In December 2012, I wrote a piece about Real Ventures investor John Stokes, calling him “the Gordon Ramsay of Canadian Startups.”
For a journalist, Stokes was a story waiting to be told: a guy coaching dozens of new web startups every year, often pushing and challenging them to their breaking points. Coincidentally enough, the name of a 2012 reality show depicting a FounderFuel cohort was called Make it or Break it, in which a calculated, tough-talking Stokes could be seen at his finest.
He’s credited by many of his closest colleagues as being perhaps the driving force behind what would become the Montreal startup community. He came to the city in 2007 and started a blog called MontrealStartup.com. Within a few years he’d hook up with partners Alan MacIntosh and JS Cournoyer to form Real Ventures, the city’s first seed-stage venture capital firm. Before that, say experts in the community, investments into tech startups were extremely rare.
Recently, MTLinTech quizzed the investor on everything from preparing startup founders for DemoDay to what separates the best founders from the rest.
MTLinTech: The “Gordon Ramsay” article ended up getting quite a bit of attention (and laughs) from Canadian startup folks. Did you agree with the comparison?
John Stokes: When you look at Gordon Ramsay, he uses techniques that try to elicit a change in the emotional state of the entrepreneur. That’s exactly what I try to do. Sometimes that results in trying an aggressive approach or a “take-no-prisoners” approach. That’s the one that’s most obvious, but if you look at Ramsay, there’s a lot of other things that he does.
There’s a real genuine relationship that’s formed between him and those people on the show, not because he gives them shit all the time, but because he tries a variety of different things to get it out of them, and that’s only when you realize nothing else is going to work. It’s like, “Okay, now I’ll try the ‘be over-aggressive to make your point.'” It’s all about, “How can I get this person to get where I want them to be?” Let’s try to appeal to their mind. Let’s try and appeal to their intellect, and then let’s try and appeal to their ego. Let’s try to get them to do it as a favour to me. Doesn’t work? Okay, do it as a favour to someone else. Now let’s get them to try and do it just to show me how wrong I am.
Ramsay uses many different techniques to try to get them to understand the mindset that they currently have, which ultimately needs to change.
MTLinTech: You’ve been coaching startups for almost five consecutive years within the FounderFuel program. What’s the most common thing you find yourself working on with new founders?
JS: The concepts of fog and clarity. If entrepreneurs can clear away this notion of fog, it leads to clarity in how they communicate and run their business.
This sense of fog is something which is something I’ve never personally been comfortable with. I don’t like operating in fog. And I didn’t know that I was in fog until I got older and got through this process. I’ve realized now that the more I can help people clear away fog, the more they’re going to really understand what it is they see and what it is they don’t see.
The biggest issue in startups is not being clear enough on every action that you take. In fact, I think one of the biggest issues in life is not being clear enough on every action you take.
One of the words I lookout for when I speak with entrepreneurs is that word “and”. How many “ands” do they put in the description of what they’re doing. They more “ands,” the more fog. And that lack of clarity will kill your business.
Clarity doesn’t just come from knowing what you’re going to do, it more comes from the specific choices you’re going to make of what you’re not going to do. The more “ands,” the less tough choices you’ve made. Therefore, the less clarity you’ve got on what action your taking.
MTLinTech: You’ve helped a lot of founders with your at-times brutally honest approach. But as new batches of fresh faced founders come to FounderFuel, is it frustrating having to go through the same process again and again?
JS: The emotion I feel most often as a VC is frustration. It doesn’t matter what company you’re dealing with or what cohort. But this is for a variety of different reasons. I think one of the reason is because I can see where someone’s state of mind currently is, and I can understand that in order to succeed, their state of mind needs to change. But, often it’s just not changing fast enough.
Their mindset is currently here and I know it will get there, it always does. How quickly can I get it to go from here to there?
MTLinTech: What’s it like during the final weeks of the program as you prepare companies for FounderFuel’s glitzy DemoDay, where startups pitch their businesses on stage in front of a crowd of nearly 1,000 investors, media and others?
JS: DemoDay is something that I love and hate. It can be very tiring, but I think the companies in FounderFuel really appreciate how much we want to help. They see how much effort and time we put in. It’s so immensely draining, the two to three weeks before, it’s like I’m almost dead. But, seeing how clear the founders are on stage is the reward.
A lot of people have talked about FounderFuel and DemoDay, and unless you really had to go through it, I don’t believe you can truly appreciate it.
MTLinTech: You’ve been labelled an expert at preparing people at clearly communicating their business, which seems harder than it sounds. What have you learned about new founders?
JS: I now realize that it’s not my problem if it’s not clear what your startup is doing. It could be that you’re not just very good at explaining it, and that’s often why people like me help them understand [their business] in the pitch training. It’s only when they clearly understand it that they can get rid of the “ands,” and all this fogginess around the edges.
The most important point about pitch training is understanding, “Unless I’m really clear about what I need to be doing about my business now, and why I’m doing it, I’m never going to be able to communicate it well.”
MTLinTech: Whenever we ask you which companies of a given cohort impressed you the most, we get the politically correct answer: “I’m proud of them all”. But what really separates the better companies from the others?
JS: The thing that’s probably frustrating sometimes is when they seem so clear on stage, and then they come off stage and you think, “They just repeated what they were told.”
And I think for the companies that are just not good enough, it really shows when they walk off stage and they cant clearly tell their story in a different format or a different way. When a question is asked they don’t respond with the clarity they just showed on stage, and it shows you it was almost like they didn’t understand.
There are some companies that go through FounderFuel that learned. There are few that understand, and that’s what keeps you going.