Somewhere over Europe, 6:30pm

#2 Optimisation

You’ll need to read part one to put this in context. I’m writing about why I set up and run MOHARA – it’s either my innermost feelings or Boots meal deal-induced nonsense. I guess if it’s the latter, you’ll never read it, so if you’re reading this I’ve probably decided it’s valuable.

This is part two; the theme is optimisation.

When I started MOHARA in 2011, the majority of our projects were troubleshooting, stepping in to salvage projects derailed by apathy, incompetence or worse. The duty of care other agencies afforded founders was lacking, and many projects were in a bad way.

There were parallels with my previous life as a teacher – apathy and incompetence were prevalent in schools – and I’m not talking about students. 

Teaching is demanding and to do it properly you need to build relationships with students, plan engaging lessons, provide meaningful feedback, whilst being a role model for the students. 

It’s very easy to take your foot off the gas and do a little less preparation, a little less marking, a few more “internet research lessons” – and every little backwards step reduces the value to students.

This is how most agency relationships deteriorate – most agencies don’t set out to rip-off startups, but they find projects hard and often beyond their capabilities. They’ve overpromised, and they’re under-delivering.

Agencies become a little less motivated every day, they become tired of making excuses and the result, as I’ve seen many times, is often chaos.

It’s like when a teacher takes their foot off the gas – they can get away with it for a while, but it always catches up with them.

Good schools make sure that the teaching staff are incentivised properly. While not simple in education, it’s possible – recognising teacher effort, linking input to outcomes and being supportive are all tactics for schools to create strong incentives for teachers. I’ve thought hard about creating the right incentives at MOHARA, so we can optimise success for our startups.

When a startup hires an agency, they are starting from a difficult position. To the agency, the startup is a client – they represent revenues on a P&L. While the agency may start with the right intentions, when the going gets tough (which it always does), problems emerge.

There is limited alignment; founders need support in the early stages – they need a partner in the trenches succeeding and failing alongside them. Agencies are incentivised to maximise profit, whereas the MOHARA model means we’re incentivised to maximise outcomes – we’re completely aligned with the founders.

The way we engage startups is a critical part of the model I believe passionately in. We optimise for long-term success – we optimise for a big upside if the product and business works. If it doesn’t, we suffer – maybe not as much as the founders, but we end up with no profits and a ton of wasted resource.

If we fail a lot we’ll go out of business just like the startups we back, and that’s how it should be. It means we won’t be the teacher taking their foot off the gas – we’ll be the teacher that does that last paper at midnight because we need the startup to succeed. 

The startup owner is trying to build something, trying to make the world a better place, and this makes them incredibly vulnerable. We must add value to the ecosystem and the founder. 

If that means telling a founder we can’t help because their idea is unviable then so be it. I want us to be a place where a founder knows we are looking out for them, somewhere they can feel comfortable and somewhere they will be supported.

Somewhere they don’t need to worry because the team at MOHARA will always try and do the right thing – this will happen because I’ve set this business up to optimise for long-term outcomes.