Startups, angels, and milestones…

As your tech startup grows, it’s always a huge relief to reach milestones – particularly when (thanks to the way bootstrapping makes development cheaper but s-l-o-w-e-r) they can be a fair old while in coming.

Yesterday’s big milestone here in Nanodome Towers was getting our final camera PCB to boot from a memory card far enough to print  “Hello world” out to a serial console. OK, it ended up at 57600 baud rather than the 115200 baud I had intended, but who cares? It worked! Next I’ll sort out the clocks & the memory, and then try to get it to boot from Linux (machine type 3248 “Nanozoom“, for any passing ARM Linux people): but all of that should now be a matter more of graft than of prayer… fingers crossed, even so.

(Just so you know, the PCB’s 3V3 line ended up slightly lower than intended, so all I needed to do was remove the undervoltage detector chip and it came out of reset fine. A Swiss Army Knife hardware mod!)

All of which is not quite chill-the-Krug excellent, but a fantastic (and tangible) milestone nonetheless. Even so, there’s a bigger point about progress and startup finance to be made here. For… what is a milestone, exactly?

For angels, milestones are usually a linear sequence of de-risking plateaux, i.e. each milestone should clearly remove a source of development uncertainty, and hence reduce the startup’s financial exposure to fail cases. In this case, if the assembled PCB hadn’t worked at all (and we had no idea why, and could see no way of fixing it), chances are we would have had to design & build afresh around a completely different SoC. And how much would that cost? Oy oy oy!

Yet for entrepreneurs, milestones are a parallel sequence of moves towards full engagement with their market, i.e. each milestone should tangibly improve access to market opportunity. For example, having a demonstrably working set of boards (and particularly all assembled as a working camera) arguably gives Nanodome firmer access to bank finance as well as the ability to make ever more persuasive product demonstrations to its customers.

(This is why entrepreneurs are often advised to include both a “past milestones” slide and a “people” slide in their Powerpoint presentation ‘decks’ – the former to show what has already been achieved, the latter to give investors confidence that the people running and implementing the startup’s ‘vision’ will be able to overcome the innumerable day-to-day hurdles to hit future milestones.)

Of course, both positions are equally correct: they’re the twin sides of the coin that’s eternally bouncing on its side, like the bomb above Springfield’s dome in The Simpsons Movie. And startups need to combine both financial pessimism and market optimism if they are to be at all realistic: in the past, this has sometimes been cited as why entrepreneurs need angels to counterbalance them, a yin to their yang.

Yet these days, UK angels seem unable to see beyond their traditional side of this coin, and seem collectively unable to build up any sense of faith in startup people’s abilities to solve problems in order to reach future milestones. They write entrepreneurs off as having “reality distortion fields” (a dismissive way of saying ‘charisma’) while writing off their skills as irrelevant, inapplicable or simply overhyped. At the same time, many (if not actually most) of the entrepreneurs I’ve met over the last year seem as a generation to have already internalized this whole lesson, this whole yin-yang balance. They don’t need angels to tell them how difficult the world has become, they already know – it’s their world.

All of which leads me – at long last – to today’s quasi-religious irony to ponder: that angels seem to have lost their faith in people and/or in the future. So, your starter for ten is: does an angel without faith deserve to be called an ‘angel’ at all?

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