The Venture Capital Long Game | Andreas Panayiotou

Strategy sounds clean on paper until it hits real markets, real customers, real competitors and real time pressure. I’m joined by Andreas Panayiotou from Notion Capital to unpack what venture capital actually optimises for, why VC is a long-horizon game, and how that reality shapes startup strategy, leadership, and decision-making from day one. 

We get specific about the scaling journey and the uncomfortable statistics behind it: the power law of venture returns, why many companies stall at key revenue thresholds, and what founders often misunderstand when early traction stops growing. Andreas explains the £3m “chasm” where product-market fit is not enough, and why the hardest move is turning founder-led selling into a repeatable go-to-market engine. We talk positioning, focus, sales motion, and the practical need to document what works so a team can execute it consistently. 

Markets do not sit still, and AI disruption makes that painfully obvious. We explore how timing and luck can reshape viability, why some businesses get leapfrogged, and what it takes to pivot without losing the plot. That leads into a sharper theme: speed and judgement. We debate explore versus exploit, Andy Grove’s “let chaos reign” approach, one-way door versus two-way door decisions, and why hiring for intuition and good taste can matter more than perfect data. 

If you’re building, investing, or leading strategy in a fast-changing environment, you’ll take away concrete lessons on startup scaling, go-to-market strategy, and adapting to AI-driven change. Subscribe, share with someone building a startup, and leave a review with your biggest question about scaling past the first revenue ceiling.

Find Andreas here: https://www.linkedin.com/in/anpanayiotou/

Enjoying the show?

Subscribe and leave a review on your favourite platform — it helps more people find the podcast.

🔗 Full episodes, show notes, and resources: https://www.lbiconsulting.com/strategymeetsreality-podcast

📺 Watch on YouTube → https://www.youtube.com/@StrategyMeetsReality

Connect with host Mike Jones → https://www.linkedin.com/in/mike-h-jones/

Transcript

Strategy Meets Reality Setup

Mike Jones 0:00

Most people do think of strategy that way.

SPEAKER_01 0:02

Developing a new strategy.

Mike Jones 0:04

Strategic blind spots when strategy meets reality, strategy, and innovation in the strategy world. Drive their strategic goals. And welcome back to Strategy Meets Reality Podcast. And welcome back to the Strategy Meets Reality Podcast. I'm absolutely delighted to be joined by Andreas Paniatu from Notion. And I'm really excited about this because I've noticed that a lot of the time we talk about or or I probably talk about large organizations, where actually we're going to be talking about organizations from the different various scales. So I'm so happy to have Andreas with us. So welcome, Andreas. Thank you for coming on the show.

SPEAKER_01 0:40

Yeah, thanks for inviting me. I mean you nailed my surname. So well done. I feel like you've been practicing how to pronounce it. Yeah, just to clarify, so um I work for uh a venture capital fund called Notion Capital, so not to be confused with the app Notion. So we we had to rebrand recently just to make that that really clear. So yeah, I'm an operating partner, so not an investor myself. I work with our portfolio companies.

Mike Jones 1:07

Nice. And I'm looking forward to exploring what we mean by that. But just for a bit of background about yourself and anything in context, what you've been up to, you know, um share of our uh listeners.

SPEAKER_01 1:21

Cool. Maybe I'll I'll I'll also kind of share a bit about what venture capital is. I didn't really fully understand until I until I joined. Um so I joined, I started my career in consulting for eight years, didn't want to be a consultant forever, but uh gained some quite kind of useful skills, general consulting skills, but then also around a lot around go-to-market and pricing, monetization. And then joined a former client. So went to a large business that um had been spun out of Thompson Reuters, so got to experience the difference there from kind of small consultancy to a large kind of bureaucratic entity, and then joined Notion Capital about four years ago to be kind of on what we call our platform team. So that's sort of after you've invested in a business helping, supporting the business, basically. And so, yeah, I didn't know a lot about venture capital when I joined. It's a really small industry globally. I think it's a bit of a cottage industry. So there's probably only a few thousand sort of venture capital firms globally. I'd say it's a pretty immature industry. I I was very surprised at how immature sort of internal processes and just the way things are run were run in in industries. So they tend to be very, they're very small companies. So for example, Notion Capital is just 30 people managing, I think, just over a billion in assets under management. And essentially how the kind of industry works is we raise money from what we call limited partners who are looking to get exposure to early stage high growth startups, essentially. And then we we take that money and we deploy it into early stage businesses. And it works kind of on a fund basis. So you'll you'll raise a bunch of money in the fund, you know, a couple of hundred million, and then you'll deploy that over a few years, and then you'll hold those assets for around kind of 10 to 12 years in total. So it's

Meet Notion Capital And The Role

SPEAKER_01 3:30

you know, you're playing the long game, you're you're taking on a ton of risk. So you're going very early, you're really betting on the possibility of kind of a highly improbable outcome. So if you if you invest in, say, 20 businesses, between one and three are really gonna generate the returns, and the rest don't really move the needle. So for each fund, you've got this kind of power law. That's sort of how it works. So what you're trying to do is kind of knock it out of the park rather than go for singles. You want those one or two businesses that just get massive. And then if you look across venture capital firms, you see the same pattern. So you've got the top firms that do really, really well, and then the sort of long tail of actually quite poor performance. Okay.

