Entrepreneurial Teams. A keynote presentation from Facet5 Live 2022.

Thank you. Hello, everybody. Thanks for being here. Tonight, for us, it’s tonight in the Netherlands. Tanja and I are really enthusiastic to tell you a little bit more about things that we do in the Netherlands, and especially things that have to do with Facet5 and entrepreneurship. Let’s take a look at what we have for you tonight. There we are. Sort of a brief introduction. I see some familiar names amongst the public, but also some new names. So, a brief welcome. Tanja and I are the co-founders of Human Collective, and we are the Dutch Facet5 partner. We have a background in occupational psychology and business, and we have known each other for, well, a very long time, I think. Yeah, I think it’s now like 32 or something. Yeah, that tells you something about our age. But we will. We will. Not say more about that. We’ve prepared an introduction about entrepreneurship at Facet5, also telling you something about a case study that we’ve done. And basically, the idea is to present you with some slides. And in between Tanya will ask some questions and the ideas that you might give us inputs through the chat if you want to. And at the end of the presentation, there will be a Q&A, a live Q&A in which you can turn on your microphone and ask all the questions that you want to ask. So great that you’re there. And let’s kick off and see what it’s all about. Today’s subject is entrepreneurship. And there are many definitions, I think, of what an entrepreneur is. And I think we all have examples of entrepreneurs, very famous entrepreneurs. So that is what we will be talking about. We will also take a look at how to predict success as an entrepreneur, which is a challenge I can say, and we will discuss a business case in which we try to do this. And finally, we will try to see if we can apply the learnings that we had into a broader perspective about entrepreneurship in organizations. So basically, this is that we will be looking at, so what is an entrepreneur? I decided to look it up in the Cambridge dictionary and this is the definition that they gave. So, a person who starts his own business. And it has to do with seeing opportunities. Interesting would be to think about the characteristics that an entrepreneur has. Yes so? Yeah, of course. Well, both Michiel and I are psychologists, and I’m not really sure about your backgrounds. You must all be people experts. So, we would like to know what kind of personality traits make up a real entrepreneur or a successful entrepreneur. So, I was just we were just wondering, what do you think are the necessary personality traits of an entrepreneur? And please share them in the chat. And let’s see what you think. OK Diane. Driven to succeed. Clear vision. Sounds good. Anyone else. Confidence Yeah ability to navigate uncertainty. Yes, of course. Yeah Resilient, disruptive, creative, visionary. High Will. Confident and influential. All right. OK sounds like a nice list. let’s take a look at things that we found. Self-starter. Seeing opportunities. Let me just admit, having a vision, as one of you already mentioned. There is also a certain amount of risk taking. Otherwise, everybody probably would do it. Facing difficulties, overcoming difficulties, being results oriented. These are all characteristics of a typical entrepreneur. And then I thought back, I think I’ve been doing my own business for over 20 years now, so why did I start my own business? And I think some of it has to do with an issue that I have with authority. So, I don’t like other people to tell me what to do. So, I thought if I start my own business, I can be the only person deciding what will you do, what I will do, and what I won’t do. So that for me was an important starting point. But also, I think I have something to tell clients and in some cases I like to give advice on how to act in certain ways or the choices that they should make. But for me, it’s freedom in how I spend my time and what kind of projects I do I think is most important. Tanja, anything for you that strikes you? And why did you start as an entrepreneur? Well, actually, I came across the same things I thought I was, wasn’t really so keen on my freedom. But when moving back into a sort of employment situation, I really felt that it yeah, it didn’t really fit me anymore. So, I also wanted to have the freedom to decide what to do. And to do that also with other like-minded people like Michiel and Petra. Our third partner. And so, making my own choices is very important. Yeah OK. Well, questions that we had when we started thinking about entrepreneurship is, is there something that every entrepreneur should have? We’ve worked with entrepreneurs in different sectors, and is there something that they all should have? Or does it depend on the specific markets that these people work in? So, we have dealt with entrepreneurs in finance, entrepreneurs in healthcare, in media. Is there something that they all have or is there a difference between the markets and next to having a great idea? Are there typically personality characteristics that will help you to be successful as an entrepreneur? And of course, we all are very much busy and focused on using Facet5. So, our idea was if Facet5 measures your personality, your preferences, your perspectives, it might be interesting to use Facet5 to tell something about entrepreneurial qualities that a person might have for looking at an entrepreneurial team. So, these were questions that we had beforehand, and we used a business case, which I think is a very interesting