‘Start-up founders are like scientists carrying out experiments in business’

24 Nov 2022

Image: Cristobal Alonso

Startup Wise Guys’ Cristobal Alonso discusses the areas of tech to watch, the qualities of a good founder, and the three big mistakes that start-ups make.

Cristobal Alonso has more than two decades of experience as an entrepreneur and investor. He is now the global CEO of Startup Wise Guys, a European B2B start-up accelerator and early-stage investor.

Since joining in 2016, Alonso has brought the organisation from three to 60-plus employees. He is spearheading efforts to broaden the accelerator’s reach and has led the opening of offices in Latvia, Lithuania, Denmark and Italy, as well as launching partnership accelerator programmes across Europe and in Africa.

Alonso has worked at start-ups and scale-ups, and this is his third time being a CEO. He is the co-author of Perform: The Unsexy Truth About (Startup) Success.

‘People will carry you through the long-term vision, as in the short-term start-up life there will always be suffering!’

In your opinion, which areas of science and technology hold the greatest scope for opportunities?

If technology such as AR or XR manages to be constructed and applied in a human way, then this will create enormous opportunities. The catalyst here will be to develop this tech in a sustainable and ethical way.

To me it’s about connecting the metaverse with the universe. Ready Player Me, one of our portfolio companies, encapsulates that well. Right now there are many virtual experiences that are lacking interconnectedness, lacking common denominators. These are the real building blocks that are needed right now, and not necessarily one single VR platform.

Additionally, cybersecurity is another vertical that has been gaining much traction in the last few years. With the current events, there is much opportunity for data-driven cybersecurity. It is inevitable that, as a larger percentage of the economy becomes digitalised, more of it becomes targeted by cybercriminals. Every business will need cybersecurity measures.

Lastly, fintech and micro finance are big areas in developing countries at the moment. It is enabling a lot of growth and globalisation of business transactions. We only need to look at Nubank in Brazil or Lidya in Nigeria to understand the potential of technology to help the unbanked and underbanked.

What are the qualities of a good founder? Are good entrepreneurs born or can they be made?

At the end of the day, I believe that good founders are good leaders. Although I am sure some are born that way, I believe that leaders are developed through coaching, mentorship and finding inspiring role models.

Some people’s tolerance for risk is higher than others by nature. There are other traits important to start-up leadership where we see similar patterns, so we could argue that ‘genetics’ plays a role.

In my opinion, the top four qualities that entrepreneurs should have are these:

  • The ability to deal with uncertainty, feel comfortable with a certain risk, which is an inherent part of the job
  • The ability to be ambitious but at the same time be strategic – many people can be visionaries but cannot pave the steps strategically in order to reach that vision with a long-term view
  • The ability to motivate people – this comes through listening, understanding people’s needs, communicating them and meeting them, which is so key to leadership
  • The ability to have fun whilst on your journey and maintain other passions around this baby which is the start-up – work-life balance is always going to be different for entrepreneurs and there’s no single right answer, but rather a matter of finding comfort and fun in new ways
What does a successful entrepreneur need to do every day?

Start-up founders are like scientists carrying out experiments in the business world. The key to succeeding with these experiments is to iterate and adjust variables, settings and fine-tune the machine. Trying again and again, and getting back up if they fall.

I think that planning, adaptation, reflection and replanning are the daily elements needed for an entrepreneur. Many things will come to change over the course of time, so it’s a matter of being flexible whilst knowing where your vision lies. This also means that a successful entrepreneur has to behave in a values-driven manner, so define these well!

What is the critical ingredient to start-up success?

The critical part of a good start-up is people. The best thing you can have, at any given time, is unity around the vision of the company accompanied by the skills and tools working towards it.

No matter how bad the market is treating you, the people will carry you through the long-term vision, as in the short-term start-up life there will always be suffering!

And this is why leadership is so important. Leaders capable of motivating people in the toughest of times are the ones that have the highest chances to succeed.

How can founders assemble a good team?

To assemble a good team you have to understand the purpose and values of the company. If you are able to define a long-term vision, you’re defining how you operate and sell to people based on that. Package all of that into a ‘story’.

It’s also good to surround yourself with complementary people. Of course, their skills and abilities, but also temperaments and personalities.

A team should be diverse in all the metrics: age, gender, nationality, which is an amazing ingredient that brings a lot of opportunities.

The last element is respect. Surround yourself with people who can give and receive respect.

What advice do you have for founders who are starting to look for investment?

The advice is to not take just any money from anyone. Understand what you really need from an investor, and be as selective as you can.

Take money from people who enjoy your vision and who enjoy working with you. You’re entering a long-term relationship. Your investor should enjoy working with you, you must know they are investing in the vision and not only the financials.

What are the biggest mistakes that founders make?

In my time I’ve seen three main mistakes happen over and over again.

One big mistake people tend to make is to hire on skills only and then discover you don’t like that person and that they are not aligned with the company.

The second mistake is to create a company based on investor metrics rather than growth metrics.

The third one is to not understand the path to profitability, and believing that someone else will be paying for the party.

What are your views on mentorship and the qualities one should look for in a mentor?

For mentorship, you need someone from a specific industry, someone who has the right experience and expertise, who has the ability to ask the right questions and listen.

Mentors need to understand that they are mentoring someone else’s company and not their own. Their experience might lead them to draw parallels, so it’s important they understand that although it might be very similar, the mentee’s business is theirs and is different.

Lastly, it is great if the mentor has a large network that can be put at the entrepreneur’s disposal.

What’s the number-one piece of advice you have for entrepreneurs?

Have fun, all the time! Surround yourself with people that allow you to fulfil your vision! Always aim higher than you think!

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