Tag: Silicon Valley

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Internet Culture Startups

Day 282 and Stop & Go

I wasn’t born until after stagflation so I can’t tell you what America or Britain felt like in the 70’s but the chattering classes seem to enjoy bringing up the comparison. But there does seem to be a bit of “stop & go” energy in the air. Everyone is raring to go but the energy cannot quite flow freely as we smack into obstacle after obstacle. Demand is pent up but the reality of supply is uglier.

Obviously this perspective of excitement and demand is colored by working in startups where the bias is always towards the excitement of building new things. Crypto is burning with the fire of millions of zealots, all of whom are confident we are building the infrastructure for a better future. Everyone feels like it’s worth investing and higher prices are a good sign. There is more go than stop here.

Of course, I am one of those zealots. I’ve got the optimism of someone who saw how fast previous waves of web1 and web2 changed my entire world. Wealth and creativity was unleashed twice over for the elder millennials who were lucky enough to witness the dot com boom as children and the social media era as their first jobs.

There were massive crashes and financial implosions too. Stop more than go. More of us got hurt than got wealthy. But we saw the possibility even as failure engulfed most of us. So we believe we might be the lucky ones this time. That we might be the ones to win the game. “Red light, green light” seems fun if you can make up ground when everyone is running. Just don’t get hurt too bad.

I feel this energy in my own body. I am excited to push into everything. My portfolio companies are all riding high. There is no way I can do it all in any given day. So when the go energy pushes me sometimes I find myself leaning into stop and simply taking a nap in the middle of the day. It makes me a little jittery to feel the push-me-pull-me of demand grind up against the limited supply of energy and focus. I’d like to feel fully unleashed but I know somehow there are moments where it’s best to stop before I go.

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Finance Startups

Day 275 and Manifesting

I had a really terrific September. Everything just started going my way. Projects that I’d been pushing on had significant breakthroughs. My deals got hot. My focus and health improved. Even when I had setbacks and failures I was able to execute on quick recoveries. But mostly I didn’t give in to past bad habits. And all of that happened without any additional effort on my part.

I’ve been making a really conscious effort to stop pushing myself to always be doing more. Either I am able to find elegant solutions or I ask myself to take a step back till I can. Rather than brute forcing everything I am finding ways get where I am going without sacrificing myself to costly bad trades on my time and energy.

I asked for something really significant from one of my investments (an additional allocation for an special purpose vehicle). The second I asked for it I started to panic. I didn’t have an immediate or simple path to deliver on what I asked for from this founder. Even though I was confident I had the money for the deal it out I panicked that maybe I had bitten off more than I could chew. Immediately it started going through my head about how bad I’d feel if failed this founder. I relived the guilt, shame and punishment I had felt in previous failures to deliver for people that trusted me. I hated feeling like I’d failed people.

And I just decided stopped the cycle of worry then. Like turning off a switch. I told myself I could do it, I knew I could do it or I wouldn’t have asked, and that there was simply no way I was going to let down this founder. But this is where I felt the frown Instead of going into overdrive, I stuck by my schedule. I didn’t change anything. I didn’t push myself to a frenzy by adding in calls, pitches & emails. I just put down all the steps I could and would take to make the deal available to the right people and I began.

In the past I would have let that fear drive me. I would have gone into overwork and adding in additional tactics that I didn’t even need to insure I would reach my goal. But here I trusted myself to get the outcome. I didn’t exhaust myself. I took care of myself. And the allocation got filled quickly. I checked the commitments this morning and I’ve only got 15% of the deal left.

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Emotional Work

Day 272 and Small Steps

I talk a lot about pacing and routines and rhythms but it’s mostly because I struggle with it so much. As soon as I notice something is going in a direction I dislike, rather than course correct a little bit, I love to run in the opposite direction as fast as I can. Why be steady when chaos begets creativity?

Silicon Valley success myths are tied heavily to people that go their own way. We’ve coined terms like contrarian and narrative violation to add a high gloss to the basic truth that we just don’t like having our hands forced. Not even by ourselves. We like being able to pick and chose our direction.

