Founder, lecturer, investor and mentor Joe Haslam talks scaling, team-building and learning business lessons from sport and Harry Potter.
Joe Haslam is the executive director of the Owners Management Program at IE Business School in Madrid. The Financial Times ranks IE first among business schools in Europe for teaching entrepreneurship, and this programme is specifically designed for start-ups that want to scale.
Haslam is also the chair and co-founder of Hot Hotels, a mobile-only last-minute hotel booking app targeting users across Europe. Hot Hotels sells hotel rooms in 54 countries and was the first start-up founded in Spain to be accelerated by the Techstars programme in the US.
‘Hanging out in Google and Facebook has made us complacent. Ireland has no indigenous tech companies on the NASDAQ anymore. We should really be doing better than we are’
Describe your role and what you do
About half my time is spent as a professor at IE Business School and the other half I spend actively running companies.
I was on the founding team of Marrakech, a Dublin company that raised $75m during the dot-com era. This gave me an interest in the concept of ‘scale-up’, the phase which happens after start-up.
The Owners Management Program – the programme I run – is designed to help founders and owners meet the challenges of scaling up. As anyone who has been through the experience will recognise, these are completely different to the challenges of starting up.
To defend myself against the GB Shaw taunt (“He who can, does; he who cannot, teaches”), I spend the rest of my time in the start-up trenches. I co-founded Hot Hotels and we were the first start-up founded in Spain to be accelerated by the Techstars in the US. So I spent some of the summer of 2015 in their accelerator in Boston, which is one of the global centres for travel technology.
I’m also on the boards of two other companies: a fintech start-up here in Madrid and an AI platform for secure B2B comms in London.
In your opinion, which areas of science and technology hold the greatest scope for opportunities?
The elective I teach in the MBA program at IE is called ‘Trillion Dollar Opportunities’, and we look at how entrepreneurs can use exponential technology to solve problems that were once only solvable by governments and large organisations. Specifically, we look at what artificial intelligence, robotics, synthetic biology, cryptocurrencies and 3D printing make possible in the fields of energy, agriculture, telecoms, health, education and space. Of everything we look at, a gene-editing technique called CRISPR is the biggest OMFG.
— Joe Haslam ☘ (@joehas) January 12, 2017
Are good entrepreneurs born or can they be made?
I’m with MIT’s Bill Aulet on this. Entrepreneurs are not born. There’s no such thing as an entrepreneurial gene. Many of the skills needed to get the job done can be learned along the way and I see this first-hand all the time in IE Business School. Importantly, though, Aulet adds that it helps a lot if you are not afraid to be different and if you have something to prove. His quote says that good entrepreneurs have “a spirit of a pirate but the discipline of a Navy SEAL”.
Anyone can be an entrepreneur, though, and, to borrow from Steve Blank, there are six different kinds: lifestyle, small business, scalable, buyable, social and inside a large company. It’s not ‘be Steve Jobs or go home’.
However, if someone is prepared to employ you, it’s probably not a good sign that you have the skills to create something really big. Adam Grant’s Originals: How Non-Conformists Move the World or The Misfit Economy: Lessons in Creativity From Pirates, Hackers, Gangsters, And Other Informal Entrepreneurs by Alexa Clay and Kyra Maya Phillips give great insights into why this is usually the case.
What are the qualities of a good founder?
I don’t believe in founders, I believe in founding teams. If you can’t get at least one other person with you and are not prepared to credit them as a founder, then that’s a red flag. I’m a great believer also that you need to have XX chromosomes as well as XY chromosomes. It still shocks me when I see a founding team of four guys.
‘The data is in. We know companies with at least one female founder deliver superior returns’
The data is in. We know companies with at least one female founder deliver superior returns. Similarly, with diversity in general. Yes, you can move faster at the beginning if you all know each other from childhood but, in my experience, the input of non-native English speakers or people who have lived in many countries is worth having.
I’m a fan of the three-person management team: a Qual, a Quant and a Sicario (the Mexican Spanish word for a ‘hitman’). The Qual, or Qualitative, is the face of the company who gets out there and meets customers, investors and the press. The Quant, or Quantitative, spends all day on Excel, manages the cash flow and knows at any time whether the company is winning or losing. The Sicario fixes problems (of which you can expect many).
What does a successful entrepreneur need to do every day?
The first line of The Customer Development Manifesto says: “There are no facts inside your building, so get outside”, and if there is anything I’ve learned in the six start-ups where I’ve worked, it’s the truth of that statement.
In The Huffington Post, the six-time entrepreneur Martín Varsavsky wrote an article, ‘On Managing My Time’, where he says: “I work from 9am to 2pm. Afternoons are for family and sports.” His point is that, as the CEO and founder, he needs to trust his team. If you need to be in the office for work to occur, then you are going nowhere. He also needs time and space to get the important decisions right. They are more likely to come on a mountain bike than in a corner office.
On one board that I’m on, the CEO presents extremely detailed reports to which my reply is: “C’est magnifique, mais ce n’est pas la guerre!” What I’m very pretentiously saying here is I want to talk about the future and not the past. What are we doing to get an edge? What bets are we laying and what waves are we trying to catch?
What resources and tools are an absolute must for your arsenal?
I start every day by looking at look at a one-page Leftronic chart, which tells me how many hotel rooms we sold the previous day as well as data, such as how we are doing against that day last year. Every company should have an online chart like this available to all employees and investors.
