Basically the Founder Institute is a 4 month training and apprenticeship programme for entrepreneurs to help them launch meaningful and enduring companies. That’s an easy sentence but all these words are there for a reason. Every year approximately 25,000 technology companies are created worldwide; but only about 3,000 end up being ‘meaningful and enduring’.  We don’t want to launch companies that do not go anywhere.  

 

I’m an 8-time entrepreneur; a serial entrepreneur.  The entire time that I have been an entrepreneur, I have never come across a good training and networking program that is specifically geared to entrepreneurship.  If you’re an athlete there is a clear path for you; there are all sorts of dedicated training and coaching programmes available. But there is nothing like that for entrepreneurs.  The universities are starting to do more for entrepreneurs, but they usually take an academic perspective.  When it comes to entrepreneurship, I think a sports analogy is more accurate.  Entrepreneurship is a hands-on discipline.  And it is a craft that is constantly changing.  The modern world is changing so rapidly—the market, the technologies, the tools that entrepreneurs use. That’s why an academic approach to entrepreneurship training can’t be as effective as a hands-on approach.

 

To facilitate our learning process we have involved mentors who are themselves successful CEOs of young fast growing technology companies. They learned—and are learning—the hard way the lessons that our founders need to know.  These are people who are still in the thick of things today.

An important component of our programme is what we call the bonus pool.  This is a type of shared ownership pool that is set up for every class. All the stakeholders—the founders, the mentors, the institute—will own a piece of each new company, or more accurately, will own a piece of the upside of the companies (stakeholders aren’t technically shareholders). The idea is that all the stakeholders involved in a particular programme—say the Brussels programme—will have a shared goal that their companies succeed. This creates a specific dynamic and sense of common purpose in the group. And it is a key aspect of the way in which we are trying to export and internationalise Silicon Valley. We do two programmes per year in each city and in this way we’re not only helping our founders, but we’re also having an impact on the broader ecosystem in that region.  We’ve clearly seen that effect in other cities where we’re active.  Once the Founder Institute starts operating in a city, then the stakeholders in the area begin to cluster around it; and this can have a significant impact on the quality and quantity of technology companies created.  

 

The fact that we don’t invest in our startups makes us pretty unique. It’s a subtle difference but it allows us to keep the entrepreneur’s interests in mind.  For example, we don’t expect our founders to quit their job while they’re on the programme. If we were investors, we probably would—as the VCs behind other accelerator programmes do.   We want to do what is best for the entrepreneur, and sometimes that can mean that an entrepreneur should give up and try something else.  If we were shareholders in these companies we might be more inclined to push the entrepreneur on, even when that might not be the right decision for the entrepreneur.  Once the entrepreneur is ready then we do go out to help find funding. Close to 40% of our graduates have attracted investors.

 

Scale is another important difference. Our goal is to create 1,000 companies per year. That’s a radically different scale to the other startup acceleration programmes out there. To achieve that number we will need to be active in at least 30 cities. Today we’re in 13 cities and only a year old, so we’re firmly on track to get there. We have more than 250 mentors and hundreds of graduates. 

 

Finally, the social science testing is pretty fundamental to our success. All applicants need to do a test that predicts their likelihood of succeeding as an entrepreneur. This test currently has a 73% accuracy rate in predicting entrepreneurial success. That allows us to work much more efficiently. For example, in the selection process, we don’t even need to ask you about your business idea.  

The running costs of local programmes, such as catering and mentor travel, are charged back to the entrepreneurs in a course fee, so there is negligible cost to the parent company. But ultimately we’re betting on our ability to make entrepreneurs successful with the bonus pools.  We retain 15% of each bonus pool, which provides us with upside and administration fees for managing the pool for ten years.  

When I sold my last company in 2007, I made myself a promise that, before I’d start another technology business, I would make the world significantly better for entrepreneurs. My two next companies were set up with that in mind. The first is TheFunded.com, which is a global review site of Venture Capital companies.  At present it is the largest community of CEOs in the world.  We have about 15,000 members and we process about 100 new CEO applications per day. But TheFunded has a problem in the sense that not all applicants are really worthy of being members. That got me thinking about how we could help these entrepreneurs. One option was to develop a ‘light’ version of TheFunded, but we eventually concluded that a good training programme was the most pressing need for these entrepreneurs. Our first programme we tried to extend through remote telepresence.  Even though I think those participants still had a fantastic experience, it was pretty clear that you can’t beat the real thing, where the strength of personal relationships and teamwork come to play. That led to our decision to physically expand the programme around the world.  

Yes, but not in the way that is obvious. The legal context for setting up companies is more cumbersome in Europe compared to the U.S., but we expected that.  In each country we have to customize the contractual side of things to the local incorporation laws.  

 

Another difference I’ve noted is that European entrepreneurs have a tendency to come up with solutions that apply well to the local market; but from a technology market perspective that is too limiting. You need to think global or at least at a European scale.

 

On the positive side, we’ve had a very strong semester in Paris. The French entrepreneurs are just as good as anywhere else in the world.  And I have the test scores to prove it. Brussels right now has the largest number of applicants in Europe. That’s fantastic, seeing that enthusiasm. This is your shot Brussels, I’m excited.  You could see the programme as a type of shock therapy, a defibrillator, to boost entrepreneurship in the region.  If you’re thinking about becoming an entrepreneur I’d encourage you to apply and take the test.  Most people who dream about being an entrepreneur are looking for an indicator of some sort that they’re ready, that there’s an opportunity for them.  Well, this test is highly predictive of entrepreneurial success; I can’t think of a better indicator. Here it is.