Roro Oyegun is a student at the London Business School, working toward a Masters in Finance. The TELL series of talks is held fortnightly on the LBS campus at Regents Park and is open to the public. See the website for the list of upcoming speakers.

Ken Olisa, current chairman of Restoration Partners, founder of Interregnum and advisor to successful dotcom ventures with a tech career spanning over 30 years, gave a witty and inspiring talk at TELL (Talks on Entrepreneurial Leadership at London Business School) last month. Ken shared stories of his journey as an entrepreneur advising entrepreneurs, helping tech companies continuously scale up through what he dubbed ‘The Entrepreneurial Cycle’ of Concept -> Research -> Plan -> Resource -> Implementation. He began by noting that the term ‘entrepreneur’ is frequently bandied around, but rarely well defined. It isn’t about one’s inability to work for someone else, and it isn’t just about innovation either – after all people are innovating in large corporations every day but we don’t call them entrepreneurs. An entrepreneur is driven to create something new (or a better way of doing things), is utterly dedicated, and exhibits blind faith in the face of risk and uncertainty, viewing these as opportunities rather than negatives to manage around.


Most people start their entrepreneurship journeys with a dream, a concept – but their journeys are cut short by bad business planning. A good idea is simply not enough, you also need to know where you want to go with your idea, and draw up a plan that gets you there. Ken recounted a story he’d heard years ago, about an old man in a forest. He was wandering about in circles, going one way then the next, retracing his steps. Some villagers observing the old man were at first frightened by his odd movements, but soon realising he posed no threat they sent a child to him. “Old man,” ventured the child, “you’re obviously lost, can we help you?” “I am not lost,” the man replied, “for I have absolutely no idea where I’m trying to go.”

Like the old man, many would-be entrepreneurs are on a ramble rather than a journey. They’ve got the idea, perhaps they’ve identified a vacuum (or “white space”) that they can fill with their valuable new invention. They’re rearing to go – but where, exactly? It may seem obvious, but it bears pointing out that unless you’ve figured out where you’re trying to get to, you’ll never get there! And you’ve got to figure this out in the context of your chosen market, quantifying the success of your vision in terms of time and money. Ken stressed that there’s absolutely nothing wrong with measuring success in terms of how much money you make, as this is simply the way the world works (of course if you make a fortune off your clever idea you can happily give it all away!). In his view, if your motives are purely altruistic the odds that you actually realise your idea are remote – in the end, no one benefits.

Going back to the concept, and what it means to be an entrepreneur, Ken pointed out how some of the most successful entrepreneurs have found a category that didn’t exist before, defined it, and then gone on to dominate it. He gave the example of James Dyson and his bag-less vacuum cleaner. In 1983, after decades of zero innovation in vacuum cleaning technology, Dyson produced a machine which made us all question everything that had come before it! He created a new category, went on to dominate it, and became a billionaire in the process.


Ken often hears aspiring entrepreneurs, by way of research, offer up such nuggets as, “Gartner says the worldwide market is $1bn, and if we only get X% of the market we will be a £XX million company.” He is at pains to point out that this is not research. Proper research thoroughly investigates and communicates need, fit, and benefit, by answering the following questions:

NEED/WHAT – What is the need to be satisfied, the white space to be filled, and are there currently, or will there eventually be enough people/companies who have got this need?

FIT/HOW – What are the resources I’ve got to fill the need, and why would the customer choose to do it my way?

BENEFIT/WHY – What would be the benefit to them of buying from me?


At Restoration Partners, Ken constantly receives business plans, all of which look much the same – pages upon pages of business description and poor research (see above), followed by pages of spreadsheet data denoting resources, income, expenditures. Ken drew a big laugh from the audience noting that in almost every instance, the only connection between the words at the front and the numbers at the back is the staple! He cautioned against creating a business plan with disparate sections obviously drawn up by different people (the ‘ideas person’ and the ‘numbers person’). His advice is to draw up a simple staged flowchart showing prospects (the market), business drivers (again, see ‘Research’), targets or performance indicators populated with a few numbers (e.g. revenues), and an action plan. You may want to colour code your chart red, amber and green, denoting what is most tenuous, what’s questionable, and what’s succeeding. Think of your business plan as a map which clearly illustrates how you’re going to make money with your idea – otherwise it won’t sustain even a first review from potential investors or advisors. A good plan encapsulates a company’s strategy for how it will get to its specified destination. Until you have your strategy figured out you will be stuck reacting rather than effectively executing your game plan, but once you’ve figured it out it will guide every other business decision you have to make going forward.


The resource question really boils down to money and people.

