How to start a social startup: the boring bits

There are some bits of starting a company that everybody has to do, no matter whether their aims are to change the world or not. I thought I’d just write quickly how we went about doing the legal setup, banking and accounting for School of Everything because when we started out, I had no idea how those kind of things worked and what you needed to worry about.

First of all there’s setting up a company in the first place. In the UK this is very, very easy once you’ve made the decision about what type of company you want to be (see a later post for how to make that choice). There are hundreds of services that offer online company registration through Companies House. I used Company Wizard and it was a very straightforward process, costing about £35 and was all done within a few hours. Unless you have all the details worked out at the stage you register the company, it’s worth keeping things simple. Go for the minimum number of directors and give the founders the minimum number of shares to get the percentages right but don’t worry too much about everything else — you’ll update it and change it when you take on investment or if anything changes along the way.

Next you’ll need a bank account. This can take some time and is worth getting right because I got it wrong and have struggled a bit ever since. We went with Co-op Bank because I’d been a customer for ages and liked their ethical stance. The main problem has been their online banking which until last year was one of the worst web services I’ve ever seen. Now it’s just middling but it can really slow you down if you’re not careful. If I were you, I’d look very hard at how good banks’ online services are before taking the leap.

As you get a bit further down the road and start dealing with real money you’ll need an accountant. When we started out, I naively thought that all accountants were pretty much the same but I’ve now seen that we were very lucky in choosing ours after seeing other companies spending far more time and effort on accounting than we have ever had to. We chose Complete Accounting Solutions on Seedcamp’s recommendation and have a service where we pop everything in the post once a month, answer any queries and they do everything else. I am intrigued by Crunch which looks like a good service but make your choice based on which service is going to keep everything above board but save you the most time.

You’ll also need lawyers and again I’m very thankful that we chose Keystone Law early on. Here you can end up spending a fortune so you do need to bare price in mind and since lawyers generally charge by the hour, I think you’re looking for a lawyer who has lots of experience at doing what you want them to do so they can do it fairly quickly. All of the people we’ve dealt with at Keystone ‘get’ startups and have been great at explaining what we can and can’t do. Other lawyers are available but I’ve been very happy with everything they’ve done for us.

All these things are important and if you get it wrong they can really drag you down. I’d say go with personal recommendations but do remember that there are lots of friendships in this world that can lead to people recommending people who may be good but aren’t suited to what you want to do. So take the time to understand exactly how the people you’re going to work operate and ask them a few questions to see how well they can explain things to you. After all, when you start something up, the buck will more than likely stop with you, so you have to understand all the boring bits as they relate to the company as much as the people who are advising you.

I’ve actually found what I’ve called here ‘the boring bits’ really interesting. I didn’t know much about how companies worked before I started and now I’m very glad that I do. I think it’s one thing that puts people off starting their own organisations but it shouldn’t really. It’s all pretty straightforward once you get into it and there are plenty of people around to ask for advice as well as places online to get information. So don’t let the minutiae of running a business put you off. It’s not as scary as it looks. And if you’d like to join Bethnal Green Accountancy Club, just let me know.

Whole Earth Discipline

Stewart Brand’s book Whole Earth Discipline is one of the best books I’ve read in the last few years, partly because it’s very well written and researched but mainly because it made me change my mind about some important issues.

Perhaps the easiest argument for me to accept (although I still learned a great deal) was the section on cities. It’s always made sense to me that cities are more efficient use of resources and are the driving force behind new ideas and problem solving. I’m a pretty big believer that new things happen when you bring people together who have different skills and experiences. You can either design those situations — as things like the Manhattan Project show — or you can just sit and watch as it happens in cities — the more cosmopolitan and connected the better. Of course, as cities grow they develop new problems, but they solve them just as quickly as they produce them.

The next section is about nuclear power. I think I’ve been through my own mini-version of Stewart’s conversion story. He was properly involved in the environmental movement, in fact with the Whole Earth Catalogue you could say that he, more than many people, invented it. But over the decades he’s come to be frustrated with the side of the movement which ignores science which is something I’v noticed too. For me, there is just no strong enough argument against nuclear power, especially in the UK. We have all the experience, we even have a whole bunch of sites that are already suitable and we’ve actually developed some of the best reprocessing technology in the world.

From my reading around, there is enough nuclear fuel to last us until the end of the century which should hopefully be enough to come up with something else. Chernobyl couldn’t happen again, because nobody is proposing building that type of reactor. Over the next 25 years I think it’s going to be cheaper than renewables and will take up much less space too. My only caveats would be that we should spend as much on energy efficiency as we do on new generating capacity and that all nuclear facilities should be open to the public.

Next Stewart takes on the opponents of genetically engineered crops. This is where I get a little bit more uncomfortable, but in the end he and a lot of other things I’ve learned over the past few years have won me over. We don’t know enough yet but the basic safety questions have been answered and we should find out more so I’m in favour of more field trials and in the cases where there is good safety information and economic or health benefit we should go for it.

