‘I haven’t heard of a single company built with a four-day work week’: Taavet Hinrikus on Sifted Podcast
Taavet Hinrikus is one of those figures in the startup world known only by his first name.
He is a successful founder (of fintech Wise), a super active angel investor (in over 150 startups, including Bolt, Verification and Zego) and from last year also a VC.
Majority, the anti-VC firm he co-founded with three other experienced startup operators – Ian Hogarth, Sten Tamkivi and Khaled Helioui – announced a fund of 250 million euros last summer, with a rather ambitious goal: “To have an impact at the level of GDP in Europe.”
Since then, it has invested in seven companies, including carbon revenue platform Arbonics, battery storage startup Field Energy and gaming platform metaverse Ready play me, stick to the plan that each partner only makes four or five investments per year, to enable them to be very practical.
It has also made several operational team hires – Daniel Tarver, head of investor relations; Kate Connolly, Chief of Staff (formerly of DeepMind); Tamsin Ashworth Reeves, General Counsel (previously in the same role at Entrepreneur First); and Verner Uibo, CFO — and promises Sifted that a new partner will also be announced soon (fingers crossed she’s a female).
Sifted invited Hinrikus to our podcast, Startup Europe, for an in-depth interview covering how Plural is doing, what founder Hinrikus got wrong and why working with founders can be painful. Listen to the whole episode here, or watch it here:
On “balance”
“I think the balance issue is so difficult and it’s hard to force it on people. A lot of it, I think, goes back to setting a somewhat healthy example. I’m sure we’ve all heard of companies where the managers are constantly pulling all-nighters and forcing people to do it. But, you know, at the same time it’s difficult, because I haven’t heard of a single company being built with a four-day working week either. So there is definitely a sacrifice to be made. And I think we shouldn’t say that it isn’t.
“I haven’t heard of a single company built with a four-day work week”
“So the question is, how do you do it for 10 years in a row? How do you avoid burning yourself out? And how do you avoid getting people on your team burnt out? I’ve definitely taken it personally that people burn out on the team, to the point where they’re physically in a bad place. It’s not fun and it’s really hard to deal with in the early stages, especially if the team is fired up and everyone’s like “I’ll make it work”.
“Somewhere I read that when the first Boeing 747 was built in the 60s, the employees secretly crawled back into the factory at night to continue building it because they were so driven by the project. It happened in the 60s with kind of moonshot projects. The same thing happens with startups, especially if you’re doing something good and new people are turned on. So sometimes you have to hold them back.”
About the importance of the first few employees
“It’s a cliché, but the importance of the early team, the first 10, 20, 30, 40 people, can’t be underestimated – because they will end up hiring the first 100 people. It ends up building the culture of the company .”
About angel vs VC investment
“I’ll tell you honestly, doing a lot of angel investing started to feel a lot less fulfilling over time. It was kind of like becoming the equivalent of Wall Street indexing — like, ‘Oh, that’s a great company, can I put in a ticket in the round?” Suddenly every business ends up as a line on a spreadsheet. There’s no joy and no way to make a GDP-level impact doing it that way.
“Making fewer investments is more disciplined. You have to think much more about the company, the founders. How can you be of help? Can you be useful? And are you doing things you really care about? It’s much harder for me to get excited about a SaaS HR company. I’m probably not going to run and think hard about how to solve this HR problem with this SaaS tool. Whereas if I think about how we scale something that has an impact on energy, there’s a likelihood that when I go for a run, I’ll think about that.
“Obviously, at all times you have to work on things that probably aren’t something to get out of bed for, like something going wrong, etc. But still, if it happens in a business or an area that you care deeply about om om, I think there is a much greater chance of having a positive impact.”
On the government
“Although I agree that Tech Nation and visa stuff aren’t good, I think it’s far too early to say that the UK tech scene is in a significantly troubled state. I’m mostly optimistic about the whole of Europe – we’re living more and more in a time where tech companies are going to happen everywhere.
“Bloody Italy had its second unicorn last year! I mean, how great is that? And I’m sure that now Italy has two unicorns will accelerate ecosystem development over there.
“ONE a lot of what the government does doesn’t end up being that useful”
“So yes, there will be temporary hiccups. And maybe the funding in the UK did not grow as much as France last year. But who cares? I think it is dangerous to try to conclude too much from this. Yes of course we should go and protest outside number 10 and tell them to get their act together and see what they can do.
“But the reality is the biggest thing they can do is get out of the way, which you know, I think they’ve been semi-successful in doing.
“In most cases, there are a handful of key policies that have a big impact, whether it’s about stock options or immigration and so on. There, the government is the only one who can have a major impact.
“I think this is happening in France will make every other government think much harder about what they can do too, and hopefully develop more blueprints of what can be done that actually work – because a lot of what government does doesn’t end up being that useful either.”
About the ways Plural is different
“We remain true to not having an investment committee – as in a committee that decides to make investments – the equivalent of the dog and pony show that is a partner meeting at most venture firms where they spend Monday together and just shuffle entrepreneurs in and out , come to give a presentation to partners who read their emails or look at cat pictures, we don’t.
“We don’t hold back, we get straight to the point”
“It works well for us. We spend a lot of time discussing deals internally, which is what we planned. We have a structure where we write an internal investment memo and we spend a lot of time discussing it. We don’t hold back, we get straight to the point. And I think we make each other better and hold each other accountable.”
On the plan to add more former operators as partners
“I still feel very good that by the end of the year we will be around 10 [partners]. But something we’ve learned building companies is that you can get ahead of the skis if you do it too fast. So we just have to make sure we get the right people on board at the right time. Finally, can we live to be 20 or 50? Time will tell. We think if someone can find a way to scale venture differently, we’re in a good place to do that.”
About why founders can be a pain in the ass
“They’re bloody stubborn. But you know, you can’t have everything. This is a matter of finding a suitable investor-entrepreneur. If you talk to a founder and they listen to everything you tell them and act on it immediately, the founder’s maturity is probably a little too low, or you’re casting a magical spell over them. And it’s not so healthy. And the opposite – when they never listen to you – is also a waste of time.
“There’s kind of a sweet spot in between where some of what you say gets thought about or acted upon. And that’s what you need to look for. It also depends on the type of person. I’m sure there are founders where I probably won’t enjoy it, they won’t enjoy it. And yet there are a lot of founders where I think we have great chemistry and we find that we respect each other, and hopefully that’s where one plus one equals two point zero one.”
Amy Lewin is Sifted’s editor and co-host Startup Europe — The Sifted Podcastand writes Up round, a weekly newsletter about VC. She tweets from @amyrlewin
