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Brent Hoberman has transformed the word "founder" into a global project. It all started in 2005 after he sold lastminute.com, the company he formed with Martha Lane Fox. Left with time on his hands, Hoberman teamed up with financier Jonathan Goodwin and organised a get-together for 80 entrepreneurs. It didn't go well. "The floor wasn't good," he says. "The people we'd invited were too successful. There was no energy." But, even so, the idea seemed to have potential.
Read more: Entrepreneur First doesn't find startups, it builds them
Fast forward to 2017 and Founders Forum, as the event is known, has become an institution. Held annually in London and repeated in cities across the world, the invite-only gatherings attract the cream of tech and business talent. Reid Hoffman co-hosted in New York in 2012 and Eric Schmidt gave a keynote speech in London in 2014. As the forum has grown, Hoberman and his collaborators, including Martha's brother Henry Lane Fox, have added to it. Today, Founders Forum's 3,000-member "private network" supports a sprawling brand comprised of six projects, including the consultancy Founders Intelligence, recruiting agency Founders Keepers and AI-powered entrepreneurial talent-spotter Founders of the Future.
Hoberman even has a nonprofit - Founders Forum For Good. Launched in 2015, the forum's Founders Pledge asks entrepreneurs to donate at least two per cent of the personal proceeds of any future acquisition to social causes. It has attracted more than 500 pledges, including the founders of Jawbone, DeepMind, Farfetch and Hampton Creek. In September 2016, Mountain View accelerator Y Combinator announced that it would be recommending the programme to its members and alumni.
How did the idea take shape? As a sub-section of the main Founders Forum event, where attendees expressed a desire to give back. Now Hoberman is expanding the Forum's most ambitious offshoot: accelerator-turned-incubator Founders Factory. For the 48-year-old, it marks a return to entrepreneurialism, after spending years at PROfounders Capital, the investment firm he set up in 2009. "I decided to leave in mid-2015 to do something really world-class," he recalls, sitting in the glass-fronted meeting room of his soon-to-be-vacated Kensington offices. (In January, the company's 60 staff moved down the road to The Daily Mail and General Trust-owned Northcliffe House.) Hoberman is gravelly voiced and gossipy, with tanned skin dark against his trademark white shirt. "I didn't want to go and work for another fund," he continues. "I don't want to feel like an employee, whether that's right or not. And I like building something."
What Hoberman is building is a startup programme backed by A-list corporate partners including L'Oréal, Aviva, easyJet and the Guardian Media Group. Early-stage companies that get into its six-month programme - the acceptance rate is one per cent - are given mentoring, office space and contacts, plus £30,000 in seed capital. In return, they give a three to ten per cent stake to the accelerator - and, in turn, its corporate shareholders.
For Hoberman, this alliance of disrupters and incumbents solves the so-called "innovator's dilemma" - according to which big, established companies are bound to be overtaken by younger, faster competitors. "I was asking myself if corporates could innovate," he says. "I knew it was hard to do so for companies' boards, with things like consensus management, conflicting priorities and so on. That was the genesis of Founders Factory." It's also a way of leveraging Europe's competitive advantage. As Hoberman, who sits on the board of The Economist and TalkTalk, among others, says: "What's Europe got that's world-class? Corporates. Silicon Valley has fewer that aren't tech."
Each of Founders Factory's corporate backers invests in startups in its field - L'Oréal funds health and wellness firms, whereas Guardian Media Group focuses on media ventures. "It's like free R&D for corporations," Hoberman says. But isn't it potentially damaging? What if a media startup, for example, builds a rival to The Guardian? "We'd love to do it and The Guardian would support it," he insists. Where others might see tension, Hoberman sees a win-win. "We help entrepreneurs and the side effect is that we are helping corporates, too."
Not everybody agrees. "In general, accelerators' track records are chequered," says John Mullins, professor of entrepreneurship at London Business School. "It is very hard to build a successful entrepreneurial venture. Incubators or accelerators don't seem to be better than entrepreneurs working on their own." Neither, he says, are they particularly profitable for corporate backers - who often pressure accelerators to spend their money, resulting in investments in less-than-stellar startups. Still, Mullins admits, being part of a galaxy of interconnected ventures might give Founders Factory a leg-up over its competitors. "Another key difference is the people who are running it," he adds. "They can claim to give good entrepreneurial advice, unlike others."
Hoberman predicts that by 2021, Founders Factory will have launched 200 startups. It's already five per cent of the way there: since making its debut in 2015, it has helped launch 11 new companies, including data-visualisation studio Flourish and FitWell, Turkey's number-one fitness app. Now Hoberman is building the next piece of his jigsaw - a European-focused seed fund, with Skype co-founder Niklas Zennström's Atomico named as the first investor, which today (12 June) announced that it had raised $60m (£47m) in funding. One problem: the name Founders Fund belongs to US venture capitalist Peter Thiel. So Hoberman has gone back to the start. The name of his new fund? Firstminute Capital.
Update April 3 2017: Founders Factory has announced the first two artificial intelligence startups accepted onto its accelerator programme: AI research assistant Iris.AI, which automates literature searches for scientific researchers, and illumr, a University of Birmingham spin-off that visualises patterns in organisations' data.
Founders Factory's AI startups are backed by CSC Group, China's third largest private equity firm and a big tech investor – witness its $400 (£320) million investment into "LinkedIn for startups" Angelist in October 2015.
Watch an interview with the founders of Iris.AI and illumr below:
1. Poppy Gaye Co-founder, Accelerate-Her; head of partnerships and producer, Founders Forum 2. Brent Hoberman Co-founder and executive chairman, Founders Factory 3. Pierre-Simon Ntiruhungwa Head, Founders of the Future 4. Jonathan Goodwin Founder, Lepe Partners 5. Sandra Steving Head of Innovation, Founders Intelligence 6. Henry Lane Fox Co-founder and CEO, Founders Factory 7. Richard Segal Partner, Founders Keepers 8. Hannah Blake Business development lead, Founders Factory 9. Greg Kennaugh, Chief Operating Officer, Founders Forum 10. Frank Meehan Co-founder and CEO, Smart Up 11. Tim Groot Co-founder and CEO, Grip 12. Farah Kanji, Head of talent, Founders Factory 13. Rob Chapman Managing director, Founders Intelligence 14. Vanessa Gstettenbauer Senior investment manager, Founders Factory 15. Justus Brown Head of product, Founders Factory 16. Lubomira Rochet Chief digital officer, L'Oréal Group 17. Rob Haines Director, Founders Intelligence 18. Louis Warner, Chief Operating Officer, Founders Factory 19. Amy Grimshaw Head of PR and communications, Founders Factory 20. David Goldberg Co-founder and CEO, Founders Pledge 21. James Millett Director of marketing, digital and brand, easyJet 22. Anaïs Benazet Head of events, Founders Forum 23. Paul Heybourne Head of digital innovation, Aviva 24. Alan Hudson Chief investment officer, GMG 25. David Hickson Head of corporate development, Founders Factory 26. George Northcott Co-founder and head of business development, Founders Factory 27. Paul Egan Chief technology officer, Founders Factory
This article was originally published by WIRED UK
