OpenOcean’s Patrik Backman outlines opportunities that have been opened up by data and what he sees as the critical ingredients to start-up success.
Patrik Backman is CEO, co-founder and general partner at OpenOcean – an early-stage venture capital firm investing across Europe with offices in London, Helsinki and Amsterdam. Since launching its first fund a decade ago, it has backed start-ups including Booksy and Sunlight.
Backman comes from a background in the tech sector. Before starting OpenOcean, he co-founded open-source database company MariaDB and spent a number of years managing product and business development at MySQL.
‘People used to say that software is eating the world – but, in my opinion, it’s only just beginning’
– PATRIK BACKMAN
What is your experience working with start-ups?
As general partner at OpenOcean, my main priority is to drive new investments into promising early-stage data-intensive software companies throughout Europe while helping those companies to scale and reach positive exits that drive return on investment.
At OpenOcean, our philosophy is to provide more than just funding. General partners actively support founders and start-up teams in scaling successfully, drawing upon their decades of experience as founders and operators themselves. This can involve a great number of things, from product development and business modelling all the way through to go-to-market strategy.
In essence, we use our experience as former founders – in my case at MariaDB/MySQL – to help new founders prioritise and answer the right questions at the right time during the early stages of building a business. Typically, we work with founders on many of these areas prior to first investment.
In your opinion, which areas of science and technology hold the greatest scope for opportunities?
People used to say that software is eating the world – but, in my opinion, it’s only just beginning. There is still a huge number of industries and business operations where software development has yet to take hold.
Digital disruption has paved the way for some major developments in STEM that will continue to provide a range of opportunities in the future.
For example, solutions in the new world of cloud data infrastructure enable businesses to meet user needs at a faster and cheaper rate than ever before. These trends are also redefining big markets of consumer-facing SMEs by providing modern apps that connect SMEs to millions of users in a way that was not possible without these digital advances.
The ability to gather and process data while developing new insights using AI and machine learning has also allowed for an enormous leap to take place in the healthcare industry. Finally, enterprise automation and the next generation of manufacturing automation have both been enabled by innovative data gathering and the use of smart learning and predictive algorithms.
Are good entrepreneurs born or can they be made?
What typically is ‘born’ in a good entrepreneur – or more likely developed during their early life – is their passion and hunger to create something significant, the willingness to take risks and seek impact, and a desire to build a successful solution supported by a growing team and company.
The latter part of this can be made and taught, eg building a company. But the right passion, drive and mentality needs to come from within.
What are the qualities of a good founder?
As I’ve said above, the ambition must be there.
Dreaming big from day one quickly becomes the thought process behind every decision made – in selecting your co-founders, in early technology and product choices, in choosing your go-to-market model and pricing, in all recruitment of talent, in strategy and in the choices you make when seeking investors to support you.
What does a successful entrepreneur need to do every day?
Have a clear vision, and then prioritise and focus – and it’s important to do this while making sure that each move is the right one for the company and its long-term success. Without focus, it can be easy to get dragged into the details or try and solve too much at once.
How do you assemble a good team?
The key thing here is that founders need to lead by example and drive passion, ambition and culture. My advice is to focus a lot on the early hires. The first 10 people you hire will form the basis of your organisation for the road ahead through the culture they form, the work processes they adopt, the ambition they set for themselves and others and the recruiting that they go on to do in the future.
In summary, make sure that you get the culture, passion and ambition right, even if that involves making tough decisions when it comes to your team.
What is the critical ingredient to start-up success?
- Founder ambition, passion and drive
- Choosing the right market and the right problem to solve
- Building the right team
- Understanding the needs of your customers and continuously revalidating these assumptions to learn about shifts in the market
- Identifying and tracking your competitors and learning from them – copy the things that make sense, don’t try to reinvent the wheel
- Trying proactively and failing fast – being OK with failure but learn from your pitfalls
- Choosing a go-to-market model that is scalable
- When seeking VC funding, aim for sooner rather than later – be bold and ambitious in your pitch and aim high
What are the biggest mistakes that founders make?
Very often, founders don’t think big enough early on. This can lead to compromises or decisions that do not favour success. For example, when choosing the product to build, the market to tackle, the strategy to use, the people to recruit, the money to take in, the parties you give decision-making power to etc.
What are your views on mentorship and the qualities one should look for in a mentor?
Make sure that you pick the right investor for you as they will stick with you for a long time. Ensure that they can help you and are people you’d like to work with.
What’s the number-one piece of advice you have for entrepreneurs?
Don’t underestimate the value you can get from asking questions to others, listening to what they say and learning from what they do – but make your own decisions.
For example, naturally good founders have their own strong vision and drive. But while executing that vision, it is smart to actively talk to stakeholders about the opportunities and problems you face and listen and learn from those conversations.
Finally, it’s essential to detect the signal from the noise. Not all advice is advice that you should buy, so be sensible with who you listen to.
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