This isn’t just truth of institutions or common knowledge. I get pissed when I’m forced into something by my own body. Heck, I especially dislike having my hand forced by my own biology. There is no authority more unforgiving than my own flesh.

Which has sometimes meant if I can overcome a biological reality my ego finds painful I’m inclined to do it. I love imposing brute force on myself. Naturally this habit isn’t the sort of thing that makes for a comfortable or pleasant life. But it’s a huge comfort to know that if you simply apply a little willpower you can undo the sins you’ve spent too much time accumulating.

Just look at some of the habits that have gained popularity in startup culture from intermittent fasting to overnight work sprints. Those techniques work. Some are arguably even sustainable for people. But it’s important to remember no matter how much we like to make things happen quickly, decisively or in new directions that sometimes the reality of being human cannot be ignored. On those days remember it’s ok to take small steps.

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Finance Startups

Day 270 and The Circle of Capital

Capital has evolved a lot in my life. The dynamics have changed so much in the 30 years I’ve been ambiently around venture it’s barely the same business. And yes I mean since I was a kid. The apocryphal family history is that I was born on the poor side of Silicon Valley while my unemployed father was working on pitch deck for education software. Yeah it’s a shitty origin story but it’s mine.

Back then you sold your entire life to some dudes for half a million bucks and gave up a lot of control. It wasn’t really collaborative but it was worth it to create the future. Back then your VCs controlled a lot more than they do now for capital they deployed. Flexibility and collaboration wasn’t really considered necessary. Your VCs actually controlled when you got fired (another childhood memory was a “take your daughter to work day” where a CEO got fired), when you could raise again, if and when you could sell your company, and honestly I wouldn’t be shocked if they had some Rumplestiltskin provisions too. That’s just where the market was at the time.

As it has become clear that non-linear returns come from creative founders and new markets, the structures of capital deployment have changed a lot. Capital cares about helping operators create because creation simply has more value than it did in the past. Venture capital isn’t old dudes optimizing for control and margin anymore (even if sometimes that might be a good idea) because that’s just not what makes money anymore.

Heck it has changed a lot in just half a decade. The last time I raised venture for my own startup, we actually priced the round (no uncapped SAFEs), we had a board from day one, and we were allowed to overshoot our valuation and capital goals by a whopping 300K. I was sure we’d reached the height of founder leverage at the time. Heck I felt certain we’d raised a small fortune on favorable & flexible terms. Six years later that would be considered a charmingly small pre-seed round with very onerous terms. Time marches on! And rightly so. Markets adapt to the needs of the participants and the returns they deliver. If it wasn’t profitable it wouldn’t be so.

This is all a long winded way of saying that I am continuing the circle of life. I’ve got my own venture fund Chaotic Capital with Alex Miller and Jacob Brody. It doesn’t look anything like the funds of my childhood or even the seed stage funds of the last decade. Probably because we as founders and operators lived through the hard lessons of venture in multiple cycles and took a lot of lessons with us. Capital isn’t about control. It’s about collaboration now. Capital starts early. Capital is flexible to generate returns But we also aren’t n00bs.

Rather than spend a year raising in silence and announcing it once it’s all said and done we are building a rolling fund. That structure works for us and my general affinity for building in public. It signals founders we are building like them (even as our other constituents see it as being responsive to the demands of the market). The rolling fund is a kind of flexibility to build at the speed of the market while also understanding that the give and take of responsible deployment must also work at the pace of founders.

While we work on forming our proper fund, we’ve created an AngelList Syndicate for chaotic where we’ll be creating SPVs for our current deals (we already have our first two which feels crazy to me) as well as follow-on deals once the fund is created. If you’re an accredited investor and interested in joining our deals, head on over. Isn’t it cool how these structures morph and change over time? I guess having a couple decades of being an operator has some benefits. You’ve seen what works and hopefully have some capacity to change what needs to be changed.

Our LPs and co-investors are mostly our friends and former colleagues who have spent years working with us at companies as varied and diverse as Stack Overflow, Trello, Easypost, Triplelift, Goop, PopSugar and over 40 different angel investments. Alex Miller, Jacob Brody and I have invested over 4m over the years which seems sort of astonishing.