Mike Jones 4:26

That's interesting because when you think about um, or we've we've challenged on here before about leaders in strategic roles, they're normally very short-term focused. So actually, to have that sort of ability to place your bets and think long-term, definitely over 12 years, um, that's pretty much unheard of or very uncomfortable for a lot of leaders to think about.

SPEAKER_01 4:49

Yeah. And now I've worked quite closely with founders now over the last four years. That's the the key person I sort of interface with and and their direct team. And um, it's a really, it's a really tough journey they're on. So they're on this journey from you know, starting a business with with basic like you know, zero revenue and hopefully getting it to a hundred million plus. And when you take venture capital funding, that's what you're you're sort of signing up for. You're signing up for this very aggressive journey. Um, because if you don't go for that massive outcome, the whole model kind of falls apart. So everyone's sort of pushing and wants you to move fast and wants you to go for a massive outcome. And uh it's it's really sort of impressive uh the sort of pressure that founders have to deal with, the amount they need to also grow as individuals and the number of challenges they need to sort of overcome. It's you know, I I have a lot of respect now for founders, having seen just how difficult that journey is. And and so, you know, part of our role as investors is to help support them as best we can. For example, pointing out some of the common mistakes we see. Every business is unique, but there are kind of patterns and sort of common challenges, and just trying to help them get ahead of some of the more the more common mistakes so that hopefully they make their own mistakes, not the mistake that kind of every early stage business makes.

Mike Jones 6:21

Yeah, I think that's that's that's why, isn't it? What's the point in trading over um old road that you know is not going to work when you can actually focus, especially at that boundary stage where you haven't got much capital, you haven't got much resources, you can't really afford to take that time going over old roads when you might as well take the wisdom of you you can see what can go wrong and you avoid it.

SPEAKER_01 6:45

Yeah. I guess just on your your kind of journey point where it's you know it's a 10, 12 year journey, is I think what we find as well, and you kind of see that with the big outcomes as well, the really big, successful businesses out there, they're still founder run, right? So, like, how long was like Bill Gates there at Microsoft or Jeff Bezos at Amazon or now with Elon Musk at SpaceX? Or I I know the Google guys didn't weren't the kind of, you know, didn't have the CEO position, but they were there sort of with the CEO running the business. So there's something special about a founder still leading that business, even at scale. Yeah, I just I think that's interesting.

Mike Jones 7:25

Yeah, yeah.

SPEAKER_01 7:26

Is that is that because they don't want to let go or um you know, they're still they're yeah, I think they're um not that they don't want to let go because I mean I think every founder is different. Some some actually very early on realize maybe they're not their personality and what they want isn't actually to be the CEO and they want to be the visionary and kind of the inventor sitting alongside others, you know, want to have that role and are good at it. I think, you know, a lot of the times actually they're just best placed to run the business, even if they haven't done it before. Like it's all first time for everyone, you know. Um they might not have run a hundred million dollar business, but they they might get there and find themselves uh running it, but they they tend to learn a lot. So they they develop, they go through this like extraordinary development journey. So the business is developing, but so are they as individuals. And I think I guess because they've been on that whole journey, they understand the business intimately and they've acquired the the kind of soft skills and other, I guess, capabilities they need to be successful at scale. But they've also by that point surrounded themselves by an amazing team, is something we can kind of talk about. Is obviously they don't do it alone, right? So they have great people along that that journey. And they might be and often are completely different people, right? So the people that get you from like one to three million in revenue isn't are not the same people that are with you at a hundred million.

Mike Jones 9:07

Yeah, we've mentioned that before. Well, we've had a conversation about this before when we we last spoke, and um that must be quite a difficult challenge. And I I really want to get into that sort of journey. So, you know, what's that journey from one to one million,

How Venture Capital Bets Work

Mike Jones 9:20

one hundred million? You know, how does the business need to change over that journey from your your perspective? But just a quick one before we get on that is that that must be a really difficult challenge that you've got someone that's a really good person that has got you to say three million, but you know they're just not the right person to lead you to the next thing, and you know it it's not like you'll just cast them out of the business, it just means they're having a role, the role grows probably bigger than them, so they'll stay at a role, yeah, and you'll get someone that can take that next the next sort of cursive level.

SPEAKER_01 9:55

Yeah, yeah, because there's a a real like human element to this, right? Um that I think you don't hear it as much, but in if you're in the venture capital ecosystem, you'll you'll hear a couple of things, you'll hear kind of higher game changers or higher A players. I I don't really like those terms so much because you're kind of stack ranking human beings, right? Like you're an A person and you're a B person. And I don't think that's not actually how things work. It's uh you're a a certain maturity of business and you've got certain challenges and certain jobs to be done, and there are people out there with the skills and capability to overcome those specific challenges at that point in time, and they could be really good at it, right? So it's much more about fit with the task.

SPEAKER_02 10:49

Yeah.

