OT - Take your blinkers off!
Lately I've had the opportunity to look at things from a very different perspective. Rather than looking up all the time, I have been looking down more often than not. I don't mean this as a statement of arrogance - I am sure there will be plenty of opportunities for me to look both up and down in the coming months and years.
I only bring it up as part of a larger point. I have found a lot of people fail to see opportunities. They look down when they should be looking across. What do I mean? I mean most people fail to think laterally. They head in a given direction with blinkers on (the type horses wear, not the type cars have) and they fail to understand that people - community, relationships, like minded friends - are what really matter.
As an example, I have seen VCs ignore opportunities due to the most ridiculous of reasons and criteria - criteria like geography or how polished a 'pitch' is. You know what? If you have such a failure of imagination that you think geography is a limiting factor then you really shouldn't be making decisions about betting on companies. I'm so glad we are not looking for money.
I have seen start-ups ignore a helping hand from other start-ups who are further along than they. They fail to listen to the marketplace, to trends or opportunities and instead decide that they can do everything on their own. They think their product or vision lives in a vacuum. They forget that 100 other companies are trying to do the same thing.
Companies are not about a feature, or a product, or a business - they are about an ecosystem. Suppliers, staff, partners, customers, evangelists, advisers, friends, advocates and passionate users. And most of all, they are about a culture of change - of finding opportunities.
I have also seen sharks - people who approach with the hand of friendship but are really just sucking you for information. They have a 'not invented here' attitude - if they didn't think of it, or they don't control it, then they think it isn't worth supporting or adopting. You can only leach off people for so long before your name looses all credibility.
They also make a lot of claims. They claim that they can make things happen, but first they want to take over your company or charge you a bunch of money. If you can make things happen, then go ahead and start. If you actually deliver something then we can talk about formalizing your involvement. If you really believe in my work then put in some work of your own.
And finally I have seen talkers. People who constantly talk but fail to act in any meaningful way. Not even on their own projects. They throw their weight around, bluster around loudly, argue the academics and semantics of a subject endlessly but never quite deliver their own version of the perfect reality they claim to uniquely see.
To all these people - and the others I have failed to describe - take your blinkers off. Wake up. Reach out. Make friends. Understand that, in the end, we are all just part of a living, breathing ecosystem. Someone you underestimate today may, in fact, control the conversation tomorrow. A company you dismiss because they are missing a slide in their presentation may become the next Facebook.
How do I know? Because I have seen those things happen - and they are still happening.
I have recently had the pleasure of getting to know people, companies and investors who understand that people are the most important resource of all. That co-operation is more important than capital. That giving people a chance, and contributing real substance over bluster is more valuable than track record or geographic location.
To those people - and you know who you are - thank you for showing me what can really be achieved when people put aside ego and politics to just get things done.
If you would like to join such a group - drop me a line at me@chrissaad.com
End of rant
I only bring it up as part of a larger point. I have found a lot of people fail to see opportunities. They look down when they should be looking across. What do I mean? I mean most people fail to think laterally. They head in a given direction with blinkers on (the type horses wear, not the type cars have) and they fail to understand that people - community, relationships, like minded friends - are what really matter.
As an example, I have seen VCs ignore opportunities due to the most ridiculous of reasons and criteria - criteria like geography or how polished a 'pitch' is. You know what? If you have such a failure of imagination that you think geography is a limiting factor then you really shouldn't be making decisions about betting on companies. I'm so glad we are not looking for money.
I have seen start-ups ignore a helping hand from other start-ups who are further along than they. They fail to listen to the marketplace, to trends or opportunities and instead decide that they can do everything on their own. They think their product or vision lives in a vacuum. They forget that 100 other companies are trying to do the same thing.
Companies are not about a feature, or a product, or a business - they are about an ecosystem. Suppliers, staff, partners, customers, evangelists, advisers, friends, advocates and passionate users. And most of all, they are about a culture of change - of finding opportunities.
I have also seen sharks - people who approach with the hand of friendship but are really just sucking you for information. They have a 'not invented here' attitude - if they didn't think of it, or they don't control it, then they think it isn't worth supporting or adopting. You can only leach off people for so long before your name looses all credibility.
They also make a lot of claims. They claim that they can make things happen, but first they want to take over your company or charge you a bunch of money. If you can make things happen, then go ahead and start. If you actually deliver something then we can talk about formalizing your involvement. If you really believe in my work then put in some work of your own.
And finally I have seen talkers. People who constantly talk but fail to act in any meaningful way. Not even on their own projects. They throw their weight around, bluster around loudly, argue the academics and semantics of a subject endlessly but never quite deliver their own version of the perfect reality they claim to uniquely see.
To all these people - and the others I have failed to describe - take your blinkers off. Wake up. Reach out. Make friends. Understand that, in the end, we are all just part of a living, breathing ecosystem. Someone you underestimate today may, in fact, control the conversation tomorrow. A company you dismiss because they are missing a slide in their presentation may become the next Facebook.