Finally, the book turns to what Stewart admits is the most controversial topic — geoengineering. Here I’m not ready to say we should get stuck in. Research yes, but I don’t think we have any real idea what tools will work, and even if they did work whether the unintended consequences would be even worse than the problems the technologies set out to solve. I find the idea fascinating and want to learn much more but the evidence of successful approaches or of the immediate need to deploy these technologies isn’t strong enough for me yet.

It’s a great book by one of the smartest and most radical people I’ve ever come across. Well worth a read and I think should definitely be read by the new Government who are going to have to grapple with the energy issue in a much more radical way than the last Government ever did.

(I’ve been sitting on this blog post for a while. This article in Wired and realising I’ll probably make it to the Long Now seminar in September prompted me to finish it off.)

Just the beginning

My favourite business journalist, Peter Day, writing on the occasion of 21 years working on In Business:

Some 10 years ago the great management thinker the late Peter Drucker told me that he did not think that the computer had yet begun to effect the way organisations were managed. At the time, it seemed to be a crazy remark, but thinking about it afterwards it made more and more sense.

Henry Ford transformed industry after industry with his adoption of the production line in Detroit 100 years ago. Theoretically, the interactive information generated by the computer network should be having just as much disruptive impact on business now as Ford had then.

But few pre-existing companies seem to have changed their shape, size or business model to reflect what they now know about the clients and customers.

The mass production corporation tells itself it is making things its customers want to buy, and giving them a choice. But big companies seem to erect walls around themselves to keep the customer at bay. They commission market research rather than themselves go out and ask questions, and they mainly want customers who want to buy the things they make, not the other way round.

I think he’s right. Even those companies seen as cutting edge — Google, Innocent, Zappos and so on — are really not that different from what has been before in terms of the way they are organised. There’s going to be a lot of change in how we organise in the near future. Something we wrote about in Disorganisation — although I’d go even further if I were to write it again now, having run a company for a couple of years.

Long-term misunderstandings

“If you’re going to take a long-term orientation, you have to be willing to stay heads down and ignore a wide array of critics, even well-meaning critics. If you don’t have a willingness to be misunderstood for a long period of time, then you can’t have a long-term orientation.”

That’s Jeff Bezos in US News. Jeff also gets a mention in this TED talk by Stewart Brand about a field trip they took to the site of the Clock of the Long Now.

Practical Optimism

A few weeks ago I had an argument about the future of the human race that baffled me. I won’t say who with, but he’s an environmentalist of note (who is in his 50s I guess). It went something like this:

Him: We have a problem.
Me: Agreed.
Him: It’s really bad.
Me: Yep.
Him: You should be really scared because you’re under 40.
Me: Not really.
Him: But unless we convince people that it’s really, really bad nothing will change.
Me: I’m not so sure — I don’t think scaring people makes them change.
Him: How do you expect governments to regulate the problem unless people are really scared?
Me: I don’t assume that governments will do anything. I think fantastic ordinary people will create sustainable ways of organising themselves and the planet’s resources. I’m sure governments will catch up in the end but there’s no point waiting around.

At that stage we had to agree to disagree. He believes pessimism will save the world and I don’t. I’m an optimist — probably with a little bit of anarchist libertarianism thrown in. The two don’t really mix.

The last couple of months have been the most economically turbulent of my lifetime, the future is the least certain of any I can remember and I’m very aware that it could get worse. I also know the scale of the even bigger problems. I’ve seen poverty, suffering and injustice first hand and I’m fully aware of the numbers when it comes to climate change.

But I’m still an optimist.

A few days after the optimism argument I was with my friend Rob at the spot by the Brooklyn Bridge in New York where you look out over the East River to the downtown Manhattan skyline. The market was collapsing around us but we had a beer and the air was still warm. We’ve both now done some time in start-ups and we were talking about the highs and lows of start-up life. If you want a quiet time, we agreed, don’t try to change the world.

But the other thing we realised was that we were confident about our futures because no matter what happened we knew we could make things happen with almost no resources. Learning how to start something up means that you know you can turn your hand to most things and it gives you a confidence that anything is possible.

Yesterday I met Ali Clabburn who has gradually built up Liftshare over the last ten years. Each day 40,000 car journeys are not made because Ali was an optimist when people told him it would never work. Since the 1960s average car occupany had dropped and dropped. But for the last three years, it has risen. Liftshare, with it’s 300,000 self-organising members has started to turn the tanker.

Then I look at all the young campaigners in Battlefront including the amazing Zuhal who I’m mentoring (really she’s mentoring me). These are kids who are supposed to be thick, apathetic and pure individualists (if you believe the Daily Mail) who are setting out to change the world. None of them lacks ambition. And yes, they are optimists.