business case. It’s about a program called startup bootcamp, which is an accelerator program. It started in Copenhagen and Amsterdam and mainly was focused on specific industries, like fintech, like health care, like media, in which a number of start-ups were selected to join the program. It’s a three-month program in which they would get access to international network of investors, also would be supported by mentors and partners, and after three months, they would be presented to a number of investors in what they call a demo day. And hopefully from there they would start growing as a company. Well, we have been working with Startup Bootcamp for 10 years now and it is a very successful company. I think nowadays they have more than 20 countries from which they operate. And we were asked to help them in the selection of the start-ups and it looked like this. They start with hundreds, sometimes, sometimes thousands of start-ups. They go through a pre-selection process, which is mainly online, but also before. Before that they were visited by a number of people from Startup Bootcamp and actually 20 startups would be selected to join a two-day selection program in Amsterdam. And in this two-day selection program, they would be focusing on specific things that had to do with the products, that would be product experts available. There would be people who know the market very well. There would be people also asking them questions about finance, about traction, interest from the market, but also as their experience as an entrepreneur. And finally, 10 or sometimes 11 start-ups would be invited to participate in the program in three months program, and they would get certain funding in exchange for share options that would go to Startup Bootcamp. And the idea is that they would grow in these three months, and after these three months, but some of these start-ups fail. So, they have been going through a very extensive selection program, talked with a number of experts in their field, and still they fail. And the question that Startup Bootcamp asked us is, why do these start-ups fail? Yeah, so let’s pick your ideas here a little bit. So, I was just wondering, do you have any experience with start-ups or with new entrepreneurial teams? And maybe you can put it into the chat. Why do some of those start-ups fail, perhaps in your experience or just your thoughts about it? What kind of reasons would you think are there? Like competences funding? Yes relationships? Yes, of course. Lots of ideas, but not so much focus. Absolutely that’s familiar. Yes leadership? Yep, some founders find it hard to relinquish control to a widening team. good one. Deep one. And not knowing their numbers. Yeah, true. Yeah, right. OK so there are plenty, plenty of lists available on the internet. If you look at why do startups fail, we’ve sort of put together the top 10. The first one would be no market need for the product. So, you have this great new product, and you feel really enthusiastic about it. But actually, nobody’s waiting for what you have to offer. Running out of cash. Sometimes it’s an issue. Um, not having the right team can be an issue and writing can be very, uh, can be about the people with specific expertise that you miss or people with specific characteristics or personalities that don’t go very well together. One is getting out, competed. That is something that a former colleague of mine had, who started something and finally ended up with competition like Google as some point, which was huge. And they have much deeper pockets than the typical startup. Cost issues might be relevant. The quality of your product might be relevant. What we often see is lack of a business model. So, knowing for which Clients you want to go, knowing what prices you have to charge them, what your margin will be, or mistimed products. So, these are all typical things why start-ups fail. And if you look a little bit further, uh, people like Patrick Lencioni, only whom I think is a great inspiration for the teamwork that we do, they say the team is the ultimate competitive advantage. So, it’s not about the technology, it’s not about the strategy, it is about team. And if you take a closer look, you will see that 23% of all start-ups failing has to do with team issues. I think this is a stunning number and the question from Startup Bootcamp was help us to identify these issues before they become an issue. And they did two things. They did some, uh, something new, which is premeditation. So, this means that before a problem actually arises, every start-up that joins the program will go through a premeditation program. So, if there are any difficulties, they are identified really quickly at the beginning of the program. And the second thing was that they asked us, could Facet5 predict some of these failures, some of these risks that we take because there’s a lot of money involved in participating in a program like this and their return on investment is very important. So, our idea was that a minimal investment of time and money and Facet5 could really help them to not run into trouble later on. I do. Yeah, I do recall the first time that we met, but but first, what, what did we actually do? So, we thought if entrepreneurship is about certain preferences, certain characteristics, you should be able to measure this. And we decided to use a combination of Facet5 and Facet5 TeamScape, focusing both on the specific characteristics of team members, but also the makeup of each team. And with the makeup of each team, we mean the differences between team members, the specific role that a team