Every investor has a story about the megadeal that they missed. But Brent Hoberman has a doozy.
Around 2010, Hoberman was introduced to a young founder who was thinking of expanding his startup from the US into Europe. As Hoberman recalls it, Goldman Sachs’ investment banking boss, Gregg Lemkau, engineered the meeting.
The young entrepreneur was just looking for advice and not funding. After all, Hoberman was one of the best-connected entrepreneurs in Europe, and this was before the likes of Skype or Skyscanner had sold. Who better to advise an American on building a business on the continent?
“So I gave him advice,” Hoberman said, but he felt like something was missing. “I just emailed the Goldman’s guy back saying: ‘Next time someone like that comes along, can you ask me not to give advice but to give them money?'”
The young founder was Travis Kalanick, and the startup was Uber. The cab-hailing company would have been worth about $60 million at the time. It’s now thought to be worth $72 billion. Hoberman manages a chuckle as he tells the story.
Brent Hoberman wants to create 200 British startups through his Founders Factory accelerator
A self-assured and well-dressed old Etonian, Brent Hoberman made his name and is still frequently referred to as the cofounder of Lastminute.com alongside Martha Lane Fox. As CEO he floated the company in 2000, then sold the business to Sabre Holdings.
These days, he is equally known for his network. He is in and out of 10 Downing Street, chairs Prince William’s cyberbullying task force and, in the decade or so since Lastminute.com, has built up an empire of other ventures.
Hoberman’s current projects include his accelerator and incubator Founders Factory, a fund called Firstminute Capital, and the Founders Forum network for top-tier entrepreneurs. He also cofounded furniture site Made.com.
He turns 50 this year, but in person is energetic and schoolboyish, prone to bursts of laughter and the occasional jibe. At one point, he jokingly refers to Business Insider as clickbait.
Matthias Ljungman, a partner at venture capital firm Atomico and an early backer of gaming giant Supercell, told Business Insider: “He has a mind like no other when it comes to creating networks and bringing people together. He is a master at engineering serendipity, and in doing so, [is] raising the overall bar for the European tech ecosystem.”
Channelling corporate venture capital is a smart move, peers say
At Founders Factory, Hoberman and his team take in fledgling startups, house them in the accelerator’s Kensington headquarters, and provide £30,000 in cash in exchange for an approximately 7% stake. That money comes from corporate backers, including the Guardian Media Group, and L’Oreal.
Targeting corporates is a smart move, peers say. Big companies, desperate to glean some startup cool and find new places to invest their money, are making more capital available to invest through their venture arms. According to data from Beauhurst, the number of corporate venture capital deals in the UK jumped from 28 in 2011 to 65 last year. Hoberman is helping big firms find a home for their cash.
“In London, we are the corporate HQ of many world-leading companies,” Hoberman said. “The idea was to play to that competitive advantage of our location, and then to play to the fact I had been on big corporate boards. I had seen how hard it was to innovative and seen how much of a necessity it was for them to do more.”
In two years, Founders Factory has facilitated 60 pilots between startups and corporates. Around 20 of those have turned into paid projects. And the startups have gone on to raise almost £100 million in further backing.
One example partnership is EasyJet’s integration of LuckyTrip into its mobile app. LuckyTrip went through the Founders Factory programme in 2017 and allows travellers to find a holiday best tailored to their needs.
Good entrepreneurs are obsessive and dysfunctional
With 70 startups passing through Founders Factory’s doors so far, we asked Hoberman what makes a good entrepreneur. He gave a three-part answer.
Firstly, he said most of his angel deals were made on “gut instinct” and that he seeks passion. Secondly, he asks whether he himself would have worked for the company’s founder as a 25-year-old. And the final quality he looks for in entrepreneurs: “Are they ever so slightly dysfunctional? You don’t want ordinary, you just want extraordinary.”
It is unfashionable in 2018 to suggest that the Travis Kalanicks of the world deserve funding. But Hoberman said founders need to be passionate, even obsessive.
“I can understand people working for relatively obnoxious people if they are extraordinary, and they are going to learn from them, and they are the best at what they do,” he said. “It is this fact that beta players are fine working with average people, alpha players only want to work with alpha-plus leaders.”
Reading Walter Isaacson’s biography of Steve Jobs — a notable brilliant jerk— taught Hoberman that occasionally it was OK to be unreasonable as a CEO.
“When I was being at my worst running Lastminute.com, I think I was at my best,” he said. “I was at my most impatient, difficult, most aggressive as a CEO… I hadn’t realised that that was OK. The best people were responding quite well to that.”