While we work on forming our proper fund, we’ve created an AngelList Syndicate for chaotic where we’ll be creating SPVs for our current deals (we already have our first two!) as well as follow-on deals once the fund is created. If you’re an accredited investor and interested in joining our deals, head on over.

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Finance Startups

Day 255 and Bias Towards Fuckround

There is a tendency to believe that startups have a bias against older people. While ageism is alive and well, I’d argue what appears to be a bias against older teams is actually a bias against teams with experience. No one wants to invest in a team who don’t fuck around. We want teams that will find out.

One of the reasons I work with early stage startups is because their trajectory is not yet set. Every conversation has a hint of “fuck around and find out” because your vision is far away. You need to experiment, test, throw spaghetti against the wall. Pick your metaphor. The bias towards action and the bias for momentum exist in investor minds because the alternative is death.

This has the second order effect of selecting against teams with experience. It isn’t ageism. It is a bias against a certain kind of professional that knows too much. It’s not that anyone thinks experience is bad. It’s harder to fund teams with no exposure to the industry they are working in. It means that some types of experience will function as negative signaling. We think you know too much to solve the big problems. We are afraid you aren’t flexible enough to do the work of throwing out all existing assumptions.

While being an expert in a field means you have a better sense of how you will get from point A to B, it also means you have a less flexible mindset. You have seen what hasn’t worked. You have opinions about can or cannot be done. Even worse, you have an idea of how things must be done. Simply put a certain kind of battle tested, “expert in their field” persona isn’t trusted to fuck around enough.

If you are one of these founders, you have to fight against this signaling issue. Show investors your commitment to fucking around and finding out. Telegraph that all your experience and knowledge from your past work could very well be bullshit. Show us you will be committed to testing even more rigorously every hypothesis of how your roadmap will unfold. Then your experience becomes an asset.

We will trust that you have more opportunities to fuck around and find out than a less experienced founder because you plan to test what you think you know. Which is a lot! Show that no truism of your space will be held sacred. While a neophyte team will need to discover all the truths of a space to even begin to test. you will be ahead of them running test after test. Jujitsu that shit. Use the energy of your experience to show that you will bring the maximum amount of flexibility to finding new outcomes. The unbiased but experienced mind has the best chance at achieving momentum.

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Internet Culture Startups

237 and Crypto-Optimism

As much as Silicon Valley and startup culture claim a kind of techno-optimism, in the wake of the social media partisanship, science skepticism and climate concerns, it feels hard to really dream big. People say catch phrases like “it’s time to build” but we all understand there are limits to the problems we solve in capitalism’s current markets. And no one believes the government can solve anything.

Any possibility or big dream can be clouded by its politics or cultural baggage if you let it. We yell about cancel culture but it’s really a lack of imagination. A kind of giving in to the boundaries of what is acceptable has captured the moment.

But I’m noticing a genuine mood of possibilities in crypto. A levity that believes in wide open horizons. Instead of the long horizon, crypto sees a bright one.

Maybe it’s because crypto’s proponents genuinely believe it will be possible to toss out legacy systems. Crypto is still so new the disillusionment of compromise to human nature, design dependencies or aggregate power seem far away. The problems that plague ant endeavor haven’t become inevitable. No wonder the mood is ebullient. We are genuinely happy in crypto.

You can imagine a world in which the DAO destroys the corporation. You can imagine a world in which artists are paid directly by patrons in effectively priced markets which respect their ownership. You can imagine expensive and exclusive financial products being automated away so even a small independent entity can access the best without bleeding out through a dozen service fees. Everything could still be a utopia.

And while I know it won’t it feels really great to be optimistic about something.

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Internet Culture Startups

Day 236 and Founders Who Write

A heuristic I’m playing with for assessing founders is how good they are at writing.

