Startup speed dating with no actionable output is rife, and innovation chiefs are under pressure to bring in a huge number of opportunities each month. Just last week a new company came in and told me they have been invited to visit a huge number of agencies with the promise of projects never to be heard of again.
It’s clear to see why agencies adopt this approach. They meet lots of startups, hope to be inspired, and then pitch the ideas from the meetings to clients. But this is actually counterproductive because it prevents startups from growing, and agencies and brands from innovating.
Which is why, when I started as Director of Innovation at Wavemaker, we embarked on a mission to stop tech tourism and invest time and resource in supporting fewer, bigger, better startups to give everyone the best chance of success.
This approach follows the basic principles venture capitalists take at the beginning of due diligence. Having been a CMO at a startup myself, I learnt very quickly which qualities venture capitalists and angel investors look for: strategic fit, big market potential, an incredible team and founder, product uniqueness, and evidence-based metrics.
Each of these factors are important, especially when it comes to the detailed focus on finances and supporting claims with solid data, but it’s particularly vital to spend time with the startup’s founder because they vary immensely in terms of personality and approach. It’s also worth remembering that the differences between male and female startup leaders are often pronounced, especially in light of research that suggests the fastest growing startup companies are 75% more likely to have a female founder and that diverse teams make better business decisions.
Investors know that the majority of startups are unlikely to return their capital and they are looking to minimise risk by analysing every detail before they commit. Their rigour is perhaps antithetical to the usual agency approach where big ideas and a good presentation often prevail but, by applying these principles, I ensure that we evaluate startups only by strategic fit, applied to both clients’ and our own agency priorities to address the gaps that we need to fill.
For example, in 2017, we formed a partnership with startup Zyper, a peer-to-peer software platform that helps brands identify, manage, and maintain brand fans. I gained the support of Wavemaker to place a big bet on Zyper, bringing them to our clients, supporting their growth, and driving innovation across the agency – resulting in a number of successful projects and happy clients.
It’s great to see Zyper going from strength to strength, with them raising £1.2 million in December 2017 and being accepted onto the highly regarded Silicon Valley Accelerator Y Combinator last month.
This success demonstrates the huge impact of proper evaluation and highlights that more agencies and brands should be thinking and acting like investors. Not only will this approach bring more success for you and your clients but it will also ensure our startup economy grows. We have a huge number of startups in the UK but our obsession with the newest and latest, the lack of support we provide, and our flimsy evaluation, means many fail to grow.
It’s our responsibility to bring the best opportunities to light and to help our economy thrive. At the very least we could all make a pledge to do better.
Sarah Salter is Director of Innovation at Wavemaker and has been shortlisted for the IPA Women of Tomorrow Awards which celebrate extraordinary women in the comms industry and aim to redress the under-representation of women in positions of leadership.