member might have. So, for instance, this very high-tech CEO who discovered this great new technology thing, uh, might end up being the one who would be talking to clients or to the market or investors when in fact, this could be a very introvert person. So that would be a typical mismatch between the role that this person has and his personality. So, we would look at person job fit using Facet5. We would look at overall team composition, composition and do interviews during these two days and select our favourite teams, but also give some input for matching. So, every team would get a mentorship through these three months. And using Facet5, we also try to give some advice about what kind of member does this team need and how can they best be helped. So, it was a high-tech, high-tech team selection, selection. Just in the high tech region of the Netherlands and we did two days with interviews, discussing TeamScape reports, giving feedback on individual profiles, and at the end of the two days, the jury comes together and these were people working for banks, working for investors. They were all very finance and marketing driven. And me and my colleague, we were there, and we sort of felt like, oh, this is interesting. Usually, we deal with other types of people. Yeah, on management. And they looked at us and they said, OK, so how do you feel about this team? And is this whole idea what a team was all about in terms of the product? Because sometimes it’s very, very complicated. So, we looked at the team composition and the person shot match and there were two teams of which me and my colleague thought, Hmmm, there are some red flags in this team, both in the setup of their team scope, but also in how they talked about their own team and how they respond to certain questions that we had. And I do recall the jury deliberation, and they said, OK, Thank you for your input. We will still go ahead with these two teams. And six weeks after that whole idea program of both teams had fallen apart, and then they said to us, this is interesting because you see things that we dont. And then they decided to incorporate Facet5 and us and some of our colleagues in the program. And as it is today, there are some investors that will say to us, we first want to take a look at the Facet5 TeamScape report before we decide to invest in this company. So, I think that is really great. For them, It added probably something to the selection that they already were using. So we have. Worked together for 10 years now. We have a lot of data about teams, about start-ups, actually, hundreds of start-ups. Most of them are still there. Some some are not. And then the CEO of Startup Bootcamps said to me, is there something like the perfect personality for a founder, for a CEO? Is there something like the founders profile? And I said, that’s like, I don’t think so. I don’t believe that there is only one profile that determines if a start-up will be successful or not. But we still want to take a look and we still thought, OK, if Facet5 is about preference and about behaviour and you can now identify successful and not so successful it. It won’t be a. Look it was different. We’ve been more or less successful start-ups or the more or less successful CEOs. So, we started to look at the correlation between the founder’s profile and success or failure. First thing that we looked at team composition, but then you have pictures like 10 or 20 people or would be so many, so many different characters, statistically impossible. So, at first we started to focus on the founders profile and to look for the typical founders profile. There were two things that we could do. We could look at the scores with specific scores of these founders, but we started to look at the families, at the Facet5 family types. So, for those of you don’t know about what Facet5 families are, um, Facet5 describes your behaviour, your preference, and it sort of paints a picture of the typical person like you, which is called a family. I always call families sort of prefer profiles of a person that looks like you sometimes look very much like you, but not exactly, a bit like a sibling or a relative that looks the same. So, we have 17 family types, um, in Facet5. And the question that we asked ourselves is, OK, if there is one family that will be more successful than the other than the others, which one will it be? So, so that’s the question for you. Well, actually, especially for the Facet5 practitioners in the room. So, we were just wondering whether you could already predict the outcomes of all of our research. So, what do you think? What kind of families stood out in our research? What for the most and what kind of families were the most successful or no, I have to put it otherwise that contribute to start-up success. OK, Promoter and Entrepreneur. Yes, I see where you’re coming from. Some other ideas. Advocate, Entrepreneur, Promoter, Generalists. OK Yeah. Perhaps some others. It depends. Jurate. It depends, on what? Yeah, what do you think? Well, if I can commence. Can you hear me? Yes yeah, yeah. I saw a super successful specialist manager and found it in a very specific area like lasers and so on. High tech. So, it depends. I had the Super successful Explorer and I remember pushed to start the business and already for 10 years successfully operating and growing. It depends. OK, OK. Well, let’s take a look. I see. Also, Producer. Interesting. Facilitator. Yeah. OK, Promoter. Entrepreneur Yes. Yeah, I do recall and one of the projects I met a vice president of a very, very big, Uh, offshore company. He was