Meet the Founders: Guy Hutchinson
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In this post, we’ll be talking to Guy Hutchinson.
Guy is the type of person that most startups would dream of having on their board. With over 15 years of startup experience under his belt, he certainly knows the intricacies involved in guiding them through their growth story.
Guy’s interaction with the startup scene first came through a corporate lens back in the early 2000s. He was Commercial Finance Manager at T-Mobile where he worked on 3G data products - state of the art technology at the time!
“I was approving the financial plans for product launches and we had a huge number of build vs buy decisions - should we build a software platform or should we buy in to a partnership on one?” Guy recounts. Those decisions bought him a lot of face time with VC backed startups; a factor which would prove pivotal for the future of his career.
Apps before the iPhone
After deciding the time was right, Guy made the move from corporate life to the high octane world of startups in 2006. His first startup role was Commercial Director at Accel Partners backed startup Refresh Mobile - a company that made smartphone apps before the iPhone existed.
For those of us that didn’t know apps existed before the iPhone, Guy explains:
“There was a consortium that developed a now-discontinued, mobile operating system called Symbian. It allowed you to have some quite cool apps, but the problem was the phones running Symbian would only have a tiny amount of memory - you could only run around 2 apps in total. Then the iPhone came along with a great user experience and form factor, however the impact on the ecosystem was as much the sheer amount of memory it came with”.
Refresh Mobile certainly faced an uphill battle as users tended to churn through apps during this era., These “market landscape challenges” as Guy elegantly puts it presented a real challenge, but it eventually went through an exit now forming part of AppInstitute.
Don’t just tick off product market fit then move on
In recounting his greatest lessons from Refresh Mobile, Guy offers some wise advice for today’s startups: “don’t underestimate the importance of understanding product market fit. It’s not just something to tick off and move on, but something to continuously research. Understand what makes the product compelling and why people come back to your product rather than moving on to something else”.
Guy is also a big fan of tracking metrics across the business. He claims they’re one of the most important things to consider, but only when you’re looking at the right ones. “If one metric for success is going in a certain direction but others similar success metrics don’t correlate, you’ve picked the wrong metric. Keep on studying and work out which to drop or add-in”.
Reflect positively on times when you didn’t win
After moving on from Refresh Mobile, Guy became Commercial Director at Autoquake, a company with essentially the same business model as today’s Cazoo. During its time, Autoquake was growing fast and winning countless automotive retail awards. It was backed by Accel Partners and Highland Capital Partners, raising just north of $50m during its lifespan. However the business faced a whole bunch of challenges and never sustained a market leadership position.
Guy quotes two reasons why he believes it failed. The first one is that the company burned through CEO’s - 3 in fact - in a little above 3 years. The second was around the less well known subject of unit economics, at least at the time “It was 2008 when unit economics were really quite nascent. It was a challenge to get the board stakeholders interested which meant it was tricky to convey the balance between growth and sustainability”. Thankfully, understanding of unit economics has expanded considerably since that time which may be because of the lessons learnt from failures.
Guy went on to be Finance Director for ServiceMagic Europe, which is now a substantial part of the NASDAQ listed entity ANGI Homeservices. “This was probably the highlight of my full time career. I got to work on the most data-driven business you could ever imagine, with a small team of very smart experienced executives. All the experience I gained before ended up being deployed at ServiceMagic. I got to take my first business to profitability, but also acquired some deep domain experience on using metrics in trading meetings. The team in Denver CO were amazing mentors and it was a fantastic period of time. The minute you’ve got your trading meeting really well tuned you have some much control over the way these tech businesses grow.
Don't play with dead snakes
On the topic of management, Guy also explains how the talent bar has increased across executive and management levels over the years. As more and more experience is gained across the world of startups, the overall quality of management has improved considerably.
With that in mind, he’s seen his fair share of good - and utterly terrible - management advice. One of the phrases that has stuck with Guy is this: “At one company, we had a guy from Silicon Valley come over to help us with our product and one of his slides had the title ‘Don’t play with dead snakes’”.
It’s easy for people in startups to get fixated with particular problems, solve them, then go back and tinker with them over and over again. Some elements of business problem solving can become an obsession. But successful startups need to know when to stop tinkering once the problem is resolved - ‘don’t play with dead snakes’.
Interviewing is a two way street
As you’d expect, Guy has interviewed many people over his career. “The problem you have is those who are good at interviews are quite often the ones who have interviewed the most - whether that’s because they’re always out job hunting or just keep switching jobs”.
That makes it tricky for the interviewer to spot a candidate who is talented at their job, not just at interviewing. On the other side of the coin, candidates should make sure their future employer is as transparent with them as possible “Meet as many people as you can before you join. Ask lots of questions. Don’t be drawn in just by the idea or by the charm of a founder - understand exactly how the company works, and who you’ll be working with, before you sign the contract”.
“If you love the company and it all seems to make sense so far, you could offer to spend a day free of charge with the company. If you can get it, use the time to talk to employees and try to have the hiring manager do this with an attitude of complete openness about the challenges and get a real feel for what’s involved. If you come to accept the offer, one you’ll have had time to get into some of the weeds and two you’ll feel much more confident when you commit. At the end of the day the real win in startup life derives from committing to a team for many years, there are no overnight successes”.
Guy Hutchinson is a portfolio CFO through his consultancy company, Finance Foundry. He also co-founded the Startup CFO members group and actively leads the majority of the community learning and development events.