The Startup Blueprint series shares insights from the founders and operators building companies & ideas defining what the world could become. Hear about their journeys, learn from their insights, and maybe leave with a dose of inspiration. 

We sat down with one of our own, Barnaby Marshall, Partner at Icehouse Ventures.

We sat down with one of our own this month, Barnaby Marshall, a Partner here at Icehouse Ventures. He's packed a lot into his working life so far. From co-founding fashion brand, I Love Ugly, back in 2011, to joining Icehouse Ventures as a Partner in 2017, to co-founding New Ground, an innovative & end-to-end solution for the speciality coffee industry.

Having one foot firmly planted on both sides of the fence; as an investor and a founder, Barnaby shares his take on:

- navigating the minefield of possible distractions startups can face that pull them away from their mission,

- common (or not so common) characteristics and mental frameworks successful entrepreneurs often have,

- how to approach and find alignment with the right investors that could save time and lead to higher-value add partnerships, and

- how he got into it all in the first place

Whether it’s understanding the ‘physics’ of business, defining and owning a niche, mastering the art of storytelling for your business, or just wrangling three energetic boys (where he's closely rivalled by Jo Wickham) Barnaby's our go-to, and we’re excited to unpack some of these topics for you below.

First up, what led you to pursue starting a business in your early twenties, and did that set you on your career trajectory into the startup/venture capital world?

BM: I think I've just always loved the challenge of building companies. To me, it’s like the most fun sport that you could possibly play.

I like to think about it in three distinct ways;

• Strategy - how do you identify a market that's got an opportunity in it?
• Processes - how do you run a business super effectively and have the lowest cost possible cost to make whatever you're doing?
• And then people and culture - how do you get a group of people aligned to a certain mission and all rowing the boat in the same direction?

It’s a multi-faceted, challenging problem, but those three things all need to spin in the same rhythm for a business to be successful.

I have been fascinated by trading and the idea of making money ever since I was a kid, and I'd be lying if I said that making money wasn't part of what I've always found compelling about doing business. But also, I really love the challenge of it, and that's been a big driver for me.

Some people start businesses because they want to solve a specific problem in the world. I come at it differently. I've never had any specific urge or desire to solve any one particular problem or even use it as a creative outlet. It's more that I'm fascinated by the challenge of building companies and successful cultures.

You’re a 2x founder and in your day-to-day at Icehouse Ventures interact with a lot of other founders and startup teams. Are there common characteristics or attributes that you’ve witnessed among the founders who are successful in executing their vision? Is the ‘founder mindset’ a real thing?

BM: It I think the most successful people in business are those who grasp the fundamental physics of business. The physics of business relates to those three categories I mentioned; strategy, processes, and people and culture. Understanding the physics of the business is really about knowing what levers to pull that drive value and it needn't be complicated.

Some companies are good at idea creation, they're creating lots of IP, but they don't necessarily know how to capture any value from it. Or they are ineffective at maximising how much value could be captured from it, and therefore you get a business that might have lots of ideas or an interesting IP, but isn’t necessarily generating revenue.

I think successful entrepreneurs often keep it simple, so they figure out what their model of success is and then they repeat that same thing over and over again. That's where you get incremental gains once you've found that product market fit and you've developed something that works for the world, repeating it and improving it is what makes something really profitable and impactful.

Some of the common attributes that I witness in successful founders are a bias to action, a certain level of resiliency, and a certain kind of tenacity. I don't think raw intelligence or intellectual capacity have a huge degree of correlation to success in building a business of success. What I do think matters is people listening to their intuition and making decisions that are intuition-driven.

Pair the levers of process, strategy and culture, with the common attributes and a solid dose of intuition, and a founder has an incredible foundation to build a business upon and be an effective entrepreneur.

"I think successful entrepreneurs often keep it simple, so they figure out what their model of success is and then they repeat that same thing over and over again. That's where you get incremental gains once you've found that product market fit and you've developed something that works for the world, repeating it and improving it is what makes something really profitable and impactful."

When it comes to venture capital and founders raising capital, you are in a unique position sitting on both sides of the fence. What advice do you have for founders approaching investors? 