SPEAKER_01 10:50

So so early on, it's really about kind of generalists and builders. So you want the people that can wear many hats and can build the the processes that you need to be successful to kind of be repeatable, but that's quite different to maybe what you need when you're much more mature, when you maybe need more just someone that's more of an operator that can kind of operate the machinery. So it's much more about fit. And so, you know, you'll surround yourself by people that are good at that stage and will help you progress over a year or 18 months. But then if the business is growing, it's a completely different business. I think it's better to think of it as like as really different businesses. So a 1 million euro business, even though it's it's the same business, is completely different to that business at 10, 30, 100 million. It's it's just different. And so, you know, is that person right for that stage of growth? Both for the business, but also for them, because it's probably not what they enjoy doing, because the nature of their role will change significantly. So they'll go from maybe being a bit of a generalist to being highly specialized, and it's do do they want that? Or actually, would they much prefer to go do that journey again? So, you know, you join a business at one million, take them to 10, and then you go do it again. And it's like that's what you're really good at. What you know, keep doing that, because you you won't necessarily enjoy the job, you know, whatever job you have, whatever it becomes, you you you're not necessarily gonna enjoy it either. So I think it works both ways, yeah.

Mike Jones 12:33

And you're right about that enjoyment part, because like you said earlier, there's a lot of pressure, you know, going from this, the stages we're going to talk about, but going from that one million to a hundred million, there's a lot of pressure there. Um, and you've got to sort of enjoy that pressure on that stage that it's in, and some people have a natural preference towards certain things. I'm agreeing with you there. I don't think it is, you know, people that are better, it's just in that environment there are people that are more suitable, have greater fit with that, and then if they've got fit, then you know that's going to do everyone and themselves a lot better. So think about that then. So the journeys from one to a hundred million, um, you know, what does that look like? And what are those various key stages?

SPEAKER_01 13:21

Yeah, so there's these kind of chasms along the way, so it's not this nice, smooth, linear journey, it's these these sort of sigmoid curves, right? So you you get you you're kind of building capability, then performance is improving, and then it sort of goes horizontal a bit, maybe. And so you're trying to get ahead of that and you're trying to stack these curves on top of each other. And we we think of these sort of revenue thresholds just as sort of a heuristic where businesses tend to get stuck, and they tend to get stuck at around the first kind of threshold is maybe at about three million in revenue. And so they've they've built a product which is is valuable, they've made a they've managed to sell it to you know some customers, but then things kind of stall because they haven't, they might have product product market fit, but they essentially haven't worked out how to sell. So they haven't clarified where exactly in the market they should focus and who who they're building for and um how they should position themselves in the market and how they should talk about their proposition and what the sales motion should be, and built like the sales processes you need to be repeatable, and then things kind of stall, and probably during this period they're also burning quite a lot of money. So they raised, you know, I don't know, 10, 20 million pounds, and they deployed that capital hoping the growth would would appear, and maybe they made a few mistakes in their strategy or just some bad luck, and so they've burnt through that capital, the the growth didn't appear, yeah, and so they get a bit stuck, and so that transition from having a product that's like quite strong to actually selling it in a repeatable way is this first sort of chasm. And so about 40% of businesses that raise from venture capital get stuck there, which is like quite a high, it's actually quite a high proportion. Yeah, yeah. Are getting stuck pretty early in the journey.

Mike Jones 15:38

You can see that really, because if you're you've created a product and you you believe in that product, of course you believe it, you've just put a lot invested a lot of money in it. Um it it's it's probably hard at a point then to think why why is no one buying this product? I've got I've got small people buying it, but why is it not growing? I see this in still in

Founders Grow As The Company Grows

Mike Jones 16:00

large organizations for leaders that that challenge they get into this point, but we've built it, and it's almost a bit like field of dreams. Remember that film that film, you know, we build it, they will come. Yeah, which um is not the case. No, that's the case, but I think that's the sort of mental trap that people can get into.

SPEAKER_01 16:16

So there's this saying, I don't know where it came from, but first time founders think product, second time founders think distribution. Because just because you've built like an amazing product doesn't mean it's gonna fly off the shelves. Like no one knows you exist, they might not even realize they have a problem that your your product kind of solves. Because you're probably doing something very innovative and new, right? By the nature of it being sort of uh a startup, there's you know, a degree of invention there that so you've built something that hasn't existed before, so the market like doesn't know about it. And what one of the specific challenges with a startup kind of founder-led business at this stage is transitioning from it's always the founder that secures the first deals. So the founder's wearing many hats, one of which is being like head of sales and you know using their network to win their first deals or just sort of reaching out to people and and getting those first 20, 10, 20 logos. And actually, even though they they don't necessarily come from a sales background or are particularly commercial, you know, they might be very technical, they still close deals and they still actually do quite well at kind of selling, probably because of their passion. And obviously they've put, you know, they've put their heart and soul into this business. So I think that comes through. And then they want to transition from them kind of selling to a professional sales team, and that's when things start to go awry. Um, and there's this myth that you can just, I don't know, just hire a salesperson and they'll be able to sell your baby, and they can't. Um, so one of the things we really hope found as with is to basically document why what they do works, like to really think of it as like a process and get down that down on paper so that when you do bring in that salesperson, they're operating off a process rather than having to figure it out themselves. Yeah. So it's like few people I think are builders, so particularly in sales, like, are you bringing in someone that can build that process, or is it just someone that can kind of operate the process? And there isn't really getting away from it's the founder that has to do that because they're the ones that understand the product, understand the market, have been talking to customers, have closed a few deals, so it's kind of on them, and so they have to they have to put that work in before they kind of scale up sales.

