Learning to grow: how coaching unlocks value for founders
Learning to grow: how coaching unlocks value for founders
As a portfolio partner on the Octopus Ventures People and Talent team, I work with incredible founders every day, so I’m more than familiar with the level of pressure they’re under. Starting a world-changing company takes guts – but just because a founder has shouldered the burden of building a start-up, that doesn’t mean they’re better equipped than anyone else to deal with the challenges that can ensue.
There’s no two-ways about it – being a founder is stressful. The catch-22 is that the cause of the stress (responsibility for a whole company’s worth of careers, for example) is also why it must be dealt with. Psychological pressure makes for bad decision-makers. That’s why, for the good of their businesses, founders need to take steps to take care of themselves – secure their own metaphorical oxygen masks. Getting help is an act of responsibility.
I used my last blog to highlight some of the methods founders might find useful in ameliorating the stress, fear and anxiety they might be struggling with. In this one, I want to take a closer look at (and bang the drum for) a tool we, at Octopus Ventures, really believe in. Coaching.
We believe in the value of coaching so much, in fact, that we’ve added it to our term sheet. We’re asking every founder who accepts our investment to earmark a small amount of the capital raised and re-invest it back into themselves, in the form of coaching. To help them out with this, we wanted to make the process of engaging a coach as simple as possible. We spent months interviewing tens of coaches around the world and narrowing that list down to a select hub of individuals that we believe have the tools and skillset to make a major difference for any one of our founders.
The case for coaching
When I joined Octopus Ventures it became immediately apparent that we brought a holistic approach to founder support. Beyond capital, we support our founders through an extensive network of accomplished operators and advisors who can be leveraged to offer our portfolio a competitive advantage. Our dedicated People + Talent function ensures founders can stay ahead of the game when it comes to scaling world-changing businesses.
Through these channels, we’ve successfully optimised founders for business success. But at the same time, there seems to be an industry-wide blind spot. We recognised a lack of focus on more personal, and long-term, one-to-one support for founders navigating the nuanced and often lonely ups and downs of building a company. Personal support is about ensuring a founder has the skills they need to realise their business’s full potential.
Throughout my career, one observation has struck me time and again. In my experience, people, including leaders, often reach out for help or external support when they’re already in crisis mode. Of course, that’s not too late – there’s almost always a route out of it. But by receiving help earlier, founders save themselves huge amounts of energy, confidence loss and time spent in a muddle.
Plus, crisis almost always comes with collateral damage, to personal relationships, or relationships with co-founders and colleagues. That’s why we think providing support for founders to elevate their strengths and success in good times, and equip them to survive and maybe even learn to thrive in the bad times, feels like a preferable route to take. Coaching is that support. It’s not therapy, or mentorship. It can be completely context agnostic; coaches don’t need to have domain-specific knowledge. Sure, some coaches are former founders (our Coaching Hub contains some founders who’ve exited with great success) but many aren’t – and that works too.
A coach’s job is to help a founder look inwards, unlock new forms of thought, overcome negative self-belief and self-imposed restrictions, and challenge received wisdoms. Working with a coach isn’t an acknowledgement of failure or incompetence – it’s about being better. It’s about recognising that the leader of an organisation is responsible for all outcomes, both good and bad. And it’s about making a commitment to building, refining and improving the skills a founder needs to drive their company to world-changing heights.
One of the key questions that comes up when I talk about coaching is, ‘What are the tangible benefits?’
I understand why it’s asked. Businesses are built on metrics. As VCs, our investors assess a huge range of metrics before they offer a start-up support. Every experienced entrepreneur knows that data and metrics inform great decision-making and strategy. And yet – businesses with the strongest metrics in the world still fail. Underdogs emerge because great leaders and top talent overcome obstacles that, on paper, look insurmountable.
As a founder, building a business in the world, there are always going to be intangibles, from unexpected interpersonal conflict to macro issues, such as covid, that upend how things are done and demand a speedy, reactive response. Businesses that are entirely constructed on the basis of metrics, without understanding of or insight into the relational side of things, will struggle when faced with the unexpected, whether it’s a consequence of irrational human nature or a massive, global disruption like the pandemic.
That’s why coaching matters – because it deals with intangibles, and offers space and guidance for founders to develop into better leaders, better positioned to respond to the distinctly non-tangible challenges that growing a start-up inevitably presents.
Overcoming the blockers
When we started thinking about coaching, and asking ourselves how we could extend its benefits to the founders we back here at Octopus Ventures, we couldn’t quite understand why so few founders were engaged with it. We’d made a few introductions between coaches and founders, but the number of founders actively seeking coaching was vanishingly small. To get a clearer picture, I reached out to dozens of founders from within the Octopus Ventures portfolio and from my wider network.