responsible for the whole Southeast Asia. And I had a discussion with him. And he had filled in Facet5, and he was a Specialist. And I was very much surprised by that because usually you don’t see Specialists in those type of positions, which does not mean that they are not able to do it. But it is so far away from what they are expected to do in a role like this. So, I told him this is really a surprise and he said, yes, I’ve been working for the company for over 30 years, and I started as a welder in welding ships. And he said, deep down inside, I’m still the welder that I used to be, although now he understands that he has to sort of address the crowd and go outside and meet big clients. But still inside, he was sort of technical person that he really chose to be. All right. So, we decided, how can we measure the success of a start-up? Does this mean that they are still in business? Are we looking at the revenue that they might make? But this can be very different in very different markets. What should we focus on? And then we decided to focus on the valuation. So, this means the valuation in terms of the investors investing, actually investing money in these start-ups. Which is also one of the interesting things for Startup Bootcamp because they have a percentage of average start-up. So if they run into a new Facebook, they make a lot of money. So, they, they look at the valuation of start-ups. For them, that’s a logical measure. And these were the numbers. And I was not very surprised. And the thing that I liked particularly is that the first three profiles are the profiles of the three partners in our company. That is really great. Uh, I, as a Generalist, I’m a Promoter, as an Advocate. So is really nice. What I thought was surprising that an Entrepreneur was not in the top three. So, you could say a Generalist is a person who is focused on everything, a High Will person pushing through when things become difficult, but also High Affection, meaning that he cares for people but also goes for the deep solution also reaches out in terms of Energy, reaching out to the market, but also controlling and making sure that everything is in place. Promoter typically very much focused on the outside world, not so much on the administrative side of things. An Advocate, sort of a promoter with feelings, as I always call him. Those were the top 3 and they are responsible for 76% of the valuation. So that is a very, very big number. So for us it meant that there is no one profile that is successful in a start-up, in a CEO of a start-up. But there are several profiles, and this is the top three, that accounts for the highest percentage of the evaluation. Is that, is that a surprise when you look at this list? Is something that you did not expect or maybe people saw your list to start with? A lot of people mentioned Promotor, Advocate and also the Generalist. Yeah, but also. What do I see anymore? Facilitator. Yeah, somewhat. So, if you, if you look at the start-up, in the beginning of the start-up phase of a company, it is about High Will, High Energy, sometimes also about High Affection, I think. And very often we get the question ‘When we grow as a team, what kind of person should we add to the team?’ And usually I say things like, this will be a person that you will not particularly like because they will force you to build a process. They will force you to do something about administration and detail. Typically, you sort of will see a COO profile or a Producer like profile. So many start-ups are focused on going from 0 to 1 and not so much on going from 1 to 100. So, they are really focused on the first phase of starting out. So, this is the list for the most successful start-ups. There’s also a list for the least successful start-up. So which family type would be on top of the list of the least successful start-ups? Anyone? sort of a quiz. Yeah, it is. Yeah but. Any ideas in the chat? Specialist oh, OK. Producer. Controller. Supporter OK, I miss one, which for me is the most complex family type, but it can be due to my own personal preference or situation. The Idealists and the Specialists, and especially the Specialists. So, this does not mean if you’re an Idealist, you should not start up a company. Or if you’re a Specialist, you cannot be successful. But if you take a look at the typical CEOs of failed start-ups, this is the list that we worked from. There are still Generalist, Advocates and Promoters among those, but not as many as in the successful startups. So, we are dealing with a client sort of boot camp that likes to make life as simple as possible and likes a clear Yes or no from us. And we try to be a bit more balanced in what we say about people. There is no Yes or No. There are only different options and different shades of gray, maybe. And typically, they would look for one of these three profiles. They would look for the Promoter, the Generalist and the Advocate, and they would sort of make their own order into the startups that go through the selection process. And if there would be such a person in the team, that would be a big plus. And if that would not be such a person, that would be sort of the red flag for these people. OK so I think this is interesting. There is no one founders profile, but there is certainly a link, maybe not a causal link, but there is a correlation between the family type and being a successful start-up team. So, what does this mean? What can we do with this? And that means that we take a broader look at entrepreneurship. And entrepreneurship is very hot, at least in the Netherlands right now, because