How do I know? Because I have seen those things happen - and they are still happening.
I have recently had the pleasure of getting to know people, companies and investors who understand that people are the most important resource of all. That co-operation is more important than capital. That giving people a chance, and contributing real substance over bluster is more valuable than track record or geographic location.
To those people - and you know who you are - thank you for showing me what can really be achieved when people put aside ego and politics to just get things done.
If you would like to join such a group - drop me a line at me@chrissaad.com
End of rant
Labels: APML, blinkers, business, funding, Media 2.0, off topic, opportunities, patnerships, rant, vc
3 Comments:
Hey Chris,
I totally agree that people are the most important thing in both business and in life. In fact, I have written about the fact that friendship is the most important thing in business a few times recently including this post: http://tinyurl.com/2znetb
We're all on this rock together and we should all help each other to achieve our goals.
That said, I thought I would jump in and comment on the VC criteria angle you bring up. I can see your point on the polished nature of the pitch being an issue. I think a lot of the better VCs out there are beginning to care less and less about a polished pitch and business plan in favor of valuing a top notch product that is already up and running. However, I think you may be a bit off in bringing the location/geography criteria into the mix.
VCs are answerable to their investors who, in most cases, are large pension funds, endowment funds, etc. These investors build portfolios of VC funds in order to mitigate their risk just as they would with any other asset class. They build their portfolio around certain criteria one of which is geography.
When a VC fund pitches a new investor one of the things they define is an investment geography. The investors then trust that the VC will stick with that geography since the investor is building their portfolio and, thus, working to mitigate their geographic risk based on that information.
When a VC strays from their geography things start to get a little tricky since they told their investors they would stick with a certain geography or geographies. Even if the investment(s) go well investors may reconsider investing in the VCs next fund since the trust has broken down.
I hope that adds some context to why VCs do what they do. It isn't irrational when you look at who they need to answer to and the fact that those folks are trying to build a balanced portfolio of VC funds.
Also, chiding VCs for looking at an entrepreneurs track record and valuing it is a little off. It is a completely rational thing for VCs to do. Sure, a good track record isn't a measure of future success but knowing the track record eliminates one major risk for the VCs (and the entrepreneurs) - that is, the risk of the team working well with each other and working well with the VC.
As you said, people are everything and in that case the VCs are realizing that and valuing it highly.
Lastly, I haven't ever heard the term blinkers before. We call them blinders over here. :-)
Hi Eric,
I do understand the need for VCs to limit risk and report to their investors. However my problem is not with managing risk so much as the inability to think beyond it or work around it.
How hard is it to re-locate a willing founder? Not very.
It's such a simple notion it boggles my mind why a VC can't have many, many conversations with people all over the world. If a deal is worth doing, it takes very little effort to put a clause in the term sheet 'Founder must re-locate themselves to Bay Area.'.
Also, on the issue of track record, this also takes a touch of creative thinking. Again, limiting risk is fine and betting on people who have succeeded before is an easy way to feel good about limited risk. However two phenomena drive me crazy about this criteria.
1. I have seen some ridiculous companies started by entrepreneurs who have had huge successes in the past. If you read their stories some of them have even fallen into their success with a random feature they didn't expect to matter - PayPal comes to mind. Funding an A class team with a C class idea is just silly - and I've seen it happen. Slideshows anyone?
2. If a founding team is willing to take on experienced managers - then their great idea and personal motivation and passion deserves a chance to survive irrespective of the caliber of the pre-money team.
Perhaps this is not about VCs at all - perhaps it is a call for a better system and a better attitude to helping people innovate. A system where people of all skill types/levels and geographic locations can find a way to bring their ideas to life. Maybe not as full fledged companies - but certainly as a living breathing entity.
Maybe they don't have to be an A-class team (in the traditional sense) to be willing to work hard for an A-class idea - in collaboration with A-class help.
Incidental - I am not just talking here - I have just such a model. I alluded to it at the end of my post. As I also said in my post, talking only gets you so far - at some point you need to do something.
I agree with you on both points one and two above. Point one especially hit me as I have seen that too. I have scratched my head over a couple companies that found funding simply because of a famous founder with prior success.
I wonder about the relocation clause in the term sheet though. I bet if VCs started doing that then you would hear a ton of entrepreneurs complaining that VCs will talk to them and like their idea but then, when they get a term sheet, it requires them to relocate.
Also, VCs do that a lot. Look at the YouTube guys or the PayPal guys. Those things were developed by guys from the University of Illinois who relocated most likely for the money to keep the company going. That type of stuff happens a lot but perhaps not so much internationally.
In closing I'd like to say that I do believe there is a lot of innovations still to be made in early stage VC and I think we're at the cusp of a period of innovation in the space. I am absolutely not one of those guys who thinks things should say the same just because they are that way now and "it works." See this string of posts for some of my arguments: http://tinyurl.com/2wumnk
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