The older I get, the more I realise the importance of diet and looking after yourself. You are no good to anyone if you are if you are constantly sick and tired. I’m fortunate that the food and drink culture is different in Spain to Ireland. Also, the good weather helps you to get out and about.
‘In 10 years’ time, no executive will be without a mental coach’
Although start-ups are a marathon and not a sprint, there are key moments that you have to peak for. Leo Messi only ‘works’ 180 minutes a week, the rest of the week is peaking for these moments. Business is slowly learning the lessons from sport. 10 years ago, very few people in sport paid attention to the mental side, now all the top people do. In 10 years’ time, no executive will be without a mental coach.
How do you assemble a good team?
If you haven’t already, then go read this New York Times article – ‘What Google Learned From Its Quest to Build the Perfect Team’ – about Project Aristotle in Google. Next, listen to Patrick Collison on hiring at Stripe from Reid Hoffman’s Blitzscaling class at Stanford. (If you prefer to read, then the main points are in this blog post: ‘Tips for building a great team from Patrick Collison of Stripe’.)
Like Peter Drucker says, “Culture eats strategy for breakfast,” so it is the thing you absolutely have got to get right. Patrick talks about taking the time to get the early hires right and these will then set the culture and attract the best people. Retaining the best once you have them should be a constant priority. A sure sign that a company is not on an upward curve is when good people are leaving.
What is the critical ingredient to start-up success?
In his book, Innovation and Entrepreneurship, Peter Drucker says: “Entrepreneurship is risky mainly because so few of the so-called entrepreneurs know what they are doing.”
In the UK, fewer than 4pc of start-ups have 10 or more employees after their first decade. Attention is often on availability of venture capital or technical skills, but what start-ups most need are management skills.
We all think we are great at hiring people, making sales pitches, designing products etc – but being among the best 90pc is not good enough. To be successful, you have to be among the very best. This requires an attitude of lifetime learning. Like the basketball great Ray Allen asks: “Do you want to fit in, or do you want to embark on the lonely pursuit of greatness?”
A good case is to talk about Intercom, now Ireland’s best-ever funded start-up at $115m. My session in the Owners Management Program on product design is about 50pc Des Traynor. Posts like ‘Not all good products make good businesses’ on the Intercom blog or the ‘Jump-starting product strategy in a start-up’ presentation he gave at The Lean Startup Conference 2013 show that they have thought very deeply about the issues and sought out best practice. And not every one does.
What are the biggest mistakes that founders make?
The biggest is just not trying. I see a lot of failed start-ups who, if they are honest with themselves, didn’t put everything on the line. Some founders learn this in their first start-up and go on to do better the next time, but others continue to lack the courage to really have a real go.
You need to have a ‘failure is not an option’ mindset. Mark Zuckerberg, when asked why Facebook has a billion users when Friendster and MySpace had a head start, said: “We just kinda cared more than those other companies.”
Another example, if you haven’t seen it, is the famous ‘from the depths of hell’ race that Phil Healy ran for UCC. That ‘never say die’ attitude is what it takes.
Who is your business hero and why?
As a part professor and part businessman, I’ve always admired Dr John Teeling. At UCD, people used to sneak into his lectures just like they now do with mine. Also, he steers clear of property, which is the one asset class I also avoid.
I worked as a producer on the Harry Potter video game Goblet of Fire and that got me interested in the story of JK Rowling. First, she turned the adversary of a marriage break-up into a success. She talks about this time in a speech she gave in Harvard: “And so, rock bottom became the solid foundation on which I rebuilt my life.” Next, there is the respect for the craft. She plotted Harry Potter to extreme detail before she wrote a word. And, finally, there is the letter she wrote explaining why she chose to remain a domiciled taxpayer. (“This, if you like, is my notion of patriotism.”)
In 1936, four men were born in Ireland: Feargal Quinn, Tony Ryan, Tony O’Reilly and Michael Smurfit. They remain the benchmarks. Each of them has a biography that is worth reading. Then there’s the gang of four behind Primark (Arthur Ryan, Breege O’Donoghue, Seamus Halford and Paddy Prior). More people in Spain have bought something in a Primark than in a Zara. Eddie O’Connor turned getting fired from Bord na Móna into Airtricity and a €50m cheque. Chris Horn and the other founders of Iona not only made the NASDAQ but also spawned ‘the Iona mafia’. Pat Phelan, Jerry Kennelly, Colm Lyon, Ray Nolan, Brian Caulfield, Dec Ryan and Barry O’Callaghan all deserve a mention. As does Gillian Bowler, who sadly died recently.
Finally, we recently had John O’Shea of Goal in Madrid to speak at IE Business School. He has saved hundreds of thousands of lives at a minimum. I’ve never met anyone who has achieved anything like he has.
What’s the number one piece of advice you have for entrepreneurs?
Get help! Many founders I talk to don’t really know the game that they are in until it’s too late; like a Sherlock Holmes not knowing his adversary is Prof Moriarty. You have to realise that the odds of success are really low and that, unless you do something special, you will not be successful.
When we started Marrakech in 1998, there was nothing like the resources that are available now on the internet. Yet I still meet founders who don’t believe they have anything to learn from reading the core entrepreneurship texts, taking courses or watching online talks.
As a start-up location, Ireland has a lot of advantages. Hanging out in Google and Facebook, though, has made us complacent. Ireland has no indigenous tech companies on the NASDAQ anymore. We should really be doing better than we are.