there are many changes, the rapid changes, revolutionary changes through the use of online solutions, new competitors entering your markets, the innovation culture that has become more and more important. And we feel that entrepreneurship should be on every manager’s agenda. And I think in fact, it is on every manager’s agenda right now. So, there are plenty of reasons why people find entrepreneurship interesting. But also, let’s start a Bootcamp to a start-up in ellipse, which is sort of a similar company, but then helping companies to develop entrepreneurship within their own company. So, it’s a sort of in company version of Startup Bootcamp. The current practice of these corporates that we work with. And as Human Collective, our company, we like to work with international companies, with big corporates because that’s where we come from. The three partners are all former PWC consultants who are used to working with big international companies. And they struggle with innovation because they are so big. So, if you are talking about ING bank or Unilever, companies like that, very, very big international companies, they are so big and changing something overnight, as a start-up can, is really difficult for them. So, think about the elephant or the super tanker. If you want to change the direction, it needs a lot of effort and a lot of time. So, some of these try to tackle this issue by creating innovation labs. And innovation labs are sort of putting people together with a certain characteristic, usually high energy, usually low control, with a revolutionary approach, putting them in a team, sometimes also on an external location far away from headquarters, and then asking them to behave as a start-up or using external help, external guidance for them to be a start-up within the bigger company. I think this is a very interesting thing to do and it can actually really lead to new products, new applications. But it also comes with the struggle. It comes with the struggle connecting to the company, to the bigger company itself. Um, usually these start-ups have to do some sort of presentation every six or seven weeks to a committee of the boards. And what you can typically see is that they are very enthusiastic about all the possibilities, whereas this committee of bankers is thinking about how can we manage this risk, how does this fit in our portfolio, how can we actually make any money doing this and not realizing that your audience might be different from you might result in a mismatch, not understanding each other. So this is, this is typically something that we, Uh, that we see. What have we learned? And this is the final slide. Then after that would be really great to hear something from your life. Maybe a Q&A and just something about your experience. Yeah, there’s already a question from Garcia, but I will park it a little bit until the Q&A section. Yeah OK. All right. So what did we learn? We learned that it really pays out if you spend some time looking at the team, selecting the team carefully. So usually, they would be selected by being available. They would be selected by this person that is looking for a next step, but he does not yet know what to do. So maybe put him in a start-up situation. And only picking those type of people might result in people who are… want to make a next step. But don’t know where to go. Or maybe only are focused on doing something new instead of building something. So, it is all about finding the right balance between these revolutionary types, but also the follow up and the existing organization. So ultimately a start-up in a big bank like ING will either result in something new within the bigger bank or leaving the company and starting as a start-up. So, creating moments in which both parties can actually meet each other and discuss things, but also involving management and top management in mentoring and coaching might actually help to bridge the difference between these innovation labs and start-up teams and the management of the organization. So, we have seen companies struggle with it. And actually, yesterday I heard one of the bigger banks in the Netherlands is shutting its Innovation Lab down because they see too many difficulties in connecting both parties. So, they decided to shut the whole thing down, which I think is a shame. But then these are typically the things that people might run into, or the companies might run in to. Tanja, any question? Any things in a Q&A? Well, now we have one. It’s from Garcia. She’s asking, how big was the research sample for the results? Uh, interesting. That’s an interesting one. I believe it was somewhere between 100 and 200 start-ups, of which we had all the data and also the data about the valuation. Yeah, but that’s a good question. There was an issue because we thought there might be thousands of start-ups because we have seen so many people. The downside is that if you select a group, you end up with a group who is not as diverse as they were when you started selecting. So that’s typically a selection issue. Dianne, did you keep data over 10 years about their success and failures? No, not for this research they do because they are still in most start-ups, they are still participating. But there have been some exits. So yes, that I think it is possible, but we didn’t include that in this research. Interesting question from Jurate. Did you collect and analyze ToRQ data too? Yeah, that would be nice. Yeah, we didn’t. This was a pre Facet5 Torq I’m afraid. So Yeah Yeah. OK any other questions? You can also unmute and just ask your question. So, it can be