Experience, mindset and determination - the keys to unlocking investment

A conversation with Ross McNairn - Wordsmith

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Founded in 2023 by Ross McNairn, Volodymyr Giginiak and Robbie Falkenthal - Wordsmith hit the headlines in June 2024 after raising a $5m seed round to support their mission of helping lawyers maximise their output with the assistance of AI. 

Wordsmith aims to give every lawyer their own paralegal assistant that chews through the mundane work, manipulating documents, basic research and marking up repeatable agreements.  An extra pair of hands to give you more bandwidth! 

“AI is not about replacing professionals. It's about making them better at their jobs,” explains Wordsmith CEO Ross McNairn. “Just as the word processor didn't replace writers, but instead made them more productive, Wordsmith is ushering in a new era of AI-assisted professional services.”

Within Scotland there remains a general perception that Tier 1 VC capital is extremely difficult to access. Wordsmith’s $5M  round led by Index Ventures shows that it is possible.

“One of the biggest challenges facing Scottish entrepreneurs is the lack of front line experience and comparables” Ross explains. “Get exposed to the best companies you can is my advice to any budding entrepreneur.”

Having worked in global scaleups such as Skyscanner, Letgo and Travelperk, Ross built invaluable experience in working at various stages of the expansion journeys, gaining hands-on knowledge of how to build teams and products and the language and appetite of Tier 1 Investors.

“Raising investment is all about risk management. Investors are looking for huge outcomes, they want to know that the people they invest in have both the ambition to build global businesses and the capabilities to execute on that ambition.

The more credibility you can add to that statement, with traction, previous experience and your team, the lower the risk.

Having spent some time learning the ropes helps on all these fronts. You learn the language, you learn to execute and your definition of success will calibrate more closely with what these investors are looking to achieve.”

One of the issues facing Scottish entrepreneurs who are seeking experience is the lack of scaleups operating in Scotland.

“One major bottleneck of innovation in Scotland is the lack of scaleups. Having 30 tier one scaleups in Scotland would create their own ecosystem. The liquidity of talent and labour would generate incredible learning opportunities, cross-pollination and spin out experienced, educated founders with coal face experience which translates incredibly into an entrepreneurial journey. I firmly believe spending up to two years in a global scaleup will return 10x or 20x in your following entrepreneurial journey.

“I would love to see steps being made to actively attract and make Scotland the place to scale up your next engineering team when you are an ambitious CTO looking to open your next hub.

“We should be looking to attract these types of businesses to Scotland through whatever means necessary as the quality of startups behind these operations will significantly improve. Until this is in place potential entrepreneurs should really consider remote roles or opportunities further afield to work for scaleups going through the process where they see their future startups going.”

With this in mind, Ross and his team periodically host early stage founders at their office as part of their end of week wrap ups, where they review the operations of the business and monitor performance.

Reflecting on his own journey Ross believes there are 3 skill sets vital to being an investable and successful founder:

“1. Technical ability - Building the product or selling the product

 2. Obsessive understanding of or empathy with your user -  

 3. Work Ethic. No one is going to give you success, you need very high degrees of agency and self enablement”

Ross describes how the founder journey is never easy and that investors are looking for determination and a history of resilience in industry to support the core business financial modelling.

“We need to understand that we are competing on a global scale. Hard work and determination is key to early stage success. I remember coding 7 days a week in a little flat behind the job centre in  Leith just trying to make the flight search work. Just ignore all the noise and focus on building for people and getting something helpful into their hands.

“Look at the US and Silicon Valley, there’s a reason the Y Combinator model works. You are given limited resources and a deadline to pitch something compelling to investors after 3 months. The American dream and lack of safety net really drives individuals to make their companies a success and if the first doesn’t work they learn and try again.

Being close to the edge is a gift. We understood there was a 95% chance we would fail on day one. After investment this dropped to maybe 80%. Understanding we are constantly at risk drives us to focus on making sure we are going to survive. With every new customer this percentage drops but we are not out of the woods, not by a long shot.”

From Ross’s experience the pathway to building an investable and scalable startup is somewhat linear:

1. Become good technically using the quality of education and support available in Scotland

2. Get 18 months / 2 years of experience in quality scaling companies

3. Ensure your mindset is right. Hard work and determination are non-negotiables

With a combination of these skill sets founders will start to naturally attract investment as they become valuable propositions.

Ross and the team at Wordsmith have recently joined Techscaler as members. We are working with Ross to open up peer to peer learning opportunities to enable more insights into the startup scaling journey in Scotland.

‍Join Techscaler today to keep in touch as these opportunities are developed.