Nicola McClafferty. Image: Draper Esprit
Draper Esprit’s Nicola McClafferty gives her advice for start-ups, from the importance of mentorship to assembling a good team.
Nicola McClafferty is a partner at venture capital firm Draper Esprit. She leads the consumer practice, with a focus on consumer and B2B SaaS businesses.
McClafferty sits on the boards of portfolio companies Lyst and Pollen, and led the company’s investments in Roomex, Sweepr and Decibel. She is also a director on the global board of Draper Venture Network and heads up the firm’s Dublin office.
‘Building a good company is a marathon, not a sprint’
– NICOLA MCCLAFFERTY
Describe your role and what you do.
I’m a partner at Draper Esprit, heading up the consumer practice, with a focus on consumer and B2B SaaS. I also head up the Dublin office, and serve as a director on the global board of Draper Esprit Venture Network.
On a day-to-day basis, I source and complete deals, and work closely with portfolio companies, particularly those on whose boards I sit.
In your opinion, which areas of science and technology hold the greatest scope for opportunities?
The environment we’re working in has obviously increased the emphasis on science and technology massively.
Digital transformation has been a theme across most industries for a while now, but the pace of change, particularly in more traditional industries, can be slow. In my view, the current coronavirus crisis is going to accelerate this significantly for many industries.
I would highlight food, retail and healthcare delivery in particular. These are areas which have already undergone some transformation, but are now faced with very significant changes in consumer behaviour and these industries will have to adapt to this. Telemedicine is a great example of this – we have seen adoption levels in the last few months which otherwise may have taken years to achieve.
The lockdowns around the world have really emphasised the importance and the accessibility of remote and distributed working. New communications and engagement tools and new have really come to the fore and I think there are huge opportunities here.
We’re still very bullish on the growth to come in businesses that leverage machine learning – there’s still a long way to go to get to true AI and truly reinforced machine learning, and we’re very excited about this.
Are good entrepreneurs born or can they be made?
There are definitely personality traits which are common among entrepreneurs: propensity towards risk, determination and single mindedness are among the key ones I’d highlight.
That said, just because you’re born to be an entrepreneur doesn’t mean success is guaranteed. There’s a lot to be learned in order to develop the right skills. Experience, hard work and mentorship turn the raw material into a successful entrepreneur.
What are the qualities of a good founder?
- Self-awareness
- Persistence
- Passion
- Flexibility
- Being a good sales person, because you have to convince people to join you on your journey
What does a successful entrepreneur need to do every day?
Work hard but know when to take a break. A burned-out founder is no use to anyone.
What resources and tools are an absolute must for your arsenal?
- In practical terms, Zoom and a mobile phone – I couldn’t exist without either of those at the moment
- In our field, tools like Pitchbook and CB Insights are very important – it’s our job to really understand the markets and the market trends
- Field experts are also extremely valuable – these will depend on the sector
How do you assemble a good team?
A good team needs to be built on complementary skills. There need to be functional heads and specialisation. But a key thing for a leader is the ability to prioritise – a founder needs to know what they’re not good at in order to delegate effectively to people who can do those things.
Shared vision is also very important – you need to be committed to the same objective. Running a start-up is demanding and you need to believe in it to get you through the tough times.
What is the critical ingredient to start-up success?
Hard work and luck.
What are the biggest mistakes that founders make?
Optimising for the short term. Often you see this in fundraising – optimising for right now, not without thinking about the longer-term horizon. For example, focusing on price as opposed to thinking about better terms.
Classic early mistakes would include expanding or hiring too quickly without giving thought to the longer-term fit with the business – plugging a short-term hole but missing the bigger picture.
What are your views on mentorship and the qualities one should look for in a mentor?
Mentoring can be incredibly powerful – particularly for founders, where it can be a very lonely experience and you may not yet have built a great management team. For a founder to have someone they can bounce ideas off can make the burden of entrepreneurship lighter.
That mentor should have relevant experience – not necessarily sector-relevant, but the experience of someone who has run a business and who has seen the ups and downs. Also, ideally, someone with experience in the not-too-distant past.
What’s the number-one piece of advice you have for entrepreneurs?
Building a good company is a marathon, not a sprint. Recognise that in terms of the way you work and the decisions you make, you have to see the longer-term picture.
No one will reward you for not taking a break.
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