On money… the team at Restoration Partners once analysed all publicly available venture capital fund results from the late 1960s to date, and found that the thousands of IRRs ranged from a whopping -100% to 700%, with a median IRR of 2%. Taking American VCs (the majority) out of the dataset, the median is negative.

Conclusion? The vast majority of investments for the vast majority of VCs lose money. That’s the business model, and it’s why there is so much pressure behind negotiations with owners which – with the rare exception – often devolve into horse trading. The VCs are looking for that one investment that will really “shoot the lights out.” Ken cautions the entrepreneur seeking VC funding to think about the investor’s motivation and objectives in evaluating the business; rather than feel grateful for attention from VC investors, be extremely savvy in negotiations with them.

On people… it’s really difficult to find and hire the right people. Ken, a firm believer in core values as a guiding principle for doing business, assesses his own team on two key dimensions, performance and shared values. Picture a 4-square grid. People in square 1 neither share your values nor are they performing in their jobs; they should be fired. The superstars in square 2 tick both boxes and should be promoted. Square 3 employees who share your values but aren’t performing need coaching. Ken is adamant that the group in square 4 who are doing a good job but do not share your values will eventually ruin your business and should be fired “visibly,” so it is clear to everyone else why you’ve done it.


So now you’re running your business, and every day it feels like there are umpteen things that could go wrong – your team underperforms, you fail to meet targets, your customers won’t pay you, you’re having trouble raising capital, etc., etc. – all of which seem like the very worst thing that could happen. Really though, there are only one or two key things that are really important enough to endanger a business (running out of money is certainly one of them!), and you should forget about everything else. Ken noted from his own experience that running out of money isn’t necessarily fatal, but it goes without saying that if you are running out money, you need to do something about it.

Another big part of the implementation puzzle that companies need to get right, particularly as they scale up, is governance. There is no perfect model for this – you need to figure out what works best for you and your company – but one idea that seems to work well is making governance independent of the CEO function.
Perhaps the biggest implementation challenge for entrepreneurs is decision making. The larger your company grows, the more susceptible you are to other people’s advice. Avoid the pessimism of naysayers, who make it hard for an entrepreneur to maintain confidence and self-esteem. If you run out of money, there’ll always be someone ready to inform you that you’ve got no choice but to throw in the towel and liquidate your business, but in Ken’s experience, companies rarely go bust unless they decide to as there’s “always a way out.”

So how do you go about making those big decisions? With a perfectly straight face Ken offered up this bit of advice on how best to do it: find a quiet, solitary spot, write up exhaustive lists of arguments for and against, mark one list ‘H’ and the other ‘T’, toss a coin, see if it lands heads or tails, and then follow your gut! Point is, consensus gathering is not necessarily the right way to operate an entrepreneurial venture, and making difficult decisions requires tuning in to your inner senses. This of course presumes that you are the primary decision maker for your business. Ken offered up some interesting ideas about how to distribute equity to ensure efficiency in decision making by keeping it in the hands of those who stay on to build the business, rather than allowing inactive founding partners who have moved on to continue to have a say. The ideal situation would be to have one dominant equity owner who is able to make key decisions and remove or dilute the ownership of others who are not performing or no longer share the values.

Despite his emphasis on a primary decision maker, Ken went on to stress the importance of advisors – you should absolutely listen to your advisors, but this doesn’t mean you have to take their advice. Ken gave the example of founder Mel Morris, who stuck to his guns for over a year against the advice of his closest advisors (including Ken), and rejected offers for the business of $40 million and then $80 million, until he eventually sold to Barry Diller’s USA Interactive (owner of for a cool $150 million. These are the sorts of decisions only a true entrepreneur can make, and today uDate is acknowledged as one of the UK’s few home grown successes of the dotcom era.

For building your network of advisors, Ken recommends tapping friends and family who care about you (and presumably won’t be after a fee!). Seek out advisors that are interested in working with you over the long term – interestingly, these will typically be people who either have no interest in the outcome of your business (the truly independent), or those who for whatever reason are completely invested in your success. Either way, they must share your values!

In summary, Ken Olisa’s advice for successfully navigating The Entrepreneurial Cycle:
– Identify your category and look to dominate it;
– Know where you are going and how you intend to get there;
– Be savvy in your approach to investors;
– Only hire people who share your values;
– Don’t sweat the small stuff, focus on what’s most important; and
– Follow your gut – if the inherent risks and decision making of entrepreneurship scare you, go be a manager, but if you find the prospect exhilarating, then go for it!

The TELL series of talks is held fortnightly on the LBS campus at Regents Park and is open to the public. See the website for the list of upcoming speakers.

Share This