BM: I think the first thing is understanding what the investor that you're targeting is looking to invest in. What is the investment thesis of that specific individual or firm? Once you've understood that, you can know whether you are a fit or not and if you're not a fit, don't waste your time.

A lot of companies end up pitching investors who aren't a fit for their business and are then disappointed when they don't invest. Some investors just won't fit your business, and that isn’t necessarily a reflection of your pitch.

The biggest challenge is finding the types of investors that will suit your particular business model, capital structure, stage of life, all those sorts of things. Then you can be much more targeted and spend the limited calories that you have, in the most efficient way possible to get to the answer that you want.

The three questions to answer to create a capital strategy are; what are we trying to achieve? How much capital do we need to fund our plan? Does the capital market I'm operating in support that plan?

This might take some adjusting to make a plan that sufficiently de-risks the business and is viable with the capital market.

Painting a compelling picture of the future, of how the world will be different when the company is successful is key. The bigger and bolder that is, with credible steps to de-risk the plan help to build investors’ confidence in the steps.

What have you seen as the most common hurdles or distractions that startups face when on their growth journeys? 

BM: There are a million distractions, almost everything in a startup is a distraction and there are only a very few things that actually matter.

Attending events can be a distraction. Employees asking questions that aren’t relevant to the core job to be done can be a distraction. Investors can be a distraction. Customers asking you to do things that you don't want to do is a distraction.

I think before you have product market fit, the challenge is just talking to customers and building product in a way that tests what the market really needs and what the strategy you're going to have is. Then once you've found product market fit, it becomes a question of how to find as many customers who have the exact same pain point and sell to them as efficiently as possible.

Anything that is not the few core activities of value creation should try to be eliminated or at the very least limited. It’s a useful exercise to go through your diary and identify the units of time split between a value-creating activity and a distraction.

Did you spend time on the core bucket of activities or initiatives that will ultimately drive the business forward? Or was most of it spent putting out a fire, just dealing with what's going on, or responding to inbound traffic? From there, you have the insight to decide what of those tasks you could limit or eliminate, outsource, or hire for.

"It’s a useful exercise to go through your diary and identify the units of time split between a value-creating activity and a distraction... From there, you have the insight to decide what of those tasks you could limit or eliminate, outsource, or hire for."

Running a business is a full-on role, let alone when you’re also a full-time partner in the country’s most active VC firm and a dad to three young boys. What are your non-negotiables for getting s**t done and looking after yourself? 

BM: I honestly don't have any non-negotiables, but I find what slips off the calendar most frequently and what I'm consciously trying to ring-fence a bit more time for is exercise. I get tired and I’m aware that if I don't have a routine time to reset, like that little bit of exercise or some quiet time for myself that's not scrolling on my phone, but intentional time to reset, then I get pretty exhausted. Otherwise, it’s go go go all the time or the downtime could end up being filled with an activity like lounging in front of the TV which is not a positive refresh.

I try to find time to coach football teams and help out at the school, go to the kindy events, things like that. On top of running a business and being meaningfully involved in the companies we’ve invested in, it’s a lot of activity but I’m doing things I love, and that can also energise you.

🔥 Quick-fire questions 

A resource you recommend to all founders or entrepreneurs?

All In? Maybe that's a bit of a VC meme, but I do think it's a good way for founders to stay up with a brief summary of how the macro VC market is progressing.

A word or phrase that reflects how you approach life at the moment?

My life right now is pretty busy/borderline wild. But I am just embracing the madness and enjoying it. My wife and I talk about it regularly as just being a season of being really busy, when we have lots of schools, kids, and work commitments all going on at once. But we are enjoying ourselves.

It’s the year 2044, what’s one thing that you hope has materially changed for the better as a result of the work you’re involved with?

I hope to have been a part of building several iconic NZ companies. And as a result, lifted the ambitions and expectations of all NZ entrepreneurs. To that end, I hope those companies have created wealth and prosperity for thousands or tens of thousands of NZ companies directly or indirectly.

Meet Barnaby here.

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