I’m often asked about the differences between being at a VC and being an entrepreneur and whether I prefer one or the other.
The biggest difference I cite is that Venture Capital often feels like an “individual sport” while startups are a “team sport.” The reason is that at a VC you have a group of partners who often have different focus areas of excellence, each pursues deals in their respective field, each makes investments and sits on boards and each spends their most difficult hours tackling problems at portfolio companies vs. solving the challenges at the VC itself. You come together as a team one day per week (the “Partner Meeting,” which for most firms is on Mondays) and mostly share the news & information from your portfolio companies or evaluate new deals.
Startups are team sports because you’re all working on the same shared objective of the company. Startups often have mission statements, goals & objectives and the best roll out company wide processes to align the CEO’s goals with the executive management goals with the next level staff goals all the way down the organization. The top-line results are shared because every member of the org ought to be contributing to the same goal.
As a result many VCs feel like amalgamations of individual contributors and don’t necessarily have a shared “core.” This isn’t a criticism, just an observation. The best firms I have interacted with over the years seem to have more of a sense of shared mission & values. The truth is that the newer the firm the easier that shared mission is. When you’re on Fund I or Fund II it is often a founding team that all started together, knew each other before and went through the trenches together to get a fund raised.
Let me start the post with three statements
1. I have attention deficit disorder, it is a real condition, I have been diagnosed including having radioactive isotopes through my brain to map my development and yet I’m a leader, I have accomplished much, I did well in school and went on to earn a master’s degree and I can actually concentrate when I want to. I wasn’t even aware that I had ADD until I was 40 (I’m now 47) and knowing it has changed my life for the positive. I don’t believe it’s a disease – it’s simply a slow-functioning prefrontal cortex. Essentially – it’s just the way your brain is wired. It’s both your curse and your secret sauce. Embrace it.
2. I believe many entrepreneurs have ADD. I believe the condition actually is conducive in many ways. Many people with ADD don’t work well in corporations & with bureaucracy, people with ADD have a bias towards action, people with ADD often speak up & take action and have strong bursts of creativity. So suck that every teacher who scolded us for not paying attention to boring classes or making people with ADD feel less accomplished
3. If you DO have ADD you are highly unlikely to finish this entire post in one sitting.
This morning Clutter.io announced they raised $9 million from Sequoia, arguably the best venture capital firm that exists. Congratulations. Sincerely.
Conventional wisdom says I shouldn’t tell you this because I invested in their main competitor, MakeSpace. I know my MakeSpace friends will forgive me because I just don’t believe the conventional wisdom is right. And it’s part of what can go wrong in startup land.
For starters – the co-founder of Clutter.io, Ari Mir, is a friend and 6 years ago I backed the first startup he co-founded with Ophir Tanz, GumGum. Ophir was and is the CEO and is running what is now a spectacularly successful business. Clutter is LA based and many of my friends invested. So why would I want to damage a bunch of friendships for no reason?
But the bigger truth is the competition is important. We will have two well-funded companies educating the market on why this
Today Twitter announced it had laid off around 336 jobs or 8% of its workforce. Nobody should celebrate, cheer or shout, “it’s about time.”
This is about 336 people whose lives are altered and need to begin looking for work, saying goodbye to friends & colleagues and go on that journey of transition that most people dread. I wish all of them well and feel confident that anybody employed at one of the most innovative companies of the past 10 years will land on his or her feet.
So what can we learn from this? Is it a bone headed move by Twitter? Is Twitter finally screwed as many have predicted? Is this a sign of weakness in which others can prey on the carcass of a rotting core?
None of these things. Here’s my take away. This will be seen as a watershed moment in the wake-up call and rationalization of our industry. I spoke at Michael Kim’s excellent annual Cendana VC/LP conference today. One of the points I tried to make is that as venture capital investors as an industry we seem to have an unhealthy disdain for public market investors.
A while back while I was reading the tech press I saw a quote from Randy Komisar, a partner at Kleiner Perkins that was simple, yet profound. He was quoted as saying,
“Being a great partner is as important as being smart or being right.”
I liked it so much I wrote it down and tried to think about what it meant to me and I promised myself I would write about that one day. What does it mean to be a great partner? In business? In life?
When I think about partners I think about: integrity, loyalty, commitment, trust and knowing that somebody will be there for me in good times and bad. I think of somebody who is non-judgmental even when they have reason to be. And while it’s not always easy to avoid saying “I told you so” or trying to persuade others that you have the “right” answer – it seems like a rational goal to avoid “knowing better.”
In a way it reminds me of a lesson my wife taught me. When she’s unhappy about a situation and is frustrated or near tears I immediately move into problem-solving mode. And she said to me long ago
“I’m not looking for better answers to my problem. I just want some sympathy. Just say you understand.
I have never met a person who loved their rental car company or the experience of turning up at an airport, waiting in line, paying a huge fee and then dealing with returns, airport shuttle buses and so forth not to mention half-washed and smelly cars. I think the closest parallel I have is the feeling I had for taxi cabs (inconvenient, smelly, expensive) before Uber. The rental car companies have a million scams to get more money out of you – mostly notably the gasoline scam. They either ask you to fill up your tank before returning the car (and gauge you if you don’t) or they pre-sell you “cheap” gas but when you factor in that you never return your car with a totally empty tank is also a scam.
And leave aside the fact that it’s very hard to rent cars if you’re below 25.
You simply can’t build a long-term great company by duping customers and with the top three rental car companies controlling 90+% of the market their behavior won’t change. It’s a classic “innovator’s dilemma,” making this market ripe for disruption.
Surely the startup can do better.