoned my wife most days.

And three and a half miles away in the village of Kinloch Rannoch there is a little coffee shop with free Wi-Fi (“for PAYING customers only”) where I went once per day for an hour. It quickly became more important to have the tea and Mint Aero cake (or Border Pie) than it did to let my phone do its thing.

I added in some other rules – I downloaded all emails, deleted all those that could be deleted immediately (generally from the title) and left the rest (no responding to emails with one exception). I allowed myself one or two Facebook posts per day with a picture to let my friends know what I was up to, but didn’t look at the news feed or timeline, did not respond to messages except from my wife and a very close friend, did not “like” anything and did not check anything else.

My Out Of Office (OOO) message explained I was off grid for a week – expect no contact and no response from me.

Because of the lack of mobile signal (and even the GPRS up the hill was variable), I didn’t get text messages or voice messages. No WhatsApp, no Skype, no LinkedIn either. I couldn’t access Google maps to plan a route, or check train times on Qjump. I didn’t shop on eBay, accepted connections on LinkedIn, check the BBC news, look at the sports results on SportingLife or “Google” anything.

On the first day I went exploring after doing a couple of hours writing – and discovered GPRS but no 3G – and that was 12 miles away!.

The first day was really hard – at least as hard as when I gave up smoking 6 years ago (after 35 years) and did it cold turkey – no patches or substitutes. I found myself picking up my phone to check for messages, twitching to know “what is going on” in the world. That Fear Of Missing Out (FOMO) anxiety was very high. Whilst out driving around and exploring I sent a few txt messages, but after that I relaxed, maintained my discipline and didn’t drive out of the glen.

The FOMO anxiety served to demonstrate how much I needed this break, how my life was becoming dominated by all the messaging. It is indeed a drug. Just sit in a coffee shop in the heart of London (or anywhere else) and put your device down and watch. How much real conversation is going on, how many slack eyed people gazing longingly at their phone, picking it up every 30 seconds to check for their fix.

We truly have become slaves to the machine. We feed ourselves with irrelevant snippets of information and keep ourselves hooked.

I will most definitely be taking the digital detox self-therapy much more regularly now, and paying more attention to my behaviour and activities. We have been beguiled by the “social” in the Social Network into believing this is socialising. I promise you, it isn’t.

I learned that some people expect me to be ubiquitously available for their benefit, don’t respect that I wanted to be off-grid, and get impatient if they don’t get a reply one way and try another, and another and yet another (and remember – I had an OOO set).

My friends were positive and supportive (thank you) and so was my wife (she also benefitted from not having me a round for a while).

So, time to start some detox meetups I think. Getting groups of people together and turning off (not silent) all devices and forcing people to talk to each other; share experiences and opinions; agree and disagree with equal good grace and develop connections at a personal level without the benefit of technology. To be human beings again!

If you are coming to any of my networking events in the coming months, be prepared.

PS: I managed to avoid hearing the result of the GBBO Final until Friday afternoon, when a Scottish Hydro worker in the café commented on the result as he paid his bill!

PPS: Great progress made on the book, new structure and chapter headings, new sense of purpose, sample chapters written!

Permanent link to this article:

The future’s bright – hear more @digitaldoughnut #DLUK Trends Briefing

Bright FutureOn September 24th I will be presenting at the Digital Leaders Trends Briefings 2015 on the topic of technologies set to impact on business. Ahead of this event I had to reflect on what I have seen recently and what I have learned.

In an average week (when do we have one of those?) I will receive 10-20 business plans, pitch decks and summaries by email. I’ll attend at least one pitch event, one networking event, one workshop or coaching session and mentor my normal tally of businesses in accelerators and incubators.

All-in-all that amounts to somewhere around 2,500 “new” companies a year mostly from the UK and mostly in some form of technology. Add in the work I do with Universities across the UK and you can take that to 3,000 a year with ease.