Mike Jones 18:53

I do think there's a bit of and you see it in the wide combinator world, and you see it from the sort of the stories, the post-rationalization of stories about these founder-led companies that have really made it, and I think they do, to your point earlier, make it very seem like a quite a linear, cool like thing, right? They bring quite a bit of um romanticizing about the the founder's journey, but also I've always seen there always seems to be this maverick that turns up at the right time that can sell and get some that sell thing. And I think that's that's something that you see where really what you're saying in it is not like that all. Actually, we need to try and think about how you know what what is it, what does this thing actually really do, and how you know what's the benefit, and really get it into um a proper system, as it were. Yeah. Yeah, because exactly. Then you're not relying on this map this maverick, you're relying on good people that would know the product, know the service, and be able to repeat that and to get the it needs. Exactly. Then it's kind of repeatable sales.

SPEAKER_01 20:02

So just just to kind of continue that journey, right? So 40% fail to get past three million, 60% fail to get past 10. So you've got like this another drop, and then 80% fail to guess get past 30. So when you're at like 30, you'll re you should really be scaling the business. So everything should be fundamentally working. So you've got a product that solves a real problem for a massive market, you've worked out how to position yourself, talk about the product, and sell. So you understand what the sales motion should be. You've got a process which works. Um, marketing is generating demand. You can forecast deals accurately. And then it should just be a case of like putting your foot down and deploying more capital into that business, hiring people and just scaling the thing. But but that's where you've got this like another chasm. And I don't know, it's not it's not the biggest. I guess I guess at each stage you kind of lose 20% of businesses, but yeah, only about 1% get past 100 million in revenue. So it's like one in a hundred VC backed businesses, roughly, depending on how you kind of measure it, get past 100 million in revenue, which is is really like the minimum you want them to be getting to to have any chance of of producing a big outcome.

Mike Jones 21:32

So just a quick one on those, like as you as a VC, what do you do at that point? I mean, you know they're not gonna get to that past that point.

SPEAKER_01 21:39

So what the the the the whole model is built on the fact that that's the reality, right? And so you know that if you invest in 20 businesses, only once if three are really gonna make it big, and then the next sort of fifty percent will do okay, like very respectable, and then and then maybe the Bottom kind of 20%, maybe you're getting your money back, or or it's like a write-off. But that's that's like the nature of the beast. And and as a fund, we want to be, you know, equally supportive to every founder, whether they're growing quickly or not, we're we're we're helpful to you know all of them equally. That's why they take money, choose to take money from nation capital versus another fund. Because venture capital funds they're providing a commodity, right? Like undifferentiated commodity, which is money.

unknown 22:35

Yeah.

SPEAKER_01 22:35

And it's quite it's very competitive. So you're you're trying to win the best deals. And so the way we do that is by adding genuine value after we invest. And and so we we help them with that journey, but you know, as we've discussed, most aren't gonna make it to 100 million. But there's other ways to be helpful, right? So it's for example, you're helping them to still achieve a good exit for you know, based on what they've built, still still getting an exit, which means you know, the the founders and employees can still enjoy some upside. So that they're still, you know, we still want to be helpful, even if they're not they're not on that VC sort of trajectory the whole way.

Mike Jones 23:21

Yeah, yeah, yeah. There's just always that that point, isn't it? There's that that that seed in some will we'll get to for various reasons. It's not really it's not really about them or the sport, it's could just be the environment. The environment has a lot to play on this in the sense of what actually there is fit. You could have a perfect product, but as we've spoken for uh spoke

The £3m Chasm And Repeatable Sales

Mike Jones 23:40

about on the show a lot before, is that you know things can shift in the external environment, different constraints could pop up, different competitors, different situations, which means that that thing is probably as viable as it's going to get at that stage.

SPEAKER_01 23:53

Yeah, I mean we see that a lot, especially with AI now, right? Where if we look at and we've always invested in actually artificial intelligence for quite a while. It's not such a new thing to us. And if you look at some of the, you know, I have one in mind in particular, an artificial intelligence business we had invested in a couple of funds ago. So maybe we've been invested in for, I don't know, seven, eight years. And then, you know, Chat GPT, like OpenAI and Anthropic come out and basically put an end to that business. It's no technology is is is, I guess, has been leapfrogged and it's it's yeah, it's no longer a viable business. And no one saw that coming, obviously, right? So that there's a lot of that going on as well, especially when you're still like not a mature business, you're still dependent on outside capital to fund you, and then and then the outside environment completely changes or new technology, and then it just destroys your it's like creative destruction, right? Just destroying your business, and there's probably nothing you can do about it. That's it's hard.

Mike Jones 25:04

And it is hard because the the rate of change there, you're in that stage from that sort of you know, one to a hundred million, you're not you're not, we're not talking about a fully resourced with loads of capacity and you know extra resources you can just throw at a problem. So you are limited in in the amount that you can respond to certain situations, and there's some situations like in Chat GPT and all that lot, the the amount of investment that that had from the start, you you're not going to compete.

