Archive for February, 2013
A rant for the haters of Andrew Mason
I just read the news that Andrew Mason is out. Before you hate, ask yourself, what the fuck have you done lately? Every VC that opines or sneers, remember he created billions of dollars in value for his early shareholders. For those founders that hate, remember that he was a fucking kid, like any of us, who started something from nothing and scaled into the leader of an organization with tens of thousands of people. We admire the founder who raises a $20M brow-raising growth round from a big name VC…Mason raised more than $1 Billion in private capital from Accel, NEA, Andreesen, Greylock, Kleiner and on and on…oh and by the way…CEO of Starbucks on the board…no bigs…lot’s of us founders hobnob with likes of Howard Schultz… it’s not the $1B raised that’s impressive…of course…raising a lot of money doesn’t mean you were successful, but even if you look at it objectively, with the current depressed public pricing, he created a multi-billion publicly traded company…fought his way through one of the most competitive, blood thirsty markets in the world, remained last man standing, while every other company in the space fell one by one…he fought this ridiculous battle and won… ask yourself, how would you have performed in this fight? Why is Groupon GRPN and Buywithme…oh wait…yea…to what end I don’t know…we’ll see who takes over, we’ll see where the company lands and how it evolves, but as a founder, Andrew Mason was a dazzling success…as a public CEO maybe less so…fine…but strictly as a founder, if we measure his run against what every founder reading this aspires to do…he will have outperformed all of you…remember that before you grin and make and off-color comment about how “Mason is finally out” or how “Groupon is a mess.” The “mess” Andrew Mason created is 10x the scale of the greatest accomplishment you will ever have….dude built the fastest growing company in the world…respect
Oh, and for the overly smart analysts and financiers in the making on wall st, who are making jokes around the water cooler and discrediting Mason with “I told you so’s” as though you are somehow his intellectual or professional superior…unless your name is the one on the door to your office building…get real…you are not even in the same atmosphere.
Read Full Post | Make a Comment ( 18 so far )From Disciple of @cdixon to Selectively Stealth
Before I started in the venture capital world, an opportunity recognized was an opportunity worth guarding. Later, after listening to folks who had been around the block, I learned that there was little to no risk in preaching my new ideas to anyone who would listen. Reading advice such as this post from Chris Dixon only furthered my position that stealth mode was for the naive.
For the last few months I have been working on a new project…and I’d be lying if I said I haven’t reexamined my perspective on what is worth sharing and what is worth holding back. Bijan wrote this post today which crystalized an archetype of founder for whom stealth mode is a reasonable form of operation. He writes:
“I do appreciate what stealth mode represents to me — namely an idea that takes a long time to build with founders that are wonderfully proud, crazy ambitious with a healthy dose of paranoia.”
A little while ago we incorporated our new company under the name Coopkanics, Inc., not because we had a secret to hide, but simply because we needed to start building “that thing that takes a long time to build”, and while we had a vision for what it was, we didn’t have a brand or a product that was worthy of “market facing” ink. Our intention was not to be secretive. Ask me what we’re working on and I’ll tell you. Out intention is, however, to be straightforward about where we are and where we are not yet. And right now we’re at “Coopkanicks, Inc.”…3 (arguably) smart guys, who have had some success in the past, working on the biggest thing we could possibly find to work on. Full of ideas…started to build em, and doing it reasonably efficiently. Anything more than that would simply be premature, so why sell it?
People always expect you to sell them. They want you to convince them of your work. When I meet someone who assumes this position with me, I stare blankly at them. When I meet someone who wants to engage and contribute, I go as deep as I possibly can. I guess you could say my position is “selectively stealth.” If you are and idiot, arrogant, or opportunistic “I am working on the mobile internet, and I don’t know much more yet” If you are intelligent, curious, and engaged, “I am working on the mobile internet, and here is everything I know so far.” Regardless of which conversation I am having, one thing I will not do is sell you. We are where we are…which is a space that I fear many “stealth founders” can’t live in.
The other side of Bijan’s version of stealth, which I abhor, is the founder who hides behind stealth when they don’t yet know or have confidence in what they are building. They can’t live with where they are. It takes a special kind of chicken to mask uncertainty as some sort of strategic decision to stay quiet about one’s work. If you aren’t confident enough to say “this is what I know, and this is what I don’t know yet” and you’re keeping things under wraps until you have a story to sell, you are doomed. And if you are hyping your company and brand while playing this game, you are triple doomed. Unfortunately, I think 1 out of 10 stealth founders are Bijan’s long term thoughtful archetype, and 9 out of 10 are blowing smoke while they try to figure it out behind the curtain. Those people give stealth a bad name.
I think it’s not about stealth vs. open…I think it’s about sharing what’s worth sharing thoughtfully.
Read Full Post | Make a Comment ( 3 so far )What Really Happens When You Fail in Startupland
This is not going to be an easy topic to talk about, but it needs to be said. This post is about failure, the way we talk about it in the startup world, and the disparity between the way we talk about it and the way it is.