Understandably some trends emerge, and from these I have picked 5 technology trends that I think are going to be commercially significant in the next 12-18 months. Most of these technologies have been around for a while – it is the broad scale adoption and availability that I think will be commercially relevant.

In particular order:

  1. Additive Manufacturing (formerly known as 3D printing)

What?          3D printing has grown up! Aircraft parts, UAVs, complete assemblies and even fighter aircraft are being made this way. We can make plastic, glass, food, living tissue, metal, paper… and combine them.

Why now? In the USA, 11% of the top 100 manufacturers use it in volume. Creating design files for other people to make is becoming the norm.

Impact?       Our whole infrastructure will have to change. The way we design, create, manufacture, market, sell, ship, stock and maintain products will start to change.

  1. Augmented & Virtual Reality

What?          Creating digital overlays for real world views.

Why now? After many false starts the technology is there and the need is becoming evident. With the release of Google Cardboard, which turns your SmartPhone into a VR headset for less than £20,anyone can try this.

Impact?       The “immersive consumer experience” is just around the corner.  It will find its way into tourism, navigation, medicine, architecture, design.

  1. Analytics & Machine Learning

What?          Hidden in large volumes of data are patterns and useful information about patterns and processes – we need help finding them because we can use them to our advantage.

Why now? We have had the understanding and technology for a while. As long ago as 2006 Netflix held an open competition to find the best filtering algorithm to predict user ratings for films – without knowing either the users or the films. It was won in 2009. There is a massive trend to develop algorithms that analyse and adapt software in real time.

Impact?       Predictive health care, economic forecasting, movie choices, buying patterns, recommendation engines – all proliferating as AML goes main stream at last.

  1. Artificial Intelligence

What?          Not robots, androids or other movie material (yet). Intelligent analysis, anticipation of behaviour, decision making and support, contextual intelligence.

Why now? Data – the ever rising tsunami is being fed by increased connectivity and the exponential growth of sensors. We need help. AI is a key component that will transform our user experience.

Impact?       Context rich experiences. We need filters that remove irrelevance – which requires AI. We will slowly learn to trust the machines around us to make decisions for us. Hopefully they’ll still want us around.

  1. Programmatic Everything

What?          Automatic buying and selling of media

Why now? Internet of Things (first coined 1999!) – the proliferation of ways to interact with consumers, the rise of mobile company personal profiling. We are willing carry a device that records where we are, what we do, when we do it and who we do it with.

Impact?       Personal advertising, increasing relevance of promotions and recommendations, high speed, automatic auctioning of access to us (from which we arguably do not profit).

Permanent link to this article:

Conkers (or acorns if you prefer) and investing in startups

In the early 1970s, British Railways ran excursion trains at weekends for families to get away for the day. For the most part they went to known destinations, but there were also “mystery trains” where you knew the duration of the journey but not the destination.

In 1972, my family (Mum, Dad, Sister & I) set off from Manchester Piccadilly to Windsor. It was a long journey, nearly four hours, but when we got there the sun was shining. Having left a grey & grimy Manchester in drizzle, we had arrived in a paradise.

My parents did the sights, my sister & I tagged along. Our parish priest had become vicar of St George’s Chapel in Windsor Castle (we visited him), my cousin worked on Home Farm (the Windsor Estate farm) so we visited her and had a tour. We walked in the sun and soaked up the affluence.

I can’t quite remember why, but my Mother was pretty keen to see the Air Forces Memorial at Runnymede so we caught a bus (on a Sunday!). The bus dropped us by the river on Windsor Road and the driver told us it was a short walk to the memorial.

It is not exactly a short walk (1.5 miles) and it’s up hill!

By now, my sister (8) and I (12) were a bit bored, tired, hot… you get the picture.

I trailed last and as I walked along I kicked up leaves lying by the side of the path (I think this was April) and in the process disturbed a conker from a Horse Chestnut tree which had a sprout growing out of it.

