Taavet Hinrikus – Director magazine, May/June 2018

IN THIS SECTION

Growth tips from three unicorn founders p17 | A six-step plan for instilling an innovative culture p24 | Ask the execs p26 Seasoned TED talker Rachel Botsman on public speaking and credibility p28 | Lead like… YouTube’s Susan Wojcicki p30

S O , H O W D O YO U BUILD A UNICORN? Start-ups that grow to a value exceeding $1 billion are so scarce that they’ve been given a pointedly mythical epithet. But the UK is home to a handful of unicorns – and Director has tracked down the founders of three such rare beasts. They share their wisdom on issues ranging from recruitment and mentoring to investment and hurdling failure at a gallop Words Hannah Gresty and Chris Maxwell Photographs Tom Jackson

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UK UNICORNS

UK UNICORNS

TA AV E T H I N R I K U S

‘ YOUR ABILITY TO LEARN WILL DEFINE WHETHER YOU’RE SUCCESSFUL OR NOT’

What have you learnt about attracting the right people to your company?

Pay is important, but you don’t want to recruit people who only want the salary.

You want them to come and join a mission.

I often see small businesses giving away fancy titles – you’re a 10-person company and you’ve hired a COO? What the ****?!

If you hire an intern and call them a COO, you’re quickly creating trouble for yourself.

We’ve designed the way we work to focus on speed, so it’s a flat structure. We are reserved in giving out job titles. It’s become quite a good test: if somebody starts asking too quickly about titles, they probably aren’t going to be successful here.

The co-founder and chairman of TransferWise on going global and being careful with job titles TransferWise has attracted investments exceeding £290 million so far. Which qualities attract investors the most?

First, you need to offer a product that is 10 times better than the competition.

Second, you need to be doing this in a big market. This is true for my former company, Skype, and it’s also true for TransferWise – there’s a huge market out there. Lastly, it’s about demonstrating that you can get results. If you can show that you had 100 customers in January and 120 in February, you’re likely to find people who are happy to invest.

How did you persuade Sir Richard Branson to invest in your business?

We pitched to him at an early stage and his answer then was that it was a bit too soon and too risky. But a year later we went back to him. It’s a great fundraising tip – going to an investor and saying: “Hey, here’s what we’re doing; here’s the plan.”

You can then go back later and tell them: “What we told you last year came true.”

This makes it very hard for them to turn you down. It happened with Branson, it happened with Andreessen Horowitz and it even happened last year with Institutional Venture Partners.

How have you coped with setbacks?

TRANSFERWISE Business A peer-topeer money-transfer service that’s designed to undercut the foreign exchange fees typically charged by banks.

Founded in 2011 by Estonian friends Taavet Hinrikus (now chairman) and Kristo Käärmann (now CEO).

HQ London. There are nine other offices worldwide – locations include New York, Tokyo and Sydney.

You need to be OK with failing repeatedly.

The only way to never fail is to never try.

Public failure is not treated well in Europe.

If you’ve tried and failed in business in the US, people there see that as experience.

If you fail once in Europe, you’ll have a hard time in the future. This culture is holding Europe back and it’s something that will take a very long time to change.

Headcount 1,000.

Valuation $1.6 billion (£1.18 billion). The firm has raised more than £290 million to date from investors including Sir Richard Branson, Old Mutual Global Investors and Andreessen Horowitz.

Did you know?

Hinrikus was the first employee of Skype, rising to the position of strategy director by the time he left the company in 2008.

What’s the secret to your successful international expansion?

We’ve found that the best thing when we’re looking to establish a new base overseas is to find a number of existing employees who are willing to relocate there. Setting up the Singapore office was probably the smoothest operation. Of the 40 or so people there, about 10 had worked in our other offices. These early settlers brought our culture with them and hired the rest of the team accordingly.

How can policy-makers ensure that the UK becomes home to more unicorns?

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It’s easy to become a great pitcher, but that doesn’t correlate with being successful in business. In a way, fundraising is the easy part. The hard part is building the business – and the entrepreneur is responsible for that. If you’re expecting your investor to do that, you’re in the wrong place.

Your attitude and ability to learn will define whether you’re successful or not.

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What’s your secret to converting the investment you secure into growth?

This country is still the best place to start a fintech business and we are completely committed to keeping our HQ in London.

The question is: how will the UK retain its lead? Things such as the Financial Conduct Authority’s regulatory sandbox and opening up access to faster payments will make a difference. TransferWise recently became the first non-bank to join the Faster Payments Scheme. This is a great example of the Bank of England and the regulator listening and creating a level playing field for incumbents and newcomers like us.

For Hinrikus’s views on growth and profitability, visit director.co.uk from 1 June

GORDON SANGHERA

‘ BE BOLD, AMBITIOUS AND DECISIVE’

Oxford Nanopore Technologies’ co-founder and CEO on turning innovation into profit and taking inspiration from Dutch football You were a director at another business before you established Oxford Nanopore Technologies. What did you learn there?

I saw some risky approaches pay off and others go wrong. I spent 14 years at a spin-out from the University of Oxford – MediSense – which was sold to US giant Abbott Laboratories for $876 million in 1996. I then spent seven years at Abbott, where I saw the terrible impact of a lack of investment in intellectual property.

Our IP-insularity meant that, instead of dominating a $6 billion diabetes care market, we achieved only a minority share. MediSense was very successful, but our growth could have been controlled better and we didn’t always match manufacturing with demand.

How did you set up your new company to be different?

I had three clear objectives: our technology would be disruptive; we would make a global play for IP; and we would seek out long-term investors who wanted to build a global technology company in the UK. Growing a high-tech company is a juggle: you are constantly balancing factors of investment and bold approaches against the need for caution and frugality. You need to have a clear vision and hire people who share that vision. director.co.uk 21