The party line on failure, if you talk to anybody in the venture world specifically, is that “failure is a badge of honor” or at the very least, “there is nothing wrong with trying and failing.” This is the line that we tell young founders to encourage them to jump in and take risks. This is the line that we tell the world so that we appear genteel, respectful of the risks that people take, and admiring of their willingness to risk everything. It is a pom pom we wave when we are trying to say “we love entrepreneurs and admire their boldness.”
The truth is, and I am speaking from an investor’s standpoint here, we want to believe that we live the reality of this party line. We want to believe when we lose money with a founder that that loss has no impact on our feelings toward this person…but if I am really honest about it, and I look at empirical data…the party line and the reality don’t always line up.
The truth is, when you fail, your investors tend to have a bad taste in their mouths. Nobody likes to lose money. Nobody likes to be wrong. Nobody likes to sit in that space that isn’t so happy…and unfortunately for a founder, his person at the point of failure is an embodiment of many things that nobody likes. Now sure, an investor doesn’t dislike the founder himself. If the founder does right and doesn’t succeed, there is no “black ball”, or malevolent desires on behalf of an investor…but I’d be lying if I said there isn’t a slight tinge on that relationship…and unfortunately, in this world, a slight tinge is all the friction necessary to turn momentum into something less. Note: this tinge is not permanent, and it is not insurmountable…but coming off a failure…you are only as good as your next act…and weather we say it openly or not, clawing your way to the next act, you are starting not at neutral or positive, but with a headwind.
I’ll give the example of my own experience as a founder. My first company, I raised about $600K. I operated for a year, failed, and returned about 50% of the capital I raised. I felt terrible. Everyone said I did the right thing returning the capital, that I was a standup guy for doing it, but still I lost them money. Nobody turned their back on me, once the company wound down…but they just weren’t leaning into investing more time and energy on me. When I went to raise money for my second company, Hyperpublic, weather I asked them or not, not a single investor in my first company invested in my second. Just gives you a sense of the increased friction you face, coming off a failure. Sure I was able to raise money from new investors, but I had to answer the question “is so and so from your last company investing?” and so on. New investors call old investors and say “What do you think of Jordan?” Of course, again, investors who lose $ with you don’t “blackball” you, so they say “stand up guy, did the right thing, etc…” but still their signal of not reaching out to put $ into the next thing becomes something a founder has to overcome.
Now, let me show you how powerful the mental impact of a failed venture can be on a relationship. When I started Hyperpublic, I felt so bad about losing my previous investors’ money, that I cut all of those angels a piece of equity in the cap table of Hyperpublic. It was free, they didn’t know how much they had, but they signed a piece of paper, that to them was a nice gesture, but still probably worth very little. In their minds they owned a piece of a new thing with an unproven and recently failed person. Fast forward a few years, I sell Hyperpublic to Groupon, and get to send an email to each of these angels saying “you thought I lost half your money, turns out I doubled your money. Here’s the check.” Again everyone appreciative. But now, if I am really honest about it, I only have real relationships with two of the seven or eight investors who lived three years thinking I failed and lost their $.
I listen to the way investors I interact with on a daily basis, from all different funds east and west, talk about their “losers” or the ones that didn’t work out…and it is always the same…a muted expression of disappointment, and slight negative tinge…not a condemnation by any stretch, but we have to be honest about the realities of failure. It is ok, but it’s a black mark that you have to work your ass off to wash away. Coming off failure, you are only as good as your present and future. That’s the reality of the market. I don’t want it to be this way, but even the most accomplished of people cool off when things go south…which means if you haven’t proved anything, and you fail, you really cool off…only way to heat back up is to earn it back through hard work and new success.
Read Full Post | Make a Comment ( 6 so far )When the wise thinks himself wise
Earlier today Chris Dixon dropped a nice excerpt from “The Principles of Psychology” by William James. The entire excerpt can be read here, but I absolutely loved the following thought :
“As the art of reading after a certain stage in one’s education is the art of skipping, so the art of being wise is the art of knowing what to overlook.”
That is a very powerful concept that I hadn’t fully articulated but have definitely been living as I begin to build the mobile web I want to see in the world. Said another way, knowing what NOT to focus on at various stages in a company’s development can be as important as knowing what needs focus. I have actually been pretty dogmatic about focus this time around. I guess you could say, I’m feeling sort of wise. I’ve now been through this phase in building a company three times, and I’ve seen this stage in company development at least 5000 times more.
I sat down last week to write a 90 day plan for what we needed to do as a team and as a company…and it took me about 30 minutes to lay out what I’ll call an A- plan. A few years ago, it would have taken me 6 months to even figure out that I needed to develop a 90 day plan, and the amount of ridiculous crap that would have been in it would have been immense. So my plan was an A-, and I knew that it would take some more thought and discussion with our team before it got to an A, but I was feeling pretty wise indeed, knowing that there was nothing on that paper that the wise man would or should overlook…but what I learned a few hours later, was that I had gone a little heavy on the “wise whiteout.”