interactive with a small group. Oh, sorry. I was going to ask a question, Diane, here. I was going to ask if you besides looking at just the founder, the mix of the teams necessarily, and if you also tracked or did any analysis by the sector that they were in. Uh, Yeah. We started out by thinking about the mix of the team, but there were so many variables. It is impossible, especially with those numbers. The numbers were not that big. So if you would have thousands of start-ups, maybe you could focus on the number of people in the start-up team or the sort of people in the start-up team that was way too diverse to include in the analysis. So finally, we only focused on the CEO. And the sectors that start-up Bootcamp works with were, if I recollect and correct me if I’m wrong Michiel, finance, marketing. Yes, Smart Living is one. Fintech is one. Media as one. Usually there are two or three a year. I think fintech is the most common one that is still in operation, but usually two or three programs a year. Yes and they all last three months. Yeah. And were you able to connect the profile of the founder to the success of based on the sector? Did you notice any trends or correlations? No, the numbers were too the numbers were too low, I think, to do that this month. OK so you might end up with 40 or 50 start-ups still existing in fintech. That’s way too small. It would be interesting to do interviews with these people and also ask for their opinion. Of course, why are you successful and what makes the difference for you? So, there’s a lot of stuff that I think is very interesting. And actually, basically the first idea was to write a book on the founder’s profile. But then as it is with a lot of these people working in start-up bootcamp, they are entrepreneurs themselves. And typically, this is a very high energy environment. So, there are lots of plans and usually what I learned is just wait for one month to see which plan still exists before you commit to joining them on such a program and such a project. OK I saw that, Sybe, you had a question? Yeah, it’s a different one. You mentioned the innovation team within corporates and within the consulting firms, et cetera. Do you think is what do you think are the differences between an innovation team that is set apart in their own building and own budget, et cetera in a corporate environment versus the start scale which has collected the 1 million and grow from two founders to 30 people in 3 or four years. Yeah, there is a difference. Usually, the difference might not be in the terms of the personalities of the people working there. But the difference is that if you are working for Deloitte’s as you are and you are in a start-up team, if you fail, you don’t have to sell your house or you don’t have to look for a new job. So, if your start-up fails, that’s a whole different cookie, as Louisa van Gaal would say, famous Dutch football coach. So, I think it would feel different if you’re all in as some of these start-ups are. The stress level I think, is much higher than when you work for a big global company. Yeah, I think that would be the main difference. Yeah, Yeah. OK are there any other questions or perhaps some experiences that you have yourself with working with start-ups? Our innovation teams. You mentioned, Michiel, they start a lot, and they don’t always finish it, or maybe they keep starting up, my experience is that they don’t care that they are keeping starting it up, that they think, well, one of them will fall through. So, I just continue the way I am, and the rest of the team has to just fall in line with my own thoughts. And yeah, that’s true. Sometimes. Or it’s sort of a shotgun approach. So, if we have a lot of them, one of them will be successful. There have been very successful exits and sometimes very, very unexpected successful financial exits. So, yeah, that’s true. Yeah, and I think it is also a bit due to the culture of people starting something up that’s very new and they get distracted by new things coming along or they are focused more on starting up than really building a bigger company. Yeah, I think both things are true. Yeah OK. I, oh, I see a question of what was the typical size of a start-up team? How many people were involved? Uh, it depends. If you have a start-up team with a tech start-up team, you might have a number of developers, um, which would usually not be part of the, of the group going to Amsterdam. So, one of the things that Startup Bootcamp found very important is that there is, the core team is in Amsterdam for the three months programmers and usually the minimum number for the core team would be three people and it would be less than three. It would be physically impossible to attend all the different things that they had to offer and you would not get the maximum out of it. So it would depend. I think the smallest one would be two or three. The biggest one could be up to 40 or 50. But then usually there would be groups of developers or technicians working from East Europe or Dublin or somewhere else. So, we only focused on the core team. And not so much for the others in the stronger. OK I’m being mindful of the time. I think we’re it’s I see an interesting quote of Allison. She said, well, I definitely have seen the issues of founders not liking the process driven personality. So, I guess you mean the High Control people, how, however important. They might be, creates a lot of tension. Actually, what we see is that they are the control people come in when it comes to scaling up. And so being able to move to the second phase, actually. so, Yeah.