This is part of my series on Entrepreneurial DNA that was originally published on VentureHacks. I know this series has been running for a while (and is getting long in the tooth) – I promise it’s nearly over. I started with a “top 11” list – only because I couldn’t fit them into a top 10. But in the end I ended up with 12. So only two more after this.
I’m not anti VC. Obviously. I am one. But there are a lot of things that become norms in the VC industry that always drove me crazy from entrepreneur’s side of the table. They still do. One of them is when VCs say, “I’d like to ‘noodle’ on that for a while.”
Translation for any first time entrepreneurs can mean one of:
a. I’m not interested but it’s easier to say than “no”
b. I’m not really sure whether I’m interested, but if you suddenly get a lot of “traction” I’d love for you to see me soon
c. I’m super busy with other stuff. I’d love to spend time thinking about whether your business would be successful, but I’m not gonna.
In short, Noodle = No. I’d love it if VCs gave more honest and direct feedback. But I’m totally off topic.
In the VC industry you can’t take daily actions. It’s our job to say “no” 99.9% of the time. Literally. That’s the one thing that sorta sucks about being a VC because nobody enjoys saying “no” all the time but we have to. Right before I got into the industry I was at a cocktail party in Palo Alto and spoke with James Currier, the founder of Tickle and a former VC for Battery Ventures. He said that as a VC he really struggled to have a job where he had to say “no” all the time. So he left and focused on starting companies. I get that. As an entrepreneur you’re used to being optimistic and finding a way to make things work despite the odds.
But as a VC you simply can’t do the majority of deals you look at. So our job is to think a lot about things but not to take action on most of them. When looking at new deals we analyze, consider, contemplate, talk to colleagues, go to conferences, reference check, triangulate, debate and … noodle. Mostly we say “no” a lot.
That’s not you or you’re dead. In an entrepreneur I need to see the anti VC character. You need to be “The Decider.” OK, maybe not. But you need to be uber decisive.
10. Decisiveness – As I’ve said previously, being an entrepreneur is about moving the ball forward a few inches every day. What astounded me when I switched from being a big company executive to being an entrepreneur was the sheer amount of decisions I had to make on a daily basis. The minutiae. Some of it incredibly important.
The decisions sound so basic when you’re not the one having to make them. Should you go with Amazon Web Services (AWS) or have your own servers hosted at RackSpace? Should you build in Ruby, Java or .NET? Should you sign a 2-year lease or rent month-to-month? Should you hire an extra developer now or a business development resource? Should we take angel money or just go for a seed round from a VC? Is venture debt a good idea? Should we launch at TechCrunch50? Should we charge for a product or offer fremium? Should we ask for a credit card up front or after their free trial?
It never ends. And there is no such thing as a startup decision with complete information. The best entrepreneurs have a bias for making quick decisions and accept that at best 70% of them will be right. They acknowledge that some decisions will be bad and they’ll have to recover from them. Building a startup might be a game of inches but you don’t get timeouts to pause and analyze all of your decisions. As I’ve posted about before: my startup motto is JFDI (think Nike).
And it is so easy to spot entrepreneurs who struggle to make these decisions. They’re slow to hire new staff. They’re slow to fire even when a person isn’t performing. They lollygag on deciding whether to raise money, how much and from whom. They are reluctant to quit their day job and jump in head first.
I was recently considering investing in an entrepreneur in Silicon Valley. He was deciding between taking another senior role at a prominent Silicon Valley tech company or starting his own business. I told him I didn’t think he needed any more resume stuffers and now was the time to go do something big on his own. It was time to earn! Within a week he had me a deck with a strategy for a new company. He offered to fly down on 24 hours notice and meet with my partners (which he did).
He then booked tickets to China to talk with suppliers and he promised to revise his strategy by the time he got back. He is getting stuff done in entrepreneur years which is a step change faster than dog years. The next time I spoke with him he had a customer order for $125,000 – and he doesn’t even have a product built!
But I have the feeling by the time we speak again he’ll have made so much progress that he’ll question whether he should take my money. I’m certain he will have talked with other funding sources. This is how it should be. (If he reads this he’ll know that I’m still open to being an angel investor ;-))
If you’ve been “thinking about doing something” for a long time and batting this idea around with your favorite VC for six months to a year, don’t be surprised if they’re not prepared to back you in the end. VC’s understand the difference between the way their job function works and the way yours does. Entrepreneurs don’t “noodle” they “do.”