Startup Lessons


Technology. It has been a hobby of mine since 1981 when I fell in love with programming, applications and online games. My brain is wired for logic and for problem solving and computers have always helped me fill this compulsion.

And since I was 13 years old I have been accustomed to the debate about the limitations of technology or rather the downsides of being overly obsessed with gadgets, devices, software or applications. Every hour of Zork was an hour not on the soccer field or basketball court and every chat in Prodigy or CompuServe was an in-person chat not happening. I was blessed with a healthy extraverted side to accompany my inner computer geek so the balance never had negative consequences.

The detractors were much stronger in the 80’s and early 90’s but my arguments that for every person who was pulled away from an actual social interaction was another who was alone and now could connect with other humans and feel affinity with people thousands of miles away. Technology is of course a dual-edge sword but the media discussions of how it affects human interactions all too often focuses on the downsides.

But the debate rages on and we know the last eight years drove computing from the confined time & space of our desktops and into our pockets and now wrists. The mobility of technology has exacerbated both the upsides (all the information at our finger tips at any moment) and the downsides (addictions of checking updates incessantly or spending more time capturing and posting events than enjoying them).

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Last night I wrote a post about how the fall in the stock market over a 3-day period may affect the venture capital markets. If you’re an entrepreneur or VC who wants somebody else’s view on that you should read it. This morning the US stock markets are rallying. So now what?

 

Let me give you the quick summary of what I said yesterday:

Public markets affect venture funding. Full stop. When they’re bullish venture valuations go up, LPs put more money into VCs, more angels want to get involved, new entrants (hedge funds, mutual funds) feel they’re missing out and the overall venture market goes us.
In a period of “uncertainty” about the future venture capital rounds take longer – particularly later-stage deals. Mostly because VCs want to wait to see if a “new reality” has set in.
If markets pick back up venture funding will return as it was before the 3-day, 10% correction but if the VIX goes up (a measure of expected volatility in the stock market) then expect rounds to take longer. If the markets continue to go down expect less funding.

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If you didn’t notice that the stock markets in the US dropped nearly 4% today (after falling last Thursday and Friday) then you were probably completely off-the-grid and on vacation.

It was a nerve racking morning.

My favorite Tweet of the morning came from Hunter Walk

You thought media twitter was bad… You thought tech twitter was bad….

— Hunter Walk (@hunterwalk) August 24, 2015

And by this I assume he meant that “market prognosticator twitter” was vomitous. And if that’s what he meant he was right. I saw a few friends politely suggesting that “now was a great stock buying opportunity” meaning that given the stock market is off by 10% it was a great chance to buy and lock in presumably low prices before the market rises again.

I’m not so sure.

And I said so publicly. I said nothing more than I thought people should be cautious because it times like these it’s hard to know how much market panic could ensue, what the knock-on effects would be and whether the market could fall further.

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This summer I had the extreme pleasure of watching one of the funniest, funnest and most insightful documentaries in a long time: Supermensch. If I had one wish for all startup employees it would be that you watch this film. It’s not for everybody: it condones sex, drugs and rock & roll. But please read on before deciding.

Supermensch (I won’t give anything away here other than high-level, obvious storyline of film) is about the life of Shep Gordon, one of the most revered talent managers who managed the likes of Alice Cooper, Blondie, Teddy Pendergrass and even Groucho Marx in his older age. He also created the celebrity chef industry.

I watched with headphones on with my wife in the room and I cackled so loudly and so often I think she wondered what I was up to. I laughed. I got verklempt. I was inspired. And I even drafted notes to some portfolio companies afterward.

A few take aways for me that parallel startups

1. Shep launched his career managing a no-name artist called Alice Cooper. It was the music industry and terribly hard to break out from the crowd.

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There is much discussion about this weekend’s article in the NY Times regarding Amazon’s work practices. People seem polarized between, “that’s what it takes to succeed” to “I can’t believe what a heartless, intolerant and misogynistic company culture they’ve built.” I’ve heard the gamut from reading opinions online and even hearing the debate in circles of my close friends and family.

For anybody who has never worked in a hard-charging environment I can see how this article portrays a unidimensional view of Amazon but it isn’t one I believe tells the complete story. The basic premise of the article is that Amazon breeds a culture where it’s work hard, sacrifice personal life, succeed and climb ahead or be tossed aside. It’s best encapsulated in a famous Jeff Bezos quote,

“You can work long, hard or smart, but at Amazon.com you can’t choose two out of three,”

The truth is that if you examines the most successful organizations and people in the world you’ll find similar cultures to those outlines in the article.

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Survivors


Posted on Jul 29, 2015 | 0 comments

Failure.

To most people it smells. People are afraid of it. It’s like cancer or divorce. When you have it you find you who your true friends are because they’re the ones who double down on helping, on being available, on listening, on understanding. Most people run from failure or disease because they’re hard to handle. Hard to know how to deal with. Awkward.

But I am attracted to those who have had severe set-backs in life because it tells you something about the mettle of the person with whom you’re dealing. It reminds me of a famous quote in one of my favorite novel’s “Damage” by Josephine Hart

“Damaged people are dangerous. They know they can survive.”

And more than anything I love survivors. I love people who have been put to the test – whether by market forces or even by their own stupid mistakes – and come back stronger. But markets don’t generally love failure. It reminds me of the old saying on the topic

“Success has many fathers, failure is an orphan.

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