And while this approach to vetting a founder is a practical method (everyone writes) it’s obviously limited. But I think it is nevertheless sufficient for reaching an approximation of founder capacity in a swift and asynchronous way. I like to see examples of founder writing whether it is Tweets, blog posts, technical documentation or a Notion document.

It’s my belief that we’ve overweighted salesmanship, pitching & synchronic communication methods (remember reality distortion fields) which has led to prioritizing messianic style founders. A rousing keynote speech used to be the gold standard. But this may be less relevant as teams go fully remote and more work is done asynchronously. Your capacity to document and communicate meaning at scale is crucial as a founder.

The canonical example of a founder who telegraphed competence and meaning through writing was Joel Spolsky. The Joel on Software blog established him as ur technical writer and gave us documentation culture which blossomed in Stack Overflow.

A more recent example for me is Devin Finzer who I discovered through his technical writing. Long before OpenSea was a clear winner in the NFT space, Devin’s writing caught my attention as his crisp clear articulation on the basics non-fungible tokens was legible to everyone.

My guess is this heuristic of focusing on writing instead of showmanship will improve overall diversity of founders & companies in a portfolio as less bias creeps into asynchronous documentation whereas mirroring & social cues easily tilt pitching in favor of certain classes of people

I’m also keen on folks who like messaging culture. Being able to hop in and out of conversations is crucial to team building & scaling. Those that are happy to DM & chat to build rapport in distributed fashion more easily will succeed at building relationships in a remote first world.

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Emotional Work Startups

Day 230 and Punishment

I wish I understood why we feel the need to punish ourselves sometimes. What is it about human nature that makes us abuse ourselves? Oh we deserve it. It apparently has a social purpose as well according to Psychology Today

Self-punishment tends to serve a dual purpose as it not only relieves internal feelings of guilt but impacts how others perceive us as well.

I’ve been feeling guilty. This month is the two year anniversary of me selling my last company Stowaway to a private equity firm and pursuing a medical leave to diagnose and treat my spinal condition ankylosing spondylitis. It was a happy ending, at least mostly, with the company being put into better hands than mine. But I still felt guilty.

I felt bad I didn’t live up the expectations of our biggest dreams. I felt guilty I didn’t 100x the capital for my venture investors. I felt guilty that my colleagues had dedicated so much to me and I had failed to deliver on the outcome we had dreamed of in our early days.

So punishing myself seemed like the right thing to do. I deserved to be sick. I deserve to be in pain. I deserved for the whole world to read about my experience and my failures. I deserved to be shown in public as a weak sick woman. It sounds so abusive when I write it out. Like I thought I deserved to be tortured. But maybe that’s exactly what I felt.

I am trying to unearth why I have the self limiting belief that punishment is what I deserve. As it’s more than just the circumstance of selling a startup and not seeing the results I wanted. It’s got to be deeper than the rationalizations I’ve given.

I’ve practice family systems therapy. The basic premise is that our childhood informs how we react as adults. And by healing the rough patch’s or even traumas of those times we can live the life we choose. For me I felt abandoned as a child. I wanted my father in particular to be emotionally available. But it just wasn’t to be. But I held on to the idea that I must have deserved to be abandoned. But of course it had nothing to do with what I did or did not deserve. It wasn’t about me at all.

Now I remember that I am a capable, brilliant and above all reliable person who needs to accept what I can be and not be bound by what I learned in failure. Finding that and turning it into your superpower is where the real success comes from.

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Finance Startups

Day 202 and Show Me Anything

I’m lucky to see work from founders at the very earliest stages. If you have a problem you are solving for chaotic world I’m generally interested in seeing it even if it’s just in the idea phase. But you have to show me you’ve got a plan to build a product. Any product is fine. Just show me something! Show me how you have the capacity to build even if you suck at it.

Bobby Goodlatte captured some of the sentiment I feel on the subject well with this exasperated Tweet.

What’s a “builder”? Show me something. Anything. Just show me one pixel you’ve created. That’s what a builder is. That’s why PM’s don’t qualify.

Sometimes it can feel hard to build something, anything, when you are very experienced. This is a problem I’ve seen across all kinds of impressive people. Academics, government folks and higher end finance folks, former c-suite executives. They know what good looks like so anything they can physically make with their own two hands will all look like crap.