SPEAKER_01 25:36

Right, yeah. Yeah, you might not have the capital as well, right? Like you might these this new technology might come out just as you're trying to raise your next round, and then and then you're just like uninvestable, and it's just bad luck, bad timing. So luck definitely plays a big role, a big role in the journey.

Mike Jones 25:56

Yeah, I think luck is uh underestimated thing in strategy full stop factor, you know, as much as we do say about you know, look to the external environment, but a lot of that really is thinking an opportunity is is appeared and you've identified the opportunity and you've been able to seize on it before someone else has. Um and there is a there is always a bit of luck in there, and I think that gets um a lot of underestim uh underestimated in in how much that can play into uh a lot of people's successes. But yeah, I I I kind of imagine that you know what you're looking for in that, especially when you're thinking about that that sort of start build phase, is that they are they are organizations that are not just going and you know head to head with a previous product is out there and you know just sort of just trying to do the same thing and just see if we can battle harder, probably more on the they they're they're creating the conditions for something new. Could be.

SPEAKER_01 26:58

I mean there there are some which is just pure head-to-head, but it's a proposition which is just far superior. So there's something about it which means it will be far more attractive to customers at maybe a a more attractive price as well. There's definitely I think you know, we there's still kind of businesses that I think fit that profile that attract venture capital funding because you might have propositions that have been in the market for quite a while and they sort of stop innovating and they get a bit stale. And actually, in some markets, maybe they never really solve that initial problem they set out to. Um and there's a a number of players like in a particular segment, but they're all kind of shit, to be honest. And like, and and a founder has noticed that there's there's a market out there, it's an established category, they all suck, like the all their customers hate them, and so there's there's an opportunity to some do something great here, and there's definitely still maybe invention and something unique that goes into that that product, but it's going up against kind of known competitors, and just you know, we'll win based on the strength of the proposition.

Mike Jones 28:18

Yeah, well, that's what brought um blockbusters down, wasn't it? You know, there wasn't much Love DVD wasn't much different. The only thing it was mail order and you didn't get fined for um late fees. You know, that was that was really the only sort of different proposition.

SPEAKER_01 28:34

I I guess you see it a lot with like a lot of product-led organisations. So with Apple just like destroying Nokia's market share, right? Yeah. And BlackBerry's and them just being too slow. So again, like the I guess the environment changing because new competitors enter with new products and you're not able to keep on this sort of treadmill and they fall away.

Mike Jones 28:59

Yeah. Well, it's the viability principle, isn't it? You must be able to move as quick as or quicker than the external environment or your competitors, otherwise you'll you'll cease to exist. And you see, you see that, and that you know, from your experience in that, do you do you find that some some you know founders going through that stage, you know, do they do you find some will less rest on their laurels and they're not really you know keep an eye on it, just they're just you know, set they've got this product, that's it, they're not looking at adapting or changing it as the circumstances changes. They're just invested in this is the product, this is how it stays.

SPEAKER_01 29:39

I don't I don't think any founder is like resting on their laurels. They're um just by the nature of their personality and what they've decided, they've decided to go on this like crazy journey, and they have risk on investors sitting on their board that are also kind of advising and applying pressure.

Mike Jones 29:59

I think maybe maybe resting their laurels is probably the wrong word for me. More about, you know, are they still keeping that one eye on the um external environment in the future and it changes?

SPEAKER_01 30:12

I guess some I guess some are and some aren't, and the ones that aren't don't survive because the failure rate is still enormous, right? So like lost a lot of them must be blind to what's going on outside and so don't react or do pick up on what's going on outside, but don't have the resources and capital to react or for whatever for whatever reason. So I guess it's uh different reasons why they don't manage to adapt and change. Maybe one of the most difficult and probably where you need r really brave leadership is to actively destroy what made you strong previously to make way for the new. So I I think a good example of this, people might be familiar, was actually just acquired by Salesforce, so a business that was called Intercon, which is sort of customer service bots, I guess. When ChatGPT came out, they were really quick to pivot and use that technology, you know, embrace AI to see how it impacts their product, as well as internal processes, how they develop the products of their engineering department, but also the brand, so they rebranded to the the product name, which was called Finn. And so they so they moved away from an established brand which had a lot of respect called Intercom to Fin. And I guess the point is they were they were willing to destroy, to actively destroy and move away from the things that had made them successful,

Scaling Thresholds, Luck, And Timing

SPEAKER_01 31:50

because they realized the external environment had changed so much that they either decided to do this, you know, you either do this proactively and you become masters of your own destiny, or the market's gonna do it to you, and some other AI native uh proposition is gonna come out and uh and take market share from you. So I think that's the best kind of recent example of founders moving really quickly and pivoting the entire business because they had to and they've achieved an amazing outcome. Um that if they hadn't have done that, it could have been, you know, uh put them in a really difficult position.