And then tomorrow we will choose the finalists for Social Innovation Camp 2. I have no doubt that we’ll find some more optimists there.

So while sometimes I do get a bit uncomfortable being called an entrepreneur (I don’t think I have enough chest hair to fit that particular mould), I’m happy to call myself an optimist. In fact, I’ve come to realise I’m a practical optimist and proud.

School of Everything in the FT

Team Everything

There was a really nice piece about School of Everything in yesterday’s Financial Times. It was quite funny for me because Jonathan had told me that it was coming out on a Wednesday and I have a long running battle with my local newsagent who insists that the FT isn’t published on a Wednesday and so never stocks it.

Anyway, I think the main theme that comes out is the difference between motivations on either side of the Atlantic for creating web businesses. Obviously it’s a huge generalisation because there are some fantastic ‘change the world’ businesses that have come out of silicon valley, but I do feel that London is more of a hotbed for Umair’s ‘next industrial revolution’ and Tim’s ‘web meets world’ stuff at the moment.

On that note, do submit your ideas for Social Innovation Camp. Just a week and a bit to go until the deadline. And here’s a fantastic little video that explains the concept from the wonderful glovepuppet.

Meetup, ‘Why Don’t You…’ and 10,000 year thinking in a pub

I love Meetup and there’s a great piece in the FT Weekend Magazine that explains quite what it is that makes it work. It really started to come together for me a few weeks ago when we had a fantastic Long Now London Meetup. Up until then it had just been people I knew, but last month we grew beyond that. It was great to be able to organise something so easily that brought together people around a shared interest.

So what’s it got to do with Why Don’t You? Well, the full title of Why Don’t You was “Why Don’t You Just Switch Off Your Television Set And Go Out And Do Something Less Boring Instead?” which was pretty revolutionary for a TV program when you think about it. Somebody once described the email magazine Pick Me Up that I used to help out with as Why Don’t You for grown-ups. With our manhunts in Covent Garden, taking cows to Toxteth and journeys to find the source of the Thames, it was all about getting people away from their email.

I like that idea — that we should build technology projects that help people get away from technology and I’d say Meetup are one of the most inspirational companies that already do so. I hope we’re doing it with School of Everything and Social Innovation Camp too.

Oh, and our next Long Now London Meetup is on September 17th. Come along!

Why London will never be (and should never try to be) like Silicon Valley

I went to a really interesting dinner chat on Wednesday night organised by Saul Klein for Fred Wilson the VC who was over from New York. I left a bit unsatisfied with the story we told Fred about London, so in the bar afterwards and on the bus home I tried to work out why.

The conversation centered on how difficult it is to set up tech start-ups in London compared to the US. The other entrepreneurs talked about how incredibly hard it is to raise angel money for tech start-ups, how difficult it is to hire great coders, how risk averse British culture is and how there are no great start-up role-models in the UK. It’s a story that I’ve heard before and all of these things are true.

What frustrates me about this is what it misses out by assuming that London should be just like Silicon Valley. Much as I love and respect the Techcrunches of the world, I do get fed up with the reification of start-ups and entrepreneurs as if it was the only way of creating value and as if the best thing to happen would be if everywhere became like the Californian tech scene.

I don’t think the lack of angels in London is quite such a problem as some people make out. If you really are doing something great then there’s a simple solution — get on a plane. Our experience with School of Everything is that people in other countries are very willing to invest here if you’re doing something they think might change the world (we have angel investors based in the US and Europe). There’s also a very nice ecosystem of early stage funding emerging here that doesn’t come from angels. Nesta, UnLtd and the Young Foundation are all trying out new models. Channel 4 are soon to join them in quite a big way. Even the Cabinet Office is trying.

Then there’s the people. In the US, it’s assumed they will be MBAs or engineering graduates. Here, it’s a totally different community. It’s been most visible to me at three fantastic events — all of which I would heartily recommend to people like Fred — Social Innovation Camp, Interesting and 2gether08. The influx of people into the start-up world to look for from an investment perspective is former (and current) campaigners, activists, policy and civil service people.

Matt Jones put the reason for this neatly when he said that the 80s and 90s were the decades of the think tanks because they were the most cost effective ways of experimenting with ideas that could change the world. Now you can build a start-up for the same cost as a Demos project — with School of Everything we got a site up, team together and “proof of potential” for £20,000.

Just a final note. For me there’s something special about London (and the UK) because this is the beating heart of so many social movements. From anti-slavery to fair trade, universal suffrage to third world debt cancellation, many of them have started or grown from here. And as John Batelle says, every great business is an argument. Umair Haque writes that the tech world needs to solve the world’s big problems. And Fred too has written about his yearning for projects that are a force for positive social change.

So — despite our grumbling on Wednesday, I’m incredibly positive about the potential of London to be a cauldron of new ideas, projects and value creation. We’re just not going to do it the in the same way as Silicon Valley.