I’d even go so far as to suggest there is an inverse relationship between how much you obfuscate your lack of existing product and your credentials. There are other corollaries on that basic theme. How comprehensible your product is right now is inversely related to how extensive your service layer is at the moment.

I see a lot of brilliant, extremely credentialed people solving big problems, but because making money is important they will pitch what amount to service companies without an existing product. But they will use extensive jargon and hand waving visionary opportunities to hide the fact that there isn’t any product layer yet. Which is weird because like eventually I’ll find out right? You wouldn’t want to trick your investors on the state of play.

I’d encourage you to stop trying to hide that fact. Don’t be embarrassed that you can’t make things to your standards. None of us can. New things always look like shit. Just own up to that reality and you will find more help from folks who will want to help make it better. Stop showing me CAGR and TAM and possibilities as a way of hiding that you haven’t built a product yet. It’s ok. You don’t need to have built something great yet.

Admit it. Show me some wireframes and a roadmap. I’ll take that way more seriously. In fact, I’ll probably overweight you showing me exactly what you do have and how you plan to use funds to improve it. That’s how much startup people value just building the damn thing.

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Startups

Day 190 and Neutrality

One of the more influential pieces of art on my worldview is the science fiction comedy Men in Black. Yes you read that right. My philosophy is underpinned by a speech by Tommy Lee Jones.

1500 years ago everybody knew the Earth was the center of the Universe. 500 years ago everybody knew the Earth was flat and 15 minutes ago you knew people were alone on this planet. Imagine what you’ll know tomorrow

I don’t really know shit. I know enough to know I don’t know shit. My mother had a favorite bumper sticker “ask your teenager while they still know everything” which at the time as a teen I found a bit insulting and now as an adult think was quite astute. The more I know the less I know for sure.

Because I’ve slowly come to realize that knowing can be a crap shoot I keep odd company. Arguably bad company. I follow some truly outrageous people on Twitter. I follow hard right partisans and tankie left wing socialists. I follow folks with deep convictions on the irredeemable evils of technology and the most ebullient techno-optimists. It’s hard to talk me into not keeping an eye on all view points. Sure I think some folks are dead wrong but how do I know I’m not one of them?

Not knowing things for certain as saved my life. Medicine has a tendency to interpret data as absolute. Biometric markers and test results can for some doctors have as much authority as a papal decree. Anyone who has been told “well your test results are normal” while still feeling like absolute shit will know how frustrating this can be. Plenty of data points look absolutely normal before a system cascades into failure.

We don’t know as much as we need to believe we know. Our craving for certainty as humans is a significant weakness. The venture capitalist who insists that some metric will determine a crucial outcome is a favorite trope of mine. As if favorable CAC/LTV ratio functions as a warding spell or an attractive margin structure offers protection against a changing consumer preferences. Knowledge isn’t magic. Superstition can just as easily apply to P&Ls as poltergeists.

I find it best to remind myself to take a neutral when approaching entrepreneurs. Maybe I don’t know. Maybe everything I’ve ever known was particular to my circumstances, bias, education quirks or just plain randomness. Maybe one small insight will shift the grounds underneath me and reveal entirely new frameworks for interpreting reality. The unknown unknowns have a habit of springing themselves when you least expect.

It’s often tempting to throw opposing viewpoints into buckets that are easy to dismiss. Venture investors are notorious for this. We dismiss folks for any error we spot. We deride their data. We applaud ourselves for spotting cracks in their plans. Resist this tendency. We must always retain the neutrality of perspective that allows us to change our mental models. What we know to be true might be a lie. We may lack a key piece of context that would unlock a cascade of understanding that changes our entire perspective.

This is why the adage “strong beliefs weakly held” can be so key to success. Changing our minds is a strength. It’s hard to admit to ourselves we’ve gotten something wrong especially if we sunk a lot of time, money and reputation into it. But would you rather be right or successful? Feeling superior can be a delight but not if it gets in the way of what we want in life.