That night I went to a sushi dinner with a dude who I have come to see great wisdom in. I told him, “this is my 90 day plan, not my big vision of where we’re going, I just want to focus on ops and see if there’s anything you’d be doing differently” I would have preferred to have my plan at an A, as this dude’s time is scarce, but our meeting ended up being a few days earlier than I had anticipated, so I just dropped in where I was in thought. I went into the dinner hard pressed to add any major initiatives to the plan (as it was already quite ambitious), but left feeling a gaping weakness in what I had been thinking. My friend rightly suggested that I had designed a 90 day plan that overlooked one of the hardest parts of our effort. I wanted to keep the scope of our first build manageable and known. I didn’t want to commit to a messy challenge, knowing that it might turn my 90 day plan into a 120 or 150 day plan, and so I had “wisely” chosen to overlook it until a time when I either had the resources or gun at my head to address it.
Turns out I thought myself too wise. Under the guise of wisdom, I gave myself the license to overlook a key element of the company we are trying to build…while maybe not solvable in 90 days, it was certainly attackable…and further…the commitment to attack it will be a key influence in the early DNA and culture of our company….and thus my response to Chris’ post was a retweet with warning: “True but dangerous when the wise thinks himself wise”
The lesson: wisdom is a spectrum, no matter where you are on it, seek out the wise and they will pull you closer to their end
Read Full Post | Make a Comment ( None so far )Bad Asses Make Peace with Unanswered Questions
As I walked to work this morning, I found myself extremely aware of how wound up I am in moving forward on our new mobile web endeavor. I found myself hurrying. Hurrying to shorten my morning routine at home, hurrying to make progress on product design and definition…hurrying to get administrative tasks done…and if I had to take a step back and examine the hurry more holistically…it’s really a hurry to answer all the unanswered questions between today and the future I want to build into the world. At Hyperpublic I lived hurrying for two years…a founder is never satisfied as long as questions are outstanding…but the question I arrived at today, which I already knew the answer to, I just hadn’t articulated it in my mind, is as follows: “Is hurrying a necessary state of mind for a startup to succeed?”
There is no doubt, when a tone of hurry is introduced into a founder’s mind, and by extension a team’s mind and culture, things get done. We see founders all the time setting artificial deadlines, things to run at…as though creating a sense of urgency is a necessary catalyst to stretch a team to produce. Urgency is real, and sometimes a deadline is the difference between getting a deal and not. Sometimes, when building a startup, you have to be in a hurry or someone else comes along and eats your lunch. But there is a difference between recognizing moments when we are in a hurry, and creating a culture where the only way to find the finish line is to live and work in a state of perpetual hurry. It doesn’t take a rocket scientist to know that running a marathon is not simply a consecutive set of strung together sprints…but there is more to this question than just strategic pacing.
Hurrying can be at odds with thoughtfulness, happiness, health, etc…I have seen some repeat-founders, in recognition of this truth, slow down too much. Having isolated the truth, that hurrying is not the way to win a marathon, they attempt to create a new culture and personal lifestyle that takes urgency out of a startup’s culture…often these repeat founders have had a success in the past, and now in their wisdom, they say “this time, it’s important to be as zen as I was in that lovely 12 month break between gigs, so this is what our new culture looks like.” Almost invariably, those founders either fail in the new endeavor or realize they swung the pendulum too far, that they lost a full cycle of development and progress, and now it’s time to “get serious and buckle down”…at which point they inject hurry into a culture that isn’t as ready to accept it.
On the other end of the spectrum, I have seen young first time founders hurry the entire way through and either succeed wildly or burn out while running at the finish line. I think you get to do this once, and only once, in your life. I have never seen a repeat founder attempt to sprint wire-to-wire the second or third time around.
So where does that leave me? Sort of retraining myself…My mind and my body recognize this period of deep uncertainty/opportunity as a state where we hurry to answer the unanswered…we’ve been here before…and when we hurried we did well…so I wake up and instinctually I am hurrying…taking deep hacks at the unknown…but as I walk through my day…my experience and rational is talking to my mind and body and saying, “dude, chill the fuck out. You are not in a hurry right this second. You are not going to lose this market if you enter a week later. In fact, you don’t even know yet if your timing is 6 months early or 6 months later than optimal. You haven’t raised capital and you don’t have any burn…time is not running out, it is just beginning. THESE UNANSWERED QUESTIONS THAT YOU ARE ATTACKING LIKE CANCER WILL GET ANSWERED OVER THE NEXT 5-10 YEARS. STOP TRYING TO ANSWER THEM ALL TODAY.
So the CAPITAL LETTERS in my head are my experience yelling at my founding instincts…saying “you asked to be in this ocean of unknowns…I told you how nice it was to chill on the beach and let the world pat you on the back…and you just couldn’t let us graduate into the life of a non-hurried venture capitalist…waiting for other people to answer the unanswered for you…FINE…we’re back…answering the future ourselves…and making up the answers where no answers exist…I accept this, but remember you are a mother fucking bad ass, don’t act like a fucking kid.”
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Jordan Cooper's Blog: startups, venture capital, etc... 