Mike Jones 32:32

Yeah, I love that. That's uh a great example, and it really brings to life John Boyd's um destruction creation, the ability to destroy your own orientation to be able to enable something new. And I love that and the fact that you know people you know, people look at these changes in the external environment and it it does it does elicit different responses. Like some look at it and they're just like rabbits in headlights and goes paralysis, and then they start defending what they know, and then they just have to react to the situations. And we know if you're reacting, that leads to suboptimal uh options and positioning. And then there's those ones that look at it and think, well, okay, so what does this mean to us? Where's it going? And how what do we need to do now to adapt or shape the environment to our advantage? And it's more that you know, that sort of offensive approach, yeah. Opens up the possibility space, and that's where that's where true sort of strength goes in. But it does come back to what you're saying about that or in you know, destroying, being willing to destroy that.

SPEAKER_01 33:34

Yeah, it's it's interesting you use the word like offensive. I know you come from like a military background, but it's it's interesting. I I think to to run or be part of a high growth, early stage business, you've got to be really aggressive. Um, it's actually there's actually a lot of aggression in there. Like you've got to know what your objective is and you've got to go after it with a lot of energy. I guess that's what I mean by aggressive, not like your not throwing. Like everyone's shouting at each other, but like just you know what you want and you're just single-minded in kind of going after it, and you do it with a lot of energy. I think if you don't have that and you're too kind of thoughtful and slow to react, you're probably not gonna make it. So that there's a time for kind of thinking and being thoughtful, and then there's just a time for action, and I think it's quite aggressive.

Mike Jones 34:35

Yeah, you've got to see that because you you you look at um, you know, a lot of people will will sit and pontificate around what will happen, but we don't know what's gonna happen because it's the external environment, right? It's it's unknown, there's a lot of darkness there, and sometimes you just need that you know, that focused approach to do something, yeah, and see how it responds, and then you can then reorientate quickly to to see what's next.

SPEAKER_01 35:03

Because you don't know what the right answer is exactly. You you're just kind of taking educated guesses and then you're you're trying it. So I I really like this, I think it comes from machine learning explore exploit concept where you're you're trying to learn, you you don't know the answer to something or what you should do. And so you're trying you're exploring maybe the external environment and then you're learning about it, and then when you spot opportunity or you understand what to do, then you that information you've acquired, you're you exploit it. So I think that's where you're you you sort of you have clarity of your objective and direction and and and you try exploit that opportunity, uh, but then you always keep an amount of capacity aside to still explore. So maybe initially it's kind of 80% explorative, and you're just trying things and you have a high failure rate, and then that shifts maybe to 60 to 80 percent exploiting things, and and you have and you make sure people are really focused on that and are going after it sort of aggressively, and then you have another 20% spare capacity to just sort of try things out, tolerance for failure, learn, and then that allows you to spot the next opportunity, which might be you know the next segment or market you should enter or the next product you should develop, whatever it might be. But you need to do both, right? And then and then over time you kind of rebalance them. So early on, you're much more exploritive because you don't know anything really. You're learning faster. And so you're trying to you're trying to optimize for like fast feedback loops, quick learning, talking to like a lot of customers, getting clarity, and then and then driving sort of focus. I really like uh Andy Goves Grove, sorry, Andy Grove's uh book, only the paranoid survive. So he sort of he alludes to this. He doesn't use the what he doesn't talk in the terms I do, but he talks about kind of letting chaos reign. Yeah so he was the CEO of Intel, and uh you know Intel survived over many decades and has had to actually change the focus of its products, etc. Yeah to do so. And the way he did that was to actually let loosen control over the business. So when when he felt like the external environment was changing and he didn't quite understand why, and wasn't sure the bets to make and where to focus the business, he let go of control and he he he let sort of information sort of bubble up to him and experimentation to happen and also more decentralized decisions, right?

SPEAKER_02 37:55

Yeah.

SPEAKER_01 37:56

To kind of find a path forward. And then once he had clarity through kind of the business finding a way forward, but also his own efforts to kind of talk to people about what was going on, when he had that clarity, then he would he would sort of tighten the reins again.

unknown 38:10

Yes.

SPEAKER_01 38:10

So it's sort of playing with chaos, actually using using chaos to your to your advan advantage, letting letting letting letting go of control a little bit actually was helpful.

Mike Jones 38:22

Yeah, because it comes back to what I was talking earlier about the viability principle, you know, you have to adapt. You can only do that with an organization that has the capacity to adapt, and you don't get that through um centralized control. And there needs to be that bit where you are willing to poke and sense to the

AI Shocks And The Courage To Pivot

Mike Jones 38:40

external environment to what's going on, and Intel, they've done it enough times, you know, they've been through you know numerous you know technology changes that they've had to wade their way through. But it comes back to that point about that focus, isn't it? Once you have something and you know that it's you know good enough, better it's gonna work, you need to focus your limited resources to achieving that effect. And I think that's where a lot of companies let themselves down because they get distracted with a lot of noise and unnecessary stuff rather than going, right, let's let's focus now and let's deliver this effect at the tempo that's required, because you know that that opportunity is not going to be open forever, as you you know from that previous story about the your one of your ones with Chat GBT, you know, those things will close, those opportunities will close, or someone else will seize it, so you need that aggression.