Over the course of the interviews, I established five key blockers standing between founders and coaching. Some were exactly what I expected, while others surprised me.
- Don’t have time. No surprises here – founders of early- and growth-stage companies work staggeringly long hours, and it makes sense that, without having experienced it, founders might see coaching as a time-luxury they could ill afford.
- Don’t have the cash. Again, fair enough. It’s no secret that the macroeconomic landscape is challenging, and founders are having to do more with less. They may even be confronting the possibility of layoffs, which makes the perception that they’re ‘spending money on themselves’ particularly unattractive.
- The perception of coaching (‘I don’t need a shrink.’). Whilst not wholly surprising, I do think that this perception is slowly shifting. It’s important to note, again, that coaching isn’t the same as therapy, but even so, this attitude feels outdated. Recognising capacity for growth is good leadership.
- Permission. Another surprise was that many of the founders I spoke to voiced concerns that seeking out coaching might elicit eyerolls, for example from shareholders. It crosses over with the question of funds – they worried that it might be seen as an inessential luxury. In some cases, founders revealed that they were working with a coach, but were in fact paying for it out of their own pocket. This highlighted a huge gap in understanding of the direct correlation between leadership coaching, founder wellbeing and business performance.
- Knowing which coach to pick. It’s true that in the UK coaches don’t legally require any sort of formal accreditation from a recognised body. Anyone can call themselves a coach on LinkedIn, and the founders I spoke to voiced concern over knowing who was worth the investment of time and money.
If we were going to bring the benefits of coaching to founders in the Octopus Ventures portfolio, it was clear that these were the key blockers we needed to overcome.
Our first step was reaching out to coaches themselves. We spoke to over 60, to learn more about their practices and the type of client their talents were best suited to. Once the list had been narrowed down, we went about speaking to as many references for each coach as possible (at least three) to build a clearer picture of their competences and relevance to our founders.
What we’ve ended up with is a curated list of eight coaches. I strongly believe that each of the founders we support could find at least one amazing coach to work with on that list. As I’ve written, earlier this year we added the requirement to engage in coaching to our term sheet. Every new founder to the Octopus Ventures portfolio is required to try coaching within six months. They don’t have to use the coaches we recommend – that’s just a starting point if founders are at a loss for where to look. And, it goes without saying, all coaching is confidential with all coaches working totally independently of Octopus.
What I hope to have demonstrated to our founders is that they have both the money and permission to seek coaching. Doing so doesn’t reflect on their individual competencies – it’s a requirement for every founder, no matter how experienced. We’ve provided them with a list of incredible practitioners. The only thing we can’t do is create time in the day for them to do it. The truth is, I believe everyone has time for coaching – and if they think they don’t? Well, coaching can help with that prioritisation.
Introducing a coaching clause was a gamble – but it’s paid off. So far, we’ve had no complaints. In fact, quite the opposite. Feedback has been extremely positive, with one founder telling us firsthand that the requirement to invest in their growth and development represented a huge, positive differentiator in Octopus Ventures’ favour. It gave them confidence that we do truly care about the people that we’re investing in. But giving founders permission to take their wellbeing and leadership seriously is just the start.
Last month, we launched the first cohort of peer group coaching. This allows our founders to partake in coaching with an intimate group of fellow founders from our portfolio. Once again, it’s important to state that beyond connecting founders and coaches, we have no insight into what goes on in these sessions. For us, making sure our founders can access coaching is an insurance policy in itself. We care about their wellbeing, and the wellbeing of their businesses, and we want to do everything possible to set them up for success.
In my last blog, I wrote about the benefits of building a network of supportive peers, and the importance of speaking out when times are tough. Unfortunately, some still perceive a correlation between vulnerability and weakness. If founders are going to minimise the personal cost, even as they build businesses capable of reshaping the world, that perception needs to be broken. That means a paradigm shift in how we think about getting help. Hopefully, our new offer to founders represents another step towards just that.
- Book – From Start up to Grown up
- Coaching Hub Coach article – You don’t have to suffer as a startup CEO
- Coaching Hub Coach article – What does a founder coach do?
- Coaching Hub Coach article – How to know when change is needed: A cheat-sheet for professional growth
- Coaching Hub Coach article – Unpicking yourself from your business
- Coaching Hub Coach article – What does remarkable leadership look like as a Founder CEO?
- Podcast – Reboot
- Podcast – High Performance