Instanda founder: Startups must think beyond product-market fit

Tim Hardcastle is the co-founder and CEO of Instanda, which provides a no-code platform for insurtech companies to build software products.

Hardcastle co-founded London-headquartered Instanda in 2012 with Derek Hill. It has created tools that let insurtech companies create products without specialist coding knowledge. It does so with a combination of pre-built product libraries that can be adapted for specific insurance providers.

Its clients include Atlanta, Standard Bank and Hamilton Fraser. In June last year, Instanda raised nearly £37m in Series B funding to fuel its international expansion.

In this week’s Founder in Five Q&A, the Instanda chief explains why startups should explore all options before external funding, why he’s excited by AI and quantum computing, and shares a common founder mistake.

1. What funding advice would you give to a first-time founder?

Tim Hardcastle: Be clear on the resources you have as a founder. Savings, equity in a property to borrow against, family (parents and in-laws may be more likely to have disposable capital) and friends who believe in you and are prepared to back you. This all should be thoroughly explored before you look at external funding sources.

Funding options via banks or debt are very limited as are pre-revenue venture funding options unless you have a previous track record.

The key: get revenue and build momentum, bootstrap for as long as you can, then go for seed funding via angels or specialist seed VCs.

2. What’s a common mistake that you see founders make?

TH: In 2021/22 over 200 companies were incorporated every day. Not all were startups but for those that were I admire all founders, as starting a business is a brave step to take.

Sadly though over 50% fail within two years. Looking specifically at technology startups, the current funding environment has exposed frailties in the business model of many startups.

Founders need to create not just a business that has a great product-market fit but also speaks to the essence of sound, resilient business – namely getting to profitability and cash generation.

3. How do you motivate your team?

TH: We have a clear vision and purpose. It is fuelling for our teams but not enough. Our culture is open and transparent and based around our core values. It encourages and supports challenge, dialogue and collaboration. It’s a fundamental – when people feel they make a difference it’s motivating and rewarding.

Our agile ways of working engender daily real-time interactions at the team level all the way up to monthly all-hands company meetings.

Our EVP [employee value proposition] covers career progression, skills and knowledge training through to consistent and regular two-way feedback. We run a regular EOS so we know where motivation levels stand.

We develop and stretch ourselves so we organise events such as a day planting trees through to life moment events where we take a couple of days out to experience something new and challenging that take our teams out of their comfort zone.

4. In another life you’d be?

TH: When I look back I was always an adventurer, leader and restless soul focused on fixing and improving things.

I think I would have found a natural level in another life that were similar to where I am now. So in likelihood ended up as a racing driver who, as a sideline built a small tech business as opposed to the flip of that, building a big technology business with a sideline in racing (although am still working towards becoming a racing driver so watch this space in 2024!).

5. Excluding your sector, which nascent technology holds the most promise?

TH: Quantum computing and bio innovation. Although both have rich histories, real bounds in advancements are only just emerging in both areas, which together with AI, will create a new world of possibilities across all aspects of society. It is hard to predict where it will take us and arguably, we are not fully equipped to cope with new capabilities as typically regulation for example falls behind technology advancements.

Beyond this question though is where we start to envisage a future where humans are not the smartest ‘entities’ on the planet.

Founder in Five – a UKTN Q&A series with the entrepreneurs behind the UK’s innovative tech startups, scaleups and unicorns – is published every Friday.