SPEAKER_01 39:32

Yeah. Get there fast. I think that the other thing is it's so investors are backing you because you're providing solving a problem for like a massive market, right? So you're investing in businesses that you believe can be huge, but when you're starting out, the the trap you can fall into is by trying to serve too much of that market, and actually you want to do the opposite, you want to find where you have the highest degree of fit early and focus on a very narrow set of customers that generalizes to a massive market. So there's we've got a saying here that you you want to be uncomfortably narrow, yes, and you you have to do that just because you don't have much resource, right? So you're like a team of 20 people with limited capital. You can't, you can't sold, you can't serve a huge market with a lot of different requirements. You've got to pick a subset of the market that you can you can serve well and make really happy, and then you're sort of stacking segments of that market over time. So you're you're sort of mailing a bit of it, and then you're you're exploring the next couple, and then you're working out which one you sort of exploit next, and you just keep doing that, and then your your addressable market sort of expands over time. But a common a common trap is to trying to is trying to serve too broad a market initially because you've been invested in under the assumption that you're gonna serve a massive market, but it becomes a bit of a trap. So you you you and you've got to navigate that as well for investors because they they also don't like the good ones understand you need to focus on like a small bit of the market and then it grows over time, but maybe some of the less helpful ones will feel like oh you're you're kind of you're not being ambitious enough or you're you're gonna get stuck, which you don't want to do, get stuck in this sort of cul de sac serving very specific customer and customer segment when we should be going after a much bigger opportunity.

Mike Jones 41:44

Well, that's that's the the potential trap, isn't it? Because like you said before, you know, that that that journey through is is is a fast journey, and there's you know expected to you know a lot of returns on that. And then that's where it can get people thinking, well, I need to I need to exploit more. Where actually what you know what we're saying is that actually you need to get a foothold, and it's because of you know um Ross Aspie's only variety can absorb variety, you you can only absorb what you can absorb at that point, so you get that foothold, but then you're always asking that that strategic question, you know, if I go this way, will it still give me options? Yeah, and that's where you prevent yourself getting into that um cold de sac, and then you can then exploit to the next bit. You only have to look at history. The most most reasons why battles failed is because they've over-exploited themselves, yeah. And then because they've over-exploited themselves, they can't serve it and they they can't absorb the variety, and then they internally destroy themselves.

SPEAKER_01 42:43

Yeah. I think I think it is really hard though for founders because you have to make like an initial bet of where in the market you you concentrate, and some of those decisions are really hard to sort of reverse or back out of. I think one of the toughest ones is do you go kind of up market or you know, are you are you selling to enterprise? Are you serving enterprise clients, so large, complex businesses, or is it sort of mid-market or SMB? And uh that's a really big decision to make because it's not necessarily so easy to move up or down. It's probably easier to move down than up because you architect the product in a certain way, and then if you try move up, you find might find that you you have to do kind of a lot a lot of we re uh rework.

SPEAKER_02 43:33

Yeah.

SPEAKER_01 43:33

But I guess this is where the luck comes in, right? You you sort of have to put a stake in the ground, you're making an educated guess, might not be the right one, though, in the end. It's I mean, this is the nature of kind of venture capital, is uh it is highly risky.

Mike Jones 43:49

That's the funnel strategy, really. You know, strategy would be boring if it was all about safe bets and yeah, things like this. And that's why I think I do admire the founding. A startup arena is because they've got to make some ballsy decisions and they've got to make it quick. Yeah. Where you know, when you can work in sort of the larger ones, um, you can sit there, you know. I'm very frustrated about I just want you to make decisions.

SPEAKER_01 44:15

Yeah.

Mike Jones 44:16

We don't know it's gonna be right. We just need to, and I still remember I sat in a in a conference room once and seen the leader look to me and goes, how how Mike, how are we gonna know this is gonna work? I said, We don't. Yeah. You know, we've done all the thinking, we can make our assumptions, we're gonna do something, we're gonna test our assumptions, and we're gonna learn from it, and then we're gonna do the next thing. That's all we can do.

Fast Decisions, Intuition, And Good Taste

SPEAKER_01 44:40

And I think it's it's obviously if you if you're a a founder or or you're working for an early stage startup, that that's sort of the culture. That's much more difficult in a large sort of bureaucratic organization. But uh yeah, I think even for founders, they can maybe be too slow on making certain decisions. And actually, whether they go path A or B wasn't actually so important. What was more important is that they made a decision quickly. So there are there are certain decisions I think you can afford to spend, be more thoughtful over, and there's others where you just need to get on with it, and it like almost doesn't matter because if you go path A and you make that decision quickly and you realize it was wrong, you can just back out and go. So Jeff Bezos talks about one-way door and two-way door decisions, right? One-way door are big commitments, it's very hard to back out of them. But they're actually the minority of decisions, most decisions are two-way door, where it's just like if we get this wrong, we'll just we'll just change things. And I think too many people agonize, like treat two-way door decisions as if they were one-way door. And it wouldn't matter if they just made a decision, even if it was suboptimal. Like nothing's optimal, actually. You're not um so yeah, speed, speed definitely matters, which means founders should trust their intuition, actually, because they're making decisions about things that there is no data for a lot of the time, or data is very sparse, but they have an intuition for it and they should kind of trust their intuition. I'm also like having sort of lived this for a few years now, especially early on, where you need to do a lot of sort of building and working out what to do, is just hiring people with good intuition. And almost just like good taste in decisions. Like there's because you'll meet people that are just smart, and it's like on paper, you're really smart and you seem smart, but you just make terrible decisions. There's just something about the way you think, even though you've got the clock speed, that just feels off. Like you just don't, you just don't get it. You don't get what we're trying to do here. And so, yeah, if I were a founder, I would just I would definitely be just testing for kind of intuition and and taste. Like, does this does this person have good taste?

