Bothsides of the Table

VC funding.

Our perspectives on the topic wax and wane with market cycles. We love capital efficiency until we love land grabs until we abhor “over funding” until we get huge distribution & ring the bell for more funding until we attract every non-VC on the planet to invest in startups until it crashes and we start the cycle all over again none the wiser. Amnesia sets in and we get back on the merry-go-round for the next cycle.

I saw this great image on Twitter courtesy of Simon Wardley, CC3.0 by SA. (blog here). It’s kind of a truism for life and certainly our industry. I see it in many newer VCs. They enter the industry knowing that they know nothing. Same as I felt. If one entered between 2009-2015 he or she is no doubt in the “hazard” phase where one need to be careful about thinking he know more about the industry than perhaps he do. We’ve had just one market since then and it could confuse one into thinking:

every deal finds downstream investors,
every company good or bad finds a home or soft landing (“there’s no downside, people would buy this for the IP alone”)
you know anything at all about brazil, india, china or even saas sales, ecommerce or analytics (you know all these in a bull market)
the more money you give a startup the faster they grow

I think I’m at the expert stage of venture capital and I mean in the Wardley sense. The longer I do this the more humbled I become. Not the kind of false, humblebrag, “I’m always ready to learn” kind of humble but the “who the fuck knows” and “G-d I hope I’m right” sort of humble.

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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 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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Posted on Jul 29, 2015 | 0 comments


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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The hardest thing about starting a company is that from day one you emerge as this completely vulnerable entity trying its hardest to project success, power, trajectory and inevitability while you secretly know that you’re one knock-out blow from extinction.

Think about it: You start with nearly no money, you bring on some co-founders and if they quit it could completely derail your mission, you talk to journalists who if they decide to be cranky can ruin your reputation, you pitch investors who can change your outcomes by giving you cash that enables more forward progress but if they withhold it you can starve. While all of this is going on you are trying to get customers to use your product, enterprises to sign contracts that don’t leave you with unlimited liabilities and landlords to take you in with limited deposits or guarantees.

In a word – you are truly vulnerable.

Understanding your vulnerability and understanding the power of those with whom you must do business is a very important part of figuring out as a startup how to fit into the broader ecosystem and the art of statecraft is tremendously important in knowing when and how to project power in sales, recruiting, negotiations, fund raising, etc.

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