This was more interesting than the walk, or memorial, so I wrapped it in a handkerchief and put it in my pocket.

The rest of the day went as expected, we saw the memorial (not that fascinating to a 12 year old), got the bus back, got the train home… and slept like logs.

The next day, I found the conker in my pocket. The sprout was intact, the damp from the leaf mulch had not dried out, and I decided to plant it.

I was no gardener, and we had only a small garden behind our suburban semi-detached house. Nonetheless, I planted it carefully, marked the boundary of “my garden” with stones, and watered it (as instructed by my mother).

The conker quickly became a sapling and before too long it was a 10ft high tree. It probably helped that it was planted in a sunny area, Manchester kept it watered, I watered it when I remembered. Apart from that, it was left to its own devices.

By the time it reached 13ft it was starting to shade my mother’s border plants in the summer and she announced it had to go. But rather than simply cut it down, my mother found it a new home. It was carefully dug up, with as many roots as we could get, and bundled in the back of a van. It wasn’t a scientific process, a few spades and 10 minutes work.

We drove it to my Aunt’s house in the Lancashire countryside 30 miles away, replanted it in their garden and I quickly forgot about it. Life moved on, I lived in America for 4 years, built companies and got married. And had two boys.

Although I had met my Aunt & Uncle at family gatherings I hadn’t been to their house for many a long year, until early in 2001 when we did a family road trip to see my family in Scotland, and decided to spend a night in Lancashire catching up with family there as well.

When we went out into the back garden of my Aunt’s house, there was a magnificent  Horse Chestnut tree, maybe 40 or 50 feet high. It was on the boundary of their land, and in the field next door, horses stood under it in the shade. That was in 2001 and thirteen years later the tree is visible on Google maps (near Wheelton in Lancashire but only I really know which one it is).

That tiny conker, found on a footpath near Runnymede, Surrey has grown into a magnificent tree, partly because of my nurturing, partly despite it. And when it mattered most it was left alone to do what it does best – grow.

Even the coolest Ice Queen will understand the relevance to what I do now – mentoring, advising and coaching start-ups and entrepreneurs. We just need to remember to give them space and let them get on with it when they need to.


March 2014

Permanent link to this article:

Grim Fairy Tales – Part VI

grimVIThis is the final part in a six part set of blogs about “how not to raise money for your start-up”. The grim stories you read here are based on real life events – meetings and conversations I have had over the years, and will no doubt form the basis for my next book.

So far I’ve covered:








This final time we’ll take a look at Scale & Scalability.

For a business to be considered investable it is pretty clear it will have to grow. The rate of growth is what is really important – slow and steady organic growth, funded through increasing sales is really not going to make a compelling investment proposition. For the most part, entrepreneurs pitching for funding understand this and present their case with rapid growth – particularly in revenues.

There are two implications to scale however – one is the rate at which you can grow the business – the opportunities to expand into new markets, develop new products or establish new sales channels. The other is the economy of scale – as you get bigger, you should get more efficient, so that the margins get bigger, delivering ever increasing profitability that out-accelerates your growth.

This is something that is much easier to write in a business plan than it is to actually deliver. This is where prior track record and experience of taking a small business through the process of becoming a much bigger business helps. And this experience will be what an investor is looking for.

It is also important to test your assumptions, identify your dependencies for growth and present a credible story about how you will scale between the point of investment and the point of exit. Remember  you should still be growing, or have the potential to grow, at the exit!

So where does this go wrong?

As you would expect, the problems are either over-ambition – claiming to rapid growth, or not establishing credibility in the claims for growth; or under-ambition, in setting a target which is too low and will not generate the returns an investor will seek.

Whilst the latter are a problem and tend to reflect inexperience or a lack of ambition, the former are more common and can lead to some fairly wild claims!

I already mentioned in Part IV the plan I saw where sales went from zero in year one to £216m in year two.