Mike Jones 47:08

I like that. You've got to trust this person, and you want to make sure that they're gonna make the right the sort of good decisions in those um different environments, and I suppose it's exactly the same. You don't want people around that are going to make um in informed decisions, um, or like you said, I like I like where you put it, they've got bad taste.

SPEAKER_01 47:29

Yeah, yeah, yeah. It's not all about kind of what the data says because it's just it's sparse. You've got to you've gotta you've gotta make a decision. So yeah.

Mike Jones 47:40

You think most most big things have happened. There was no data for it. You know, it's and and I think this is the thing where I always caution that, yeah, data's good and fine. People often accuse me of being anti-data. I'm not anti-data, but you know, I'm more about looking at the environment and seeing what opportunities are there, you know. Yeah, because the best ones are going to be the things that are being explored, and you can explore those and you could shape those sooner off. You're gonna create something new and create new lands that um people didn't foresee. Um you know, people didn't foresee that we would be obsessed by our iPhones, you know. Yeah, yeah. So there's there's opportunity there, which data, you know, is not gonna have the whole whole there there's no data on the future. Yeah.

SPEAKER_01 48:30

Right. So and especially in the environment I work on, it's sort of it's all future oriented. So it's about inventions that you know the market doesn't even know exist yet. So data only takes you so far. I guess what's changed with AI is that it's much, much faster to do to gather. So you can be more comprehensive in the information you're capturing. So like every sales call, every internal discussion is recorded now.

SPEAKER_02 49:00

Yeah.

SPEAKER_01 49:00

Um so you're capturing, I guess, larger quantities of information with sort of high fidelity, and you can also analyze it very quickly and spot patterns and also do sort of desk research very quickly, but like very high-quality desk research now, right? You can create like a really detailed, helpful report on an industry in like 10 minutes. So it's it's it's probably it's it's easier to work. I guess it's easier to get the data you you need now.

SPEAKER_02 49:32

Yeah.

SPEAKER_01 49:33

Which probably leaves more space for kind of the intuition-based judgments, because it's like, okay, we've got all the information we could possibly have. Like it's not going to get any better. Now let's make a decision about it. Whereas before it'd be like, oh, let's go run like a customer survey, which takes six months. By the time you finish it, it's like the insight is irrelevant.

Mike Jones 49:54

Yeah, it it you know, the time of opportunity is too slow. And this is why I say the era now is of organizational intelligence. You can build that organizational intelligence um a lot quicker, a lot with higher fidelity, like you're saying, but that should, and that should

UK Startup Careers And Closing

Mike Jones 50:10

have used correctly, give you the capacity of you and your team to look out um and see what that data has given you. Because remember, we always look for you know the the the terrain, the actors, and our own organization, and that's where strategy emerges from. Yeah, I like it. So um, yeah, I've really enjoyed this in insight, and uh again, this is the frustration of having you know a limited time to have these conversations because um I think there's a whole element that we could have gone on to, which maybe would get you back to explore, you know, yeah, the latter end of the journey for them. So, Andreas, you know, from this episode, what would you like our listeners to think more about?

SPEAKER_01 50:54

There's some just fantastic businesses out there, new kind of startups, particularly in the UK. We have a really vibrant ecosystem, particularly in London. So there's just a gr a lot of great stuff coming out. Um I'd say if if no one's kind of worked for a high-growth early start stage business before, and you'd like a career change, I think it's it's a lot of fun and a lot to learn and probably a pretty unique experience. Um, so maybe that's something is like if this is really new to everyone to sort of investigate it a bit and and you know, there's some great opportunities out there. They great businesses are always looking for amazing talent. So, you know, if you want if you want to have a go at a high growth business, I think there's plenty of opportunity out there. So maybe I'd just say encourage people to see what's out there and give it a go.

Mike Jones 51:51

Yeah, yeah, yeah. It you definitely find it um exciting. I'm always you know excited about the the different dynamics of of that that sort of environment of from founders upwards, um, mainly around the strategies and decisions. But it's been absolutely fantastic to have you on. And for the listeners, um, I will share Andreas' details. So if you ever want to get in um touch or find out more, know or more about what Notion's doing, uh Notion Capital, I'll put that. Yeah, um they're doing. Please reach out to him. And if you enjoy this and there's other people you think you get value from it, please like and share to those. But Andreas, that's been absolutely fantastic to have you on. I really enjoyed the conversation. Thank you for joining me. Yeah, me too. Thanks for having me. No, a pleasure.

SPEAKER_01 52:36

Cheers. Take care. Bye.