This is possibly the most extreme example of exaggerated growth, but there are plenty that fail to establish a credible plan to achieve the numbers they forecast – just because you are addressing a big market doesn’t mean you will become a big company – no matter how compelling your product.

One of the more common approaches to forecasting sales, growth and scale is to start with a set of “Year 1” numbers and then work forward applying some factor – sales double every year for 4 years, costs are indexed at 10%, directors salaries double and so on.

We all know that a business plan for a pre-revenue company is not much more than an educated guess – so at least make an effort to explain your assumptions, the critical milestones, thinking behind the projections and specifically exactly how you will sell what you forecast.

Similarly, and particularly where there is a manufactured product, establish where you can reduce costs in the production process as you scale, and identify exactly who will be making the products & where – reduced manufacturing costs are often at the expense of increased shipping costs!

Most tech companies forecast sales on a J curve (the traditional hockey stick) yet very few achieve this. Most often sales growth is flatter – steady, growing but not exponential. The fear is that the investor won’t find it very compelling if the numbers are not big enough to generate a return.

There is a well known Harvard Business Review paper by Churchill and Lewis called “The Five Stages of Small Business Growth” which in addition to identifying the stages, also identifies the issues associated with each stage. Although written 30 years ago it is as relevant today as it was then. If you look it up you will see that the first three stages have little to do with the scalable growth we desire – and if you can address the issues identified you are much more likely to get to stage 4 (take-off).

You can find the article here: Harvard Business Review


Permanent link to this article:

Grim Fairy Tales – Part V

Grimm TalesThis is the fifth in a six part set of blogs about “how not to raise money for your start-up”. The grim stories you read here are based on real life events – meetings and conversations I have had over the years, and will no doubt form the basis for my next book.



So far I’ve covered:





This time we’ll take a look at Exit..

A great majority of the business plans I’ve seen in the last 10 years (maybe 4-5,000) have had a paragraph somewhere towards the end with the title “EXIT” and a single paragraph which states that the Company (or the Directors) anticipate that investors will achieve an exit by means of a trade sale or flotation in 3-5 years.

You can rearrange the words a bit, pad it out a bit, but at the end of a quick edit this majority all say the same thing.  One of the simple tests you can apply to a business plan is to take any section and if it can be dropped into another business plan with little or no editing, it is adding limited value.

Take a look at “10 things you shouldn’t write in your business plan” and you will see two common errors that tend to appear in the exit section of any plan – the one stated above and promising (or guaranteeing) a return for investors.

However possibly the worst example of poor thinking in this regard was a company I saw in a Dragon’s Den style investor pitch at the old Patent office in 2006. As usual I will spare the people involved their blushes, and in fact I cannot for the life of me remember what the company actually did – except that it made a product.

I do recall that the CEO presented for 5 minutes his vision of the future and finished with a request for £100,000. At this point I naturally asked what his valuation was – how much equity? His response was that he wanted to give 10% and that in three years time he would buy the equity back at the same price I bought it for!

As exits go, that is “broken”. I give him £100,000 for a high-risk start-up and get 10% of the equity – and 3 years later I sell the shares back to him for £100,000!

My second example of the problems around exits relates to another common failing in business plans – guaranteeing (or promising) a specific return on exit.

It should be obvious that if you write the words “guaranteed return of 10X” someone is likely to expect you to live up to your commitment – whatever it costs you personally. More to the point, whilst you will no doubt believe you will achieve or exceed your plan, there are many reasons why you won’t – most of which you don’t know yet.

“Confidence is the folly of fools” as Seth Klarman says here.

And yet time and again I see plans with the words “guaranteed return” in relation to a pre-revenue technology investment – and the absolute worst case was for a new airline which was raising money back in 2007 – it put the words guaranteed return in its plan and went bust within 12 months – the investors set the dogs on the management team!

Next and final chapter will address Scalability…

Permanent link to this article: